1. Describe the monetary issues of the late nineteenth and early twentieth centuries that gave rise to the establishment of the
Federal Reserve and the weaknesses in key sectors of the economy in the late 1920s.
2. Understand the explanations of the principal causes of the Great Depression and the steps taken by the Federal Reserve, Congress, and Presidents Herbert Hoover and Franklin Delano Roosevelt to combat the economic crisis.
3. Discuss the human toll of the Depression, natural disasters, and unwise agricultural practices and their effects on the depopulation of rural regions and on political movements of the left and right, with particular attention to the Dust Bowl refugees and their social and economic impacts in California.
Terms : Hide Images
| 707453061 | Causes of the Depression | A. Black Tuesday - October 1929 -15% drop in Dow Jones(43 pts) B. Lack of Economic Diversity - too much dependence on basic industries - decline in sales afflicted steel, oil, rubber industries C. Inadequate Distribution of Wealth, Weak Demand - consumers had little purchasing power - proportion of profit was small - profits principally severed capital expansion D. Bank Failures - wall street banks failed because of reckless investments - tight money supply led to declining prices - led Federal Reserve to increase interest rates E. Declining Exports - foreign demand of exports declined - US increased tariffs to keep business within borders F. Unstable International Debt Structure - England struggled to repay American banks - US refused to relive foreign debts | |
| 707453062 | Economic Indicators (1930-1933) | -American GNP declined 25% -Capital investment declined from 16.2B to 300M -Consumer Price Index declined by 25% -25% of American workforce was unemployed. -Businesses cut workers in aim for lower wages and hours | |
| 707453063 | Black Tuesday | October 29, 1929; date of the worst stock-market crash in American history and beginning of the Great Depression. 16 Million shares were traded and the industrial index(Dow Jones) had dropped 43 points. | |
| 707453064 | Reparations | The reparations that were established at the end of World War I had proven too large for Germany and Austria to handle; they were no more able to pay the reparations than the allies were able to pay their own debts from American banks. | |
| 707453065 | Breadlines | was embarrassing for Americans to accept aid. However, during the Depression, breadlines stretched for blocks outside of soup kitchens. This shows that the average American in the depression was having a hard time even just to eat | |
| 707453066 | Global Depression | Economies around the world were interconnected and US economy was largest. Due to large debts after WWI and collapse of stock market worlds, economies failed. It led to a cascading domino effect as it soon toppled agriculture, production, and business. | |
| 707453067 | Dust Bowl | Region of the Great Plains, stretching from Texas to the Dakotas, that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages. With no opportunity to grow crops, farmers soon were crippled by the natural disaster. Although the farm economy had continued to produce, they produced far more than American consumers could buy. Farm prices fell so low that few farmers made any profit at all from crops. | |
| 707453068 | Okies | the farmers, who in the Great Depression, were forced to move because of the Dust Bowl; came from Oklahoma. They traveled west in search for new economic opportunity, however they found conditions to be no better than those they had left. Many worked as migrants, traveling from farm to farm picking fruit and other crops at low wages. | |
| 707453069 | Shantytowns | Due to econmoic downturn, problems of malnutrition and homelessness grew at an alarming rate. On the outskirts of town, these sprang up in which families lived in makeshift shacks constructed of tin, wood planks, and other debris. Other homeless people sleped in freight cars, city parks, subways, or even sewer ducts. | |
| 707453070 | Scottsboro Case | Nine black teenagers were taken off a freight train in a small town in Alabama and were arrested for vagrancy and disorder. Later, two white women accused the boys of raping them, and although there was significant evidence to suggest the women were lying, an all-white jury convicted all of the boys and eight were sentenced to death. However, with the Supreme Court's decision to overturn the convictions in 1932 and with the support of an organization associated with the Communist Party, the International Labor Defense, all of the defendants eventually gained their freedom. | |
| 707453071 | NAACP | The depression was time of important changes in the role and behavior of leading black organizations. This association began to work to win a position for blacks within labor movements; supporting the Congress of Industrial Organizations and helping to break down racial barriers. Its secretary, Walter White implored blacks not to work as strike breakers. Such efforts led to more than half a million blacks being able to join the labor movement. | |
