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Unit 4 – The 1930s & The Great Depression
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FDR: Hero or Villain – Throughout this unit, we will examine decisions made and actions taken by one of our
most controversial presidents. As we progress, this graphic organizer will help you to keep those actions and
decisions organized, and will make for easier studying.
Decision/Action Hero
Why heroic?
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Decision/Action Villain
Why Villainous?
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Learning Goal 1 – I will be able to:
-Define Bull Market and Bear Market.
-Define Margin Buying
-Explain why margin buying is so dangerous
-Summarize how margin buying led to disaster in 1929.
-Explain how/why demand for stock goes up.
II.
The Great Depression
a. The Stock Market Crashes
i. 1920s = Bull market or upward trend in stock prices; Downward = bear market
ii. RCA stock $85/share in 1928 and $549/share in 1929 – why?
1. Demand high when people want to AND are able to purchase something
2. How could people purchase so much stock and stock that was so important?
MARGIN BUYING
iii. Margin buying – buying stock with borrowed money
1. 10% down, borrow the rest, eventually sell the stock at a much higher price, pay
back the loan, keep the profit – only works if stock prices continue to rise
2. Dangerous b/c if stock price drops, you have no way to pay back your loan!
iv. Summer 1929, stock prices peaked, then slowly declined
1. Investors rushed to sell shares and pay back loans before value dropped further
v. Thursday October 24, 1929, stock market lost $11 billion in three hours
vi. Tuesday October 29, 1929, Black Tuesday, stock market crashed
1. September 1929, total value of stocks was $87 billion
2. November 1929, down to $55 billion
Where’d the money go?! – List the answer and explain it in 1-2 sentences.
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Learning Goal 1 – I will be able to:
-Define Bull Market and Bear Market.
-Define Margin Buying
-Explain why margin buying is so dangerous
-Summarize how margin buying led to disaster in 1929.
-Explain how/why demand for stock goes up.
Bull Market
Margin Buying
Why MB is Dangerous
Bear Market
How MB Led to Disaster
How/Why Demand Up
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2012, stock price is $100/share – I buy 100 shares = $10,000
I pay 10% down ($1,000) and borrow the rest ($9,000). I have $10,000 in stock, and I am in debt to the bank
$9,000, so I’m ok. Each year, I make the minimum payment the bank requires, so the amount I owe the bank
goes down by $100 each year.
2012
100 shares x $100/share = $10,000
I owe $9,000
Ok?
Yes
2013
100 shares x $125/share = $__________
I owe $8,900
Ok?
______
2014
100 shares x $150/share = $__________
I owe $8,800
Ok?
______
2015
100 shares x $175/share = $__________
I owe $__________
Ok?
______
2016
100 shares x $200/share = $__________
I owe $__________
Ok?
______
2017
100 shares x $40/share = $__________
I owe $__________
Ok?
______
How much money did I lose? (2017 price – 2016 price) _____________________________________________
Where did the money go? ____________________________________________________________________
Shares of stock only become “money” when _____________________________________________________
Why Not Sell Now?
How MB Helped
How MB Hurt
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Learning Goal 2 – I will be able to:
-Summarize what happens when you put your money in the bank.
-Explain how bank failure led to panic in the late 1920s.
-Define and summarize what the business cycle is
-List and explain how margin buying and unequal distribution of wealth were the two primary causes of the
stock market crash and Great Depression
b. The Economy Collapses
i.
Bank collapse
1. Banks invested in the stock market, lost money when market crashed
2. Banks lent money so people could buy stock on margin, when they didn’t pay
money back the banks went out of business and some lost their life savings
3. Panic as people rushed to the banks to withdraw their money
4. Banks don’t keep total value of all deposits in the bank, ran out of money, closed
a. Bank failure = banks run out of money, when people don’t pay loans
5. Businesses lost savings in failed banks and closed
b. Others cut back production and laid off workers, unemployment up 8x
6. When you take your birthday money from Grandma and put it in the bank, the
bank uses that money to make more of it themselves. They pay you a little bit of
interest to entice you to put money in their bank, then they loan it to other people
to buy cars, houses, college educations, etc. Those people then pay the money
back to the bank at a higher interest rate than they pay you so they can make
money. Before bank laws were written, if the banks loaned too much money and
it wasn’t paid back, you ended up losing your life savings. Later in this unit we’ll
see why this can’t happen again today.
ii.
