Chapter 15: The New Deal Unit 3 The Great Depression

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Chapter 15: The New Deal
Unit 3 The Great Depression

 ...The Great Depression and New Deal

  • Essential Question: How did the US and other countries respond to the rise of capitalism, economic collapse and the development of social welfare programs?

  • Standard(s) 9-12 2.4: Analyze the major political, economic, and social developments that occurred between WWI and WWII.

    • 9-12 1.2: Resources: Interpret and evaluate documents (primary and secondary sources, fact, fiction or opinion) to enhance the understanding of social studies content.

    • 9-12 1.4:  Research Process:  Use media (oral, written, websites, computer simulations, multimedia) to access, record, and analyze, and communicate information relating to social studies.

Focus Questions:

1. What economic changes of the 1920s led to the Stock Market Crash and the Great Depression?

2. How did American's lives change following the economic shift from the 1920's to the Great Depression?

3. How did Herbert Hoover and Franklin D. Roosevelt approach the problems of the Great Depression differently?

4. How did the New Deal's legacy impact the United States government, economy, and society?

I Can Statements:

1. I can compare and contrast living standards and conditions within urban and rural communities from the 1920s to the 1930s.

2. I can compare and contrast different approaches between Herbert Hoover and Franklin D. Roosevelt.

3. I can classify and evaluate the social, economic, and political causes that resulted in the event of Black Tuesday and the Great Depression.

4. I can recognize and evaluate New Deal programs that are still in effect today.

Chapter 15: The New Deal
Section 1: The New Deal Fights the Depression

  1. Americans Get a New Deal in 1932

    1. President Herbert Hoover was directly blamed for the Great Depression and for not doing enough to end the Depression

      1. The Republicans re-nominated Hoover as their presidential hopeful for the 1932 election

  1. Republicans knew they were doomed, but no one else would represent their party

      1. The Democrats placed their faith in Franklin Delano Roosevelt, a two-term governor of New York and distant cousin of Theodore Roosevelt

  1. FDR was a reformer and focused on what could be done, not what couldn’t be accomplished

  2. The Democrats also controlled 2/3rds of the seats in the House of Representatives and almost 3/4ths of the seats in the Senate (this hadn’t happened since the Civil War)

    1. Four months passed b/w Roosevelt’s victory in November 1932 to his inauguration in March 1933

      1. Brain Trust: team of professors, lawyers, and journalists that were selected to advise him in the White House

      2. New Deal: relief for the needy, economic recovery, and financial reform

    2. Fireside Chats: radio broadcasts from the White House related to issues of public concern

      1. Urged people to reinvest in banks and assured people banks were safe

      2. Gave a total of 30 fireside chats and began each with the greeting “My friends.”

    3. Hundred Days: intense activity b/w March 9 and June 16, 1933 in which Congress passed more than 15 major pieces of New Deal legislation (expanded the federal gov’ts role in the nation’s economy)

      1. Bank Holiday (1933): FDR closed every bank for a few days

        1. Designed to stop withdrawals

      2. Emergency Banking Relief Act (1933): Treasury Department examined all banks to determine which ones were financially sound and then could reopen

        1. Banks that were not stable could receive loans

        2. Designed to restore public confidence in banks

      3. Glass-Steagall Act (1933): est the Federal Deposit Insurance Corporation (FDIC)

        1. FDIC: provided federal insurance for each individual bank deposit up to $5000

        2. Also, required banks to me cautious with depositors’ money

      4. Federal Securities Act (1933): required corporations to provided complete info on all stock offerings and made them liable for any misrepresentation

      5. Securities and Exchange Commission (SEC-1933): regulate the stock market to prevent people with inside info about companies from “rigging” the stock market for their own profit

        1. Martha Stewart, Joseph Kennedy. Enron, etc.

      6. Roosevelt also convinced Congress to allow the production and sale of some alcoholic beverages so the gov’t could increase revenue by taxing alcohol

        1. Prohibition was repealed soon after by the 21st Amendment at the end of 1933

  1. Helping the American People

    1. Agricultural Adjustment Act (AAA) and the Agricultural Adjustment Administration (AAA): gov’r would pay farmers to leave a certain amount of every acre of land unseeded

