AJ: CH 25 The Great Depression and the New Deal

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Questions and Answers

What was the purpose of the Security and Exchange Commission (SEC)?

To regulate the stock market and protect investors from fraud and insider trading.

What did the Federal Housing Administration (FHA) do?

Insured bank loans for new houses (correct)

Created jobs in the construction industry (correct)

Provided employment for unemployed artists

All of the above

What was the focus of the Second New Deal?

Relief and reform for the unemployed and industries.

What significant act replaced the labor provisions of the National Industrial Recovery Act?

The National Labor Relations Act (Wagner Act). Signup and view all the answers

What was one of the main features of the Social Security Act passed in 1935?

A federal insurance program for the elderly, providing monthly payments. Signup and view all the answers

Roosevelt was disliked by the working class during the election of 1936.

False Signup and view all the answers

Who was opposed to the Share the Wealth idea?

Huey Long Signup and view all the answers

What did the American Liberty League aim to do?

Stop the New Deal from subverting the US economy and politics. Signup and view all the answers

What was the main criticism of the New Deal from extreme liberals and socialists?

They believed it did too much for businesses and not enough for the poor and unemployed. Signup and view all the answers

What did the Fair Labor Standards Act establish?

A minimum wage, maximum working hours, and child labor restrictions. Signup and view all the answers

In the recession of 1937-1938, government policies contributed to the economic downturn.

True Signup and view all the answers

What did the Indian Reorganization Act of 1934 do?

Returned lands to tribes and supported the preservation of Indian cultures. Signup and view all the answers

What problem did many Mexican Americans face due to the New Deal?

They were excluded from many New Deal programs and forced to return to Mexico. Signup and view all the answers

The Depression caused widespread _______ among labor unions.

strikes Signup and view all the answers

What were the major causes of the Great Depression?

Systematic weaknesses in the economy, risky speculation on Wall Street, weaknesses in agriculture, coal, and textiles, and fiscal policies. Signup and view all the answers

How did President Hoover respond to the Great Depression?

He believed in private initiative and refused to yield to government intervention, although he later saw the need for government action. Signup and view all the answers

What were the goals of the early New Deal?

To revive banks, provide relief for the unemployed, address the agricultural crisis, and regulate industry. Signup and view all the answers

What event marked the beginning of the Great Depression in the United States?

Stock Market Crash of 1929 Signup and view all the answers

What was Hooverville?

A shantytown where unemployed and homeless people lived during the Great Depression. Signup and view all the answers

What was the New Deal?

The economic and political policies of the Roosevelt administration in the 1930s. Signup and view all the answers

What was the Federal Deposit Insurance Corporation (FDIC)?

A government agency that guarantees bank deposits, protecting both depositors and banks. Signup and view all the answers

What was the main purpose of the Securities and Exchange Commission?

To regulate trading practices in stocks and bonds. Signup and view all the answers

Which act stabilized the private banking system?

Emergency Banking Act Signup and view all the answers

Match the following acts with their purposes:

Federal Emergency Relief Act = Establishes a national system of relief Home Owners Loan Act = Refinances home loans to prevent foreclosures Civilian Conservation Corps Act = Provides work relief for reforestation and conservation projects Tennessee Valley Authority Act = Planned development of the Tennessee River Valley Signup and view all the answers

What did the Wagner-Peyser Act create?

A U.S. Employment Service and encouraged states to create local public employment offices. Signup and view all the answers

What phrase did Franklin Roosevelt famously say?

The only thing we have to fear is fear itself Signup and view all the answers

Study Notes

The Great Depression and the New Deal (1929-39)

The Great Depression was the worst economic crisis in the U.S. lasting throughout the 1930s.
The New Deal refers to the policies of President Franklin D. Roosevelt aimed at economic recovery and social reform.

Causes of the Great Depression

Government Policies: Lack of regulation in banking and stock markets led to speculation and economic instability.
Excessive Use of Credit: Americans borrowed beyond their means, leading to widespread defaults and financial strain.
Unequal Distribution of Wealth: In 1929, the top 0.1% earned as much as the bottom 42%, contributing to poverty and decreased consumer spending.
Overproduction: Higher production rates than demand led to unsold goods and factory shutdowns.
Weak Farm Policies: Farmers faced low prices, high debt, and weather challenges, worsening their financial plight.
Oligopolies: Few firms controlled half the corporate wealth, leading to artificially high prices.
Banking Crisis: Bank failures due to consumer panic and withdrawal of savings left many without their lifetimes' savings.
Stock Market Crash: Began in October 1929, with stocks plummeting, contributing to massive unemployment and bankruptcies.

Hoover's Response to the Great Depression

Hoover believed in private initiative and minimal government intervention despite growing economic needs.
Initially urged businesses not to cut wages and appealed to charities rather than federal aid.
Instituted limited programs like the Federal Farm Board and Reconstruction Finance Corporation but these were seen as insufficient.
His mishandling of international relations, particularly through tariffs like the Hawley-Smoot Tariff, worsened the global economic situation.
Farmers organized to protest price drops, exemplified by actions like the Farm Holiday Association and the Bonus Army march, which highlighted Hoover's perceived indifference.

