Truman and post-war reconstruction

Who was John Maynard Keynes and what is he known for?

A British economist known for theories that encouraged government spending to stimulate the economy during recession or depression.

What was the main idea behind Keynesian economics?

Governments should borrow and spend money on large-scale projects to stimulate industry and create jobs.

Which US president used Keynesian principles in his economic policy?

Franklin D. Roosevelt (FDR) in his New Deal.

How did Truman feel about Keynesian economics?

He was more sceptical than FDR but still wanted to continue liberal social programmes.

What challenge did Truman face in implementing his domestic programme?

An economy set for decline and a population transformed by war.

What was the Bretton-Woods System?

A system of monetary management created in 1944 by 44 Allied nations to stabilise global finance after WWII.

What institutions were established by the Bretton-Woods System?

The International Monetary Fund (IMF) and the World Bank.

What requirement did the Bretton-Woods System impose on countries?

They had to tie their currencies to the US dollar.

How did the IMF support countries under the Bretton-Woods System?

It promised to help countries in financial trouble.

Where were the IMF and World Bank headquartered?

In New York, USA.

Why was the USA economically dominant after WWII?

It had a strong post-war economy and had prepared for global trade.

What did Truman believe would help the global economy recover post-WWII?

Returning to peaceful trade with Europe and the Pacific.

Why was global economic recovery important for the USA?

It allowed Allied nations like Britain, France, and China to repay substantial war loans.

How much did Britain, France, and China owe the USA in war loans?

Britain: $31 billion, France: $3.2 billion, China: $1.6 billion.

What was Truman's role in the early post-war economic system?

To maintain the established system and let economic growth follow naturally.

What are the IMF and World Bank?

Organisations set up after WWII to assist countries in economic crisis; headquartered in New York.

What is capitalism?

An economic and political system where trade and industry are controlled by private organisations aiming to make a profit.

What does it mean to demobilise?

To take troops out of active service, usually after a war.

What is inflation?

A rise in the price of goods or services from one year to the next.

What was the baby boom?

A rapid rise in the US population following WWII, with nearly a million more live births per year in the late 1940s compared to 1945.

What was Truman's domestic agenda called?

Fair Deal

What was the aim of the Fair Deal?

To tackle poverty, unemployment, and inequality in education and healthcare

How many soldiers were demobilised in 1945?

9 million

How many soldiers were kept in service in 1945?

3 million

What was the army reduced to by 1946?

1.5 million

What was the peak unemployment rate under Truman?

5%

What caused short-term unemployment after the war?

The gradual reintroduction of soldiers into the workforce

What caused the consumer boom in 1945-46?

Victory in war and returning soldiers increased consumer confidence and demand

What was the inflation rate between 1945 and 1946?

25%

What political impact did inflation have in 1946?

Democratic defeat in midterm congressional elections

What legislation did Truman propose to control inflation?

Price Control Bill

What was created to advise the government on economic issues?

Council of Economic Advisors (CEA)

What act committed the US to maximum employment?

Employment Act of 1946

What legislation provided veterans with housing and education support?

GI Bill (1944)

How much did the government invest through the GI Bill over the decade?

$20 billion

What was the effect of the GI Bill on society?

Boosted social mobility and key sectors of the economy

What was the baby boom?

A large increase in births from 1945 to 1950

How did the baby boom affect the economy?

Increased demand for housing and goods/services

What was Levittown?

A suburban housing development offering affordable homes for returning soldiers

How did car sales change between 1946 and 1955?

They increased from 2.1 million to 7.9 million

What was the economic effect of war bond maturation?

Injected money into the economy and fuelled a consumer boom

By how much had total US output increased by 1952 compared to 1939?

Almost 90%

How much did industrial output increase under Truman?

Approximately doubled

By how much did agricultural output rise?

By one-third

How much did business investment increase?

From $14 billion to almost $38 billion annually

How much did employment grow during Truman's presidency?

From 46 million to about 61 million

How much did per capita income rise under Truman?

About 40%

Why did Truman face political trouble in the 1946 midterm elections?

Republicans highlighted economic problems with slogans like 'To Err is Truman', winning control of House and Senate.

What was the likely result of opposition from Congress before the 1948 election?

Political gridlock making it difficult to pass bills.

What was significant about the 1948 presidential election?

The greatest upset in US political history with Truman's surprise victory.

Who did Truman propose as the Democratic nominee in 1948?

General Dwight Eisenhower (who declined both Democratic and Republican nominations).

What caused the Democratic Party disarray in 1948?

Former VP Henry Wallace formed Progressive Party; Senator Strom Thurmond ran as independent on States' rights platform.

How did Truman campaign against Thomas Dewey?

He toured the country aggressively, criticised Republican Congress, earning nickname 'Give 'em hell, Harry'.

What was the outcome after Truman's 1948 victory?

Democrats regained control of both Houses, allowing more domestic cooperation.

Could Truman run in 1952?

