History 474A

Devine

Study Questions for Burton Folsom, “What Caused the Great Depression?”

1. What were the negative consequences of World War I that contributed to the Great Depression?

2. In what ways did the Smoot-Hawley tariff damage the American economy?

3. How did the poor performance of the Federal Reserve contribute to the Great Depression?

4. What is the “underconsumption thesis” (p. 34) and why has it been discredited? Why did academics at the time find it persuasive?

5. How does Folsom assess FDR’s command of economics? How does he assess Hoover’s handling of the economy?

6. What was the Reconstruction Finance Corporation? Why does Folsom say that it was “politicized”?

7. Why did Hoover’s critiques of FDR’s contradictory campaign promises hold little weight with voters?

Study Questions for Warren Cohen, Empire Without Tears, Chapter 2

1. According to international bankers like Thomas Lamont, why would U.S. cancellation of European debts after World War I and a reduction of the U.S. tariff have benefited American businesses and workers? Why was it politically impossible to have such policies enacted?

2. After the war, why did European nations need American dollars? In what ways did Americans help to get these dollars into European hands? In what ways did United States make it difficult for Europeans to get these dollars?

3. Why was it to the Americans’ benefit that Europeans had dollars to spend?

4. Why would an American involved in the export business support generous loans to France and Germany?

5. Why was the U.S. government unsuccessful in its efforts to persuade businessmen to increase their exports to China and bankers to increase their investments in China?

6. In what ways was the relationship between the federal government and Thomas Lamont similar to the relationship between the federal government and the leaders of industry who served on the War Industries Board? In each relationship, who seemed to have the upper hand?

7. To maintain its rate of economic expansion, U.S. businesses needed easy access to two things. What were they?

8. During the 1920s, the U.S. was the leading importer and consumer of raw materials. The European powers often controlled the sources of these raw materials. How did they use this leverage to exact concessions from the U.S.? What concessions did they want?

9. Why was the whole international economic system of the 1920s dependent on the outflow of long-term loans from the United States? How were German reparations, French war debt, and American loans all related? Why was this an unstable system?

10. What were the international consequences of American businessmen and bankers’ decisions to establish factories or capital investments in some foreign countries but not in others? For these nations, what were the tradeoffs of the U.S. economic presence in their country?

11. During the 1920s, how did the United States use its economic power throughout the world and what was the impact? What influence did the U.S. government have on the uses and impact of American economic power during this period?

Study Questions for Peter Fearon, “The Economy During the 1920s”

1. The 1920s have been called the “prosperity decade.” Does the name fit?

2. How did Hoover’s views on government’s role in managing the economy differ from Harding, Coolidge, and Mellon’s?

3. What were the arguments for high wages? What other policies did high wage advocates usually propose?

4. Why was there an increase in investment during the 1920s? Where was the money coming from? Why was there an increase in the rate of production? Who benefited (and who benefited the most) from increased productivity?

5. How did the boom in auto manufacturing affect the broader economy?

6. Why was there a construction boom (both residential and non-residential) during the 1920s? Why would a collapse in the construction sector have a widespread negative impact on the economy?

7. Even though there was a growth in total employment between 1920 and 1929, why did many workers still feel insecure? Why does the author argue that in evaluating labor’s situation we must look beyond aggregate statistics like rate of employment?

8. Why did union membership decline during the 1920s? To what extent was this the result of conditions beyond organized labor’s control? To what extent does the AFL leadership bear part of the responsibility?

9. How would you characterize the distribution of income during the 1920s? Is there a point at which the state should intervene to keep income disparities at a certain level? What would be the arguments for and against pursuing this sort of governmental policy?