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I am back from mourning my young daugther. Times have been hard, but I am back to the political scene. I fear that Sherman drove the Republicans into decay, and lead us directly into a Ryan victory.. If I had been there to defeat him in the primary, things might have been different. I also congratulate president-elect Ryan on his victory. I am worried about his stance on Jim Crow, but I will remain loyal to the president, right or wrong.

Senator Carlsson of Alabama
 
Ryan (1st Term): The Collapse

The election of 1929 was one of the greatest upset victories in American history, and also proved to be predictive of the great upheaval of the decades to follow in changing the American political landscape. The election of 1929 made final the fall of the Federal Party, which had, more than any other, been the truly dominant political force of the half century following the Reshuffle. Of course, in the opinion of most historians and Federals, the Federal Party died after 1925, and the campaign run by William Taggarman was that of a ghost party; a Republican monster wearing the skin of the deceased Federals.
It was precisely this criticism, leveled at him most of all by the party that was supposedly his support base that caused Taggarman to drop out in late December, and throw his support behind Patrick Ryan. The Federal Party never recovered from this, its congressional members quickly divvying themselves between the Independents and Progressives, with a tiny minority even heading for the Republican side of the aisle [1]. It was this end to the division of the left and his role as the candidate who actually campaigned and put himself out there that allowed Ryan to capture the votes of a population that now voted largely on their opinion of social issues like pensions and Jim Crow since economic prosperity seemed guaranteed.

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1. Results for the Election of 1929.​

Once in office, Ryan was faced with the reality of his third-party victory, as the largest faction in Congress was still the Republicans, with the Progressives second after finally achieving Congressional victories against the ailing Federals in the 1927 mid-term elections and defections after the final Federal collapse. The gains of the Progressives in 1929 though, were dwarfed by those of the Independent section of Congress. Having two years earlier accounted for only 44 seats in the House and 3 in the Senate after the Progressives became too large to be considered a part of the Independents, they now accounted for 122 seats in the House and 23 in the Senate after Federal congressmen who did not count themselves as Progressive defected or were elected as Independents.
Congress was thus more liquid than at any other time in its history; victory would rest in the hands of the party that swayed the Independents. The first major bill to go through Congress in Ryan’s term though, passed near unanimously. The Stewart War Debt Act, which acted to solve the impending debt crisis threatening to halt the Anglo-French heart of the European Economy by allowing alternate methods of payment [2].

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2. William F. Stewart, c 1930.​

The next items on Ryan’s agenda proved much more controversial. The first was the higher brackets’ tax hike to 10%, which was intended to pay for the expansion of social programs to their previous levels. The tax hike failed due to opposition from the Republican Party and independents unwilling to raise taxes, and social programs would be expanded on the current budget, with the costs having to be offset by growth in the same way the loss of revenue from the Sherman-era tax cuts was still being offset.
The second item on the President’s own agenda was the bold move of extending regulation to the US Banking System. The Banking Safety and Stability Act of 1929 would prove to be one of the most controversial pieces of regulatory legislation in American history, and was so from day one. The proposed BSSA, being the signature piece of legislation in Ryan’s attempt to bring regulation back into the American economy, and into a historically unregulated sector at that, was always going to be a close battle. However, Ryan knew that if he could bring regulation to banking at least partially, he could bring it back to the system as a whole.
The BSSA entered debate in April 1929, and did not move to a vote until September 14th. In the interim, Ryan had already drawn up many more regulatory acts to propose should the BSSA pass, and brought the funding of numerous social programs back to Jarvis-era levels. The President and his allies in Congress had even begun to prepare for a campaign to properly enforce the Civil Rights Act of 1921 and push for further bills like it. The great social plan of Patrick Ryan and the Progressive Party however, would be placed on hold by the chain of events the passage of the BSSA, by a 234-201 margin in the House and 54-46 margin in the Senate, set in motion.