Business cycle – periodic ups and downs in a capitalist economy; continuous
1. No way to stop it, can only hope to lengthen the “ups” and shorten the “downs”
iii. The Causes of the stock market crash
1. Margin Buying – buying stock with borrowed money; people bought too much
c. Stock prices driven up higher than they should have been.
d. Increased demand should have pushed prices up, but not as high as they
were b/c of margin buying, which was like high demand on steroids!
e. When people could not pay back the banks, the banks ran out of money,
people lost their life savings and b/c people spent less $, econ collapsed
2. Uneven distribution of wealth
f. 1929: 5% of wealthiest people earned 33% of the income while bottom
40% of the people earned 12%.
i. Fewer could afford to spend enough money to help the economy
ii. Money is scarce (limited); only so much money in circulation
iii. (If you have two adults making $10,000 in 1929, they may buy 2
Model Ts. If you have two adults making $100,000 in 1929,
they’re still only going to buy 2 Model Ts.
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iv.
Great Depression – worst economic crisis in American history, 1929-41, high
unemployment, many lessons from which we’ve learned, others from which we
haven’t!
Learning Goal 2 – I will be able to:
-Summarize what happens when you put your money in the bank.
-Explain how bank failure led to panic in the late 1920s.
-Define and summarize what the business cycle is
-List and explain how margin buying and unequal distribution of wealth were the two primary causes of the
stock market crash and Great Depression
When I put money in the
bank…
What a bank failure is and
how it led to panic in the
1920s
Summarize the business
cycle
List and explain two
primary causes of the stock
market crash and Great
Depression
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229
“The bubble had broken.” Explain the meaning of this: _________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
“Millionaires were sent home paupers.” Explain what Forster meant when he wrote this: ______________________
______________________________________________________________________________________________
______________________________________________________________________________________________
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Learning Goal 3 – I will be able to:
-Explain the reasons people turn to government for help.
-List reasons turning to government can be dangerous.
-Summarize why so many turned to the government for help after the stock market crash.
-Contrast the views of Republican president Herbert Hoover and Democrat challenger Franklin Roosevelt.
-Explain who won the 1932 election and why.
c. Hoover vs. FDR
v.
Hoover
3. Many turned to the government for help
g. At the time, government didn’t do as much as it does now; they relied on
religious organizations and charities
h. Hoover didn’t believe it was the government’s job to provide direct help
to the people
i. “Hoover Flags” – pockets turned inside out
ii. “Hoovervilles” – tin/cardboard shacks built by homeless families
4. 1932, new Hooverville built in Washington, DC with 17,000 WWI veterans
i. Called Bonus Army came to demand early payment of military bonuses
promised to them for their WWI service, Hoover called in military who
used tanks to drive out the veterans w/ tear gas – some veterans died
vi.
Election of 1932 - Republican Hoover vs. Democrat Franklin Delano Roosevelt
vii.
Hoover thought government should stay out of the recovery and let businesses rebuild
themselves. Franklin Roosevelt thought the government should take the lead from the
businesses in leading the recovery
FDR wins b/c Hoover seen as unwilling to help, Democrats win seats in both the federal and state governments
because Republicans no longer popular, increase in size and role of the federal government on its way because
of how bad things are about to get!
231
Learning Goal 3 – I will be able to:
-Explain the reasons people turn to government for help.
-List reasons turning to government can be dangerous.
-Summarize why so many turned to the government for help after the stock market crash.
-Contrast the views of Republican president Herbert Hoover and Democrat challenger Franklin Roosevelt.
-Explain who won the 1932 election and why.
WHY PEOPLE TURN
TO GOVERNMENT
WHY TURNING TO
GOVERNMENT CAN
BE DANGEROUS
WHY SO MANY
TURNED TO
GOVERNMENT AFTER
THE STOCK MARKET
CRASH
DIFFERENCE
BETWEEN HOOVER
AND FDR
WHO WON 1932
ELECTION AND WHY
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234
After the stock market crash in 1929, the American economy hung in the balance. Struggling, many WWI veterans came
to Washington to demand early payment of the bonuses they were promised for their service overseas. The bonuses
were coming, but not until 1945 for most of them. In July, 1932, thousands came to Washington, DC in mass protest.
They set up temporary camps with shelters made from scrap tin, wooden pallets, and other “junk” they could use.