| 707453072 | Japanese American Citizen League | Formed in the 1930s; Japanese-American businessmen overcame obstacles by changing the Nisei and encouraging them to become more assimilated. By 1940, it had nearly 6,000 members. | |
| 707453073 | John Steinbeck, "The Grapes of Wrath" | 1939 - A novel that was about "Okies" from Oklahoma migrating from the Dust Bowl to California in the midst of the Depression. It expressed the hardships that many Americans had experienced through the agrarian lifestyle in the west. | |
| 707453074 | Dorothea Lange, "Migrant Mother" | photo, one of most recognizable symbols for the Depression which supported New Deal. It conveys a message of helpless need that characterized a large proportion of American workers during the Great Depression | |
| 707453075 | Walt Disney | The champion of animation and children's entertainment. He created the character of Mickey Mouse and other popular feature length animated films. Produced "Gone with the Wind" and "The Wizard of Oz" both released in 1939. Hollywood did little to challenge popular culture on issues of gender and race. His productions brought families and countries together. | |
| 707453076 | Frank Capra | Director that celebrated small simple virtues and common people in comparison to the selfish, corrupt values of the city and urban rich; criticized the wealthy and politicians in films like "Mr. Deeds Goes to Town" and "Mr. Smith Goes to Washington" | |
| 707453077 | Spanish Civil War | In 1936 a rebellion erupted in Spain after a coalition of Republicans, Socialists, and Communists was elected. General Francisco Franco led the rebellion. The revolt quickly became a civil war. The Soviet Union provided arms and advisers to the government forces while Germany and Italy sent tanks, airplanes, and soldiers to help Franco. It also attracted a group of Americans that formed the Abraham Lincoln Brigade and traveled to Spain to join in the fight against the fascists | |
| 707453078 | Herbert Hoover's Presidency | a Republican known for his integrity who won the election of of 1928. He had to deal with the Great Crash of 1929, which caused the Great Depression. He signed the Norris-La Guardia Anti-Injunction Act. His belief in "rugged individualism" kept him from giving people direct relief during the Great Depression. He tried to adopt a voluntary cooperation for recovery; use government spending to end crisis (proposed tax increase). Agricultural Marketing Act/ Hawley-Smoot Tariff (1930); Democrats won House and got large amount of seats in 1930 election; he was blamed for economic problem; lost 1932 election. | |
| 707453079 | Agricultural Marketing Act of 1929 | established the first major government program to help farmers maintain prices. A federally sponsored Farm Board would make loans to national marketing cooperatives or establish corporation to buy surpluses and raise prices. In tie with Hoover, he attempted to protect American farmers by increasing agricultural tariffs. Ultimately did not help the farmers significantly. | |
| 707453080 | Reconstruction Finance Corporation (RFC) | Created in 1932 to make loans to banks, insurance companies, and railroads, it was intended to provide emergency funds to help businesses overcome the effects of the Depression. It was later used to finance wartime projects during WW II. It operated on a large scale as in 1932, it had a budget of $1.5B. However, the new agency failed to produce any significant recovery from the Depression. | |
| 707453081 | Farmers' Holiday Association | formed by a group of unhappy farm owners, it endorsed the withholding of farm products from the market- in effect a farmers' strike, which although blockading several markets ended in failure. | |
| 707453082 | The Bonus March | 1932; involved WWI veterans demanding financial aid immediately from the government in the form of bonuses rather than that of the ones promised for 1945; some built shacks near Washington DC until troops led by future war heroes, Eisenhower, Patton & McArthur drove them out with tanks and bayonets; the incident destroyed what little public support Hoover had left. | |
| 707453083 | Election of 1932 | The Republican nominee was Herbert Hoover and the Democratic nominee was Franklin D. Roosevelt. The Republican platform included higher tariffs, keeping the gold standard, and continuation of Hoover policies. The Democratic platform included the repeal of prohibition, a 25% cut in government spending, unemployment aid, and a "new deal" for America. Roosevelt won with 472 electoral votes and all but 6 states. His victory paved the way for his "New Deal' policies and optimism in the country "nothing to fear but fear itself (Inauguration speech)." | |
| 707453084 | Franklin Delano Roosevelt | Won 1932 election with 472 electoral votes and all but 6 states. He expressed his "New Deal" policies to combat the effects of the Great Depression. He avoided cultural issues such as religion and prohibition and emphasized the economic grievances that most Democrats shared. The New Deal experimented with objectives to achieve the three R's: Relief, Recovery, and Reform. | |
