The Great Depression and the New Deal

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consumer
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someone who uses goods and services
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Black Tuesday
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the day that the stock market crash, leading to the Panic of 1929
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Bankruptcy
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the state of being bankrupt, or having no money, being in poverty
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Hoovervilles
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Shanty-towns that housed many who had lost everything due to the crash. Shelters were built of old boxes and other discards (named after Herbert Hoover).
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Public Works Programs
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government funded projects to build public facilities (schools, highways, etc.)
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Bonus Army
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a group of WWI veterans that marched to Washington D.C. in 1932 to demand the immediate payment of their goverment war bonuses in cash ($1,000), even though the due date was 1945
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Brain Trust
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a group of expert policy advisers who worked with Roosevelt in the 1930s to end The Great Depression
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New Deal
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the name of President Roosevelt’s program for attempting to get the US out of the depression
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Relief
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for the needy
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First Hundred Days
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(March 4 to June 16, 1933)– the time when Roosevelt proposed all the programs to the New Deal
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Fireside Chats
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informal talks given by Roosevelt over the radio, sat by White House fireplace, gaining the confidence of the people; The informal radio conversations Roosevelt had with the people to keep spirits up. It was a means of communicating with the people on how he would take on the depression.
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Trickle-down Economics
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an economic theory that money lent to banks and businesses will “trickle down,” or profit smaller businesses and consumers; Hoover believed in this idea (part of his campaign)
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NRA (National Recovery Administration)
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a governmental agency that was a part of the New Deal that intended to reduce destructive competition
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FDIC (Federal Deposit Insurance Corporation)
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a federally sponsored corporation that insures accounts in national banks and other qualified institutions; a reform; assures people their money back if they put their money in the bank
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Works Progress Administration (WPA)
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a massive work relief program that funded projects ranging from construction to acting; it was ended by FDR during WW2
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National Labor Relations Act (Wagner Act-NLRA)
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it granted rights to unions; allowed collective bargaining
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FLSA (Fair Labor Standards Act)
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an act that made sure minimum wage was paid, created child labor laws; doesn’t exist today
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The Dust Bowl
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a region of the Great Plains that experienced a drought in 1930 lasting for a decade, leaving farmers without work or substantial wages; a series of winds that carried dust, sand, etc. and caused an area that could no longer be farmed on
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Court Packing Scandal
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a scheme where Roosevelt wanted to hire more justices that supported him in order to pass more bills
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Huey Long
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a Louisiana senator who opposed Roosevelt’s New Deal and came up with a “Share the Wealth” wants to give $5K to all families, was later assassinated
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Reform
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for the financial system
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Recovery
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for the economy
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AAA (Agricultural Adjustment Act)
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a recovery;, it was a federal agency that had the government pay farmers to not grow certain crops, to make a smaller harvest which equals a raise in price and more money, it taxed food processors and gave the money to farmers as payment for not growing these foods
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CCC (Civilian Conservation Corporations)
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a relief; it got city people to work on America’s national parks, forests, and wilderness
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PWA (Public Works Administration)
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a relief and recovery; it built community buildings and gave jobs to many people
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CWA (Civil Works Administration)
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a relief and recovery; it got people to build buildings and it gave people jobs
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NIRA (National Industrial Recovery Act)
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a recovery; it insured people fair competition and gave lower wages and maximum hours for employees
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TVA (Tennessee Valley Authority)
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a relief; it built giant dams along the Tennessee River, which created jobs
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FHA (Federal Housing Administration)
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a relief; it built houses for people who didnt have one
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Buying on Margin
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buying stock by paying only a portion of the full cost up-front with promises to pay the rest later
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Stock Market Crash
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the time when the value of stocks fell so low, that people were left with huge debts; banks ran out of money and were forced to close, causing unemployment; this also started the Great Depression.
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Interest Rates
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it is what the bank charges you to borrow money
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Money Supply
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the amount of money available in the economy
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Public Works
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structures (highways, schools, bridges or docks) constructed at the government’s expense for public use; the government employed the unemployed to construct these structures, so there would be less unemployed and/or homeless
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Pump-Priming
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FDR’s idea that when you do something to get the economy going by having the government spend money and raise interest rates and reduce taxes on the citizens (FDR used this idea in his campaign)
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Bank Holiday
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when there is a stretch of approximately 4 days when banks are closed
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Collective Bargaining
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the process by which unions and firms agree on the terms of employment (the contract)
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Social Security
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a federal program of disability and retirement benefits that covers most working people; it says that all retirees above the age of 65 receive guaranteed monthly payments from the government
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Social Security Act
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an act that created a tax on workers and employers, so that the tax money could provide monthly pensions for retired people
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SEC (Securities and Exchange Commission)
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it is a federal agency that supervises the stock market and eliminated dishonest practices and regulates the stock market to avoid another stock market crash
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Explain “buying on margin.” How did buying on margin make the panic worse when the stock market began to crash?