1. Read the summary of the Bonus Army from The Nation written in July, 1932.
Who are the bonus-seekers and where have they come from? They are mostly farm workers, fruit pickers, itinerant factory workers, and
other unskilled or semi-skilled laborers, and they come from every section of the country. I do not believe that a single State or a single
industry is unrepresented here. However, a large minority of the men are skilled mechanics, white-collar workers, and even professional
people. I have met an office manager, a factory foreman, two real estate dealers, a dentist, and three newspapermen in the bonus
army. These men I encountered only by chance. I was shown the rosters of some of the camps and there were the names of many
other representatives of the middle class, an editor, a grocer, a trucking contractor, a traffic engineer, several lawyers. It is these people
who have taken charge of the Washington show and who have given the bonus army what discipline it has. Thus the movement is
essentially bourgeois and not proletarian, at least in outward form. This explains in large measure the patriotism, and flag-waving of the
bonus-seekers. These middle-class representative have become the leaders of the movement and in that capacity, although they have
been most outspoken in their profession of loyalty to American institutions, they have had their past records painstakingly investigated
by the Department of Justice and other government agencies. Such seems to be the inevitable fate of all rebels in this country, however
mild or law-abiding they may be. Nevertheless, these leaders have had a profound effect upon the rank and file of the army. Uninspiring
as the man is, Walter W. Waters, commander-in-chief of the B.E.F., has a large and devoted following among the Anacostia men.
During the demonstration on the capitol plaza Saturday, although he talked the most hollow nonsense, the veterans greeted him with
tremendous applause, cheered his every word as though he alone had the power to bring them the bonus.
These veterans appear to sense the inadequacy of their demands both actually and in principle. A few hundred dollars will not in any
case go very far. Moreover, the veterans seem to know by instinct rather than by any process of ratiocination, that there is no promise
of future economic security in the bonus. They feel that the goal they are seeking is a false one, but in their confusion of mind they can
think of no other goal. Lastly, the veterans are all in or beyond middle age; every one of them has been thoroughly whipped by his
individual economic circumstances. There is about the lot of them an atmosphere of hopelessness, of utter despair, though not of
desperation. They have come to Washington for reasons beyond their understanding; they have no enthusiasms whatever, and no
stomach for fighting. People who see in the bonus army the beginning of a fascist movement or the nucleus for a successful fascist
"march on Washington" are in error. Such a movement may develop among the younger unemployed, but it will not, I am certain, start
with the bonus army.
2. Do you think the author was sympathetic to their cause (meaning agreeing with it) or was this critical of them?
Circle one:
Sympathetic
Critical
3. Underline or highlight words/phrases/sentences that lead you to that conclusion.
4. Choose one phrase or sentence that you underlined, and in 2-3 sentences, explain HOW it supports your claim
that this was either a sympathetic or critical piece.
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________________________________________
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This picture of Bonus Army shelters burning appeared in many American newspapers in July, 1932.
Summarize in 4-5 sentences what you think the reaction was by most Americans who saw it. In your
explanation, underline information you wrote that came from notes in any of the Learning Goals in Unit 4.
Then, circle any information you took from this particular picture and included in your paragraph. It is
expected that you will have information from BOTH the notes AND from this picture.
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
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Learning Goal 4: I will be able to:
-Define 100 Days, summarizing the precedent it set for future presidents.
-Define and explain the importance of the bank holiday and the fireside chats.
-Define “New Deal” and explain the constitutional question debated because of the New Deal.
d. The New Deal & The Hundred Days
i.
FDR’s first Hundred Days set the precedent for a President to work to get programs passed in
his first 100 days in office
1. It’s a bit of a honeymoon period for the president to prove himself/herself
2. March 1933, “The only thing we have to fear is fear itself!” – inaugural address
ii.
The New Deal: new programs created by FDR and the Congress to end the G. Dep.
1. Restoring Confidence
a. Needed to restore confidence in banks – bank holiday closed banks for 3 days
to give time to recover & gov’t determine which should reopen.
b. Big question = Where in the Constitution does it give the government the
power to determine which businesses should be allowed to open? FDR did this
WITHOUT getting approval from Congress
c. Reopened, no rushes to withdraw money, & people deposited $1 billion.
d. Fireside chats – using the radio to talk directly with the people
i. Some happy because they felt their government was there to help
2. Programs
a. Recovery - FDR tried to use government to create jobs
i. Civil Works Administration (CWA) to build roads & airports
ii. Civilian Conservation Corps (CCC) plant trees and improve parks
iii. Tennessee Valley Authority (TVA) hired people to build dams and
generators to bring electricity to those in the Tennessee Valley
iv. Agricultural Adjustment Act (AAA) helped stabilize crop prices –
declared unconstitutional
v. National Recovery Administration (NRA) set minimum wages and prices
to help workers make more money and help businesses sell more
products, designed to bring interests of business and workers together
and help economy by getting people to spend more money, largest, most
complex, most identifiable New Deal program – declared
unconstitutional
vi. National Industrial Recovery Act (NIRA) eliminated what FDR
considered to be unfair competition – declared unconstitutional
vii. Works Progress Administration (WPA) employed people to build more
roads, bridges, and airports (government still trying, but has it worked?)