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3. A crowd gathers outside the NYSE on September 15th.​

The New York Stock Exchange opened on September 15th 1929 with the Dow standing at an all-time high of 1321.32 points. In the morning, shares for companies in banking took a dive, as was expected after the first proper extension of regulation to that sector in history. What nobody could have expected was the crash that followed. The problem stemmed from US banks having loaned too much money, emptying the banks’ reserves, which prompted the banks to funnel money from existing deposit accounts into loans.
In order to avoid this being found out, banks began investing in the booming stock market with the returns from loans. This allowed them to essentially turn 10 dollars repaid of a loan into 20 dollars in shares, which they could then sell in case a customer wished to withdraw money from their deposit box [3]. This meant that around 30-40% of the NYSE’s shares were actually in the hands of banks. When their stock brokers began selling more than usual in the morning to account for the larger number of withdrawals due to the BSSA, shares outside of the banking system began to decline in value abnormally, which set off a wave of panic selling that fueled more panic selling.
Black Sunday saw the Dow drop by 32%, closing at 898.44. The next day, Black Monday, saw a 28% drop as investor confidence plummeted after the beating they had taken the day before. The Wall Street Crash of 1929, or Great Crash, and the following bear market would wipe out 89% of the Dow’s value before it bottomed out at 145.21 points on May 1st 1932. By then, the United States would be in the middle of history’s worst economic downturn; the Great Depression.

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4. Crowd of protesters outside of the Bank of United States, March 11th 1930.​

The Great Depression did not become reality immediately after Black Sunday. Instead it bided its time, merely the ghost of a possibility until March 10th 1930, when the main branch of the Bank of United States was faced with the running out of the money they had salvaged from their share of the failing stock market. Now they had no money to give the man demanding to withdraw the money he held in a deposit account at the bank. After being informed that the bank could not return his deposit, the man stormed out, spreading the news in anger. The Bank of United States declared insolvency later that day, mobbed by the biggest bank run in its history.
The failure of the Bank of United States now set off bank runs all around the country, as people scrambled to take their hard-earned savings out of banks that were slowly being revealed to have, on average, only a third of the money that had been on their books, losses having been written off after bad loans and the Black Sunday. These bank runs then caused a jump in bank failures, causing an average of 4 failures a day in May 1930, over twice the 1920s average of 1.8 failures per day. The drying up of American credit then caused companies outside of the financial sector to stop expanding.
This naturally prompted Washington to put all other projects on the back burner, and Ryan set to work on feverishly attempting to contain the damage of the financial crisis before it spread properly to the rest of the economy. The first measure proposed and implemented, in May, was a federal insurance on deposits of up to $2,000. This however, proved to be ineffective, as only the Big Three and about a third of banks were in a position to collect the insurance [4]. The majority of American banks were too far isolated from the safety cushion of the Federal Reserve and Federal government to be able to claim the deposits before insolvency set in [5].

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5. Philip McCahill, Secretary of the Treasury, c. 1930.​

When the rate of bank failures continued to pick up, and thus trust in the Federal Deposit Insurance Act faltered, Ryan and Secretary of the Treasury McCahill turned to the Federal Deposit Account Transfer Act. The FDATA set up a system by which depositors of insolvent banks could transfer their accounts to solvent banks at 30% of the value. This 30% would come from the federal government and what money was left in the insolvent institution.
On November 1st 1930, the FDATA soared through a congress that had become willing to pass almost any measure to halt the crisis in the banking system that was now spreading to the rest of the economy. 1929 had ended with sluggish growth of 2% for the whole year after post-Black Sunday losses and stops to expansion by companies as demand contracted. By November 1930, demand had contracted to the point that the US economy had in fact experienced negative growth for the first time since 1894 [6].
The FDATA proved marginally effective at first, as the smaller banks accepted account transfers from insolvent banks on the East and West coasts, but then ran out of effect in the same way that the FDIA had. This time, it was due to banks refusing to accept new account transfers after it became obvious that almost all the new accounts were emptied and then closed by people who had already been about to do so when their old account became worthless upon their bank’s insolvency. The government’s plans were thus running low by the time McCahill declared FDATA to be a failure at a March 1931 Cabinet Meeting.

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6. A Post-Cabinet Meeting Press Conference, c. 1931.​

