Effectiveness of the New Deal- Background Flashcards
What was America in the midst of when Franklin Delano Roosevelt was elected president of the USA?
America was in the midst of the worst economic crisis in history- the Great Depression.
What triggered the Great Depression?
The Wall Street crash (October 1929)
How well did president Hoover (previous president deal with the Great Depression?
Hoover dealt with it poorly
Couldn’t solve americas problems
Efforts described as “too little too late”
What did Franklin Delano Roosevelt promise in the 1933 election campaign?
“Action and Action Now”
&
“a New Deal”
What was the new deal?
A rush of new laws and government agencies set up to deal with individual problems created by the Great Depression.
How did Roosevelt bring new hope in his inauguration speech?
He said:
“let me assert my firm belief that the only thing we have to fear is fear itself”
What were the three aims of the new deal?
Relief
Recovery
Reform
How did the New deal provide the aim of relief?
The Federal Government took action to provide relief for millions who were unemployed and homeless I.e. provide food and homes.
How did the new deal provide the aim of recovery?
The federal Government took action to rebuild the shattered economy by reducing unemployment, stimulating demand for goods and get the economy moving again.
How did the new deal provide the aim of reform?
The federal government took action to create a fairer society and prevent a repeat of the economic disaster.
How was Roosevelt’s approach to the crisis different of that of Herbert Hoover?
Herbert hoover/ republicans: championed “rugged individualism” and a laissez- faire approach
FDR:
Large scale government action could help. He was prepared to interfere as much as possible and to spend government cash to pull the economy out of depression.
What problems were facing America in 1933?
The Banking crisis
Businesses cut production and laid off workers
Wages were reduced
unemployment
Industrial and farm production fell
International trade fell
Describe the Banking crisis (a problem facing America in 1933)
In 1929, 659 banks failed
People stopped using them and withdrew savings
1930, 1352 banks closed including the Bank of the United States with 400,000 investors.
1931, 2294 banks went
$1 billion was withdrawn from banks As customers felt safer having their money at home
1933, 5000 banks were bankrupt and the whole banking system about to collapse
Explain how wages were cut for those still employed (a problem facing America in 1933)
Average wages were cut by 60%
Workers were paid less and less- they buy less
Describe how industrial and farm production fell
Fell by 40%
Farm prices fell so low that it cost more to transport animals to market than price the animals would fetch
