The Great Depression & The New Deal
The US economy collapses. Farms, businesses, and banks are failing, causing widespread unemployment and poverty. The time of economic hardship with have global impacts. Salvations comes in the form of a new president elected in 1933.
Terms in this set (59)
When the bank takes possession of a property from the residents who are not keeping up with their loan payments.
Farming Industry Crisis
Foreign demand of American crops declined as Europeans began farming again after WWI, Increased production of crops drove prices down- between 1919 and 1921 the annual income for farmers fell from $10 billion an year to $4 billion a year. *
Many farmers will lose their farms because they cannot pay--> This leads to many rural banks failing too
from 1929-1932 about 400,000 farms were lost to forclosure
Government guaranteed to pay farmers a minimum price for certain farm products. These prices were artificially high. This was done on goods like wheat, corn, cotton, and tobacco.
An arrangement to receive cash, goods, or services now and pay for them in the future. Will lead to high levels of debt
Uneven distribution of income
Economic condition where the rich get richer and the poor get poorer. By 1929, 70% of American families did not make enough money to maintain an acceptable standard of living.
31st President of the United States, Republican candidate who assumed the presidency in March 1929 promising the American people prosperity and attempted to deal with the Depression.
Dow Jones Industrial Average
The average cost of 30 selected stocks, used to give an indication of the direction (up or down) of the stock market over time.
A steady rise in the stock market prices over a period of time
A steady drop in the stock market over a period of time.
An involvement in risky business transactions in an effort to make a quick or large profit.
Buying on Margin
buying stock by paying only a portion of the full cost up-front with promises to pay the rest later. Like buying stock on credit.
October 29, 1929; date of the worst stock-market crash in American history and beginning of the Great Depression.
The Great Depression
The Great Depression was an economic depression notable for its duration and intensity that struck the world from 1929-1933. Recovery was a long and difficult process.
After the stock market crash, many Americans proceeded to remove their money from the bank causing many banks to close., Bad bank loans drained cash out of peoples' savings accounts; depositors later demanded their cash, which banks no longer held, caused banks go bankrupt (fail)
Groups of hungry people waiting outside charitable organizations for free meals during the Great Depression
Hawley-Smoot Tariff Act
(1930) - Raised tariffs to an unprecedented level and worsened the Great Depression by raising prices and discouraging foreign trade.
Causes of the Great Depression
Tariffs decreased the foreign market for American goods, crisis in the farming industry, Easily available credit, unequal distribution of wealth.
Due to economic downturn, problems of malnutrition and homelessness grew at an alarming rate. On the outskirts of town, these sprang up in which families lived in makeshift shacks constructed of tin, wood planks, and other debris. Other homeless people slept in freight cars, city parks, subways, or even sewer ducts.
Shanty towns that the unemployed built in the cities during the early years of the Depression; the name given to them shows that the people blamed Hoover directly for the Depression.
Impact of Depression on Minorities
African Ameicans and Latino's had higher unemployment rates than whites. Those with jobs still received lower wages than the white workers. Also faced increased racial violence from unemployed whites
..., Region of the Great Plains that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages.
Cash payments or food provided by the government to the poor
Hoover Dam in Arizona, built to create jobs and provide electricity, public project; makes Lake Mead
To revise a loan agreement to make the terms of payment more suitable to a borrower's present income and ability to repay. It usually provides a lower interest rate and lower monthly payments over a longer period of time.
Federal Home Loan Bank Act
Lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure.
Reconstruction Finance Corporation
Agency established in 1932 to provide emergency relief to large businesses, insurance companies, and banks. Believed that the money given to these large corporations would "trickle down" to the American people.
Trickle Down Theory
Hoover's idea that the government should help the businesses (at the top) and the economic effects would eventually reach those at the bottom (workers)
1932 - Facing the financial crisis of the Depression, WW I veterans tried to pressure Congress to pay them their retirement bonuses early. Congress considered a bill authorizing immediate assurance of $2.4 billion, but it was not approved. Angry veterans marched on Washington, D.C., and Hoover called in the army to get the veterans out of there.
Herbert Hoover's belief that people must be self-reliant and not depend upon the federal government for assistance. Helped to shaped Hoover's policies during the Depression. *
Lack of direct relief
Displaced farm families from the Oklahoma dust bowl who migrated to California during the 1930s in search of jobs.