NO!
3. Conclusion: The extent to which FDR’s administration increased the size of the
government like never before can be seen in the number of new programs declared
unconstitutional by the Supreme Court.
iii.
Idea of Government
1. Country changed from not relying on government for much at all to expecting it to get
involved…reliance?
237
Learning Goal 4: I will be able to:
-Define 100 Days, summarizing the precedent it set for future presidents.
-Define and explain the importance of the bank holiday and the fireside chats.
-Define “New Deal” and explain the constitutional question debated because of the New Deal.
The 100 Days
Summarize
Precedent for Future Presidents
Bank holiday
Fireside Chats
The New Deal
Define
New Deal Program
Civil Works Administration
Civilian Conservation Corps
Tennessee Valley Authority
Agricultural Adjustment Act
National Recovery
Administration
National Industrial Recovery Act
Works Progress Administration
Constitutional Questions
Summarize
Constitutional Question
238
239
240
241
242
243
Learning Goal 5 – I will be able to:
-Summarize FDR’s goals when he and Congress created the New Deal programs.
-Explain why the FDIC was created.
-Summarize how the FDIC protects consumers today.
-Define Social Security and explain why it was created.
-Summarize what the New Deal did for the country and how it is still relevant today.
e. Social Security and the FDIC
i.
Relief and Recovery – 1933 unemployment at 25%, New Deal tried to create jobs to
end the Great Depression
1. Two New Deal Programs today
a. Federal Deposit Insurance Corporation (FDIC) - 1933
i. Federal government insures bank deposits up to $250,000.
ii. If your bank goes out of business before you can get your money,
the federal government will insure what you lost, up to $250k
iii. This is why though banks can fail today, the bank runs we saw in
the late 1920s and early 1930s won’t happen again
b. Social Security Act – 1935
i. Financial security to the elderly
ii. New taxes on workers and businesses
iii. First time government took direct responsibility for citizens’
financial well-being
iv. The debate:
I.
Wrong – not the government’s job!
a. Is it the government’s job to provide a retirement
for everyone? Where in the Constitution does it say
that? Is it fair to tax your parents to provide money
for the elderly they’ve never met? How do you feel
about money taken from your paycheck to pay
benefits for those retired?
II.
Why it’s needed – not everyone able to plan for a
retirement, and if people fail to plan, what will happen
to the economy?
a. What if someone did not make enough money to be
able to put away for retirement? What if there was
an illness? Stock market crash? Even if they were
just lazy, do we let them starve?
244
Learning Goal 5 – I will be able to:
-Summarize FDR’s goals when he and Congress created the New Deal programs.
-Explain why the FDIC was created.
-Summarize how the FDIC protects consumers today.
-Define Social Security and explain why it was created.
-Summarize what the New Deal did for the country and how it is still relevant today.
http://www.tinyurl.com/LammFDIC
FDIC
SOCIAL SECURITY
245
246
247
248
249
250
At some jobs, workers are paid a “Christmas bonus” which is a share of the company’s profits for the year. Assume for
this exercise that you’ve been given a $2,000 “Christmas bonus.” How would you use that money? (You don’t have to
use it all in one place; a PS4 is nowhere near $2,000.) Place a “1” next to the first thing you’d do with the money, a “2”
next to the second thing you’d do, etc. Only rank your top 5.
_____ Pay down student loan debt
_____ Pay down a balance on a credit card
_____ Buy your kids, spouse, significant other, etc. a big Christmas present
_____ Buy a new cell phone to replace yours with the shattered screen
_____ Upgrade your Xbox Live or PS3 to the Xbox One or PS4
_____ Put it in your 401k after not putting any money in all year
_____ Buy a 55 inch television to replace your smaller 40 inch TV
_____ Use it as a down payment on a new car to replace your older one
_____ Do what Mrs. Lamm does, and buy more stupid purses at Coach even though you have PLENTY of them!
_____ Plan a vacation
_____ Donate to charity or your religious place of worship
_____ Plan a trip to Vegas and gamble it
_____ Buy new clothes, shoes, etc.
_____ Fix up your car or downpayment on a new car
_____ Take the wife/husband/significant other out to a nice dinner
_____ Show tickets at the Benedum
251
Learning Goal 6 – I will be able to:
-List at least 1 argument for why the New Deal was working
-List at least 1 argument for why it was not.