| 707453085 | Fireside Chats | The informal radio conversations Roosevelt had with the people to keep spirits up. It was a means of communicating with the people on how he would take on the depression. Upon taking office he established the bank holiday which shut down the banks for four days. While the banks were closed, the federal government distributed over a billion dollars from the Reconstruction Finance Corporation into the banking system. | |
| 707453086 | Emergency Banking Act | A government legislation passed during the depression that dealt with the bank problem. The act allowed a plan which would close down insolvent banks and reorganize and reopen those banks strong enough to survive. The reopened banks were under the supervision of the Federal Reserve Board. The board used the Reconstruction Finance Corporation to buy stock in major national banks. | |
| 707453087 | 21st Amendment | repeals the 18th amendment; ended prohibition of alcohol. | |
| 707453090 | Agricultural Adjustment Act | Passed on May 12, 1933; restricted crop production to reduce crop surplus; goal was to reduce surplus to raise/control value of crops; producers of basic commodities would decide on production limits for their crops; farmers paid subsidies by federal government for idle land; declared unconstitutional by the Supreme Court in US vs Butler on January 6, 1936; Ironically, it destroyed produce and livestock instead of providing relief to farmers. | |
| 707453092 | Agricultural Subsidies | A sum of money granted by the government or a public body to assist and industry to business so that the price of a commodity or a service may remain low or competitive. In the AAA, the government would pay these to farmers for leaving their lands idle; it gave inventive to evict tenant farmers to allow the land to lay idle. Ironically, the AAA destroyed produce and livestock instead of providing relief to farmers. | |
| 707453094 | National Industrial Recovery Act (NIRA) | It's goal was to create jobs and increase consumer buying power. To do this, it created the National Recovery Administration which set codes/standards to stabilize prices, regulate fair trade practices, wages, working conditions, prices, and production levels. By 1935, the Supreme Court would strike down the act deeming it was unconstitutional; invalidating workers' rights to organize and bargain collectively. | |
| 707453096 | National Recovery Administration (NRA) | 1933; it's goal was to eliminate cut-throat competition by bringing industry, labor, and government together to create codes of "fair practices" and to set prices. It was created by the National Industrial Recovery Act. the codes were intended to reduce "destructive competition" and help workers by setting minimum wages and maximum weekly work hours. It abolished child labor and also gave workers the right to form unions. They also awarded a "Blue Eagle" to every company complying with the codes. Critics of it believed that it allowed large producers to dominate the code writing process and that prices were artificially raised too high for the market to sustain. However, industrial production still declined after it's establishment due to lack of enforcement of the codes. By 1934, Hugh Johnson was fired. | |
| 707453098 | Public Works Administration | 1935; established to administer the National Industrial Recovery Act's spending programs, it siphoned the spending so that the budget would only trickle out. It distributed $3.3B for construction and repair of public buildings and infrastructure. | |
| 707453100 | Minimum Wage | the lowest wage, either by government regulation or union contract, that an employer may pay an hourly worker. It was thought that this would raise consumer purchasing power and increase employment. | |
| 707453102 | Tennessee Valley Authority | one of the most celebrated and prosperous accomplishments of the New Deal; it authorized the completion of the dam at Muscle Shoals and build others in the region to generate and sell electricity to the public at reasonable rates. It's construction encouraged comprehensive redevelopment of the entire region; development of local industries, a substantial program of reforestation, and helping of farmers improve productivity. It improved water transportation, virtually eliminated flooding in the area, and provided electricity to thousands. Because of the low rates that the electricity was sold, private power rates declined. | |
| 707453104 | Federal Deposit Insurance Corporation (FDIC) | A federal agency which insures bank deposits, created by the Glass-Strengall Banking Reform Act of 1933. It increased federal authority over unregulated areas of the economy by guaranteeing all bank deposits up to $2,500. | |
| 707453106 | Securities and Exchange Commission (SEC) | established to police the stock market; a branch of the treasury department. It issues licensees to stock markets, investigates improper corruption of insider trading and requires valid corporate income statements. It led to trials of once well respected wall street figures for larceny, and fraud. | |