American novelist who wrote "The Grapes of Wrath". (1939) A story of Dustbowl victims who travel to California to look for a better life.
Causes of Dustbowl
overgrazing by animals, removal of prairie grasses to plant crops, crop failure so soil not held in place, high winds, and long lasting draught
was the first major highway to link the West Coast with the East (Goes from Chicago to LA). With its construction came the industrialization of the West. played a major part during the depression and WWII. Many people migrated to the West to get away from the poverty of the Midwest
Percent of Unemployed Americans during Depression
Got almost to 13% before FDR takes office
Franklin D. Roosevelt
32nd US President - Elected in 1933-He began New Deal programs to help the nation out of the Great Depression, and he was the nation's leader during most of WWII
A series of reforms enacted by the Franklin Roosevelt administration between 1933 and 1942 with the goal of ending the Great Depression.
New Deal Goals
Relieve Unemployed, Exercise Plans for Economic Recovery, and Prevent another Depression
The special session of Congress that Roosevelt called to launch his New Deal programs. 100 days after FDR was sworn into office. Congress passed into law every request of FDR enacting more major legislation than any single Congress in history
FDR's Wife and New Deal supporter. Was a great supporter of civil rights and opposed the Jim Crow laws. She also worked for birth control and better conditions for working women
Civilian Conservation Corps (CCC)
Part of the New deal, a public work relief program for unemployed men so they have jobs. the men worked on jobs related to conservation and development of natural resources
Glass-Steagall Banking Act
Created Federal Deposit Insurance Corporation (FDIC) which insured individual deposits up to $5000, thereby eliminating the epidemic of bank failure and restoring faith to banks. Also outlawed banks investing in the stock market.
A federally sponsored corporation that insures accounts in national banks and other qualified institutions. It allowed people to trust the banks again after their failure during the Great Depression.
Public Works Administration (PWA)
(FDR) , 1935 Created for both industrial recovery and for unemployment relief. Spent $4 billion on thousands of projects that included public buildings, highways, and parkways.
Securities and Exchange Act (SEC)
SEC made in 1934. It polices the stock market to avoid another crash. Monitors the stock market and enforces laws regulating the sale of stocks and bonds
Agricultural Adjustment Act (AAA)
Recovery: (AAA); May 12, 1933; restricted crop production to reduce crop surplus; goal was to reduce surplus to raise value of crops; farmers paid subsidies by federal government; declared unconstitutional by the Supreme Court in US vs Butler on January 6, 1936
Social Security Act
(FDR) 1935, Guaranteed retirement payments for enrolled workers beginning at age 65; set up federal-state system of unemployment insurance and care for dependent mothers and children, the handicapped, and public health
Government practice of spending more than it takes in from taxes. Necessary to fund New Deal programs grew immensely as nation entered World War II.
A nation's system of programs, benefits, and services that help people meet those social, economic, educational, and health needs that are fundamental to the maintenance of society.
2nd Hundred Days
There were three goals during this time. 1. strengthen national commitment to create jobs. 2. to provide security against old age, illness and unemployment. 3. to improve housing conditions and clean out the slums.
Second New Deal
1935; a new set of programs and reforms launched by FDR. These laws passed changed American life even more than the Hundred Days had done.
National Youth Administration (NYA)
1935, provided education jobs counseling and recreation for young people. part time positions at schools for students allowed for aid in HS, college and grad school. part time jobs for drop outs.
1935, also National Labor Relations Act; granted rights to unions; allowed collective bargaining
Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions. Made possible by the Wagner Act
Rural Electrification Administration (REA)
1935; made electricity available at low rates to American farm families in areas that private power companies refused to service. Goal was to improve quality of life.
U.S. Secretary of Labor from 1933 to 1945, and the first woman ever appointed to the cabinet. As a loyal supporter of her friend Franklin D. Roosevelt, she helped pull the labor movement into the New Deal coalition
New Deal coalition
A coalition forged by the Democrats, who dominated American politics from the 1930's to the 1960's. Its basic elements were the urban working class, ethnic groups, Catholics and Jews, the poor, Southerners, African Americans, and intellectuals.
1940 Presidential Election
FDR Challenges unwritten constitution by running for a 3rd presidential term.
1944 Presidential Election
FDR Elected to a 4th presidential term. Will die in office and be replaced my H.S. Truman
Amendment that created a 2 term limit on presidents.