Great Depression Unit Test Flashcards
What production switch did factories make after WWI?
Factories switched from producing military products to producing consumer goods.
As more goods came to the market, prices ________. Meanwhile, rising _______ gave consumers more to spend.
dropped
incomes
Describe installment buying. Why was this type of buying attractive to consumers?
Installment buying is buying something using credit. This means you pay for it in small payments or installments over time + interest, consumers liked this because they were able to get consumer goods they wanted, but would not have to pay for it all right away especially if they could not afford it.
What were some things Americans bought on installment?
Household appliances, cars, furniture.
How did government policies help boost the economy?
-High tariffs [taxes] on imports or goods being brought into the U.S. from other countries encouraged people to buy American made products
- tax cuts
What is the bull market? Is this a good market for consumers?
A bull market is a period of rising stock prices. This is good for consumers because they can make $ quickly by investing in the stock market.
Describe what it means to buy on margin.
Buying on margin means borrowing money in order to buy stock, this type of buying/borrowing worked well only when the stock price went up.
Which group of Americans did not benefit from the prosperity of the 1920s?
Farmers did not benefit from the prosperity of the 1920s. They produced so many extra crops during WWI but after the war the product was no longer needed. Farmers also had high debt from taking loans to expand their farms and buy new equipment.
Workers also did not wholly benefit from the 1920s prosperity. There was high unemployment and those who had jobs were unskilled where they received lower pay.
Describe the outcome of the 1928 election.
Herbert Hoover won the election.
Causes of the Great Depression
Uneven distribution of income
Overproduction
Surplus produce
Lagging wages
Unsafe banking structure
Uncontrolled stock speculation
Uneven distribution of income:
An estimated 90% of the nation’s wealth was owned by 13% of the people.
Overproduction:
Factories produced more goods than people could afford to buy. (At first, easy credit hid this).
Surplus produce:
Farmers who had bought new equipment and better seeds produced more crops. The result was a surplus, or an amount that remains unneeded. Farm prices then fell (Supply goes up, demand goes down).
Lagging wages:
Factory workers, whose wages lagged, could not afford the products they had helped make.
Unsafe banking structure:
Banks were a major weakness in the economy. Federal and state governments had no plan to protect them or their customers. When a bank failed, people lost their money.
Uncontrolled stock speculation:
Stock prices skyrocketed because it was too easy to buy stock “on margin.” On margin means people put a little money down and borrowed the rest when buying stock. Thus, they were heavily in debt. If prices rose, they could sell their stock, pay off the debt and keep the profit. But if prices dropped suddenly, they lost everything unless they sold quickly to minimize the amount of money they would lose. In October 1929, many tried to sell at the same time, stock markets plunged, and the Great Depression began.
Hoovervilles
These places are unfit for human occupancy. The dwellings are built of brush, rags, sacks, broken pianos, odd bits of tin and sheet iron, pieces of canvas… Entire families… are crowded into hovels, cooking and eating in the same room. The majority of the shacks have no sinks or cesspools [underground storage for waste/sewage] for this disposal for kitchen drainage, and this together with other garbage, is thrown all over the ground.”
Veterans march to washington
Like most people, veterans were hard hit by the depression. They protested their bonus payment in D.C. Hoover used forced to disperse them and did not pay their bonuses early.
Bank Faliure’s
The Depression caused banks to fail and people to lose their savings. Almost 4,000 banks closed in 1933.
Why did so many people rely on handouts
During the depression, people lost their homes & jobs and were suffering from lack of food. Many people relied on hand outs.
Impacts of the Great Depression
- Unemployment
- Homelessness
- Hunger
- Bank closings/failures
- Protests (especially WWI veterans)
- Need for relief from the government
Hoover’s take on bettering the depression
Why did people blame Hoover?
Hoover is slow to respond
Hoover does not believe role of federal (central) government to provide direct assistance to citizens
Hoover vs. FDR Policy
Franklin Delano Roosevelt (FDR):
U.S. President from 1933-1945
Democrat; got the government more involved in the economy than ever before
Created the “New Deal” to try and end the depression and support Americans
The only president to be elected to 4 terms
suffered paralysis due to polio
What was the Hundred Days?
The session of Congress that lasted from right after FDR’s inauguration in March of 1933 to June in which FDR worked closely with Congress to take immediate action in addressing the economic crisis.
(Relief, recovery, reform)
How did FDR deal with the banking crisis immediately after taking office?
The day after he became president, FDR declared a bank holiday and closed all banks for 4 days. Only banks strong enough to re-open could. He proposed the Emergency Banking Relief Act which created more government control over banks.
How did FDR connect with the American people?
FDR gave a series of radio talks known as the “fireside chats” where he reassured people and discussed his ideas and programs.