      1. Theory: reducing the supply will increase the price, which will give farmers more money to spend

        1. The gov’t paid cotton growers $200 million to plow under 10 million acres of crops

        2. Paid hog farmers to slaughter 6 million pigs

      2. Problem: Increased taxes on food processors only increased the costs on consumers, thus decreasing the purchasing power of city dwellers

        1. The money for these payments or “subsidies” came from taxes on food processors

        2. People were upset that crops and food was destroyed while many starved

      3. AAA ruled unconstitutional in 1936

    2. Tennessee Valley Authority (TVA-1933): sought to revitalize the seven-state region drained by the Tennessee River and its tributaries

      1. Operated a system of 38 dams that drained 40,000 square miles

        1. Provided electricity, flood control, recreation, combated malaria, illiteracy, soil erosion, and improve the regions’ standard of living

      2. Opposition to the TVA:

        1. Shareholders in private utilities brought court cases against the TVA because they were worried about losing money

        2. Best known “alphabet soup” program FDR came up with in his first hundred days

    3. Roosevelt’s administration also est. programs to provide relief through work projects and cash payments

      1. Civilian Conservation Corps (CCC-1933): employed young men and women between the ages of 18 and 25 to work building roads, developing parks, planting trees, and helping in soil-erosion and flood-control projects

        1. From 1933 – 1942, almost 3 million young men and women were employed by the CCC at some point in their life

        2. Earned $30 a month and $25 of that was sent home automatically

        3. Many of the CCC camps were located in the Great Plains were 200 million trees were planted in an effort to stop another Dust Bowl

      2. National Industrial Recovery Act (NIRA-1933): law enacted to allow the president and the National Recovery Administration (NRA) to establish codes of fair practice for industries and to promote industrial growth

        1. Designed to stimulate industrial and business activity, reduce unemployment by stabilizing prices, raising wages, limiting workers’ hours, and providing/creating jobs

        2. NIRA and NRA ruled unconstitutional in 1935

      3. National Recovery Administration (NRA-1933): administered the provisions of the NIRA by promoting recovery based on encouraging businesses to draw up “codes of fair competition.” (controlled by Hugh S. Johnson)

        1. Set prices on many products to ensure fair competition, established standard working hours, and banned child labor

        2. Congress created a section in the NIRA that guaranteed workers’ right to unionize and bargain collectively (some businessmen and politicians criticized the NRA)

      4. Public Works Administration (PWA-1933): provided jobs and stimulated business activity by contracting with private firms to construct roads, public buildings (schools), and other public-works projects (controlled by Harold Ickes)

        1. Created under title II of the NIRA

        2. Built the Golden Gate Bridge, Boulder/Hoover Dam, tunnels in New York City, schools, etc.

      5. Civil Works Administration (CWA-1933): created more jobs for the unemployed (created b/c Roosevelt felt the other programs weren’t making large dents in the unemployment problem)

        1. Many of the jobs were called make-work jobs (paid people to mow lawns)

        2. In one year, $750 million was paid to some 4 million workers

    4. Many New Deal programs dealt with housing and home mortgage problems

      1. Home Owners Loan Corporation (HOLC): provided low-interest, long-term gov’t loans to homeowners who faced foreclosures b/c they couldn’t meet their loan payments

        1. National Housing Act (1934) created the Federal Housing Administration: still today it continues to furnish loans for home mortgages and repairs

      2. Federal Emergency Relief Administration (FERA): funneled relief aid directly to state and local agencies (controlled by Harry L. Hopkins)

        1. $500 million, total, was used to provide direct relief to the needy with over 8 million families relying on FERA for survival

        2. ½ was used at direct grant-in-aid to furnish food and cloths to those in need

        3. ½ was distributed to states to support work relief programs

  2. The New Deal Comes Under Attack

    1. President Roosevelt agreed to engage in deficit spending: spending more money than the gov’t receives in revenue/taxes (deficit spending was a necessary evil)

      1. Liberals believed the New Deal had not gone far enough to help those in need

      2. Conservatives argued to much direct relief (handouts) were being distributed and too much direct federal control was stifling capitalism/free-market economy

        1. The conservative Supreme Court ruled on the argument(s)

    2. Schechter Poultry Corp. v. United States (May 27, 1935):

      1. Facts of the Case:

        1. Section 3 of the National Industrial Recovery Act empowered the President to implement industrial codes to regulate weekly employment hours, wages, and minimum ages of employees. The codes had standing as penal statutes.

