U.S. History Chapter 24 – Flashcards with Answers

-FDR established a "brain trust"; is closets advisers -3 goals 1.) relief to those in need 2.)recovery to the economy 3.) reform so Depression could never happen again -FDR wanted people w/ energy, imagination, and willingness to experiment -included conservative/ liberals, Rep/ Dem, progressives, women, lawyers, friends, social workers, professors, brightest graduates, anyone that could help

-shortened the "lame duck" period; the time period between when a new president is elected and sworn into office -start date for congress set on Jan. 3 -prez. takes oath on Jan. 20; previously not sworn in until early March -allowed prez. and congress to get into office and get to work sooner

-FDR's 1st act was to call a special session of congress and declare a nationwide bank holiday; Emergency Banking Act -closing all the nations banks gave Treasury Dept. time to investigate banks ans see how bad the situation was -restoring the banking system was vital to repairing economy -investigation revealed 4/5 of banks were in better condition than the public thought; soon reopened -run on banks stopped; within a month $1 billion in deposits flowed back into banks -by mid-summer 3/4 of banks, holding 94% of nations deposits, were back in business

-created the Federal Deposit Insurance Corporation (FDIC) -protected depositors in insured banks up to $5000; federal govt. insured banks, depositors guaranteed to get $ back -all members of Federal Reserve System had to belong to the FDIC; all national banks had to belong to Fed. Reserve/ FDIC -added savings banks to the Federal Reserve System -gave Federal reserve Board powers to prevent stock speculation

-deflation was chief economic problem -caused by: high unemployment, low demand for goods, low wages, and low prices -FDR took numerous steps to deal with issue -FDR placed the US on a modified gold standard; a single dollar was only partially backed up by gold -US citizens ordered to turn in their gold to the Fed. Reserve

-gave prez. authority to reduce the backing of the dollar up to 50% -FDR set the value of the dollar at 59 cents -4 goals 1.) provide more $ to spend 2.) raise prices of goods in US 3.) boost exports 4.) decrease burden of debt

-Securities and Exchange Commission -created to regulate stock market and prevent abuses -given power to: 1.) license/ regulate stock exchanges 2.) require basic data on stocks for sale 3.) regulate activities of investment advisers 4.) prosecute those engaged in fraud -Fed. Reserve was given power to set margin requirement; discouraged gambling on the market

1.) traditionally govt. would balance the budget to deal w/ depression -balance income and spending then natural forces would correct whatever had caused the downturn -John Maynard Keyes was an English economist; advocated different approach to deal with Depression 2.) Keynesian approach advocated lowering taxes, increase govt. spending, and intentionally run up large deficits -public spending would put people to work and increase amt. $ in circulation; deficits would be paid off after economy recovered 3.) referred to as "priming the pump" -govt. would allow budget to be unbalanced for short time; increase spending to "prime the pump" -once economy began working, govt. should step back, cut spending and let private business take over

-repealed 18th Amendment; ended Prohibition -Americans increasingly unhappy with Prohibition -FDR wanted an economy bill; passed quickly; submitted it prior to bill to repeal Prohibition -guaranteed Congress would pass economy bill quickly; Congress did not want to keep the people waiting to end Prohibition

-Civilian Conservation Corps -provides jobs for 250,000 young men between 18-25 in the outdoors -worked to conserve national parks, planted trees, stocked fish in rivers, built fire lanes and wilderness trails -restored historic battle sites

-Tennessee Valley Authority -built apprx. 30 dams along the Tennessee River Valley -dams prevented flooding, generated hydroelectricity, and put people to work -gave doctors opportunity to rid area of mularia -librarians sent bookmobiles into rural areas -better homes, hospitals, and schools built -govt. converted two WWI era munitions factories to produce fertilizer -provate electric and fertilizer companies complained govt. was competing unfairly -critics accused FDR of being a dictator; called New Deal socialism

-Agricultural Adjustment Act -created to raise the income of farmers to parity(balance); back to pre-WWI levels -primary problem facing farmers was low prices due to surpluses -AAA had farmers destroy existing surpluses -farmers plowed under 30% of their crop; 6 million piglets slaughtered; kept surpluses from reaching the market -govt. paid farmers to reduce production, leave land fallow; prevent future surpluses -money to pay farmers came from processing tax -tax on any industry that made raw materials into finished goods; ex. wood for furniture, tobacco for cigarettes -manufacturers passed cost of tax on to consumers in the form of higher prices -AAA led to a 240% increase in farm income from 1932-35