The plan that replaced FDATA was much less coordinated. The President and McCahill both acted to convince the Federal Reserve to lower its requirements for loans, so that at least part of the banking system would have liquidity, and declared a bank holiday so that financial institutions to have a moment of respite from the economic onslaught. This plan proved the most effective of the three plans the Ryan administration tried in the early days of the Depression, dropping bank failures to 2-3 a day for most of 1931. Although banks did prove to remain susceptible to runs and the financial crisis flared about every two months, forcing another bank holiday each time before the panic was calmed.
By 1931 however, the Depression had hit hard outside of the financial sector, and a drastic shift of focus there was necessary. In April 1931, unemployment stood at 20%, and the President set about remedying this by approving an unprecedentedly large federal grant of $100 billion to the State Volunteer Services, in order to increase the hiring power of the organizations, which had experienced severe marginalization since their heyday in the first decade of the century. Ryan then created a federal level public works program with the National Public Works Act, which would fund massive building projects such as the Jarvis Dam [7].
As with the banking crisis, the federal government’s solutions proved to be effective to some extent. The massiveness of the government’s investment in public works lowered unemployment to 14% by late 1931, after which it began rising again as layoffs continued in the private sector and the initial funds of the SVSs and NPWA slowly depleted throughout 1932. In August 1932, unemployment reached its height at 31% after the completion of numerous public works projects and a large wave of layoffs in the auto industry.

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7. Unemployed wait for coffee and donuts, c. 1932.​

While the coasts and industrial cities were suffering, nothing proved worse than the disaster that befell farming. Agriculture in the 1920s had been a fragile business, with the exponential increase in American farm production overshooting growth in demand by nearly 12% regularly, leaving large surpluses of foodstuffs that needed to be sold, but could not. State governments in Oklahoma, Kansas, Texas, Nebraska and Iowa had attempted to solve the problem by buying up the surplus themselves. This though, had proven itself unsustainable as funds began to dry and surpluses became ever larger [8].
Farmers were thus in a state of constant, cutthroat competition as they all flooded the market with a 12% surplus. The slightest change for the worse could see miles and miles of farm go under. In the 1930s, circumstance conspired to obliterate mid-western farmers with the drop in demand caused by the Depression and the dreaded Dust Bowl. This monstrosity, caused by the brutal over-farming of the land, turned Oklahoma, Kansas and much of Northern Texas into wastelands for most of the decade. Already faced by bankruptcy as demand for their products dropped further, farmers were brutalized by the destruction of what little sellable product they could make.
The situation took a turn for the worse in 1932, when the Dust Bowl hit in full force, and kicked off the migration of numerous farmers out of their lands, and toward areas where they were told work was easier to find. Of course, this work was easier to find only by the terrible standards of 1930s agriculture. The poor, ragged farmers found themselves in cities with no work, no experience, and no hope, with state and federal governments unable to help them due to having to ration their aid more carefully due to mounting financial strain.

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8. A farm abandoned due to the Dust Bowl, c. 1932.​

While the United States sank deeper into Depression, Europe also began to feel the effects of the American debacle. In 1930, the financial crisis crossed over into Anglo-French Banking, and fueled the bear market of the London Stock Exchange that had begun as early as the passage of the SWDA. The difference in the approaches of Paris and London to that of Washington however, was the speed at which their resistance to extreme measures collapsed as a result of their already precarious pre-Crash situation.
Both countries went off the Gold Standard in April 1931, after which their central banks flooded the system with liquidity. This apparently saved their banking systems, which were already much easier to control than the US system thanks to previous experience, but it did not prevent the horror of the Depression from crossing the Atlantic as consumer confidence faltered with this final financial blow. In Britain and France, unemployment shot past 15% in 1931, and stayed there for most of the following decade.
In Germany, the Depression proved to be an excellent weapon for the remnants of the old Imperial Party, now reformed under the control of a man called Adolf Hitler as the National Socialist Democratic Party, or Nazi Party, to gain enough votes in the 1932 parliamentary elections to become leader of a coalition of conservative parties. The Federal Republic of Germany that had been formed from the ashes of the old one during the Civil War is seen as having died in the 1932 election. Within four years, Germany would have a Kaiser again, and Adolf Hitler would be his Chancellor for life; the true and only leader of Germany.

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9. Adolf Hitler during the 1932 German Parliamentary Campaign.​

Europe thus slipped closer to the possibility of going through a rematch of the Great War to truly solve the issues at the heart of a continent forever locked in mortal combat with itself. Across the Atlantic, and south of the Rio Grande, South America’s industrial giants also slipped into recession. Chile, Ecuador and the UPCA all experienced major downturns and unemployment close to 20%, while Brazil hovered near 40% in its budding industrial cities. Whether the Depression would result in the kind of political change in South America that had already come to pass in Germany was anyone’s guess [9].
In the United States, there was no danger of a radical party coming to power, but whether the Progressives could keep the slight edge they’d gained in Congress in the 1932 mid-term elections was a real question as the Depression raged on, seemingly with no chance of getting better. Ryan so far had stayed from the same kind of truly radical action as the British and French, as there had been a general underestimation by all parties of the how severe the recession would get.
Lack of experience with recession, overestimation of the strength of the American economy, a lack of will to engage in action outside of the tried and tested methods that had beaten the Recession of 1893, and a converging of environmental, human and economic factors had thus ended with the United States reaching its situation in December 1932. Government funds were beginning to run low, unemployment was staying doggedly at the 26-28% mark, and an air of prolonged malaise had set over the country. As the National Conventions of 1932 drew closer, it was no wonder that Ryan confided in McCahill that he “was praying for a miracle.”

