The Great Depression & New Deal
What do scholars believe were the causes of the Great Depression?
1. Maldistribution of wealth (The rich get richer, the poor stay poor) 2. 1920's speculation in the stock market (Stockbrokers make commissions, traders don't retain earnings) 3. Sick Industries 4. Money and Trade policies that made interest rates go up (Gold standard! Interest goes up = borrowing gets more expensive)
Who was elected president in 1928? 1932? 1936? 1940? 1944?
1928 - Hoover v Smith - Hoover wins 1932 - Roosevelt v Hoover - Roosevelt wins 1936 - Roosevelt v Landon - Roosevelt wins 1940 - Roosevelt v Willkie - Roosevelt wins 1944 - Roosevelt v Dewey - Roosevelt wins
How are stocks valued on the stock market? What is "buying on margin"? What is a "speculative bubble"?
Buying on margin - Buying with borrowed money, buying on debt, on account Speculative bubble - tie up money that could have been used more profitably for other purposes
What was the Roosevelt Recession?
By 1937 unemployment rate had been steadily decreasing, therefore Rosevelt decided to cut government spending and try to balance the budget which only cause unemployment to spike up again! (Roosevelt was conservative when it came to economics)
What was the CCC? What was the WPA?
CCC - Civilian Conservation Corp. which calls the palm the army to take young men from cities and put them to work in the country. They built shelters to stop wind erosion, built roads, trails, campgrounds, state parks, and restored historical monuments. They had $5 for allowance and worked 6 hours a day, attending classes, and had housing, food, etc. paid for. WPA - Works Program Administration: It is a much larger program. Created a deal with problems about jobs on a state level and lasted till 1942 creating 500,000 jobs, and refurbishing public buildings and roads.
What were "Hoovervilles"?
Encampments for protestants blaming Hoover for the shit show
What were "The Hundred Days" and what happened during them?
FDR First 100 Days - He took swift action to calm the nation's crippling financial panic and began rolling out the programs that made up his New Deal (became the standard for reform used to this day)
What was the FERA? What was the NRA? What was the TVA? What kinds of things did the Civil Works Administration do? What did the Public Works Administration do?
FERA - Federal Emergency Relief Administration. Grants were distributed to states to give to agencies to help the unemployed. Lorena Picock reported disparities and corruption by doing field studies and reporting back to FERA. NRA - National Recovery Administration: intended to eliminate unfair trade practices, reduce unemployment, establish minimum wages and maximum hours, and guarantee the right of labor to bargain collectively. TVA - Tennessee Valley Authority: backwater of the economy; "hillbilly heaven". Constructed 22 dams, which created jobs and generated higher electricity turning it into an economic powerhouse CWA put people to work with building sewer lines, performing road maintenance, etc. PWA built more schools, houses, dams, and bridges in NYC
What was the Fair Labor Standards Act? The National Labor Relations Act? What was the Wagner Act?
Fair Labor Standards Act - Minimum wage (25 cents/hr) max work week (45 hrs/wk), overtime law (40/hr plus 1.5x multiplier for overtime). The goal is to give laborers more money so that they can spend more and perpetuate the economy. The goal behind the maximum weekly hours is to convenience employers to hire more, vs less with crazy hours. National Labor relations Act - Same as Wagner Act; recall Wagner from the Triangle book. Collective bargaining with employees to form unions.
How did the banking industry respond as the stock market began to crash? Were their efforts successful?
Forced to close their doors because the money that had been deposited in banks back then, had been lent out to the local community and invested in homes and businesses Their efforts were not successful because people lost huge amounts of their savings
How successful were New Deal programs in meeting the challenges of the Great Depression?
Goals was to stabilize the economy and promote economic recovery, which was successful by uing economic stimulus (putting people back to work); but it was NOT ENOUGH. Roosevelt did more than Hoover, but it was NOT ENOUGH.
Why was Hoover seen as the ideal man for the presidency as the Great Depression hit?
He was an engineer? He promised peace and prosperity "A chicken in every pot and two cars in every garage" He also promoted Rugged Individualism
Who was Huey Long? Francis Townsend? Father Coughlin? Upton Sinclair?