-List and explain the primary reason some argued that the New Deal went too far.
-List and explain the primary reason that others argued that it did not go far enough.
f. New Deal Arguments
i.
Working – New Deal created more jobs than it lost
ii.
Not working – Unemployment still at 21% (astronomical rate!), and the Great
Depression will not end with an unemployment rate that high
1. Jobs lost working for businesses to pay for jobs created by government
2. When the government creates programs like these to give people jobs, they get the
money by taxing people and businesses. When taxes on businesses go up, that
leaves them less money to pay their workers. So they lay off workers. So even
though the government sometimes creates new jobs with programs, they can also
at the same time cost jobs in other businesses because of the tax increases.
iii. New Deal Critics
1. The New Deal went too far.
a. Feared government now had too much power – afraid taxes would go up to
pay for everything the gov’t was trying to do.
b. Where is the money coming from for all the people employed by the New
Deal programs?
2. The New Deal didn’t go far enough
a. Huey Long and others thought the New Deal didn’t go far enough
b. “Share Our Wealth” – proposal to tax wealthy and give money to the poor.
i.
Each family should be guaranteed an annual income of $5,000
ii. Why become wealthy if it’s just going to be taken from you?
iii. (Remember our modified grading on the test? If you were
guaranteed a C on every test regardless of what you did to earn
it, would everyone put forth the same effort? Some would, but
most wouldn’t! If those others don’t put forth some effort,
what will happen? Who is going to work to make sure there is
enough money for everyone to get $5,000?!)
iv.
THAT’S WHY COMMAND ECONOMIES FAIL!
252
Learning Goal 6 – I will be able to:
-List at least 1 argument for why the New Deal was working
-List at least 1 argument for why it was not.
-List and explain the primary reason some argued that the New Deal went too far.
-List and explain the primary reason that others argued that it did not go far enough.
NEW DEAL WORKING
NEW DEAL NOT WORKING
WHY WENT TOO FAR
WHY DID NOT GO FAR ENOUGH
253
254
*Part of a speech given by Senator Huey Long in 1934, 5 years after the stock market crash*
According to the tables which we have assembled, it is our estimate that 4 percent of the American people own
85 percent of the wealth of America, and that over 70 percent of the people of America don't own enough to pay
for the debts that they owe.
What is the danger in having such a small percentage of the population holding such a high percentage of
the wealth? (bottom of page 227 in your study guide)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Any man with a thimble-full of sense ought to know that if you take 85 percent off of that table and give it to
one man that you are bound to have 2/3 the people starving because they haven't got enough to eat. How many
men ever went to a barbecue and would let one man take off the table what's intended for 90% of the people to
eat? The only way to be able to feed the balance of the people is to make that man come back and bring back
some of that grub that he ain't got no business with! [Laughter and applause]
Now we got a barbecue. We have been praying to the Almighty to send us to a feast. We have knelt on our
knees morning and nighttime. The Lord has answered the prayer. He has called the barbecue. "Come to my
feast," He said to 125 million American people. But Morgan and Rockefeller and Mellon and Baruch have
walked up and took 85 percent of the victuals off the table!
Why do you think he chose a food metaphor?
----------------------------------------------------------------------------------------------------------------------------What images do you see when you think “barbecue?
----------------------------------------------------------------------------------------------------------------------------Why did he create an analogy of a barbecue instead of a more formal dinner or banquet?
-----------------------------------------------------------------------------------------------------------------------------
255
Now, how are you going to feed the balance of the people? What's Morgan and Baruch and Rockefeller and
Mellon going to do with all that grub? They can't eat it, they can't wear the clothes, they can't live in the houses.
Giv'em a yacht! Giv'em a Palace! Send 'em to Reno and give them a new wife when they want it, if that's what
they want. [Laughter] But when they've got everything on God's loving earth that they can eat and they can
wear and they can live in, and all that their children can live in and wear and eat, and all of their children's
children can use, then we've got to call Mr. Morgan and Mr. Mellon an Mr. Rockefeller back and say, come
back here, put that stuff back on this table here that you took away from here that you don't need. Leave
something else for the American people to consume. And that's the program. [Applause]
Why do you think a Senator would use incorrect grammar like, “ain’t got no business with” or
“Give’em” or “Send’em?” Were these mistakes? Or were they intentional? Why?