Yes; 22nd Amendment passed in 1951 did not apply to him.

Why didn't Truman run in 1952?

Lack of popularity led him to stand aside for Adlai Stevenson.

What are States' rights?

Rights granted to states to decide on matters like education, taxes, death penalty.

What is a political campaign?

Process of persuading people to vote for a party or individual.

What is political gridlock?

When different parties control White House and Congress, making lawmaking difficult due to checks and balances.

Domestic problems?

The post-WWII baby boom increased birth rates, leading to more women staying home, higher demand for suburban housing, and pressure on schools. Jobs were threatened as war material demand ended, but factories shifted to consumer goods production.

Unemployment by 1950?

It rose to 5%, hitting minority groups and women hardest, who received little support from Trade Unions due to the unions' left-wing sympathies.

John L Lewis's 1937 speech on unions?

Unionization is based on employment relations, wage systems, private property, and investment rights. It supports collective bargaining and labour influence, which protect democracy and guard against alien government doctrines.

What issues did Truman face with organised labour?

Trade Unions, traditionally supporting Democrats, caused major problems post-war with strikes in steel, coal, auto, and rail industries disrupting the economy and consumer goods production.

How did Truman respond to the 1945-46 strikes?

He maintained price controls but allowed unions to seek higher wages. He recommended compulsory mediation/arbitration, threatened to draft railroad workers, and took the United Mine Workers union to court, forcing unions to return with some gains.

What political impact did Truman's hardline on unions have?

It damaged his relationship with an important part of his party's support base in organised labour.

John L Lewis (1880-1969)?

Leader of Miners' trade unions, founder of the Congress of Industrial Organisations (CIO) in 1938, supporter of FDR and the New Deal, led mine workers' strikes in 1945, 1946, 1948, and 1949-50.

Congress of Industrial Organisations (CIO)?

Founded by John L Lewis in 1938, a trade union organisation open to African-Americans.

State of the Union Address?

An annual speech by the US President in January to a joint session of Congress outlining challenges facing the country and proposed legislation.

Lynching?

A trial and execution carried out by an unofficial group or mob, usually involving death by hanging.

The 'Fair Deal' programme Truman presented in 1945 was designed to tackle what issues?

Economic and social domestic problems

What did Truman call his revised social and economic measures introduced in the 1949 State of the Union Address?

The Fair Deal

Name three key measures included in Truman's revised Fair Deal.

Federal aid to education, abolition of poll taxes, increase in minimum wage

Why was Truman's Fair Deal less successful than Roosevelt's New Deal?

It lacked the fierce economic necessity that allowed the New Deal to pass

By 1953, how many Americans were employed under Truman's presidency?

62 million

What was the unemployment rate by 1953 during Truman's administration?

Virtually zero

Which economic indicators reached all-time highs during Truman's presidency?

Income from agriculture, share dividends, and businesses

How much did the minimum wage increase under Truman?

From 40 to 75 cents an hour

How many veterans benefited from the GI Bill under Truman?

7.8 million

What housing achievements occurred during Truman's administration?

Millions of new homes financed, start on clearing inner-city slums

What negative effect did slum clearance have on African-Americans in northern cities?

Housing shortages led to skyrocketing rents

How did poverty levels change from 1949 to 1952 under Truman?

Fell from 33% to 28% of the population

Truman's approval rating in February 1952 was approximately what percentage?

22%

What major conflict contributed to Truman's unpopularity during his second term?

The prolonged Korean War

What economic issue was linked to Truman's declining approval rating during the Korean War?

Inflation

What scandal affected the Truman Administration in 1951?

Dozens of IRS officials forced to resign over alleged corruption

Why was Truman nicknamed the 'Senator from Pendergast'?

Because of his earlier political relationship with Missouri politician Tom Pendergast

What is the IRS?

internal Revenue Service is the US government agency responsible for tax collection and tax law enforcement

What was the purpose of HUAC?

House Un-American Activities Committee was formed in 1938 to monitor extremist groups

Joseph McCarthy became Senator for which state in 1947?

Wisconsin

What major world event had McCarthy served in before his Senate career?

The Second World War

What term is used to describe the act of making broad accusations of treason without evidence?

McCarthyism

What happened to McCarthy in 1954?

He was censured by the Senate

What led to McCarthy's rise to national prominence in February 1950?

He claimed to have a list of 205 Communist Party members in the US State Department

What global event in 1917 contributed to American fear of communism?

The Russian Revolution

Name one economic reason Americans feared communism.

The rich feared the economic consequences of communism

What 1949 event increased fear of the Soviet threat?

The successful Soviet nuclear test

Which American politician gained national attention through HUAC by pursuing Alger Hiss?

Richard Nixon

What was the estimated membership of the Communist Party USA during the McCarthy era?

Less than 80,000

What 1947 order by Truman aimed to root out communists in the federal government?

Executive Order 9835

What major US foreign policy in 1947 identified the USSR as an enemy?

The Truman Doctrine