The depression --history

"Hoovervilles", "Hoover Blankets," etc

-Makeshift shantytowns of tents and shacks built on public land or vacant lots. -Newspapers people used to provide warmth in these towns.

The "Dust Bowl"

A big drought that struck the center of the country, devastating farmers and turning that region of the country into the dust bowl. Severe and long lasting drought, and series of violent wind storms that picked up dark, nutrient-rich topsoil and carried it eastward-left behind sand.

Economic depression

A period of significant, prolonged economic decline, characterized by decreased business activity, falling prices, and high unemployment. (only happened about 6 times) in times of depression, consumers confidence and investments decrease, causing the economy to shut down. The classic example of this occurred in the 1930s the Great depression affected the global economy.

Economic recession

A period of temporary economic decline, lasting longer than a few months. It is visible in industrial production, employment, income, and wholesale-retail trade. Recession is a normal (albeit unpleasant) part of the business cycle. A recession generally lasts from six to eighteen months. Less severe than a depression.

"Black Tuesday"/October 29th, 1929

A record, 16.4 million shares of stock were sold (vs. the average of 4-8 million shares a day in 1928.) Overall losses amounted to $30 billion. Eventually, the stock market crash ened up affecting the people who had never owned a single share of stock, and even people from other countries.

Keynesian Economic Theory/Deficit Spending/ "Priming the Pump"

Believed it was the government's job to be involved in people's lives and to improve their quality of life. "_____" -spend money on things in a time of need.

How did the arrival of the Great Depression affect the lives of Americans of all geographic regions and socio-economic statuses? (I.e. families, men, women, children, the wealthy, African-Americans, farmers, etc.)

Children: in order to have some sort of livable income most children had to drop out of school in order to provide for their families end of leisure activities practically end of a childhood as you are forced to face such harsh realitites. If your parents cannot keep their house or have to start working more, family time is lost and you begin to take care of yourself.

Security & Exchange Commission (SEC) -first new deal

Created in 1934 to reform the stock market to reassure investors and stabilize the market. Purpose: protect investors, maintain a fair and efficient market, promote growth. Regulated stock market trading and made it a safer place for investments. Helped restore trust in the stock market. Still used today to maintain a healthy market and fair business practices

Federal Deposit Insurance Corporation (FDIC) -first new deal

Established by the Banking act of 1933. Was one of the many proposals Roosevelt sought to reform the nation's financial problems. Insured bank deposits up to $5,000 by the federal government, which made people feel their money was safe if the bank failed. Eliminated the common practice of bank runs during economic downturns, reducing the number of bank failures

"Okies"

Farmers that had to leave their homes due to the dust bowl. Conditions were unbearable and decided to migrate to California. This upset the families previously living there/ because of how tense the situation was. Most families were losing jobs left and right and with more competition people became hopeless.

What are some Key criticisms of the New Deal?

Focused on white males -left out women and African Americans Agricultural Adjustment Act if farmers sell land to sharecroppers and let out Socially security act didn't give money to ___ which was mostly women Military segregation Philosophy of new deal- Helped men over women more because men are more prominent in work spaces->partly this. -Taxation of the wealthy The Government is being intrusive! ( the government now has to take matters into their own hands as the economic stability of the country disintegrates) ->Not Laissez Faire-people didn't like this Prior to the New Deal American federal government was small but nothing like what comes out of the new deal

Trickle-down economics & the Reconstruction Finance Corporation (1932)

Government provides aid to banks and businesses but not individual people. Main reason is because it would encourage people to be lazy if the government payed individual people and they wouldnt want to work. -2 Billion loan to big businesses (railroads, insurance companies, other businesses)

Laissez-Faire government

Government shouldn't moderate in the economy, booms and busts are natural features of society. That philosophy is Laissez faire (government hands off).