----------------------------------------------------------------------------------------------------------------------------We will call in Mr. Rockefeller, Mr. Morgan, Mr. Mellon....Dear Mr. Mellon, We're not going to destroy the
capitalistic system, but we're going to put in a limit, you can have up to 4- to 5-million dollars and that's all.
We're not going to destroy the Gulf Refining Company; we're not going to destroy the Standard Oil Company,
but we're going to say that the limit of any one man's stock ownership in the Standard Oil company is from 3- to
5-million dollars for that individual and the balance to the people of America who own the balance of what the
Standard Oil company is worth! [Applause]
Then, we start from the bottom. That the 25 or more million American families shall have a homestead. Up to
$5,000....a home and the comforts of a home, including an automobile and a radio, the things it takes in that
house to live on...
We say to America, 125 million, none shall be too big, none shall be too poor, none shall work too much, none shall be
idle. No luxurious mansions empty, none walking the streets, none impoverished, none in pestilence, none in want, but in
the land blessed by the smile of the Creator with everything to be consumed, to be eaten, to be worn, that America will
become a land, sharing the fruits of the land, not for the favored few, not to satisfy greed, but that all may live in the land
in which the Lord has provided an abundance sufficient for the luxury and convenience of the
What do you like about the speech? List them.
What don’t you like about the speech? List them.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
256
Learning Goal 7 – I will be able to:
-Summarize why FDR supported worker’s rights to join unions
-Explain how and why FDR tried to alter the Supreme Court
-Define “court packing”
-List reasons both for how the New Deal was a positive for the country and how it was a negative
g. Clashes With the Court
i.
1935 – NIRA tried to guarantee wages to workers
1. Declared unconstitutional by Supreme Court
2. Government can’t require certain wages to be paid
3. In response, passed the National Labor Relations Act (NLRA or Wagner Act)
which gave workers who joined unions federal protection from businesses who
tried to take away their rights.
a. If the workers aren’t guaranteed a livable wage, the federal gov’t should
protect people forming/joining unions to better fight for themselves.
b. FDR = 1st president to support worker’s rights to organize and join unions
ii.
1935 – new union created called Congress of Industrial Organizations
1. Eventually joined with American Federation of Labor (remember, which survived
because it was more specialized), and today we have the AFL – CIO.
2. New Year’s Eve 1936 – CIO organized sit down strike against General Motors
a. Locked themselves in factory so they can’t be replaced by new workers.
b. FDR sent troops…………….to support the strikers!
iii. 1935, FDR tried to alter the number of justices on the Supreme Court
a. “Court Packing” – tried to increase size of Supreme Court from 9 to 15. If
he could appoint 6 more judges who he knew would be loyal to him, he
could gain a majority on the Supreme Court and they would uphold his
programs instead of shutting them down.
i.
Constitution calls for balance of power which FDR attacked
ii. Unsuccessful, and the Supreme Court is still only 9 justices.
iv.
1936, FDR wins reelection, losing only Maine and Vermont
1. New Deal Programs failed to end Depression, but people liked that he was trying.
a. Lasting effects of the New Deal – still debated today
i. Did not get the US out of the Great Depression like it was
supposed to, and many economists believe it made things worse
1. Typically, too much gov’t in the economy slows growth
ii. Greatly expanded the size of the federal government, and it’s never
gone back to the pre stock market crash level
iii. Some New Deal programs still around today
1. Social Security to guarantee money each month to the
elderly who can no longer work
2. Federal Deposit Insurance Corporation (FDIC) which
insures bank deposits so people will never again lose their
life savings if the bank fails
257
Learning Goal 7 – I will be able to:
-Summarize why FDR supported worker’s rights to join unions
-Explain how and why FDR tried to alter the Supreme Court
-Define “court packing”
-List reasons both for how the New Deal was a positive for the country and how it was a negative
Why FDR supported worker's rights to join unions
How/Why FDR tried to alter Supreme Court
FDR
Court packing
New Deal:
1+
1-
258
259
The Wagner Act
In 1932, George Barnett, a prominent economist and president of
the American Economics Association, forecasted a bleak future for
organized labor. "The changes, occupational and technological,
which checked the advance of unionism in the last decade, appear
likely to continue in the same direction," he intoned.
In 1930, only 3.4 million workers belonged to labor unions--down
from 5 million in 1920. Union members were confined to a few
industries, such as construction, railroads, and local truck
delivery.