-National Recovery Administration -led by Hugh Johnson -brought together business and labor leaders to create codes of fair business -codes aimed to keep prices and wages up; set maximum work hrs. and minimum wage -codes decided what was produced, how much, and at what price -section 7a of NRA gave workers the right to form unions -small business owners said NRA was helping monopolies -labor leaders said employers were ignoring section 7a -business leaders said codes gave unions and unfair advantage

-Public Works Administration -led by Harold Ickes; Sect. of Interior -had $3 billion to build roads, schools, hospitals -PWA built 2 aircraft carriers(floating runway); Yorktown and Enterprise -did not put people to work fast enough to satisfy FDR; Ickes was careful and deliberate, wasted little money

-provided $500 million in aid to the unemployed in the form of direct relief -gave $ to unemployed -overseen by Harry Hopkins -both Hopkins & FDR preferred to give people jobs rather than $ -supported direct relief because it was the quickest way to help people in need -FDR & Hopkins feared creating a class permanently dependent on the govt.;other critics called it charity and people should only be paid for working

-Civil Works Administration -led by Harry Hopkins -intended to provide temporary employment until other jobs became available -CWA supposed to spend most of its $ on wages; little should be spent on "bricks and mortar" -put 4 million people to work in 180,000 programs -built roads, playgrounds, airports, etc -employed teachers in rural/urban settings -pumped $1 billion into economy -CWA ended in spring 1934 over fear of dependence on govt. grants and huge cost

-Works Progress Administration -Led by Harry Hopkins -spent $11 billion and employed 8.5 million people; ran from 1935-43 -built roads, bridges, public buildings, and other public works -established NYA; National Youth Administration -offered work to young people between 16-25; aided 750,000 students across the US -put people in creative fields to work; writers, artists, musicians, actors -provided free entertainment to lift the nation's spirit

-American Liberty League Created to "combat radicalism. preserve property rights, and uphold the Constitution" -opposed FDR and New Deal, supported by Chamber of Commerce(pro-business); members included Dem. and Rep. -Huey Long, Senator from Louisiana, former governor; smooth-talking, corrupt -outspoken critic of FDR/ New Deal -promoted his "share the wealth" program to voters; every man would be king, no more rich/poor, every family guaranteed an income -Long appeared to be a serious contender in 1936 prez. election until his assassination

-"radio" priest, had a nationwide audience -initially supported FDR and New Deal, called it "Christ's Deal" -Coughlin turned against FDR when he rejected Coughlin's fascist (fascism-dictatorship. Nazis), antisemetic(anti-jew) beliefs -Father Coughlin eventually excommunicated from Catholic Church

-advocated for elderly Americans; proposed plan for old age pension -won over numerous supporters, called "Townsendites" -govt. should give every citizen 60 and older $200 per month; had to be spent each month -proposal widely supported by elderly Americans -plan would have given 50% of US $ to 9% of population

-unions unhappy with NRA; section 7a had not met their expectations -head of AFL (American Federation of Labor) threatened to oppose FDR in 1936 election

-in Schechter v. US, supreme court declared NRA unconstitutional -court also struck down laws to prevent farm foreclosures and to provide pensions to railroad workers

-FDR created social insurance program to address complaints by critics; Congress passed Social Security Act -3 main components 1.) Social Security -while people worked they paid $ into Social Security Fund; amt. matched by employer -when worker retired the received payment from the fund -payouts would not begin until 1940 to allow $ to accumulate in fund 2.) Public Assistance -joint Federal State program -provided monthly welfare checks to the aged, disabled, and dependent children -recipients had to prove they needed assistance 3.) Unemployment Insurance -joint Federal State program -provided temporary income to laid-off workers while they looked for new jobs -money for unemployment came from payroll tax -paid by any company w/ 8 or more employees

-included a series of "soak the rich" taxes to redistribute wealth -intended to win over supporters of Huey Long -included higher estate and gift taxes -raised taxes on highest incomes and created corporate income tax graduated to size of the profits of business -intended to prevent an unfair concentration of wealth

-intended to win back support of unions for FDR -guaranteed the right of workers to join unions and bargain collectively -replaced section 7a of NRA -Wagner Act created the National Labor Relations Board (NLRB); oversaw elections by which workers chose which union, if any, would represent them -NLRB could also stop unfair practices by employers against unions

-1936 Supreme Court declared the AAA unconstitutional -processing tax could not be collected, was not a real tax