      2. Question:

        1. Did Congress unconstitutionally delegate legislative power to the President?

      3. Conclusion:

        1. The Court held that Section 3 was "without precedent" and violated the Constitution. The law did not establish rules or standards to evaluate industrial activity. In other words, it did not make codes, but simply empowered the President to do so. A unanimous Court found this to be an unconstitutional delegation of legislative authority.

    3. United States V. Butler (Jan 6, 1936):

      1. Facts of the Case:

        1. As part of the 1933 Agricultural Adjustment Act, Congress implemented a processing tax on agricultural commodities, from which funds would be redistributed to farmers who promised to reduce their acreage. The Act intended to solve the crisis in agricultural commodity prices which was causing many farmers to go under.

      2. Question:

        1. Did Congress exceed its constitutional taxing and spending powers with the Act?

      3. Conclusion:

        1. The Court found the Act unconstitutional because it attempted to regulate and control agricultural production, an arena reserved to the states. Even though Congress does have the power to tax and appropriate funds, argued Justice Roberts, in this case those activities were "but means to an unconstitutional end," and violated the Tenth Amendment.

    4. Roosevelt and the Supreme Court (1937)

      1. Court Packing Bill: Roosevelt asked Congress to grant him the power to appoint one new justice for each of those 70 or older (he would have been able to appoint six new Supreme Court justices)

      2. Many Republicans and Democrats did not like the idea of “court packing”

        1. Congress denied FDR’s request (upset the checks and balance and separation of powers system est. by the founding fathers)

      3. FDR lost a small battle, but he won the war

        1. By 1945 eight of the nine justices were Roosevelt appointees b/c of death or retirements by the justices

    5. The American Liberty League (1934): opposed New Deal measures that it believed violated respect for the rights of individuals and property (those that supported big business and the wealthy)

      1. Father Charles Coughlin: Roman Catholic priest who broadcast radio sermons that combined economic, political, and religious ideas

        1. Initially favored the New Deal, but later favored a guaranteed annual income and the nationalization of banks (40-45 million listeners)

      2. Dr. Francis Townsend: physician and health officer in Long Beach, California

        1. Wanted the gov’t to pay a $200 monthly pension to every American over 60

        2. They had 30 days to spend their pension, thus pumping money into the economy (prime the pump)

      3. Huey Long “the Kingfish”: corrupt senator from Louisiana

        1. Share-Our Wealth/Every Man a King program: gov’t could take money from the rich through taxation (money used to provide a minimum income and home to all Americans)

        2. Communist and Socialist parties denounced Long even though he wanted to redistribute wealth (assassinated in 1935)

Section 2: The Second New Deal Takes Hold

  1. The Second Hundred Days

    1. FDR felt the gains in the economy were not significant enough in his first two years

      1. Second New Deal/Second Hundred Days: the president called on Congress to provide more extensive relief for both farmers and workers

      2. Eleanor Roosevelt: FDR’s wife was, a social reformer who combined her deep humanitarian impulses with great political skill

  1. Urged her husband to appoint women to gov’t positions

    1. FDR’s (Democrat) overwhelming victory against Alfred Landon (Republican and governor of Kansas) in the 1936 presidential election, also aided in extending Democrat majorities in Congress

      1. First time most African Americans voted for a Democrat instead of a Republican

  1. Abraham Lincoln (Republican) was the President of the North during the Civil War and was given credit for freeing African Americans

      1. First time labor unions gave united support to a presidential candidate

  1. Helping Farmers

    1. After the Supreme Court struck down the AAA, in 1936, Congress took action

      1. Soil Conservation and Domestic Allotment Act (1936): paid farmers for cutting production of soil-depleted crops and rewarded farmers for practicing good soil conservation methods