In 1935, Congress passed the landmark Wagner Act (the National
Labor Relations Act), which spurred labor to historic victories. One
such success included a sit-down strike by auto workers in Flint,
Michigan in 1937. The strike led General Motors to recognize the
United Automobile Workers. Union membership soared from 3.4
million in 1932 to 10 million in 1942 and to 16 million in 1952.
Bitter labor-management warfare erupted as the Depression
dragged on. In 1934, some 1.5 million workers went on strike.
Auto and steel workers and longshoremen became involved in
violent strikes. Police shot 67 striking Teamsters in Minneapolis. In
August, textile workers staged the largest strike the country had
ever seen--a total of 500,000 workers in 20 states. In
Massachusetts alone, 110,000 workers went on strike, and 60,000
workers in Georgia struck. While some of the strikes aimed at
higher wages, a third demanded union recognition.
Labor unrest forced the federal government to step into labor
relations and to forge a compromise between management and
labor. Under the Wagner Act of 1935, the federal government
guaranteed the right of employees to form unions and to bargain
collectively. It also set up the National Labor Relations Board
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(NLRB), which had the power to prohibit unfair labor practices by
employers.
During the mid-1930s, a bitter dispute broke out within labor's
ranks. It involved an issue that had been simmering for half a
century: Should labor focus its efforts on unionizing skilled
workers; or should labor unionize all workers in industry,
regardless of skill level? The country's major labor federation, the
American Federation of Labor, consisted of craft unions organized
by occupation. In late 1935, a group of union leaders, including
John L. Lewis of the United Mine Workers, David Dubinsky of the
Amalgamated Clothing Workers, and Sidney Hillman of the
International Ladies' Garment Workers, formed the Committee of
Industrial Organization (CIO) to organize unskilled workers in
America's mass production industries. The CIO formed unions in
the auto, glass, radio, rubber, and steel industries, and by the end
of 1937, it had more members than the American Federation of
Labor (AFL)--3.7 million CIO members against 3.4 million AFL
members.
The 44-day sit-down strike in Flint, Michigan forced General
Motors to recognize the United Auto Workers. A few weeks later,
U.S. Steel accepted unionization without a strike, but the "Little
Steel" companies, Bethlehem, Inland, National, Republic, and
Youngstown Sheet & Tube, vowed to resist the steel workers
union. In response to the opposition, 75,000 workers walked out
and violence flared. In May 1937, police in South Chicago opened
fire on marchers at the Republic mill, killing ten. Soon after, the
strike was routed, but in 1941 the National Labor Relations Board
ordered "Little Steel" to recognize the United Steelworkers of
America and to reinstate all workers fired for union activity.
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1. What is the meaning of prominent as used in the first sentence?
a. Well respected
b. Educated
c. Unheard of
d. Correct
2. What is the meaning of the sentence, “The nation's major industries, like autos and steel, remained
unorganized?”
a. That the workers in those industries worked inefficiently and wasted a lot of time
b. That the workers in those industries were disorganized
c. That the workers in those industries were important
d. That the workers in those industries were not unionized
3. What is the meaning of landmark as it is used in the article?
a. Famous place
b. Memorial
c. Important
d. Regrettable
4. According to the article, what is/was the importance of the sit-down strike in Flint, Michigan?
a. As a result, workers saw an increase in pay and better working conditions
b. As a result, General Motors recognized the United Automobile Workers union
c. As a result, General Motors increased the prices of their cars
d. As a result, General Motors could not produce cars for almost a month and a half
5. Which of these was NOT cited as an example of an event that affected labor relations?
a. Police shooting of strikers from the Teamsters union in Minneapolis
b. 500,000 textile workers in 20 states went on strike at the same time
c. The PA National Guard fired on strikers at the Homestead Steel Factory outside Pittsburgh
d. 110,000 workers went on strike in Massachusetts alone
6. How did the Wagner Act help workers?
a. It guaranteed workers better pay and working conditions
b. It guaranteed workers a weekend
c. It guaranteed workers the right to form unions and collectively bargain
d. It guaranteed workers a job
7. What difference separated workers in the American Federation of Labor and the Committee of Industrial
Organization?
a. The AFL was made up primarily of skilled workers and the CIO of unskilled
b. The AFL was a much larger union while the CIO was smaller and more easily managed
c. The AFL was a national union and the CIO more focused on smaller towns
d. The AFL was more successful than was the CIO
8. According to the article, which best summarizes the impact of the Wagner Act on steel workers?
a. It led to better wages and working conditions for the workers
b. It led to recognition of unions at even the smaller steel companies
c. It led to violence and attacks on union members
d. It led to a decrease in union membership
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Learning Goal 8 – I will be able to:
-Summarize how the Great Depression affected life during the 1930s.