How did Herbert Hoover and FDR's approaches to the Depression differ? (ON TEST) What were their specific approaches? How did their ideas about the role of government differ? How were those ideas/attitudes reflected in their policies while in office? How did Americans generally respond to the two men & their approaches?

Herbert Hoover believed in "rugged individualism" which was the thought of someone having the ability to be a self-made person (millionaire) also he believed that people should pull their own weight. He was set on the idea of self-reliance and he made his own fortune. While FDR on the other hand, believed in "brain trust" which was a group of people who joined together in the government to tackle the depression. He also believed as though it were the governments job to support individuals and become involved in their lives, while Hoover believed more in Lassez-Faire and the thought of having natural ups and downs and a more "pro-American" work ethic. To solve economic crisis Hoover decided to have Trickle-Down economics which was the the thought of the government providing aid to big businesses and banks instead of individual people. --Reconstruction finance corporation. --Hawley Smoot Tariff: taxes on imported goods which overall raised prices which slowed down world trade. FDR had the fireside-chats in which he reassured the public by talking about programs he would do which made Americans have hope and feel more connected to their president. He created the idea of the New Deal which was often referred to as Alphabet Soup because the names were complicated. He also believed in direct relief which was him giving money in form of cash payments to Americans in need of them.

"Fireside Chats"

In which FDR assured the public and talked about programs he wanted to do. Made America feel more connected to a president than ever before.

Federal Emergency Relief Act (FERA) -first new deal

It was the FIRST of President Franklin D. Roosevelt's major relief operations. What it Did: Provided money to states and local agencies to assist the unemployed and their families. Believed in work relief, rather than large numbers of workers on the dole. Work relief: payment for work performed. This helped maintain the morale of the recipients. Provided work for over 20 million people, but it was a little more costly.

Winners + Losers from the New Deal? --most likely on test

Losers: Wealthy-taxes being raised?, Minorities-women and African Americans got less than the men overall, Winners: Jobless/homeless- social safety net provided, Factory workers-better working conditions, Union members -couldn't get black listed, Government -new employees through CCC -grown larger in size-more power, Farmers -goldie locks affect-don't want prices too high or too low- offer to pay farmers certain amount for year to not grow crops -reduces the number of crops and raises prices

Emergency Banking Bill & the "Bank Holiday" -first new deal

Passed in 1933 to restore confidence in the banking system to help the economy recover. Called for a mandatory 4 day shut down of all U.S banks in order to complete inspections and to temporarily stop bank runs. Banks were allowed to re-open when found financially sound.

Social Security Act -second new deal

Passed in 1935, it was the most popular and significant of the New Deal programs. This reform was intended to provide a safety net for the elderly, the disabled, and the unemployed, which people rely upon today. What it did: established unemployment insurance for workers who lost their jobs, created insurance for victims of work-related accidents. gave aid to: poor mothers and children, the blind, and the disabled. Shortcomings: applied to workers regularly employed in commerce and industry, didn't apply to domestic or farm workers who were disproportionately African American, widows given smaller benefits than widowers.

Voluntary action & the Great Depression

People shouldn't be forced to help anyone but actions should come from those who are wanting to help out.

Buying stock on margin

People were buying stocks with money they didnt have through buying on margin, in which they would pay a fraction of the price and borrow the rest.

What measures did people and businesses take to deal with hardship during the Depression? —Consider the Butcherville simulation! -ripples outward - —HOW DID REASONABLE MEASURES MAKE THE GD WORSE?

People: Many wealthy families previous to the great depression had butlers, maids, and general caretakers of their homes. When the great depression comes many of these families have to fire off employees who do jobs around the house. This affects an abundance of homes as these employees were moms, dads, and siblings. Businesses: The great depression made it so many companies could not afford to keep all of their employees. The unemployment rate became so low because job opportunities were dropping like flies.

How did Second New Deal programs provide further recovery and reform?