“NEW DEAL” PROGRAMS
CCC – Civilian Conservation Corps (RELIEF)
FERA – Federal Emergency Relief Act (RELIEF)
WPA – Works Progress Administration (RELIEF)
NRA – National Recovery Act (RECOVERY)
TVA – Tennessee Valley Authority (RECOVERY)
AAA – Agricultural Adjustment Act (RECOVERY)
REA – Rural Electrification Administration (RECOVERY)
FDIC – Federal Deposit Insurance Corporation (REFORM)
SSA – Social Security Act (REFORM)
SEC - Securities and Exchange Commission (REFORM)
Glass-Steagall Act (REFORM)
CCC – Civilian Conservation Corps:
provided jobs for young men to plant trees, build bridges and parks, and set up flood-control projects
RELIEF
FERA – Federal Emergency Relief Act:
Provided money for relief projects for the unemployed
(put money back into the economy)
RELIEF
WPA – Works Progress Administration:
employed men and women to build government buildings, airports, schools, roads, bridges; employed artists, writers and musicians
RELIEF
NRA – National Recovery Act:
regulated business by helping to get workers higher wages; setting prices for goods; helped with working conditions
RECOVERY
TVA – Tennessee Valley Authority:
built dams to stop flooding and provided cheap electricity to 7 southern states; set up schools and health centers
RECOVERY
AAA – Agricultural Adjustment Act:
Paid farmers not to grow certain crops to combat overproduction on farms
RECOVERY
REA – Rural Electrification Administration:
paid workers to help bring cheap electricity to rural areas
RECOVERY
FDIC – Federal Deposit Insurance Corporation:
insured savings accounts in banks approved by the government up to $100,000
REFORM
SSA – Social Security Act:
set up a system of pensions for the elderly, the unemployed, dependent children and people with disabilities
REFORM
SEC - Securities and Exchange Commission:
gov. agency created to regulate (control) the stock market
REFORM
Glass-Steagall Act:
in addition to creating the FDIC, this law separated commercial banking from investment banking (ex: banks cannot use customer’s deposits to invest in stocks); repealed in 1999
REFORM
RELIEF
(help for those who needed it)
RECOVERY
(restarting the economy)
REFORM
(preventing another depression)
FDR AND THE SUPREME COURT
What conditions created the dust bowl?
Modern farming equipment made it easier to clear huge plots of land which removed sod layer (held soil in place)
Extreme Drought (no rain)
Dust Bowl
a period of severe dust storms that greatly damaged the ecology and agriculture of the US during the 1930s
Eleanor Roosevelt
First Lady, wife of FDR. She acted as FDR’s “eyes and ears,” traveling the country to identify issues the president should address or evaluate how some of his programs were working. Changed the role from largely ceremonial to one with a political agenda.
American Federation of Labor (AFL)
the largest labor union in the U.S. It was only open to skilled workers (workers with a trade)
Congress of Industrial Organizations (CIO)
a new union that was open to all including unskilled workers, women, and minorities.
Sit-down strike
a bargaining tactic used by workers in which employees went on strike but instead of leaving their jobs, they stayed in their place of employment and refused to move. This was done to prevent the owner from bringing replacement workers.
Wagner Act
guaranteed a worker’s right to join a union
guaranteed collective bargaining, the right of unions to negotiate pay and benefits for their members
Fair Labor Standards Act
set a minimum wage (25 cents an hour)
set maximum weekly work hours (44)
established time and a half for overtime work ended some child labor
Why were movies popular during the Depression?
Movies were popular during the Great Depression because they helped to distract people and served as an escape from the worries and problems of the depression.
What was FDR’s “black cabinet”?
FDR’s “Black Cabinet” was a group of African American advisers to the president. FDR gave African Americans a bigger role in government than ever before. Even though FDR did support some civil rights measures, he was popular with African Americans because of his efforts on behalf of the poor and unemployed.
How do some of today’s political issues date back to the Depression?
Some of today’s political issues date back to the Great Depression because of the changes that happened during that time. During FDR’s presidency, the figure of the president became more powerful and so did the federal government. Social programs that were created were run by the federal government as opposed to local or state governments. FDR’s strategies continue to fuel debate over the role of government in the economy and in general.
Why did New Deal programs include funding to support the Arts & Culture?
Way to find relief and escape during the economic crisis
Employ more people
Benefited our country
Overall, do you think that minorities gained more under Roosevelt than they had before? Explain.
Failed to pass some civil rights bills
Mexican Americans were also affected by FDR’s reforms, many deported
Black cabinet
more women held government positions than ever before
What conditions on the Great Plains led to the environmental phenomenon known as the “Dust Bowl?”
The Dust Bowl was a region of the Great Plains that was impacted by severe dust storms during
the 1930s. Drought (no rain), heat waves, overuse of the land, overgrazing by cattle, and removal of the sod (top layer of soil) by farmers, all contributed to this.
What effects did the Dust Bowl have?
The Dust Bowl brought about tremendous damage to farms throughout the Great Plains and took years to subside. Many families felt they had no choice but to leave their farms and relocate to states like California, looking for farm work.
For the New Deal
- the New Deal saved our democratic system
- ended the banking crisis
- provided millions of jobs
- helped farmers
- improved infrastructure and set aside national parklands
- brought electricity to areas
- Social Security provided for the elderly, unemployed and disabled
Against the New Deal
- the government became too powerful (intruded and threatened freedom and private property)
- the New Deal spent more money than the govt. had (deficit spending)
- the New Deal created national debt, the total sum of money our govt. owes
- the New Deal did not achieve its goal of ending the Depression
HOOVER
- believed in laissez-faire (hands off), limited govt.
- encouraged voluntary assistance and measure by business
- Republican; politically conservative, meaning he believed in less government control and more individual freedom in the economy
FDR
- expanded the role of government in supporting the public and regulating business, banks and the stock market
- Democrat; politically liberal, meaning he believed in government action that would bring about reform