-Identify the Dust Bowl.
-Explain how culture was affected by the Great Depression.
h. Hard Times & Great Depression Culture
i.
Hard Times
1. Some families had to split up, some children quit school for low paying jobs
2. Toughest on women, and the Native Americans were the hardest hit minority
group
c. Mexican-Americans deported, often WITH kids who were US citizens
d. Fired so whites could have their jobs
3. Dust Bowl – Drought throughout the decade on the Great Plains
ii.
Depression Era Culture
1. WPA hired artists, painters, sculptors, and actors
a. Jobs for artists, aimed at entertaining during difficult times
2. John Steinbeck – author, The Grapes of Wrath –farmers moving to CA for work;
also wrote Of Mice and Men
3. Woody Guthrie – Folk singer who expressed struggles of the Great Depression
a. It is said by many that he “sang the Depression”
4. Swing music – helped people forget their problems
a. Radios played shows like Little Orphan Annie & The Lone Ranger
b. Movies – when people could afford them
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Learning Goal 8 – I will be able to:
-Summarize how the Great Depression affected life during the 1930s.
-Identify the Dust Bowl.
-Explain how culture was affected by the Great Depression.
Great Depression
and life…
Dust Bowl…
Culture...
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265
266
267
268
269
270
271
272
273
Need to Know:
Fireside chats
Bull Market
Federal Deposit Insurance Corporation
Bear Market
Civil Works Administration
Margin Buying
Tennessee Valley Authority
Black Tuesday
Arguments New Deal was working
Bank failure
Arguments New Deal was not working
What happens when you put your
money in the bank
“Share Our Wealth”
Great Depression
Business cycle
1 cause of the stock market crash and
explain
Second cause of the stock market crash
and explain
Herbert Hoover
Franklin Roosevelt
Hoover Flags & Hoovervilles
1932 Election: who won and why
New Deal
The Hundred Days
FDR’s line at his inaugural address
(memorize it, only need one fact)
Bank holiday
Works Progress Administration
Social Security Act
Arguments against Social Security Act
Arguments in favor of Social Security
Act
How Social Security is relevant today
Wagner Act
Congress of Industrial Organizations
Court Packing
New Deal Negatives
New Deal Positives
Dust Bowl
John Steinbeck
Woody Guthrie
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Learning Goal 1 – I will be able
to:
-Define Bull Market and Bear
Market.
-Define Margin Buying
-Explain why margin buying is
so dangerous
-Summarize how margin buying
led to disaster in 1929.
-Explain how/why demand for
stock goes up.
Learning Goal 2 – I will be able
to:
-Summarize what happens when
you put your money in the bank.
-Explain how bank failure led to
panic in the late 1920s.
-Define and summarize what
the business cycle is
-List and explain how margin
buying and unequal distribution
of wealth were the two primary
causes of the
stock market crash and Great
Depression
Learning Goal 3 – I will be able
to:
-Explain the reasons people turn
to government for help.
-List reasons turning to
government can be dangerous.
-Summarize why so many
turned to the government for
help after the stock market
crash.
-Contrast the views of
Republican president Herbert
Hoover and Democrat
challenger Franklin Roosevelt.
-Explain who won the 1932
election and why.
Learning Goal 4: I will be able
to:
-Define 100 Days, summarizing
the precedent it set for future
presidents.
-Define “New Deal” and
explain the constitutional
question debated because of the
New Deal.
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Learning Goal 5 – I will be able
to:
-Summarize FDR’s goals when
he and Congress created the
New Deal programs.
-Explain why the FDIC was
created.
-Summarize how the FDIC
protects consumers today.
-Define Social Security and
explain why it was created.
-Summarize what the New Deal
did for the country and how it is
still relevant today.
Learning Goal 6 – I will be able
to:
-List at least 1 argument for
why the New Deal was working
-List at least 1 argument for
why it was not.
-List and explain the primary
reason some argued that the
New Deal went too far.
-List and explain the primary
reason that others argued that it
did not go far enough.
Learning Goal 7 – I will be able
to:
-Summarize why FDR
supported worker’s rights to
join unions
-Explain how and why FDR
tried to alter the Supreme Court
-Define “court packing”
-List reasons both for how the
New Deal was a positive for the
country and how it was a
negative
Learning Goal 8 – I will be able
to:
-Summarize how the Great
Depression affected life during
the 1930s.
-Identify the Dust Bowl.
-Explain how culture was
affected by the Great
Depression.
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