Terms in this set (41)
Negative Economic Cycle following the stock market crash, banks lost millions in bad loans on stocks. This triggered a long, downward spiral of the economy.
Effect on employment: workers lose jobs or go on part-time
Effect on income: people have less money
Effect on consumption (buying): people buy less
Effect on production: factories produce less
More people lose their jobs.....
Economic Cycle and Impact
Employment, Production, Income, and Consumption (spending levels) are closely interrelated and a problem in one area create problems in other areas.
Root Causes - A Faulty Banking System
There were thousands of banks in America during the 1920s, many were small
There were NO govt. regulations for banks
Banks made A LOT of "bad" loans that could not be repaid
Many banks went bankrupt and lost their depositors' savings
Root Causes - Agricultural Problems
During WWI farmers sold 100% of their crops and livestock (govt. bought for soldiers and Allies)
Farmers took out loans and bought more land and new farm equipment that allowed them to produce even more
After the war farmers could not sell everything they produced (more supply than demand)
Crop and livestock prices fell dramatically and farmers could not pay back loans and many farms were foreclosed on
Root Causes - Overproduction of Consumer Goods
During 1920s factories grew, hired more people, produced new goods
By mid-1920s factories were producing more than they could sell (overproduction)
Factories had to lay people off
Root Causes - An Unsound Stock Market
Stock market grew FAST during the 1920s
Stocks were overvalued (not worth the actual value of the companies)
People borrowed money from banks to buy stocks even though they could not afford to repay the loans unless they could resell the stock for a profit
severe economic crisis during the 1930s
Getting aid to suffering people
Taking steps to improve the economy, especially in terms of employment, consumption (buying), and production
Making changes to prevent another financial crisis like the Great Depression
Monthly incomes mainly for retired people
Nicknames for homeless shantytowns during the Depression
FDR's radio speeches that were very popular where he spoke of the problems of the nation and possible solutions - gave people hope. These talks showed FDR's warm and understanding approach to the public.
Default on loan
Not paying back a loan - many farmers and people who bought stocks on margin defaulted - thousands of banks went bankrupt
The name given to the area of the Great Plains severely damaged by droughts and dust storms during the 1930s
A person who moves from place to place to find work harvesting (picking) fruits and vegetables - many were Dust Bowl victims
Migrant Dust Bowl victims that headed west to look for work on farms, largely in California
A place where shares in corporations are bought and sold through an organized system
Buying stocks with a 10% down payment and borrowing the rest - Problem bc people could not pay back loans when the market crashed and values plummeted
The name given to the laws (alphabet soup laws and programs) aimed at relieving the Depression, which were passed by Congress during the Hundred Days (FDR's first 3 months as President).
New Deal's impact on the govt. And economy
Prior to the GD the public didn't look to the govt. To help during times of economic trouble. After the govt. took more responsibility for the welfare of the public. The SSA provided for the elderly and unemployable. The FDIC insured bank deposits and the SEC regulated the stock market. Farms and prices were regulated/assisted by the govt. too.
FDR and Court-Packing
FDR's attempt to prevent the Supreme Court from undoing the New Deal. He asked Congress to increase the number of justices from 9 to 15, and appoint 6 new justices that would support the New Deal.
His attempt failed and FDR was criticized for his attempt and seen as trying to overstep his authority, it split the Democrats
October 29, 1929
The day that the stock market crashed.
Franklin Delano Roosevelt
Democrat from NY - become President in 1933
Paralyzed from polio
Popular with the people - fireside chats made people feel that he was concerned and trying to help
Developed the New Deal to get the country out of the Depression
Relied on advisors like the Brain Trust and Black Cabinet
FDR's eyes & ears - traveled around the country and listened to the people and reported back to her husband
Concerned for minority rights, women's rights, children, and workers' rights
Gave her own speeches, press conferences, and worked to help the people
Popular but also criticized for her active role
Photographer who captured people's lives and suffering during the Great Depression, especially migrant farm workers
Senator from Louisiana
Critic of FDR
Started the Share Our Wealth Organization - believed in very heavily taxing the rich to give to the poor
President when the stock market crashed and during the first years of the Depression
Not popular - blamed for not doing more to stop the Depression
Not open with the press or the public
Criticized for driving the Bonus Army out of D.C. with the army
WWI soldiers who gathered in Washington D.C. when Hoover (and later FDR) was in office, to request their war bonus payment early. Hoover drove them out of D.C. with the army.
Eleanor Roosevelt gathered with them, when they came back during FDR's presidency, and they left peacefully.
progressive lawyers, economists, and social workers who helped advise FDR and develop relief programs
Father Charles Coughlin
Critic of FDR
Catholic Priest who gave frequent radio speeches - eventually he was taken off the air because he made anti-Jewish comments
Secondary government officials who advised FDR about African American concerns through the Depression
Racehorse who was an underdog and inspired Americans during the Depression and helped them believe in hope for something better
Social Security Act - SSA
Set up a system of pensions for the elderly, unemployed, and people with disabilities
Securities and Exchange Commission - SEC
Regulated the sale of stocks and bonds and had the power to punish dishonest stockbrokers and speculators
Tennessee Valley Authority - TVA
Built dams to provide cheap electric power to Southern states and set up schools and health centers
Federal Emergency Relief Administration - FERA
Gave relief to unemployed and needy
Agricultural Adjustment Administration - AAA
Paid farmers not to grow certain crops - to adjust supply to demand and regulate prices
RELIEF & RECOVERY
Federal Deposit Insurance Corp. - FDIC
Insured savings accounts in banks approved by the government
National Recovery Administration - NRA
Helped to devise standards for production, prices, and wages (child labor laws & minimum wage)
Civilian Conservation Corps - CCC
Provided outdoor jobs for young single men to plant trees, build bridges, and parks, and set up flood control projects.
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