USA Boom And Bust Flashcards
What did Hoover do with the banks to help relieve the depression?
-Hoover created the Reconstruction Finance Corporation. This was a massive U turn for Hoover and the Republican Party. This was the first direct attempt that the federal government was trying to get the US out of economic depression.
- The corporation was given 2 billion dollars to directly assist banks and insurance companies in financial trouble.
- 90% of RFC loans went to smaller, medium sized banks.
- The RFC did help 160 banks, 60 railway companies and 18 mortgage companies.
- However, it did not encourage banks to loan to businesses and there was not a severe change to stop economic downturn.
-However, FDR still used the RFC to combat the depression.
What was the act that created numerous jobs and what was its effect?
The Emergency Relief Act 1932
- Due to it being passed in 1932 it did not have the effect it should have had.
- It was given 1.5 Billion to give to state governments to fund public work schemes to employ people.
-There was a march on Washington by WWI veterans. 21,000 additional marchers joined and it lead to the army general needing to escort them.
- Hoover ordered the army to forcibly move them however lead to the loss of two lives. Was a major political blunder.
What was the problem with FDR’s speeches leading up to the 1933 election?
-Appeared that FDR did not always appear to have clearly thought out how he would tackle the depression.
- He said he would create public work programs and increase relief for those suffering hardship however did not say how it would be funded.
-Was in favour of abolishing prohibition, fixing unemployment and helping pensions.
- In some speeches he attacked Hoover for spending too much yet he planned to spend even more.
What was the result of the 1933 election?
-FDR gained an impressive victory and captured 22 million votes compared to Hoovers 15 million.
- In both houses, the Democrats achieved large majorities allowing them to pass legislation.
What were the reasons for FDR’s landslide victory in the 1933 election?
-The depression was so bad, any alternative to Hoover would’ve been elected.
- He was ready to experiment with new ideas(Something Hoover never did)
- He projected confidence and optimism in his speeches that things would get better.
- His anti- prohibition stance was popular.
What were the “Lame Duck Months?”
-This is the months between when FDR had not yet been inaugurated, so Hoover was still in office but with no power and a period of transition.
-Hoover was desperate to contain the depression and made a series of policy announcements in December before FDR’s inauguration.
- These policy’s completely failed and was merely a reason why the American people did not re-elect him.
What did FDR say in his inauguration?
What points did he bring up and who did he blame for the depression?
-FDR painted a grim picture of the US at the time like mass unemployment and poverty.
-He said the people were not to blame. It was that the US was poorly governed and had mismanaged the economy.
- FDR asked for emergency powers to be granted so he could pass legislation unopposed for 100 days.
The New deal- What was The Emergency Banking Act and when was it?
- FDR key priority was to restore faith in the banking system. He acted decisively as two days later he ordered a national bank holiday from 6-9 March.
- In that period he persuaded congress to pass the EBA, which it did in a record 7 hours.
- During the bank the US treasury investigated all the banks threatened with collapse and only those approved by the treasury would be allowed to reopen.
- Roosevelt’s first fireside chat explained to listeners simply, put your money back into banks for this to work.
- By April 1933, 1 Billion dollars had been returned to the banks, within a week of becoming president, FDR had effectively restored confidence in the US banking system.
What was the Glass-Steagall Banking Act and when was it?
- June 1933
- Reformed the system by separating commercial from investment banking,this was a major cause for the crash.
- Also created the Federal Deposit insurance Corporation, which guaranteed all bank deposits to the value of $5000.
- Between them these two acts restore confidence and for the first time in 60 years, in 1936 no bank closed.
What was the SEC and the Federal Securities Act and when was it?
- May 1933
- Another cause of the crash had been share speculation.
- Was to regulate the whole system of buying and selling share, all new share purchases had to be registered with the Federal Trade commission.
- SEC regulated all share transactions and stock exchanges across the US. -Made a famous arrest, corrupt banker Richard Whitney and showcased FDR breeding confidence into the banking system.
What was The Gold Reserve Act and Silver Purchase Act and when were they?
- GRA was Jan 1934
- SPA was June 1934
- FDR attempted to bring currency stability through these 2 acts.
- The GRA devalued the US dollar against the rate of gold. He hoped this would make exports cheaper.
- The SPA hoped to raise prices by increasing the amount of silver in US coinage. Aim was to encourage more economic activity.
-Unfortunately neither revived US trade due to FDR thinking issues were domestic not international. Was purely focused on US and stunted international trade.
Agriculture- What was the Tennessee Valley Authority and when was it?
- The Tennessee Valley committee was an are notorious for flooding, poor infrastructure and low standard of living and occupied 7 states.
- The TVA established a network of dams to control the flow of the river and create hydro-electric power.The percent of those with electricity in 1933 was 2% by 1945 it was 75%.
- Residents saw a 200% boost in their incomes due to the land now being fit for agriculture.
- Some critiques FDR for funding the whole thing and should’ve asked for help from states.
What was The Agricultural Adjustment Administration(AAA) and when was it?
- June 1933
- Set to stabilise farm prices with a variety of methods.
- They introduced an allotment plan whereby, to prevent agricultural surpluses, farmers would reduce their acreage. Essentially the government would pay for farmers to decrease their production in order to stabilise production to increase prices.
- Farm incomes rose by 2 billion.
- Many black agricultures did not benefit and those in rural parts still went without electricity.
What was the dust bowl?
- Climatic disaster of 1934 and 35 known as the dust bowl.
- The intense production in WWI had destroyed part of the land.
- Ten of thousands farm families were ruined and sought a new life into places like California.
- Between 1935-40 350,000 agricultural refugees arrived in California and received a hostile welcome.
- No new deal agencies were fit to deal with the issues they faced.
What was The National Recovery Administration and when was it?
- 1933
- As part of the recovery plan, the NRA issued codes of practice for each industry. These codes were used to ensure good competition, fair wages and fair hours.
- The most significant part was Section 7(A) which allowed workers to collectively bargain for higher pay
- NRA had 3.3 billion to spend and businesses that adopted the NRA received a blue eagle sign which was the most recognisable symbol of the First New Deal.
- Issued over 500 codes of practice and many had been ineffective or not necessary leading to large businesses like Ford, not participating and it was declared unconstitutional in 1935.
- Overall, did not create fast economic recovery.
What was the Public Works Administration and when was it created?
- 1933
- Lead by Harold Ickles, was a long term programme offering economic growth unlike other relief programs.
- Budget of 3.3 Billion.
- Ickles wanted to provide real, long term jobs and was responsible for building 13,000 schools and 50,000 miles of road.
- Ickles spent money smartly and had only spent 110 million.
- The three public work scheme agencies(PWA, CWA and FERA) employed 20% of the US workforce which was an astonishing achievement.
