The Evolution of

Modern Liberalism
SS30-1 Chapter 6
Part 1: Economics and the Principles of Liberalism in
North America

Teddy Roosevelt's
Progressivism
Theodore Roosevelt introduced
several reforms during his
presidency to give middle class
Americans a square deal.
One of the deals involved
preventing large companies
from abusing their control of
the market place.

 In 1906 T. Roosevelt's government investigated

the standard oil company and the United States

Bureau of corporations reported that the shipping
points are relatively slower than its competitors.
Rates have the low to let the standard into
markets, or made high to keep competitors out of
markets. The result is that Maine to California the
general arrangements of open rates on petroleum
oil is to give the standard an unreasonable
advantage over competitors. Roosevelt's
administration used the Elkins act (1903) and the
Hepburn Act (1906) to stop railroads from offering
preferential treatment to some of their cooperate

Taft and the

Sherman AntiTrust Act
William
Howard Taft
was
Roosevelts
successor and
was President
from 19091913.
Continued a
few of
Roosevelts
projects Ex.

Introduced in 1890
What is the Anti-Trust
Act
Prevents MONOPOLIES
Does NOT prevent
market domination
No two competitors
can have the same
parent company
Also prevented some
activities
Thelabour
Clayton
Act in 1914
strengthened many in the

What Are Credit Unions

Started as small
financial institutions
Was an alternative to
commercial banking
Borrows money to lend
at low rates
Non-Profit
Owned by its members
Credit Unions become
popular among farmers
in the 1930s.
Though Credit Unions
reject right-wing
liberalism, they provide

Being FIRST:
Caisse depargne
Desjardins was the first
Credit Union in Canada
Founded by Alphonse
and Dorimene
Desjardins
30,000 members
$6Million in assets
In 1920 there was 187
Credit Unions in Quebec.
150 where Alphones
Desjardins personally

What were the Roaring

Twenties?
A term often used to
characterized the
decades dynamic
cultural edge in New
York and other major
cities during a period
of sustained
economic
prosperity

The era saw a

significant lifestyle
changes.

Economic
policies

Was a decade of
increased consumer
spending and
economic growth
Harding proposed to
reduce national debt,
reduces taxes,
protect farming
interest and cut down
immigration.
These policies led to
the
The
The BOOM
era saw a of
large
Coolidge
years
scale of automobile
use, telephones,
motion pictures and
electricity.

Coolidge years-The 30th President of the

United States (1923-1929), who took office
after the death of Warren G. Harding. A strong
supporter of business, he encouraged
speculation that led to a stock market boom in
the 1920s,followed by economic collapse.

WHAT WAS THE RED SCARE AND HOW

DID IT EFFECT POLITICAL
CONSERVATISM?
POLITICAL
Pages 202-204

RED SCARE
American public fear
of communist
Bolshevik Red Army of
the Russian Revolution
Fear of communist
uprising in America
Led to Anarchist
bombings

CONSERVATISM
Two presidents,
Harding and Coolidge
3 points on political
platform
1. Isolation
2. Nativism
3. Laissez-faire

Red Scare
The Red Scare was a period between 1917-1920.
After WW1 the American people became aware of
the Russian Revolution and the Bolshevik Red
Army.
The American Govt wanted to gain support for
WW2, while the Socialist groups within the
country were against it.
Labor Strikes and terrorist bombings sent the US
into a country wide fear of a communist uprising.
These circumstances let way to an all
conservative view in America

Political Conservative:
Harding and Coolidge
The Red Scare helped G. Harding win presidency
with the widest margin of any president in US
history.
The conservative party won with three points.
Isolation-retreat from involvement in other
countries affairs
Nativism- Favoritism for dominant culture
And reductions in govt involvement.
Harding dropped immigration by 75% and
switched to a Laissez-Faire economy.
When Harding died his secretary Coolidge took
over and won the next election because of his
similar policies

Economic Prosperity and

Consumerism
After the WWI, North America experienced a

brief recession. This ended quickly as factories

switched over to produce consumer goods.
The gross domestic product of U.S.A increased
from 73.6 billion in 1921 to 103.6 billion in
1929.
Example:

With the invention of film and radio, mass

marketing was possible, therefor fueling consumer
spending.
Doing the math
Canada
1918- 300,000 motor
vehicles were registered
1929- 1.9 million were
registered.
U.S.A
1920- fewer then one in
five families owned a car
1929- four out of five
families owned a car.

As technology grew so
did consumerism.

Things that increase

consumerism.
1. Mass production
2. Higher wages
3. New inventions
4. Cheaper products.

Changing Social Values

When the North America free-market economy expanded, major social
changes occurred and greater equality was achieved.
1918: Women in Canada obtained the right to vote
1920: Women in the United States gained the right to vote
Greater numbers of women in the workforce
Native Americans were granted citizenship by the Indian Citizenship act
(1924) in the Untied States
North American population became more urbanized.
There were also many inequalities like income disparity difference in
earning- between the rich and the poor.
Ex.
1917: Wealthiest 10% of the population in the US earned 40% of all the
income in the country
1928: Wealthiest 10% of the population earned 49% of all the income in
the country.