| 707453108 | Government "dole" | a federal aid, first established by the Federal Emergency Relief Administration, who's goal was to provide cash grants to states to prop up bankrupt relief agencies. Harry Hopkins was put in charge who disbursed the grants widely and rapidly. Both Roosevelt and Hopkins both were skeptical and doubtful about establishing a government "dole". | |
| 707453110 | Work Relief | Roosevelt's plan to help the unemployed with programs, like the Civilian Conservation Corps, to give needy people government jobs | |
| 707453112 | Works Progress Administration | Included in legislation called "The Emergency Relief Appropriations Act," the WPA was directed by Hopkins and expanded the federal government's effort to provide direct relief. The WPA became the main relief agency from 1935 to 1943, keeping an average of 2.1 million men employed. In total, it employed nearly 8 million men. It funded highway construction, flood control, reforestation, housing, slum clearance, and rural electrification as well as educational, health, and sanitation projects. | |
| 707453114 | Civil Works Administration | November 9, 1933- Harry L. Hopkins was put in charge of the organization. They created construction jobs, mainly improving or constructing buildings and bridges. In just one year, they cost the government over $1B and was cancelled. So much was spent on this administration because it hired 4 million people and was mostly concerned with paying high wages. | |
| 707453116 | Civilian Conservation Corps (CCC) | established early on in the new administration. It was designed to provide employment to millions of young men who could find no jobs in the cities. they created camps in national parks and forests and in other rural wilderness settings. The workers worked in an environment where they would plant trees, build reservoirs, develop parks, and improve agricultural irrigation; the camps were segregated and mainly consisted of whites. | |
| 707453118 | Farm Management Administration | stressed rural rehabilitation, tried to bring farmers together on government owned farms, but did not work as farmers wanted ownership. | |
| 707453119 | American Liberty League | A conservative anti-New Deal organization; financed by the DuPont family. It criticized the "dictatorial" policies of Roosevelt and what it perceived to be his attacks on the free enterprise capitalism. | |
| 707453120 | Dr. Francis E. Townsend | created the Townsend Plan, that advocated pensions of $200 per month for all unemployed Americans over 60. He proposed to pay for the pensions with a tax on business transactions. Townsend's program in 1933 was largely parallel to the Social Security Administration that would emerge in 1935. His plan made little progress in congress. | |
| 707453121 | Father Charles E. Coughlin | a Michigan "radio" priest, spoke out in virulent tones against established institutions, waging a populist attack against banks and, in many cases, their Jewish executives. Coughlin called for nationalization of the banks, and a remonetization of silver and an issuing of greenbacks; admired Mussolini and Hitler. | |
| 707453122 | Huey Long | a political boss, governor of Louisiana, and a rival to Roosevelt said the New Deal did not go far enough. He had advocated a "Share the Wealth" program in which every family was guaranteed a minimum income of $2,500. He was assassinated in 1935. | |
| 707453123 | Second New Deal | Some thought the first New Deal (legislation passed in 1933) did too much and created a big deficit, while others, mostly the elderly, thought it did not do enough. Most of the 1933 legislation was ineffective in stopping the Depression, which led F. D. R. to propose a second series of initiatives in 1935, referred to the Second New Deal. His second new deal became more focused on the international crisis and a embroiled fight over the Supreme Court. His Second New Deal consisted of: The Farm Security Administration, The Fair Labor Standards Act, and a revised version of the Agricultural Administration Act. | |
| 707453124 | National Labor Relations Board | Created by the National Labor Relations Act, also known as the Wagner Act it was created in the 1930's by congressman Wagner who was sympathetic to labor unions. The National Labor Relations Board was an administrative board that gave laborers the rights of self-organization, collective bargaining, and basic laws defending minimum wage and 40 hour work week. Roosevelt was unhappy with the act, but he realized his own political future would depend in part on responding to the workers' demands. | |
| 707453125 | Industrial Unions | arose in the 1930s, which advocated that all workers in a particular industry should be organized in a single union, regardless of what functions the workers performed. United in this way, workers would greatly increase their power. | |
| 707453126 | Congress of Industrial Organizations | Created by John L. Lewis, it rivaled the AFL; originally began as a group of unskilled workers who organized themselves into effective unions. It had been more receptive to women, and blacks. They were a more militant organization than the AFL. by 1936, it was engaged in major organizing battles in the automobile and steel industry. As there popularity grew they came known for the revolutionary idea of the "sit down strike", there efforts lead to the passage of the Fair Labor Standard Act and the organization continued to thrive under the New Deal. | |
