Exam 26: Republican Resurgence and Decline

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During the 1920s, unions in the United States faced significant setbacks. One of the main challenges was the anti-union sentiment and actions taken by many employers and the government. After World War I, there was a widespread fear of communism and socialism, which led to a crackdown on labor organizations. The Red Scare, Palmer Raids, and the Espionage and Sedition Acts all targeted labor activists and union leaders, leading to many being arrested, deported, or blacklisted.

Additionally, the 1920s saw a rise in the power of big business and a push for open shops, where workers were not required to join a union. Many employers engaged in aggressive anti-union tactics, including hiring strikebreakers, implementing yellow-dog contracts, and using violence and intimidation to suppress union activity.

The courts also played a role in limiting the power of unions during this time. The Supreme Court issued several decisions that restricted the ability of unions to organize and strike, such as the 1921 decision in Duplex Printing Press Co. v. Deering, which limited the right to picket.

Overall, the 1920s were a challenging time for unions in the United States, as they faced widespread opposition from employers, the government, and the courts, making it difficult for workers to organize and advocate for their rights.

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The stock market crash of 1929, also known as Black Tuesday, was caused by a combination of factors that led to a rapid decline in stock prices and ultimately a devastating economic downturn. Some of the key causes of the crash include:

1. Speculation and Overvalued Stocks: In the years leading up to the crash, there was a speculative frenzy in the stock market, with investors buying stocks on margin (using borrowed money) and driving up prices to unsustainable levels. This led to a bubble in stock prices, as many companies were overvalued and not able to justify their high stock prices with actual earnings.

2. Excessive Borrowing and Debt: Many investors and companies were heavily reliant on borrowed money, which made the market vulnerable to a sudden downturn. When stock prices began to fall, margin calls and debt repayments forced many investors and businesses into financial distress.

3. Weaknesses in the Banking System: The banking system at the time was not as regulated or stable as it is today, and many banks were engaged in risky lending practices. This made them vulnerable to runs on the bank and contributed to the overall instability of the financial system.

4. Economic Imbalances: The 1920s saw a period of rapid economic growth, but this growth was unevenly distributed, with significant disparities in wealth and income. This created a situation where the majority of the population had limited purchasing power, which eventually led to a decrease in consumer spending and a slowdown in economic activity.

Government policies also played a significant role in bringing about the crash. For example, the Federal Reserve's monetary policy, which involved keeping interest rates low and allowing for excessive credit expansion, contributed to the speculative bubble in the stock market. Additionally, the lack of effective regulation and oversight of the financial markets allowed for risky and irresponsible behavior to go unchecked.

In the aftermath of the crash, the government implemented significant reforms to address the underlying issues that led to the crash, including the establishment of the Securities and Exchange Commission (SEC) to regulate the stock market and prevent fraud and manipulation. These reforms aimed to restore confidence in the financial system and prevent future economic crises.