      2. Second Agricultural Adjustment Act (AAA-1938): similar to the first AAA struck down by the Supreme Court, but it didn’t include the processing tax to pay for farm subsidies

      3. Resettlement Administration (1935): created by an executive order, it provided monetary loans to small farmers to buy land

  1. Farm Security Administration (FSA-1937): replaced the Resettlement Administration, which loaned more than $1 billion to help tenant farmers become landholders and est. camps for migrant farm workers, who traditionally lived in squalid housing

  2. FSA hired photographers such as Dorothea Lange to take pictures of rural life

  1. Roosevelt Extends Relief

    1. Works Progress Administration (WPA): developed in 1935 to create jobs for the unemployed (replaced the CWA, which ended in 1934)

Spent $11 billion b/w 1935 – 1943 to give jobs to more than 8 million workers, most of them unskilled (women earned $3 a day while men earned $5 a day)

      1. Male blue-collar workers built airports, constructed and repaired roads, and built public buildings

      2. Male white-collar workers conducted research projects, wrote guides to cities, collected slave narratives, ect.

      3. Women formed sewing groups making millions of garments

    1. WPA programs:

      1. Federal Project No. 1: tried to encourage pride in American culture by aiding unemployed artists in the fields of writing, theater, music, and visual arts

      2. Federal Writers’ Project (FWP): hired unemployed writers to produce travel guides and histories of various ethnic groups

        1. Some conducted oral interviews with former elderly slaves

        2. Historians still use these sources to study slave life today

      3. Federal Theatre Project: hired unemployed actors, directors, etc to encourage theatrical productions

      4. Federal Music Project: hired musicians and orchestras to perform across the country

      5. Federal Arts Project: employed artists and designers to produce posters for New Deal programs and to teach art in public schools

      6. The WPA created the National Youth Administration (NYA): gave young people part-time jobs, an education, counseling, and recreation, which provided money/aid to help them stay in school

  1. Improving Labor and Other Reforms

    1. National Labor Relations Act/Wagner Act: reestablished the NIRA provision of collective bargaining (named after Senator Robert F. Wagner of New York)

      1. Federal gov’t protected the right of workers to join unions and engage in collective bargaining with employers

        1. Also prohibited unfair labor practices and interference with unions

        2. It was challenged in Supreme Court but upheld

      2. National Labor Relations Board (NLRB): hear testimony about unfair practices and to hold elections to find out if workers wanted union representation

      3. Fair Labor Standards Act (1938): set maximum hours at 44 hours per week, decreasing to 40 hours after two years

        1. set minimum wages at $.25 an hour, increasing to $.40 an hour by 1945

        2. Created rules for the employment of 16 year-olds, and banned hazardous work for those under 18

    2. NLRB v. Jones and Laughlin Steel Corp (1937):

      1. Facts of the Case:

        1. With the National Labor Relations Act of 1935, Congress determined that labor-management disputes were directly related to the flow of interstate commerce and, thus, could be regulated by the national government. In this case, the National Labor Relations Board charged the Jones & Laughlin Steel Co. with discriminating against employees who were union members.

      2. Question:

        1. Was the Act consistent with the Commerce Clause?

      3. Conclusion:

        1. Yes. The Court held that the Act was narrowly constructed so as to regulate industrial activities which had the potential to restrict interstate commerce. The justices abandoned their claim that labor relations had only an indirect effect on commerce. Since the ability of employees to engage in collective bargaining (one activity protected by the Act) is "an essential condition of industrial peace," the national government was justified in penalizing corporations engaging in interstate commerce which "refuse to confer and negotiate" with their workers.

