History Chapter 20, 21

Social Security Administration

(SSA) - a social insurance program consisting of retirement, disability, and survivors' benefits. To qualify for most of these benefits, most workers pay Social Security taxes on their earnings; the claimant's benefits are based on the wage earner's contributions.

List Hoover's solutions to the Great Depression.

* The National Credit Association that gave billions to businesses for emergency loans * The Organization for Unemployment Relief. * Federal Farm Board which encouraged corporations to purchase surplus and persuade farmers to cut back production voluntarily. * Believed that relief and aid was a local matter and it was the duty of private individuals to help the need not the government. * Reconstruction Finance Corporation (RFC) - Most important interventionist measure. Gave billions of dollars to businesses, banks, insurance agencies to prevent bankruptcies. * The Home Loan Bank Act gave loans to homeowners to prevent foreclosures. * Smoot-Hawley tariff, increased tariffs on foreign industrial & agricultural

Causes of the Great Depression

1. Agricultural overproduction 2. Industrial overproduction 3. Unequal distribution of wealth 4. Over-extension of credit 5. International economic situation

Steps FDR took to protect New Deal accomplishments (both failed):

1. Court-Packing Plan (proposed increasing Supreme Court from 9 to 15 members, caused in revolt in Dem. Party) 2. Purge of the Democratic Party in the Election of 1938 (came out strongly in favor of liberal Dem. Candidates, evidence that he interfered in a state campaign, Republicans gained strength in both houses of Congress)

Significance of the New Deal

1. Established the principle that government has responsibility for the health, welfare, and security, as well as the protection and education of its citizens 2. Embraced social security, public health, housing 3. Entered the domain of agriculture and labor 4. Strengthened executive branch 5. Reasserted presidential leadership 6. Revitalized political party as a vehicle for the popular will and as an instrument for effective action. 7. Redefined the concept of democracy so that it included not only political rights but economic security and social justice as well.

Purposes of the New Deal

1. Relief: to provide jobs for the unemployed and to protect farmers from foreclosure 2. Recovery: to get the economy back into high gear, "priming the pump" 3. Reform: To regulate banks, to abolish child labor, and to conserve farm lands 4. Overall objective: to save capitalism

on the margin

Allows people to borrow most of the cost of a stock, making down payments as low as 10 percent

Dust Bowl

Also known as the Dirty Thirties period of severe dust storms that greatly damaged the ecology and agriculture of the US and Canadian prairies during the 1930s; severe drought and a failure to apply dryland farming methods to prevent wind erosion (the Aeolian processes) caused the phenomenon.

Scopes Monkey Trial

Biology teacher in Tennessee was taken to court and fined for teaching Darwin's theory of evolution.

fireside chats

FDR's radio talks about issues of public concern, explaining in clear simple language his new deal measures

AAA

First Agricultural Adjustment Act Agricultural Adjustment Act - reduced agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock. Its purpose was to reduce crop surplus and therefore effectively raise the value of crops.

FDIC

GLASS-STEAGALL BANKING REFORM ACT created the FEDERAL DEPOSIT INSURANCE CORPORATION. Gave depositors security, if bank collapsed, federal government would refund their losses. Provided deposit insurance to depositors in US banks in order to restore trust in the American banking system.

Reform Acts

Glass-Steagall Banking Act - 1933 Securities Exchange Act - 1934 Social Security Act - 1935 National Labor Relations Act - 1935 Fair Labor Standards Act - 1938

States impacted by the Dust Bowl

Kansas, Oklahoma (most impacted), Texas, New Mexico, Colorado, Nebraska, North & South Dakota

bull market

Long period of rising stock prices

The Election of 1936

Made the Democratic party the majority party Created a new Democratic coalition composed of both traditional elements and new elements Showed that the American people rejected radical solutions to depression

Black Tuesday

Major selling of stocks in Wall Street Prices of stocks collapsed People defaulted on loans Major bank failures Sources of capital vanished Stock Market crash in Wall Street:

speculation

Person taking risks, buying stock on hope that it will be worth more quickly

Dr. Francis E. Townsend

Physician who had a plan for the federal government to pay $200 per month to unemployed people over 60. The program would be financed by a 2% national sales tax and each pensioner would be required to spend the money in 30 days. This would stimulate the economy.

demagogues

Radical opponents of the New Deals. (rabble-rousers)

Hoovervilles

Shantytowns in and around cities across the nation. Shanties were constructed of cardboard, tar paper, glass, lumber, tin and whatever other materials people could salvage.

Hawley-Smoot Tariff

Sponsored The Tariff Act of 1930. Known as the Smoot-Hawley Tariff or Hawley-Smoot Tariff, Signed into law on June 17, 1930, Raised U.S. tariffs on over 20,000 imported goods to record levels.

WPA

Works Projects Administration - was largest and most ambitious American New Deal agency, employing millions of unemployed people (mostly unskilled men) to carry out public works projects, including the construction of public buildings and roads

Harlem Renaissance

movement of African-American culture that began in the New York City neighborhood of Harlem in the 1920's. Artist involved: Billie Holiday, Steinbeck, Lawrence, Copland

Reasons for Decline of New Deal Reform after 1937

1. Court-packing plan made Congress irritable. 2. Recession of 1937-38 weakened confidence in New Deal measures. Republicans gained strength in both houses. 3. Attempted purge of Democratic party failed. 4. Conservative Democrats were elected to office. Resentful of attempted party purge, they joined ranks with Republicans to block New Deal legislation. 5. Increasing focus on foreign affairs.