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Buying on margin is when you buy a stock and only pay a small amount of the whole price, promising to pay for the rest later on, you pay 10% and the bank pays 90% up-front. Buying on margin is also when you borrow money from the bank. Buying on margin made the panic worse when the stock market began to crash because when the market was crashing, people were losing money and so they were only able to pay the up-front amount and could not pay the price later, making banks fail, causing people to want to take their money out of the bank.
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Aside from the stock market crash, list and explain three additional causes of the Great Depression.
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1) Natural disasters (the Dust Bowl, droughts) causing farming to fail, putting them unemployed, without money, and homeless. 2) Taxing the poor more money, making the rich get richer and the poor get poorer. The government hoped that the rich would take their extra money and invest it in stocks, but either way if all the rich did, it would not help because there was such a small amount of rich people. 3) Low confidence caused people to have no trust in the banks anymore, so banks failed, which held many people’s money who could no longer receive that money back, causing less investment in stocks.
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How did Herbert Hoover attempt to stop the Great Depression in its tracks? How did this theory of Trickle-Down Economics work? Why were his plans largely unsuccessful?
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Herbert Hoover attempted to stop the Great Depression in its tracks by taxing the rich people less, thinking that they would spend it and boost the economy, making the stock market rise again. This theory of Trickle-down Economics worked by the poor getting poorer and the rich getting richer. Hoover’s plans were largely unsuccessful because the rich saved their money and stopped spending. Hoover gambled because he assumed that the rich would spend more money now.
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What were the Dust Bowl’s natural and man-made causes? How did it make recovery even more difficult?
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The Dust Bowl’s natural causes were many droughts and it made the farming conditions very horrid. Its man-made causes were that the soil wasn’t good enough to be farmed on, causing no more crop rotation (you plant here, then when it can’t be farmed on, you farm in a different area). This made recovery even more difficult because the dust covered literally everything which made it hard for farmers to do anything, nonetheless farm, which caused farmers to have no money.
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Explain the role of confidence in the Great Depression. Why did FDR believe that restoring Americans’ confidence in the economy was essential? What strategies did he use for attempting to restore Americans’ confidence in the system?
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Confidence played a big role in the Great Depression because when there was a higher confidence, there is a better economy. Roosevelt believed that restoring Americans’ confidence in the economy was essential because people would trust banks again, helping the economy and stock market.
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Explain Roosevelt’s goals for relief, reform, and recovery. What did each refer to? Why was each needed?
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Relief- builds trust with citizens (referred to Fireside Chats)- needed in order to raise confidence Recovery-stimulates the economy by trusting banks Reform- changes from hands-off to hands-on
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How did the Works Progress Administration (WPA) seek to fix America’s unemployment problems? What were some of the more unique jobs it created? How did the WPA (and other programs-CCC, NRA, etc.) instill confidence?
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The WPA tried to fix America’s unemployment problems by making temporary jobs (construction worker, etc.) for public use. More unique jobs it created were acting, music, writing, and artistic (they are all skilled jobs). The WPA, CCC, NRA, etc. instilled confidence by making jobs so the unemployed could have jobs and make money.
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What were the most significant political/legal/economic reforms created during the New Deal? How did the FDIC, NLRA, SSA, and SEC change the way America ran?
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The most significant political/legal/economic reforms that were created during the New Deal were the FDIC, NRA, NLRA, FLSA, AAA, CCC, PWA, CWA, SSA, TVA, SEC, and the FHA. The FDIC, NLRA, SSA, and the SEC changed the way America ran by giving benefits to people by reassuring them that they would retrieve certain economic rights.
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What were some of the primary criticisms of FDR and his New Deal policies? Who were his critics? How did the Court Packing Scandal contribute to fears of Roosevelt’s overextending his power?
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Some of the primary criticisms of Roosevelt and his New Deal policies were that it mostly benefits men not women, African-Americans, nor the elderly. Some of the critics were Huey Long, the Radio Priest (a well-known priest who preached on the radio), and Dr. Francis Townshend. The Court Packing Scandal contributed to the fears of Roosevelt’s overextending powers because it made him able to basically hire his own justices that he knew would pass the New Deal, so he basically was rigging his justices.
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SSA (Social Security Administration)
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a reform; allows public assistance and insurance, especially for the elderly, handicapped, and dependent children

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