The Great Depression - USA Flashcards
The Great Depression
The Great Depression was a severe worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world. The crisis originated in the United States but quickly spread globally, causing drastic declines in output, severe unemployment, and acute deflation in almost every country.
The Wall Street Stock Market Crash
On September 1929, occurred an economic downturn causing a sharp decline in stock prices leading to a period of economic depression in the United States.
Effects of the Stock market crash
- Products plummeted and investments into businesses came to half.
- When people defaulted on their loans, banks did not have enough money to cover customer withdrawals.
- Customers lost all the money they had deposited in banks.
- The depression didn’t just affect the U.S but happened all around the world.
- By 1932, 1/4 of the U.S workforce (13 million people) were unemployed.
President Herbert Hoover (1929 - 1933)
The 31st president whose administration coincided with the onset of the Great Depression. His policies to alleviate the crisis were poorly unsuccessful not to mention drastically late.
Hoover did not realize the economic downturn was a major depression and believed prosperity would soon return. He also asked people to voluntarily give their money to charities to help with relief efforts.
By the end of his term he initiated tax cuts, higher tariffs and the Reconstruction Finance Corporation which gave aid to railroad companies, businesses and banks. Despite his efforts, these reforms were too late as the depression worsened along with his popularity among the people.
Smoot-Hawley Tariff (1930)
The tariff planned on increasing taxes on imported foreign goods in order to aid domestic producers and economy. In retaliation, European countries also placed tariffs on U.S goods. As a result, this destroyed trade with foreign nations, while the tariff made the depression even worse.
President Franklin Delano Roosevelt (1933 - 1945)
The 32nd president who implemented the New Deal policies in order to alleviate the effects of the depression. His presidency would mark the turning point in addressing the Great Depression’s recovery.
During his presidency, Roosevelt would rely on a group of university professors known as his “Brain Trust” to help him create the policies for his New Deal vision. He would also appoint more African-Americans, Catholics, Jews and women to Federal Government than any other president before him.
In his first term of (1933 - 1937) he immediately called Congress into a special 100 day session. During this session Congress passed each of the 15 laws requested by FDR which included the (NIRA, CCC, AAA, TVA, FDIC, and PWA)
Along with all his programs, policies and laws, FDR would introduce his “Fireside chats” to address and reassure the American people that everything would be ok.
The New Deal
During Franklin D. Roosevelt’s presidency he implemented various programs such as the Works Progress Administration and Civilian Conservation Corps to provide federal aid and temporary jobs.
These programs would be categorised into three R’s known as - Recovery, Relief and Reform. Essentially, all of the New Deal programs implemented on Lower Tariffs, Higher prices for farms goods, government regulation of banks and the stock market.
The 2nd New Deal
The second New Deal was the second stage of New Deal programs passed by Congress between 1935-36. This would include - National Labor Relations Act (A.K.A The Wagner Act), Rural Electrification Administration, Social Security Act (SSA) and Works Progress Administration (WPA).
The New Deal Programs
- FDIC (Federal Deposit Insurance Corporation) - This program part of the Emergency Banking Act insured bank deposits up to $2’500 which soon increased to $5’000. As a result it helped regain the peoples trust if they were to lost their money again.
- AAA (Agricultural Adjustment Act) - 1/3 of farms had been foreclosed due to not being able to pay back their loans. As a result FDR pushed for more affordable loans, while also paying farmers to produce less and encouraged better farming techniques.
- NRA (National Recovery Admin) - It created codes for fair competition, set standards for working hours, wages and prices along with limits to production. This program would be recognised for its blue eagle logo that stated “We Do Our Part!”.
- CCC (Civilian Conservation Corps) - The CCC provided jobs, shelter, food and clothing for millions of young men who worked on environmental projects be it planting trees, building trails or improving national parks.
- WPA (Works Progress Administration) -The program hired unemployed men and some women to help build public work projects such as roads, schools, museums, playgrounds, zoos etc. It would also be where the Federal Government paid the private companies in order to directly pay their employees.
Executive Order [1602] - The Gold Standard
In April 1933, FDR required people to turn in any gold coins, gold bullion or gold certificates to the Federal Reserve System in exchange for $20.67/ounce.
FDR implemented this order by temporarily removing the dollar off of the gold standard, FDR was trying to prevent its rapid devaluation.
By 1934, FDR raised the price of gold to $35/ounce which helped inflate the Federal government’s money supply.
20th Amendment (Lame Duck Amendment)
In January, 1933, the 20th Amendment (Lame Duck Amendment) was ratified. The Amendment moved up the swearing in of a President from March to January and moved the start of Congress to January 3 (unless voted to make it another day).
It also attempted to clarify what happens in the event of the death or disqualification of the President elected.
21st Amendment
In December, 1933, the 21st Amendment was ratified. The Amendment ratified the 18th Amendment, thus ending the Prohibition.
The Wagner Act (1935)
The Wagner Act or (National Labour Relations Act) of 1935 helped unions grow stronger. The American Federation of Labour represented skilled workers like electricians and plumbers. While the Congress of Industrial Organization (Est. 1935) represented lower paid workers in the auto, steel and textile industries.
New Deal & African-Americans
During the Roosevelt’s presidency he appoint several African-Americans to important government positions and even established an unofficial group of advisors known as his “Black Cabinet”. FDR also didn’t support any civil rights legislation as he required the support of Southern Democrats for his programs.
African-Americans unemployment rate were almost double than whites. Many New Deal programs also discriminated against African-Americans. They received lower relief checks than their white counterparts, unequal wage scales, programs hired fewer African-Americans and also excluded domestic and agricultural workers.
New Deal & Mexicans
Mexicans were faced with job competition and discrimination as thousands of migrants poured into California. Thousands of Mexicans (citizen and non-citizen) were deported in the hopes of freeing up jobs. While thousands more returned to Mexico on their own.
However, those that stayed were often not eligible for relief payments and those who worked in agriculture did not qualify for social security. With only some being hired by the CCC and WPA.