    3. Social Security Act (1935): created by a committee chaired by Secretary of Labor Frances Perkins (three major parts to the Act)

      1. Old-age insurance for retirees 65 (today it’s 67) or older and their spouses

        1. Half the funds came from the worker and half from the employer

      2. Unemployment compensation system

        1. Funded by a federal tax on employers and administered at the state level (payments ranges from $15 to $18 per week)

      3. Aid to families with dependent children and the disabled

        1. Paid for by federal funds made available to the states

        2. Provided payments to the blind, disabled, elderly, and to the wives and children of male workers who had died

      4. Problems with the Social Security Act, which is an entitlement program

        1. Farmers, the self-employed, and domestic servants were excluded from coverage (60% of domestic servants were black)

        2. Benefits paid 1937 = $1.3 million vs. 2008 = $615 billion

        3. Life expectancy 1935 = 61.7 years vs. 2010 = 78.7 years

        4. SS worker-benefit ratio 1960 = 5 to 1, 2009 = 3 to 1

        5. Currently Social Security, Medicaid, and Medicare consume 43% of the U.S. budget = $1.5 trillion

    4. The New Deal created laws to promote rural electrification and to regulate public utilities

      1. Rural Electrification Administration (REA): extended power lines into isolated rural areas

        1. In 1935 only 12.6% of American farms had electricity

      2. Public Utility Holding Company Act (1935): outlawed the ownership of utilities by multiple holding companies

        1. Holding Company/Parent company: a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors

        2. Gov’t had the power to regulate interstate production, transmission, and sale of gas and electricity

Section 3: The New Deal Affects Many Groups

  1. The New Deal Brings New Opportunities

    1. FDR named several women to important gov’t positions

      1. Frances Perkins became America’s first female cabinet member serving as Secretary of labor

        1. Helped create the Social Security system

        2. FDR was after the female vote and was encouraged by his wife to hire women

      2. A Gallup poll, taken in 1936, reported that 82% of Americans said that a wife should not work if her husband had a job

        1. NRA set wage codes that were lower for women

        2. FERA and CWA hired fewer women than men, and the CCC only hired men

      3. The number of married women working increased from 11.7% in 1930 to 15.6% in 1940

        1. The overall number of women working only increased slightly during the Depression

  2. African-American Activism

    1. FDR appointed more than 100 African Americans to key gov’t positions

      1. Mary McLeod Bethune was hired by the president to head the Division of Negro Affairs of the National Youth Administration (ensured African Americans were trained and educated in NYA)

        1. Black cabinet: Bethune helped form a group of influential African Americans that advised the Roosevelt administration on racial issues

        2. Hastie and Weaver (part of the black cabinet) were both appointed to the Department of Interior

      2. Eleanor Roosevelt resigned from the Daughters of the American Revolution when they would not allow African American Marian Anderson to perform in their concert hall in D.C.

        1. Marian Anderson (1939) was allowed to perform at the Lincoln Memorial on Easter Sunday b/c of Eleanor Roosevelt’s efforts

    2. Roosevelt promotes racial equality, but he was never committed to full civil rights for African Americans

      1. Didn’t want to upset white Democrats that vote in the South

        1. Didn’t approve federal anti-lynching laws and chose not to end poll taxes

        2. New Deal programs gave lower wages to blacks

      2. Southern Tenant Farmers’ Union (STFU-1934): formed by Arkansas sharecroppers that were being forced of the land by the large landowners

        1. Lobbied the gov’t to halt tenant evictions and to force landowners to share payments with the farmers who rented land

  3. Mexican-American Fortunes

    1. Most Mexican Americans and Filipinos supported the New Deal, although they received fewer benefits than African Americans

      1. The average Mexican American family’s income was below $300 a year ($.09 an hour as farm workers)

        1. Mexican Americans felt they were discriminated against in the New Deal programs (harassed, denied clothing, and assigned kitchen duty more than others)

      2. The Filipino Labor Union launched strikes to protest lower wages

        1. American Federation of Labor sponsored the Field Workers Union, which was made up of Mexican and Filipino laborers

  4. Native Americans Gain Support (federal Indian policy)

    1. Dawes Act (1887-1935): attempted to Americanize Indians by dividing the tribal land into individual plots.

      1. Native Americans must farm land for 25 years before they can take complete ownership of the land (could sell it if they wanted)

