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The Great Crash, the Great Depression and the New Deal policies, 1920–41

(a) Explain why oversupply became a problem in the US economy in the 1920s.

(b) To what extent did opposition to the New Deal come from the conservative right?

23:T241f,{ "questionId": "331743", "parts": [ { "partId": "a", "markschemeText": "Explain why oversupply became a problem in the US economy in the 1920s.\n\nIndicative content\n\nBy the mid to late 1920s it was becoming clear that there was a problem of overproduction in several sectors of the American economy:\n\n• Farming – farmers had not shared in the economic prosperity of the 1920s. Many continued to produce food at a rate which had been needed during the First World War but with European markets recovering this level of production was no longer needed and this resulted in falling prices. The lives of farmers in many states were ones of constant debt and struggles which meant that they could not share in the consumer spending of the 1920s.\n• Mass consumer production – by the late 1920s demand for consumer goods was beginning to slow. Many houses had already purchased the totemic goods of the boom (i.e. a car, a refrigerator, a vacuum cleaner) and so did not need to buy them again. Although production kept employment high many goods were not being sold and so stockpiling started to become a problem.\n• Florida real estate bubble – oversupply was also a problem in construction with vast estates being built in Florida and prices going through the roof. By 1925 this bubble began to collapse as investors looked elsewhere and tried to sell for a profit. Some see this as a valuable predictor of what was to come later to the whole economy.\n\nAccept any other valid responses.", "totalMarks": 10, "answerPoints": [ { "type": "", "point": "\n \n

Indicative content

By the mid to late 1920s it was becoming clear that there was a problem of overproduction in several sectors of the American economy:

Farming – farmers had not shared in the economic prosperity of the 1920s. Many continued to produce food at a rate which had been needed during the First World War but with European markets recovering this level of production was no longer needed and this resulted in falling prices. The lives of farmers in many states were ones of constant debt and struggles which meant that they could not share in the consumer spending of the 1920s.
Mass consumer production – by the late 1920s demand for consumer goods was beginning to slow. Many houses had already purchased the totemic goods of the boom (i.e. a car, a refrigerator, a vacuum cleaner) and so did not need to buy them again. Although production kept employment high many goods were not being sold and so stockpiling started to become a problem.
Florida real estate bubble – oversupply was also a problem in construction with vast estates being built in Florida and prices going through the roof. By 1925 this bubble began to collapse as investors looked elsewhere and tried to sell for a profit. Some see this as a valuable predictor of what was to come later to the whole economy.

Accept any other valid responses.

\n ", "marks": 10, "guideline": "" } ] }, { "partId": "b", "markschemeText": "To what extent did opposition to the New Deal come from the conservative right?\n\nIndicative Content:\n\nPossible discussion of opposition from the right:\n\n• The most organised and most public right-wing opposition to the New Deal was the American Liberty League, set up in 1934. It combined conservative Democrats and some leading industrialists and some popular support for private enterprise, which these groups felt was being eroded by the New Deal. Once FDR was re-elected in 1936, the American Liberty League lost support and soon disbanded.\n• However, in Congress at least, conservative Democrats started to work across the aisle with some Republicans. In December 1937, they published a Conservative Manifesto praising private enterprise. The right-wing opposition in the Senate blocked an anti-lynching bill approved by the House, to FDR’s embarrassment.\n• FDR pushed through Congress the Fair Labour Standards Act, which introduced a minimum wage, against conservative opposition. Relations between FDR and Southern Democrats deteriorated. The right-wing opposition in the Senate blocked further New Deal reforms.\n\nPossible discussion of opposition from the left:\n\n• The leading left-wing opponents – Father Coughlin, Francis Townsend and Huey Long – are better remembered than the American Liberty League and the ‘Old Right’ Conservative Coalition of the later 1930s.\n• Coughlin established a National Union for Social Justice in 1934 and a third party to contest the 1936 presidential elections. Francis Townsend gained national publicity for his proposal to introduce Social Security for the old. Long set up his Share Our Wealth movement in 1934, arguing for progressive taxation and great redistribution of wealth.\n• As well as personalities such as Coughlin, Townsend and Long, institutions such as labour unions should also be included. There was more labour unrest in the 1930s than is often remembered. This left-wing pressure, even though uncoordinated, was at its height during the First New Deal. There would seem to be a close connection between that left-wing pressure and the more radical Second New Deal of 1935–36, which did include Social Security reform and the Wagner Act.\n• Only Townsend remained to influence New Deal legislation in FDR’s second term, helping to persuade Congress to extend Social Security to include dependents of retired workers. Long had been assassinated in 1935 and Coughlin became more concerned with opposing communism.\n\nThus, there is a clear contrast between opposition to the New Deal in the two presidential terms. Some candidates will include Supreme Court opposition to many New Deal reforms, but the Supreme Court is a judicial not a political institution and so cannot be seen as either left wing or right wing.\n\nAccept any other valid responses.", "totalMarks": 20, "answerPoints": [ { "type": "", "point": "\n \n

Indicative Content:

Possible discussion of opposition from the right:

The most organised and most public right-wing opposition to the New Deal was the American Liberty League, set up in 1934. It combined conservative Democrats and some leading industrialists and some popular support for private enterprise, which these groups felt was being eroded by the New Deal. Once FDR was re-elected in 1936, the American Liberty League lost support and soon disbanded.
However, in Congress at least, conservative Democrats started to work across the aisle with some Republicans. In December 1937, they published a Conservative Manifesto praising private enterprise. The right-wing opposition in the Senate blocked an anti-lynching bill approved by the House, to FDR’s embarrassment.
FDR pushed through Congress the Fair Labour Standards Act, which introduced a minimum wage, against conservative opposition. Relations between FDR and Southern Democrats deteriorated. The right-wing opposition in the Senate blocked further New Deal reforms.

Possible discussion of opposition from the left:

The leading left-wing opponents – Father Coughlin, Francis Townsend and Huey Long – are better remembered than the American Liberty League and the ‘Old Right’ Conservative Coalition of the later 1930s.
Coughlin established a National Union for Social Justice in 1934 and a third party to contest the 1936 presidential elections. Francis Townsend gained national publicity for his proposal to introduce Social Security for the old. Long set up his Share Our Wealth movement in 1934, arguing for progressive taxation and great redistribution of wealth.
As well as personalities such as Coughlin, Townsend and Long, institutions such as labour unions should also be included. There was more labour unrest in the 1930s than is often remembered. This left-wing pressure, even though uncoordinated, was at its height during the First New Deal. There would seem to be a close connection between that left-wing pressure and the more radical Second New Deal of 1935–36, which did include Social Security reform and the Wagner Act.
Only Townsend remained to influence New Deal legislation in FDR’s second term, helping to persuade Congress to extend Social Security to include dependents of retired workers. Long had been assassinated in 1935 and Coughlin became more concerned with opposing communism.

Thus, there is a clear contrast between opposition to the New Deal in the two presidential terms. Some candidates will include Supreme Court opposition to many New Deal reforms, but the Supreme Court is a judicial not a political institution and so cannot be seen as either left wing or right wing.

Accept any other valid responses.

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