| 707453127 | United Auto Workers | employed the "sit-down strike" technique after making little progress in winning recognition from corporations. It helped them get recognized by General Motors and other automobile companies. | |
| 707453128 | Sit-Down Strike | method of boycotting work by sitting down at work and refusing to leave the establishment until a union's demands are met. | |
| 707453129 | Memorial Day Massacre | On Memorial Day 1937, a group of striking workers from Republic Steel gathered for a demonstration in South Chicago. When they legally attempted to march toward the steel plant, police opened fire. 10 demonstrators were killed; 90 were injured. The harsh tactics of Little Steel companies succeeded as the strike of 1937 failed. | |
| 707453130 | Social Security Act | Provided for old age, survivors', and disability insurance, as well as unemployment compensation. Unemployed elderly Americans would receive an immediate $15 a month in federal assistance. Further, under the system, employers and employees funded a pension through a payroll tax. Pension payments from $10 to $85 per month would then begin in 1942. The various aspects of the act were conceived as "insurance" and not "welfare". It intended to provide a minimal level of sustenance to older Americans and thus save them from poverty. | |
| 707453131 | Unemployment Insurance | A joint state-federal program under which state-administered funds pay a weekly benefit for a limited time to eligible workers when they are involuntarily unemployed. | |
| 707453132 | Election of 1936 | The candidates were between Franklin D. Roosevelt from the Democratic Party and Alfred M. Landon from the Republican party. The principal issue was how to exploit the New Deal's popularity. In the end, FDR won in a landslide victory as he carried every state except Maine and Vermont. | |
| 707453133 | Party Realignment | The election results demonstrated the part realignment that the New Deal had produced.The democrats now controlled a broad coalition of western and southern farmers, the urban working classes, the poor and unemployed, black communities of northern cities, and progressives. The coalition would make up a substantial majority of the electorate. It would be a lasting effort as it would be decades before the Republican Party could create a lasting majority coalition of its own. | |
| 707453134 | Court-Packing Plan | proposed to increase the number of justices to 15, claiming that too many Supreme Court justices were over 70 years old and should have retired. Roosevelt wanted to "pack the court" because the AAA and the NIRA had been deemed unconstitutional. The plan was NOT backed by congress, however by 1941, due to deaths and retirement, Roosevelt would have appointed 7 new justices. | |
| 707453135 | Recession of 1937 | A second period of economic decline during the Great Depression that resulted because FDR had largely stopped spending money and attempted to create a balanced budget, which lessened the effects of the New Deal on the people by laying off many more workers and giving less and less to the people. | |
| 707453136 | Legacy of the New Deal | - The New Deal did not fully solve the economic and social crisis of the Great Depression. Employment would not return to full levels until World War II. However, it established an unprecedented "safety net" or "welfare state" for millions of Americans. The New Deal reformed the federal government so that it would function as a "broker state" to balance the interests of business, labor, and the public. - The federal government adopted Keynesian economic policies, took on budget deficits and a long-term debt to fund employment and recovery. - Established institutions such as Federal Deposit Insurance, the Securities and Exchange Commission, and Social Security would remain vital to the nation going forward. - The democratic party would enlarge it's overall appeal to citizens; included blacks and other reform minded republicans. FDR would sympathize toward blacks and included significant reforms against popular belief. Roosevelt included blacks as advisers in his administration. Mary McLeod Bethune and Robert Weaver took roles as the first African-American cabinet members as first secretary of the Department of Housing and Urban Development. ("Black Cabinet") - Advanced the social and political influence and power of women. Eleanor Roosevelt herself was the most active and public first lady in the nation's history. Frances Perkins, Secretary of Labor, led the effort to establish Social Security. More than 100 women were named to federal government positions during the Roosevelt administration. - The organized labor movement prospered during the New Deal Era. The National Labor Relations Act/Wagner Act solidified collective bargaining rights, and basic laws defending the minimum wage and the 40 hour work week were established for workers and unions across the nation. |