Franklin Roosevelt and the New Deal

FDR's New Deal aimed to address unemployment, stabilize banks, and revive industry through three R's: Relief, Recovery, and Reform.
Key programs established during FDR's first 100 days included:
- Emergency Banking Relief Act: Allowed the government to assess and reopen sound banks.
- Glass-Steagall Act: Established regulations for banks, separating commercial from investment banking and protecting deposits via FDIC.
- Civilian Conservation Corps (CCC): Employed young men in conservation projects.
- Tennessee Valley Authority (TVA): Promoted regional development, providing jobs and electricity in the Tennessee River Valley.

Second New Deal

Shifted focus from recovery to relief and reform, reacting to the persistent economic struggles.
Key initiatives included:
- Works Progress Administration (WPA): Created millions of jobs in public projects while compensating workers fairly.
- National Labor Relations Act (Wagner Act): Strengthened workers' rights to unionize and collectively bargain after previous provisions were struck down.

Significant Acts and Agencies

Federal Deposit Insurance Corporation (FDIC): Protected deposits in banks, restoring public confidence.
Securities and Exchange Commission (SEC): Regulated the stock market to prevent fraud and restore stability.
National Industrial Recovery Act (NIRA): Established fair competition codes for industries but was later struck down as unconstitutional.

Effects of the Great Depression

The U.S. Gross National Product halved from 1929 to 1932, reflecting widespread economic decline.
Unemployment soared to 13 million as factories closed and agricultural collapse occurred.
The onset of the Great Depression marked a significant shift towards greater government intervention in the economy and a demand for reform in economic policies.### Wagner Act
Guaranteed workers' rights to join unions and engage in collective bargaining.
Outlawed unfair business practices towards labor.
Established the National Labor Relations Board (NLRB) to enforce laws protecting workers.

Rural Electrification Administration (REA)

Provided loans for electrical cooperatives to deliver power to rural areas.

Enacted in 1935, creating a federal insurance program funded by employer-employee payroll contributions.
Monthly payments initiated for individuals over 65 years of age.
Included provisions for unemployment benefits, support for disabled persons, and aid for dependent children and their mothers.

Election of 1936

Franklin D. Roosevelt was re-nominated by the Democrats for a second term, having gained popularity among workers and farmers.
Faced opposition from big business due to pro-union policies.
Opponent: Alf Landon from the Republican Party.
Roosevelt won decisively, securing votes from various demographic groups, including Southern whites, ethnic minorities, and labor unions.

Opponents of the New Deal

Criticism from extreme liberals and socialists who felt Roosevelt favored business over the needs of the poor and unemployed.
Conservative critics argued the federal government was overreaching, particularly against the Wagner Act and WPA, which they claimed leaned towards socialism.
Major points of criticism included increased regulations, pro-union policies, and deficit financing for government programs.

American Liberty League

Formed by Republicans and conservative Democrats to resist the New Deal, viewing it as a threat to the economy and political structure of the U.S.

Demagogues

Father Coughlin: Catholic priest with a radio show silenced for anti-Semitic remarks.
Dr. Francis Townsend: Proposed financial aid for the elderly, leading to the Social Security concept.
Huey Long: Advocated for "Share the Wealth" program, promising a minimum annual income for every American family by taxing the rich.

The Supreme Court

Roosevelt faced opposition from a conservative Supreme Court that annulled key programs like the NRA and AAA, citing unconstitutionality.
Proposed a "Court Packing" plan to appoint additional justices over 70½ years old but faced bipartisan backlash.
Despite the controversy, Roosevelt succeeded in appointing several justices and passing significant legislation such as the Wagner Act and Social Security Act.

Rise of Unions

Key labor reforms: National Industrial Recovery Act (NIRA) and Wagner Act legalized labor unions.
American Federation of Labor (AFL) represented skilled white workers, while the Committee of Industrial Organizations (CIO) focused on unskilled labor, becoming rival factions.

Strikes

Strikes were common during the Depression.
Notable sit-down strike by United Auto Workers (UAW) at GM Motors in 1937.
By 1941, many smaller steel companies began recognizing CIO unions after initial resistance.

Fair Labor Standards Act

Established regulations including a minimum wage (initially 40 cents/hour), maximum work week of 40 hours, and child labor restrictions.

Last Phase of the New Deal

The New Deal began to lose its momentum during its later stages.

Recession of 1937-1938

Following initial recovery, the economy slid into recession due to decreased government spending and implementation of the Social Security tax.
Debate over sustaining deficit spending for economic growth in line with Keynesian Economics.

Weakened New Deal

New Deal reforms faced obstacles from a coalition of Republicans and conservative Democrats.
Increased focus on foreign affairs as concerns over the rise of Nazism in Germany overshadowed domestic issues.

Life During the Depression

Many individuals faced long-lasting effects from the Depression.
Women increased workforce participation but often earned less than men.
The Dust Bowl severely affected farmers, leading to mass migrations to California.
African Americans faced job discrimination but found some opportunities through New Deal programs, aided by figures like Eleanor Roosevelt.

John Collier

Appointed as commissioner of the Bureau of American Indian Affairs, he promoted conservation and various government programs on reservations.

Indian Reorganization Act (1934)

Aimed to restore tribal control over lands and support the preservation of Native American cultures.

Impact on Mexican Americans

Many Mexican Americans were excluded from New Deal benefits and faced deportation back to Mexico.

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Explore the vital concepts of Chapter 25, focusing on the Great Depression and the New Deal spanning 1929-39. This flashcard quiz covers significant topics such as the causes of the depression, policies implemented by Herbert Hoover, and the evolution of the New Deal. Perfect for reinforcing your knowledge of this crucial period in American history.