      2. The government gave them the unproductive land so farming (raising crops) was almost impossible

        1. They asked if they could run range cattle and were told no

        2. Used to separate Indians form their land and cash

    2. Native American leaders stopped the Harding administration’s attempt to buy back all tribal land

      1. Bursum Bill: designed to legalize non-Native American claims to Pueblo land

        1. Bill would limit the power of tribal gov’t

      2. 1924 Congress granted citizenship to all Native Americans (efforts in WW I)

    3. Curtis Act (1898): BIA decided if Indians were competent in regards to taxes, loans, etc so they could sell their land before the 25 year time frame

      1. Sent our paperwork to find out if they were competent, but never really checked reviewed it

    4. Burke Act (1906): interview Indians in order to determine if they were competent so they could sell their land before the 25 year time frame.

      1. They interviewers never really did their job (may just sign off for no real reason)

      2. Often Indians lost their land because they didn’t know they were expected to pay taxes on their land (back taxes owed and couldn’t pay them, so lost land)

    5. Decleration of Policy (1917): automatically competent if ½ white, so they could sell their land before the 25 year time frame

      1. Again didn’t understand the concept of taxation and lost their land

    6. Indians Reorganization Act (1934): assimilation was no longer the focus, but instead Native American Autonomy

      1. FDR appointed John Collier as commissioner of Indian affairs

        1. Helped create the Indian Reorganization Act of 1934

      2. The act mandated changes in three areas:

        1. Economic: N.A. lands would belong to the entire tribe and the gov’t couldn’t take and sell unclaimed reservation land

        2. Cultural: boarding schools for N.A. were reduced, and children could attend schools on reservations

        3. Political: tribes given permission to elect tribal councils to govern their reservation

    7. Termination and Relocation Act (1950s): null and void all federal and tribal treaties and make reservations just part of the state.

      1. Relocation part of the act: take Indians off the reservation and assimilate them into white society

    8. Great Society Program (1960s-LBJ): War on Poverty created, but Vietnam caused the War on Poverty to come to an end

      1. Indians receive prenatal care and meals

    9. Self Determination (1973-Nixon): get ideas from tribal leaders to help reservations recover (feds got out of the way)

      1. Gov’t finally leaves Native Americans alone

  5. FDR Creates the New Deal Coalition

    1. New Deal coalition: an alignment of diverse groups dedicated to supporting the Democratic Party

      1. President Roosevelt was considered a “friend of labor.”

        1. B/w 1933 and 1941, union membership grew from less than 3 million to more than 10 million, especially in the areas of coal and mass-production industries

      2. AFL didn’t want industry-wide unions that represented all the workers in a given industry, such as auto manufacturing

        1. John Lewis (United Mine Workers) and David Dubinsky (International Ladies Garment Workers) formed the Committee for Industrial Organizations to organize industrial unions

      3. In 1938, the Committee was expelled from the AFL and changes its name to the Congress of Industrial Organizations (CIO)

        1. The AFL and CIO re-united in 1955

    2. Sit down strikes became the main bargaining tactics of labor union (remained at work, which made it difficult for owners to bring in strikebreakers/scabs)

      1. The strike at Republic Steel plant in Chicago, on Memorial Day, was on of the most violent (Memorial Day Massacre)

        1. Ten people were killed and 84 wounded

        2. The NLRB forced Tom Girdler (head of the plant) to negotiate with the union

    3. FDR won reelection in the 1936 presidential election

      1. The largest cities in North that had powerful city political organizations that provided services in exchange for votes supported FDR

      2. Urban Americans supported FDR based on his New Deal programs and work-relief programs

        1. Appointed many urban-immigrants, particularly Roman Catholics and Jews, to important gov’t jobs

      3. Minorities and workers in all walks of life supported FDR, b/c they were all impacted by the New Deal

Section 4: Culture in the 1930s

Make sure you also read this section

  1. The Lure of Motion Pictures and Radio

    1. 65% of the population attended movies once a week and 90% of American households owned radios

      1. Gone with the Wind (written by Margaret Mitchell in 1936): a story of the Old South during the Civil War and Reconstruction