[1] - Like the Democratic Party though, the last of the Big Three post-Reshuffle parties was never officially dissolved. Instead it simply faded away as the last few life-long Federal congressmen who ran under its banner retired or passed away.

[2] – The Stewart War Debt Act’s most important effect was to place nearly half of British and French gold reserves in the hands of the United States Treasury by April 1931, when the British Pound and French Franc were both removed from the Gold Standard.

[3] – In practice, the selling did not happen at the moment the customer wished to withdraw, but rather banks sold a portion of their shares in the morning and transported the revenue to their vaults, where it would be available in case of withdrawal. Most banks would then reinvest what was left at the end of the day into more shares.

[4] – The Big Three of American banking were JPMorgan & Co., Bank of the Americas, and Citibank, which together accounted for 15-20% of the Banking System. They escaped the Crash relatively unscathed due to their size, and the carefulness brought by years of experience, which allowed them to post losses less than half the total value of the company.

[5] – Another factor was the Federal Reserve’s unwillingness to act, having been mostly inactive since the end of the Great War.

[6] –US GDP fell 12% in 1930, from $376,720,000,000 (constant 1928 dollars), to $331,513,600,000.

[7] – Named after the former president, the Dam began construction in 1932, and was finished in 1937.

[8] – Named after the two governors who came up with the idea to coordinate the efforts among the five states, Iowa’s Terry Donnell and Oklahoma’s Jerome Weir, the Donnell-Weir Surplus Plan was implemented in 1924, and abandoned three years later in 1927.

[9] – Especially in Chile, there was a possibility that the pre-war Allianza Liberal, which had become heavily revanchist and intent on “reclaiming” Chile’s place in the world, would come out on top in the next elections in 1934.

---------------------------

Exceptional Situation(s):

Well, that was a whopper. At 3,310 words, it just inches out the Civil War update for 1858 to become the longest update of the AAR so far.

Firstly, I’m sorry; Hitler’s just too perfect a guy to not utilize in a story.

Secondly, it’s primary time. Parties are: Republican, Progressive, Independent.

May God have mercy on those who debate this one.
 
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((BBB does Mussolini exist in this timeline or is Italy still a HMs government?))
 
((BBB does Mussolini exist in this timeline or is Italy still a HMs government?))

I'm currently leaning toward there being no big-jowled cartoon villain in Italy, but there's at minimum 8-9 years before it's relevant to us whether he exists or not.
 
((BBB does Mussolini exist in this timeline or is Italy still a HMs government?))

(Within the terms of v2 one could say that Italy remained a HMS gov throughout the mussolini period, just a Hms gov with a Fascist Ruling Party)
 
((Probably Prussian Constitutionalism, in PDM at least. Point was if it was still democratic.))

T.H. Terrance Shot Dead
11th December 1932
T.H. Terrance, President of the United States during the Great War has been shot dead in the Venetia region of Italy. Mr Terrance, who has being touring Europe to promote peace, reconciliation and democracy was visiting an Italian war cemetery with the Italian Prime Minister and the head of the Italian military when a man shot at them from the assembled crowd. He fired two shots; one missing and the other hitting Terrance in the chest, before being apprehended. Terrance retained consciousness for a few hours, but weakened further by his age of 61, died in hospital the next day at 7am. The person who shot him is believed to be a German ultranationalist, from South Tyrol whom wished to kill the Italian leadership due to their control over the primarily German inhabited region, which was seized during the Great War.
 
John T. Sherman murdered!
20th December 1932
Just last night, former president John T. Sherman was found dead in an alley in Chicago. His body was riddled with bullet holes, presumably from a Thompson submachine gun. Though it can only be guessed whom could be responsible, early speculation places the blame on gangsters with links to Al Capone.
 
((Oh dear, it does seem to have become a very dangerous place all of a sudden - two presidents dead in a fortnight!))
 