Huey Long - He was a successful lawyer that was head of the democratic machine in Louisiana. He attempted to both govern Louisiana and also be a senator at the same time - nutcase. He started organizing the movement "share the wealth" which would tax away all fortunes above a million dollars and redistribute it to citizens. He knew it was not realistic but created the movement anyway for his political gain. Assassinated before political elections by a physician. Francis Townsend - A retired physician who comes up with giving everyone over 65, $200 a month as long as they spend it before the month is over. As a lot of senior citizens were excluded from these New Deal programs. Father Coughlin - He was invited to give Sunday sermons, and eventually got picked up by CBS. In the 1932 election, he supported Roosevelt by referring to him as "Christ's candidate ". He was exposed for corruption and turned on FDR. Accuses him of being communistic, and becomes involved in the International Jewish conspiracy, and eventually, people just tell him to **** off lol Upton Sinclair -Wrote "Jungle". He was a socialist who was liberal in views. Eventually changed registration from socialist to democratic, and started EPIC (end poverty in Cali). A lot of people who are against him so often big production companies would do "fake newsreels" where they would go up to hobos and send the message ``I want to go to California because I hear it's going to be a paradise for people like me!" (lmao jokes on them we still poor in Cali almost 100 years later)
What did the Bonus Army do and what did its members want?
In 1924, Congress had passed a measure promising veterans of World War I a bonus to be paid to them in 1948, based on the number of their days in the military and the numbers of the their days in combat. The bonus army gathered in Washington to petition Congress for early payment for their bonuses. Since many of them had lost their jobs during the depression they felt that they could use their bonuses now and not 16 years in the future.
What was the Agricultural Adjustment Act?
It bought up the surplus of farm goods and essentially paid farmers not to farm. Had a lot of bad press
What was Court Packing? How did it affect the New Deal?
It was efforts to add more justices to court in ordered to sway the dominant party: from 5 to 7, now 9. Meaning there would be additional reform, which would divide the New Deal coalition. (Republicans disagreed with Roosevelt's further initiatives)
What was Upton Sinclair's plan to deal with the depression in California?
Kinda socialism, but he switched to democrat EPIC - End Poverty in California The plan called for a massive public works program, sweeping tax reform, and guaranteed pensions Homeless come to California thinking Sinclair will make them rich FDR doesn't endorse him
What role did 1920s speculation play in the lead-up to the Depression?
Lead to false high stock market
When did the Great Depression end? What had changed by that point?
March 1933 There were more "white collared jobs," but unemployment was still high Due to the fact that there was a Great Recession in 2008 economist and politician learn absolutely nothing to help the lower and middle class of today :(
Why do we call it "The Great Depression"?
Mass economic failure how long it lasted what it did (lasted over a decade) "Depression" is a long economic downturn
What was included in the Social Security Act of 1935?
Old-age pensions Widow's pensions Disability benefits Unemployment insurance - Keeps economy afloat to this date, made possible to avoid the 2008 and 2020 recessions ADC - Aid to Dependent Children; help for children with parents without income
What was PECE? What was POUR? What was the Reconstruction Finance Corporation?
PECE - President's Emergency Commission for Employment: sought to coordinate the relief efforts of cities, counties, and private charities as well as the efforts of business to preserve jobs and wages. POUR - President's Organization on Unemployment Relief: encouraged businesses to hold the line on jobs and wages RFC - Reconstruction Finance Corporation: set aside 500 million for loans to banks railroads large corporations and local governments to stabilize the economy during an emergency (Failed lol)
Who was Franklin Delano Roosevelt?
Paralyzed from the waist down due to polio. Started off as a New York gov, as Al Smith encouraged him to run, and then went on to win the election in 1932. Created a lot of new agencies under his administration. Elected 4 terms.
What did "Alphabet Soup" refer to?
Refers to the collection of agencies and administrations that were created under FDR to aid the jobless and stimulate the economy
In the eyes of most historians and economists, what did Roosevelt do wrong? What did he do right?
Right: Economic Stimulus (Put people back to work) which stabilized the economy Wrong: Economists say that when there is an economic downturn, the stimulus (government spending for jobs, etc.) has to be about the same size as the decline in the economy to compensate for it.
What was the "Share Our Wealth" plan?
Socialist attempt to redistribute wealth
What was the "New Deal"?
The first new deal was a lot of experimentation about what works. If something does not work, onto the next thing
What did the Civilian Conservation Corps do?
They built shelters to stop wind erosion, built roads, trails, campgrounds, State Park, and restored historical monuments.