Chapter 14-15: The Great Depression & the New Deal Flashcards
Dow Jones
• Measure based on stock prices of 30 large corporations from all sectors of the economy
• The Dow Jones dropped about 82% the next 3 years after the stock market crash
? The most widely used barometer of the stock market’s health, an overall deciding factor of whether people invest or not
Stock Market Crash
• Crashed on Black Tuesday - October 29, 1929
• Everyone needed to sell their shares, so stock prices dropped lower than original prices, causing people to go into debt
? Resulted in most people losing their savings, banks & businesses closed, jobs lost
Great Depression
• Businesses went bankrupt & unemployment was at 25%
• Hoovervilles were small, shanty towns built by the homeless named after Pres. Hoover bc people blamed him for the depression
? Economy was at its lowest ever in history
Causes of Great Depression
• Hawley-Smoot Tariff Act raised tariffs which reduced trade w/ Europe, making unemployment worse
• Government followed laissez-faire policy, so they didn’t interfere to help the economy because they believed it would improve by itself, was too late when they realized it wouldn’t
• Installment plans persuaded people to spend more money than they had, resulting in them going into debt
? Were all factors that made the Great Depression as extreme as it was
Dust Bowl
• Farmers had used tractors to break up farmland, which removed protective layer of prairie grass, so wind easily carried dust
• Region that was hit the hardest w/ droughts & windstorms was Kansas, Oklahoma, Texas, New Mexico, Colorado
? Caused many farmers in the Midwest to leave & migrate west to California & other Pacific states
Herbert Hoover
• Was the Republican president during the Great Depression
• Public opinion turned against him after he used military force to get rid of Bonus Army from D.C.
• Believed that depression was a natural part of the business cycle, so he urged Americans to continue w/ their daily lives and be optimistic
? Known for his inability to effectively deal w/ the Great Depression
Bonus Army
• More than 10,000 WW1 veterans + families marched to D.C. to get their promised bonuses 13 years earlier than planned bc they needed the money
• When veterans were asked to leave and didn’t, Hoover approved military force to be used against them
? Hoover’s actions turned public opinion against him & the Republicans, allowing FDR to easily win the 1932 election
Franklin Delano Roosevelt
• Was Democrat nominee in 1932 election & won by landslide bc majority of American blamed Hoover for depression
• Had fireside chats on radios that were directed to the public, which citizens liked
? Gave nation a sense of confidence during a time of great depression, compared to Hoover’s laid-back approach w/ laissez-faire
The New Deal
• FDR’s plan to alleviate/fix the problems the started the Great Depression
• His 3 goals were relief, recovery, & reform, which all focused on immediate, temporary, or permanent actions that would help the economy
• FDR worked w/ team of advisors, which included professors, lawyers, journalists, etc. to come up with actions, group became known as Brain Trust
? Gave Americans hope bc the gov was finally planning to start helping instead of staying w/ laissez-faire policy
Hundred Days
• Was the period of intense activity after FDR’s inauguration on May 9, 1933
• More than 15 major laws passed within theses 100 days, laws significantly expanded govt’s role in the economy
? FDR took action that would extremely help improve economical & financial issues from the Great Depression
Agricultural Adjustment Act (AAA)
• paid farmers to lower the production of crops in hopes that it would raise crop prices
• some Americans argued that the destroyed food could’ve gone to the poor
? helped raise farm prices & gave more $ to farmers
Civilian Conservation Corps (CCC)
• employed young men to build projects that would help the environment
• most of their earned money went back to their families
? by 1942, 3 million young men had passed through the CCC
National Industrial Recovery Act (NIRA)
• set prices of products & established standards
• gave workers the right to unionize & collectively bargain
? part of FDR’s many laws passed to help nation recover & was actually against antitrust laws
Deficit spending
• gov spends more $ than it receives in revenue
• gov would give loaned $ to consumers, consumers buy stuff, fuels economy, gov gets back $ from taxes
? was hoped to stimulate the economy
Three Fiery Critics
• Charles Coughlin - catholic priest w/ radio show, early supporter, later disagreed w/ FDR’s actions
• Dr. Francis Townsend - proposed national pension for elderly, had to spend it all
• Huey Long - “Share Our Wealth”, wealthy get taxed more, everyone gets something (home, radio, free college education), assassinated
? were 3 main ppl that undermined publics’ support for FDR