Recovery: Works progress administration (WPA). provided govt. Jobs building schools & other public works projects. National youth administration (NYA) set up as part of the WPA to address the needs of 16-24 year olds (who were not allowed in the CCC) The NYA worked on two levels. Reform: Fair labor standards act (FLSA). Set a minimum wage and a maximum number of hours per week. It also outlawed child labor and set the minimum age at 14 for employment outside of school hours and non-manufacturing jobs, at 16 for employment during school hours, and 18 for hazardous occupations. National labor relations act- helped unions and thus helped workers. This act created the national labor relations board, which enforced labor laws and made sure that fair business practices were upheld. It also outlawed blacklisting by business owners and encouraged collective bargaining and the formation fo unions. Social Security Administration: Permanant agency designed to ensure that the older Americans would always have enough money to survive. SS was/is still financed through a payroll tax.

How did First New Deal programs provide relief and recovery?

Relief: immediate action taken tot halt economic deterioration. Emergency banking act of 1933-closed failed banks and only reopened the financially viable ones. Civilian Conservation Corps. (CCC) provided temporary jobs to unmarried single white adult males in reforestation, road construction, prevention of forest erosian, and help in disaster type situations. Federal Emergency relief act (FERA). Gave immediate help to those that needed it in the form of cash payments. Gave money directly to the states to distribute to the needy. "Direct relief" Recovery: Tennessee valley authority (TVA). a federally run hydroelectric power program, the TVA built dams, produced and sold ferilizer,, reforested teh tennessee river valley and developed recreational lands. Agricultural Adjustment Act (AAA) designed to combat overproduction by controlling the supply of 7 "basic crops" Home owners loan corp: gave loans to existing homeowners so they coud pay their mortgages. Reform: Federal deposit insurance corporation—passed a part of a larger banking reform act. Set up the federal deposit insurance corporation, a permanant agency designed to maintain stability and public confidence in the nations financial system. Securities and exchange act: Set up the securities and exchange commission (SEC), a permanent agency whose job is to monitor the stock market and prevent abuses.

Programs of the New Deal we still have today

SCC, FDIC

Belief in "rugged individualism"

Self made person (millionare) and he believed that people should pull their own weight, should use their own talents and dedication to get ahead in life (deeply believer in it) "pull yourself up by your own bootstraps"

FDR's "Brain Trust"

Surrounding himself with able, an intellectual crop of men and men and women to tackle the Depression

Hawley-Smoot Tariff (1932)

Tariff: tax on imported goods to raise the prices. Problem with this was that inevitably, french (other places too) would put tariffs on our products → every country in the world did this. Eventually slows world wide trade down or shuts it down.

The New Deal & the "Alphabet Soup" programs

The plan to cure the Depression was known as the New Deal (a series of government funded agencies designed to provide the American people with relief in the form of aid and new jobs, as well as reform those problems which led to the Depression.) -Complex approach which included both direct federal action and money to provide relief from the Depression. This New deal was often referred to as Alphabet soup because the names were complicated so using letters made it easier.

Fair Labor Standards Act -second new deal

The purpose of the law, passed in 1938, was to reform worker rights. What it did: established minimum wage ($.25), max work week (44 hrs), and overtime pay, reduced unsafe work conditions, banned child labor

The Wagner Act (also known as the National Labor Relations Act) -second new deal

The purpose of the law, signed in 1935 was to reform the imbalance of bargaining power between employees and their employers in order to improve the standard of living among American industrial workers. Recognized the right of employees to join labor unions and gave workers the right to collective bargaining. Established the National Labor Relations Board, which investigated workers' complaints against employers. Led to increased participation of workers in unions

Agricultural Adjustment Act (AAA) -first new deal

Theodore Roosevelt passed the legislation also known as the Farmer Relief Bill in 1933. The AAA was passed to help farmers recover by raising the value of crops on the market. The government paid the farmers to decrease and destroy some of their crops or livestock, in order to make supply more scarce (and raise prices). Overall, the act succeeded in increasing revenues for farmers and driving prices of crops back up. In 1936, the Supreme Court declared the AAA unconstitutional because, since agriculture is regulated at the state level, federal government cannot force the individual states to adopt the act. The law provided the basis for all farm programs for the remainder of the 20th century.