The Great Depression

I tried to get a job all over town;
Seven hundred places they turned me
down
They told me six weeks I could get
relief
But I aint got a bite to eat.
Woody Guthrie

Following the extended

prosperity of the 1920s, the Most economists see
world economy suffered an
boom and busts as a
extreme recession now
normal part of a free
known as the Great
market economy
Depression
Due to various
circumstances, the
recession of the 1930s
was exceptionally
severe

 This period had a long lasting impact upon liberal

democratic governments
It ran from 1929 to 1941
The increase of government involvement that it led to
continues in many forms today; the government took
a greater role in economic and social lives of the
people
It began in October 29, 1929; with the Stock
Market Crash

(Hitler seized Great Depression as an opportunity to come to

power in Germany, and it led many Germans to flock to the

The 1920s were a

prosperous
decade, until The

Stock Market
Crash of 1929.

People began taking out

loans to invest in the
climbing stock market

Investments inflated
stock prices

Prices stopped rising

and people cashed in
their stocks to gain as
much profit as possible

This lead to panicwithdrawals from the

stock exchange, which
caused the prices to
drop even more.

By November 13, what

happened to the prices
of the top 30 stock
investments?

PRICES DROPPED BY

Y
M
OH
!

People
bought
goods on
credit

Banks
began
calling in
loans

AFTERMA
TH
Lead to
economies
around the
world,

crashing

Credit
made
people go
bankrupt

Slowed
down
internationa
l trade

People
lead
Bank
Runs*

USA
enacted
new
trade
tariffs

Unemploymen
t rate of

25%

Wages
were

54%

of what
they used
to be

North
American
Farmers hit
by The
Dust
Bowl**

A Bank Run is a situation where too many depositors try to withdraw

their savings from a financial institution, causing it to go BANKRUPT
** The Dust Bowl was a series of droughts in the first half of the 1930s
that destroyed crops and lead farmers to abandon their farms entirely

German
T
he
Political
G
S
extremism In lum rea
Br p t
ita
in

Had a
profound
impact
around
the
world:

Kassandra Kathleen

CCF founded in
Calgary, allows
for public
ownership of
industries and
financial
institutions
People began to
support political
parties with
collectivist
policies
Strikes and
protests became
more common
Roosevelt
adapted John
Maynard Keynes

The harsh realities

affected people with low
incomes the most.

Roosevelts New Deal

In March 1933, Franklin D. Roosevelt
became president of the United States
He introduced the New Deal, a series of
programs that focused on the 3Rs
Relief to the unemployed, Reform to
the economy, and Recovery from the
Depression

Our greatest primary task is to put

people to work. F.D. Roosevelt,
Inaugural Address, March 4, 1933

Roosevelts New Deal

The First Wave

The Second Wave

Programs that focused

on short-term efforts
were put into place
The Banking system
was stabilized
Federal Deposit
Insurance Corporation
was created in 1933

Essentially
redistributed power
among businesses,
consumers, farmers,
and workers
Unions were
encouraged
The Security and
Exchange
Commission,
Agricultural
Adjustment Act, Works
Progress

What were the two distinct

ways that Roosevelts
Responses
noteworthy?
Government involvement and

intervention in the economy was

taken farther than ever before in the
US. New Deal was the response to the
instability and upheaval of the natural
market forces.
New Deal showed that liberal
principles not only apply to the rights
and freedom of industrialists but also to
average citizens. This is what is meant
Liberalism
by the shift from
classical liberalism to
modern liberalism.
Modern

Classical
Liberalism

Prime Minister Bennett

Bennett was elected in 1930 on a

platform that included make work
programs.
Bennetts government established
relief camps, soon cut government
spending.
Bennett believed that laissez-faire
would eventually lead the economy out
of crises.
One exception to these policies was the
bank of Canada which took control over
Canadas money supply.
Bennett tried to quell the protest of left
wing groups.
The economy was not recovering so

William Lyon Mackenzie

King
Under King government became more

involved.
This created many public institutions, and
social programs characteristics of modern
welfare state and modern mixed economy.
One of the most involved individual in
government expansion was C.D. Howe.
Howe was known as Minister of
Everything
At times he was Minister of Transport,
Minister of Munitions and Supply, Minister
of Reconstruction, Minister of Trade and
Commerce, Minister of Defence Production.
Some of Howes achievements include
1. Using unemployed workers to build airstrips across
the country
2. Establishing Trans-Canada Airlines as a Crown

How did the Canadian Government Respond to the

Great Depression

Howes most important contribute was his work as Minister

of Munitions and Supply during the second World War.
Under Howe the government established 28 Crown
corporations to produce goods for the war.
About 80% of production was sent to Allied countries.
This helped Canada because in the first few years the
manufacturing sector in Canada increased by 50%.
Other public institutions and social programs are:
1. The Bank of Canada became a Crown corporations (1938)
2. The National Film Board (1939)
3. Unemployment Insurance Act(1940), which created insurance
for unemployment as well as programs to help them find work.
4. Family allowances (1944)
5. National Housing Act(1944) and the Central Housing and
Mortgage Corporations(1946), which created public housing
programs for low-income families and provide mortgage loan
insurance.
Quebec Premier Maurice Duplessis began farm credit
programs, commissions to oversee wages, and benefit
programs
Duplessis also tried suppress communist activities by
passing the Padlock Law, which allowed the government