20 December 1932

Former President Joseph Jarvis, alive and well, met with his former rival, Kevin McCahill, at the latter's Kensington home; the two old campaigners discussed politics, civil rights, sports, and had a lovely tea-time. Shortly thereafter, the former president left on his way to give a speech on war when the news that John Sherman had been shot reached him; when he arrived at the speaking hall, Jarvis gave an impassioned speech decrying this political violence, before moving to his origional speech about criticising the growing storm in Europe.

((ooh, the Jarvis Dam... bet all those memories of good times under Jarvis are starting to roll through people'sminds... Ryan is going to have a hard time winning reelection...))

------

It seems the 1930's will be a dark time indeed; revanchism, a Great Depression, assassinations, and new, radical regime in Germany... I hope for the best for our President, or our new President, should Ryan fail to win a second term (if he pursues one).
 
Trade Policy : Free trade
As you can see the free trade has always brought wealth in the pass of history, then why don't we profit of it to?
Economic Policy : State Capitalism
In this dark times, the best is to keep our industry as well as it is till we get over this crisis.
Religious Policy : Pluralism
Everyone has the right to perform thier religious beliefs without being agressed in any way
Citizenship policy: Full citizenship
No one must be discriminated in any way
War policy : Anti-military
The National Army is standing only to protect from foreign or inner agression
(( I know its hopeless to try again but, anyway i will give my speech soon))
I will try to run as president under the republican banner.
 
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Name: Charles L. Longstrum
Age: 39 (Born 1893)
Political affiliation: Progressive
Brief bio: Charles L. Longstrum was born in Baton Rouge, Louisiana, as the son of a middle-class farmer. Generally a miscreant, he grew up as a traditional American whom celebrated the independence of the American spirit and tradition. He was also highly influenced by the generally idealized Progressives of his time. He went through several lines of work throughout the beginning of his life, failing at most of them and only having moderate success at best. Eventually, he began his political career and campaigned for governor in 1924, coming in third place. He ran again in 1928 on an anti-big business platform and campaigned with the slogan "Every man a king, but no one wears a crown." Longstrum's attacks on the utilities industry and corporate privileges were enormously popular, as was his depiction of the wealthy as "parasites" who grabbed more than their fair share of the public wealth while marginalizing the poor. Long won the 1928 election and has been governor ever since.

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((Oh lord... Huey Long. Get ready for propaganda and corruption, everyone! (well... more than usual...)))

Greetings, Governor Longstrum!
 
(( I am also Governor of Louisiana... :$ so I'll just say I lost re election to Mr. Longstrum...))

I, Constant Blancharde would like to congratulate Mr. Longstrum as the new Governor of Louisiana. I am now going to be touring the South and soon be running as congressman for Louisiana's third congressional district.
 
((Or you could've decided to run for Senate? Of course, your decision to become an independent could have played in role in a failed reelection bid...))
 
A press briefing given by vice-president Jenkins.
Now more than ever it is important for all of us to hang together. It was not the implementation of the presidents banking policy that caused the crash-but the fact that they were not enacted in time. The administrations new public work programs have have reduced unemployment, not greatened it. It is important for the welfare of our great nation to keep faith in our government. Together we will overcome this great challenge that has been laid before this nation.
 
Ladies and Gentlemen, I cannot help but notice an important fact. I, and most sensible politicians, opposed the BSSA. I was afraid that introducing excessive regulation would cripple our economy, and I can't help but think I was right. I am running for President on the Republican Ticket. My plan is simple:

1. Seek a repeal of the BSSA.
2. Return taxes to their previous level, to stimulate the economy.
3. A temporary reduction in the wages of all civil servants, who are able to afford it, to help pay for a temporary boost in unemployment insurance for those who need it most.
4. Tax incentives to those businesses hiring new workers.
 
2. Return taxes to their previous level, to stimulate the economy.

That would mean raising them back to 10%. The tax hikes did not pass on Republican-Independent opposition, and then the Depression took minds off of the budget and onto heading it off.
 
((Avindian, what would you do if you lost and were asked to be VP for the umpteenth time?))

I would support the former Vice-President's proposal ((barring the tax increase)).
 
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((Forgive me, Niko, in my rush to create my most favorite American of all time, I forgot to check if the position was occupied :())

Are you all mad!? We don't need less regulation, we need more! This disaster happened in the first place because those damn fat cat bankers were allowed too much power and too much influence!