How did Americans' perception of how the economy was going in the 1920's differ from the reality?

They were very optimistic. They saw the good in the 1920s because of the new technology, cars, electricity, national heroes, bootlegging, flappers, and people making more money while working fewer hours. Even the number of infant deaths had declines and life expectancy had lenthened due to medical advances. The economy also appeared as booming during the period. Although, people started to believe that anyone could be rich, making more people buy on stocks with borrowed money, hoping to "get rich quick." Eventually the economy became out of balance, the rich becoming richer and the poor getting poorer. With the advent of credit advertising made people believe they HAD to buy things, goods were being bought with installment plans (credit), more and more money was being pumped into the economy that didnt even exist. Too many consumer products were being made as well and no one was able to buy them.

Civilian Conservation Corps (CCC) -first new deal

This organization was a relief program to help unemployed men. One of the most popular, and fastest implemented, ND programs. Public works program included segregated African Americans and Native Americans. Later, not only young men, but also Mexican Americans and others benefitted from the CCC. Young men could work on environmental conservation projects. They worked in jobs such as: replanting forests, Building trails, digging irrigation ditches, firefighting

Stock "watering"

To give customers the appearance of a better product than was actually being produced. The term was front he practice of feeding cattle salt to induce them to drink lots of water just before they were sold, thereby increasing their weight. Thus, the buyer-whether of the stock or of livestock -pays for more than is actually received.

What ultimately ended the Great Depression?

WWII -the rush to arm countries and provide food -rival of WWII provides the ultimate stimulation to ramp up everything and get people to want jobs and food New Deals helped but didn't overall accomplish this Late 30s the rest of the world is starting to fight back and we had to supply them and that's what ultimately ended the great depression

National Youth Administration -second new deal

When was it established? Established in 1935. What did it do? This program trained unemployed American youth from ages 16-25, and provided them with jobs and counseling to help young people and families recover. The administration also gave grants to high school/college students who worked in return, which allowed people to study/become educated while keeping the unemployment rate at the same level (not rising).

Farm Security Administration (FSA) -first new deal

Why it started? Some landlords used the $$ from the AAA to buy tractors, removing the need for tenant farmers with horses. -Provided loans to tenant farmers and training for basic modern bookkeeping. This was the only way tenants were able to stay on (or for some to buy) their land. Unique things about Farm Security Administration: Allowed tenants to keep their land AND develop other businesses. Had a huge influence on the photography program because reporters and photographers were hired to take pictures and write about poor farmers.

What is the difference between an economic recession and an economic depression?

With an economic recession there is temporary economic decline which could last longer than a few months. With a economic depression is a period of significant and prolonged economic decline. An economic recession is visible in production, employment, income and wholesale-retail trade while an economic depression is characterized by decreased business activity, falling prices and high unemployment.

"Pro-American work ethic"

You believe that humans are responsible for their own condition. If you're poor or unemployed its your fault. If you're wealthy and employed its because of you and your hard work.

Installment plan for purchases

paying a small price to get a product, then paying monthly payments until it's paid off

Work Progress Administration (WPA) -second new deal

the purpose of the WPA in 1935 was to end the Great Depression and help the economy recover by putting Americans to work. The WPA used a method called "Pump Priming" and was the largest and most ambitious New Deal program. It put people to work on public projects, which gave consumers money to spend on more goods, boosting the economy. What it did: By 1943 it had given worker's eight million jobs. Dredged rivers and harbors, built dams and controlled flood waters, Promoted soil and water conservation, Built more than 650,000 miles of highway and 125,000 public buildings, Employed musicians, artists, poets, writers, and actors. The most famous projects done by the WPA are the San Antonio River Walk and parts of the Appalachian trail