Reasons for Hoovers ineffectiveness

1. Hoover thought business should be self-regulating. 2. He had a mania for a balanced budget. 3. He lacked political finesse.

Bonus Army

20,000+ unemployed WWI veterans that came to DC to get their bonus promised them by the Adjusted Compensation ACT. Congress and Hoover wouldn't give them the bonus so they set up a shantytown on the edge of the city. Police and General MacArthur used tanks, tear gas, bayonets, etc. to make them leave.

Senator Huey Long

Advocated Share the wealth plan (i.e., a guaranteed annual income of at least $5,000 for every American, financed by confiscating wealth of people who made over $5 million per year).

Bank Holiday

Banking transactions were suspended across the nation except for making change. EMERGENCY BANKING ACT law reopened banks that were solvent and assisted those that were not.

CCC

Civilian Conservation Corp Purpose: relief Gave outdoor work to unemployed men between the ages of 17 and 29 Provided unskilled manual labor jobs related to the conservation and development of natural resources in rural lands. They received $30 per month, but $22 went back to the family

Criticisms of Conservative Opponents

Conservative opponents said the New Deal went too far: It was socialism (killed individualism) It added to the national debt ($35 billion) It wasted money on relief and encouraged idleness It violated the constitution & states rights It increased the power of the Presidency (FDR was reaching toward dictatorship, Congress a rubber stamp, independence of judiciary threatened, separation of powers shattered)

Anti-New Deal Organization

Conservative opponents to the New Deal had an organization called the American Liberty League. They had money but were small in numbers, so FDR was not worried.

PWA

Created for industrial recovery and for unemployment relief. It aimed at long-range recovery and spent $4 billion on thousands of projects that included public buildings, highways, and parkways.

Relief Acts

Emergency Banking Act - 1933 Federal Emergency Relief Act - 1933 Public Works Administration - 1933 Works Progress Administration - 1935

First New Deal (1933-1934)

Emphasis: reform Political Position: conservative Primary aim: economic recovery Philosophy: economic nationalism and economic scarcity (i.e., raise prices by creating the illusion of scarcity) Objectives: higher prices for agriculture and business Beneficiaries: big business and agricultural business

Second New Deal (1934-1941)

Emphasis: reform Political Position: liberal Primary aim: permanent reform Philosophy: international economic cooperation and economic abundance Objectives: increased purchasing power and social security for public Beneficiaries: small farmers and labor

FERA

Federal Emergency Relief Admin Purpose: relief Gave money to states and municipalities so they could distribute money, clothing, and food to the unemployed

"The only thing we have to fear is fear itself.

Franklin D. Roosevelt's famous quote from his inaugural address.

How Herbert Hoover Dealt with the Crisis

He played the game of confidence economics and just kept saying: "Prosperity is right around the corner."

Wagner Act

It established the National Labor Relations Board and addressed relations between unions and employers in the private sector.

Judiciary Reorganization Act

Legislative initiative proposed by U.S. President Franklin D. Roosevelt to add more justices to the U.S. Supreme Court.

Recovery Acts

National Recover Act - 1933 Home Owners Loan Corp - 1933 Federal Housing Administration - 1934 Agricultural Adjustment Act 1933 and 1937

(NRA)

National Recovery Act Purpose: recovery of industry Created a partnership of business, labor, and government to attack the depression with such measures as price controls, high wages, and codes of fair competition

Date for Black Tuesday/Stock Market Crash?

October 29, 1929

New Deal President

President Franklin D. Roosevelt.

TVA

Provided flood control, electricity generation, and economic development in the Tennessee Valley.

U.S. Housing Authority

Purpose: recovery and reform Used federal funds to tear down slums and construct better housing.

Second Agricultural Adjustment Act

Purpose: recovery for agriculture Paid farmers for conservation practices, but only if they restricted production of staple crops.

Social Security Act

Purpose: reform Gave money to states for aid to dependent children, established unemployment insurance through payroll deduction, set up old-age pensions for retirees.

National Labor Relations Act

Purpose: reform Put restraints on employers and set up a National Labor Relations Board to protect the rights of organized labor to bargain collectively with employers.

Father Charles E. Coughlin

Rabble-rousing radio priest from Detroit. His broadcasts were called the "Golden Hour of the Little Flower." He claimed there was an international bankers conspiracy and Jews were responsible. He advocated nationalization of banking and currency and national resources and demanded a "living wage."

Brain Trust

Select group of professors, lawyers, and journalists chosen by FDR to be his advisors.

New Deal

Series of domestic programs enacted in the United States between 1933 and 1938, Included both laws passed by Congress as well as presidential executive orders during the first term (1933-1937) of President Franklin D. Roosevelt.

HOLC

Used bonds to issue new mortgages to families currently in default and to prevent foreclosure.

"Red Scare"

fear of communism and anarchists in the US during the 1920's