Unit 7
America Between the Wars
part 2
The Great Depression
• stock market
– the place where shares of companies are bought
and sold.
– Stock = shares in a company
• inflation
– when prices go up and the general purchasing
power of a dollar goes down.
Election of 1928
• Al Smith
– He was a four-time governor of NY.
– the Democratic candidate for President in 1928
– He lost votes because he was Catholic, and was
against prohibition.
• Herbert Hoover
– Head of the Food Administration during WW I,
– Secretary of Commerce under Harding
– Republican Presidential candidate in 1928. He won
the election
Causes of the Great Depression
• buying on margin
– Buying stock by only paying for 10% and
borrowing the rest using the stock as collateral.
– If the value of the stock dropped below a certain
level, then the stock was reclaimed by the lender.
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•
•
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overproduction of goods outran consumption.
over-expansion of credit system
Europe never recovered from wwi
nature-dust bowl drought in midwest
Hoover’s Presidency
• Hoover only served one term because the Great Depression
started on his watch and he did little to stop it.
• Black Tuesday
– October 29, 1929.
– The day that the Stock market crashed.
– the beginning of the Great Depression in the United States.
• great depression
– Term for the massive economic decline in the United
States from 1929 to the early 1940s.
– During this time unemployment rose from 3% to 25%.
Hoover’s Presidency
• Supply-side economics
– Also known as Trickle down economics
– Economic theory that reducing taxes will allow more
money for consumers to spend in an economy.
– It is what Herbert Hoover practiced in an attempt to
correct the Great Depression.
• Hawley-Smoot Tariff
– Extremely high tariff act passed under Hoover that
killed international trade and deepened the Great
Depression.
Hoover’s Presidency
• Reconstruction Finance Corporation (RFC)
– Hoover-sponsored federal agency that provided loans
to hard-pressed banks and businesses after 1932.
– It was ultimately too little, too late to earn Hoover reelection.
• Hoovervilles
– Shantytowns set up by those who lost their homes
during the Great Depression.
– They were named after the president whom many
blamed for their financial distress.
Hoover’s Presidency cont.
• Adjusted Compensation Act
– It promised every former soldier a bonus that due in 20
years.
– It was to make up for lost wages during WW I.
• Bonus March
– Term for over 20,000 unemployed veterans who went to
Washington, D.C. to demand their bonus checks early from
the Adjusted compensation act.
– Also known as the Bonus Expeditionary Force.
– They were eventually forced to leave.
Election of 1932
• election of 1932
– Democrats nominated Franklin D. Roosevelt
– Republicans nominated Herbert Hoover again
– Hoover was so disliked by Americans and blamed for the
Depression that Roosevelt won in a landslide.
• Franklin D. Roosevelt
– Former New York governor
– roused the nation to action against the depression with his
New Deal legislation and frequent "fireside chat" radio
broadcasts.
– He won the Presidency in 1932 and 1936.
FDR’s Presidency
• Brain Trust
– The term for FDR's most trusted advisors that he
leaned on heavily for economic advice.
• Frances Perkins
– Roosevelt's secretary of labor
– America's first female cabinet member
FDR’s Presidency
• Banking Holiday
– Roosevelt-declared closing of all U.S. financial
institutions on March 6-10, 1933
– in order to stop the problem of runs on banks and
prepare reforms
• Keynesian economics
– Named after British economist John Maynard Keynes
– it states that governments should defect spend to
stimulate a struggling economy.
– It is what FDR practiced
FDR’s Presidency
• New Deal
– The term used to describe FDR's whole reform
program that he used to combat the Great
Depression.
• Three R's of the New Deal
– relief, recovery, and reform
• Hundred Days Congress
– The term for the special session of congress called by
FDR during his first 100 days in office as President
– most of his New Deal reforms were passed.
• dust bowl
– A massive drought in the midwest caused by a
combination of overproduction and lack of rain.
– The soil was leeched of all nutrients and was no
longer capable of producing crops.
– Many lost all that they owned and moved west to
California.
• John Steinbeck
– Writer whose best-selling novel, The Grapes of Wrath
– portrayed the suffering of dust bowl "Okies" in the
Thirties
New Deal - Recovery
• Agricultural Adjustment Association (AAA)
– New Deal farm agency that attempted to raise
prices
– payedfarmers to reduce their production of crops
and animals.
– The idea was to create scarcity to drive prices
back up.
– It was considered a recovery program.
– This was the birth of the modern farm subsidy
program.
New Deal - Relief
• Civilian Conservation Corporation (CCC)
– The early New Deal relief agency
– that worked to solve the problems of unemployment
and conservation
– employing youth in reforestation and other socially
beneficial tasks.
– 2 million were employed in this program.
• Works Progress Administration (WPA)
– Large federal employment relief program,
– established in 1935 under Harry Hopkins
– provided jobs in many fields including Art,
construction, and history.
– 8.5 million people were employed
New Deal - Reform
• Security and Exchange Commission (SEC)
– New Deal reform agency
– established to provide a public watchdog against
deception and fraud in stock trading
• Federal Deposit Insurance Incorporation (FDIC)
– created by the Glass-Stegall Banking act,
– it provided reform for the banking industry.
– It set up insurance on bank deposits to prevent losing
money if a bank went under.
New Deal Cont.
• Social Security Act
– New Deal program that had components of all three
R's.
– It financed old-age pensions, unemployment
insurance and other forms of income assistance.
– It was a rejection of Social Darwinism.
• Tennessee Valley Authority (TVA)
– New Deal Federal agency that produced low-cost
electrical power for rural areas of the Tennessee River
Valley.
Critics of the New Deal
• Huey P. Long "Kingfish”
– Louisiana senator and popular mass agitator who
promised to make "every man a king" at the expense of
the wealthy.
– He was a strong critic of FDR.
– He proposed a "share the wealth" program.
– He was assassinated.
• Father Coughlin
• Nine Old Men
• Court Packing Plan
– Roosevelt's scheme for gaining Supreme Court approval of
New Deal legislation by adding three more justices to the
Supreme Court.
– It was rejected.