        1. Scarlett O’Hara’s survival of war and economic chaos brought hope to readers of the 1930s

        2. Clark Gable and Vivien Leigh started in the film

      1. The Wizard of Oz (1939) and Snow White and the Seven Dwarfs (1937) were other popular movies produced in the 1930s

        1. Walt Disney’s Mickey Mouse and Donald Duck were featured

      2. Gangster films portraying men beating the odds were popular

        1. Little Caesar (1930) and The Public Enemy (1931) were notable

    1. Families often spent several hours a day gathered together, listening to their favorite programs

      1. Orson Welles (Oct 30, 1938) created one of the most renowned radio broadcasts of all time, “The War of the Worlds.”

        1. Listeners tuned in thinking the Martians were truly invading earth and the world was coming to an end

        2. Demonstrated the power of radio, and receiving info instantaneously

        3. People ran out of their homes with handkerchiefs over their mouths worried if they breathed in the vapor they would die

      2. Bob Hope and Jack Benny moved from radio to work on television and movies

      3. Soap operas (so named b/c they were usually sponsored by soap companies) aired in the morning and afternoons

        1. The Lone Ranger aired later in the afternoon when kids were home from school

      4. The first worldwide radio broadcast was the crash of the Hindenburg (German zeppelin) in New Jersey on May 6, 1937

    2. The Arts in the Depression America

      1. The Federal Art Project (part of the WPA) paid artists a living wage to produce public art and help create a public appreciation for the arts

        1. Grant Wood created the famous painting American Gothic

    3. Woody Guthrie used music to capture the hardships of America

      1. His most notable song was “This Land is Your Land.”

    4. The Federal Writers’ Project (part of WPA) hired unemployed writers to produce travel guides and histories of various ethnic groups

      1. Richard Wright, an African-American author, completed the novel Native Son

        1. It’s about a young man trying to survive in a racist world

      2. The Grapes of Wrath (written by John Steinbeck in 1939): the story follows the fortunes of a desperately poor Oklahoma Dust Bowl family as they travel to California

        1. Head of the family, Ma Joad, said, “They ain’t gonna wipe us out.”

Section 5: The Impact of the New Deal

  1. New Deal Reforms Endure

    1. FDR hinted at embarking on a Third New Deal during his second term in office, but he didn’t want to continue to deficit spend

      1. By 1937, the economy had recovered enough for people to believe the Great Depression had ended

      2. FDR faced pressure from Congress to scale back New Deal programs in 1937 which created the Roosevelt recession

  1. By 1939, the New Deal had ended and WW II loomed in Europe

    1. The New Deal was both criticized and praised over the years

      1. Republicans believed it created creeping socialism

  1. Federal gov’t was too large and powerful

  2. Stifled free enterprise and individual initiative

      1. Liberals thought FDR didn’t do enough to help eliminate social and economic inequalities

  1. FDR needed to do more to socialize the economy

    1. The New Deal gave the president and the federal gov’t more power in regulating the economy

      1. Federal gov’t created federal jobs, attempted to regulate supply and demand, and became more active in settling labor and management disputes

      2. Est. agencies like the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC): regulate banking and investment activities

  1. Currently deposits are insured up to $100,000

      1. The federal deficit increased from $2.9 billion in 1934

  1. Cutbacks in 1937-1938 helped reduce the deficit by $100 million (Roosevelt recession)

  2. In 1939, FDR increased spending causing the deficit to rise to $2.9 billion

  3. During WW II the deficit reached $54.5 billion by 1944, which ensured that the Depression was over

    1. National Labor Relations Board (NLRB): created under the Wagner Act, continues to act as a mediator in labor disputes b/w unions and employers

    2. Securities and Exchange Commission (SEC): created in 1934, continues to monitor the stock market and enforce laws regarding the sale of stocks and bonds

    3. Federal Deposit Insurance Corporation (FDIC): created by the Glass-Steagall Act of 1933, has shored up the banking system by reassuring individual depositors that their savings a protected

  1. Social and Environmental Effects

    1. One of the most important legacies of the New Deal is the gov’ts limited responsibility for the social welfare of its citizens

      1. Social Security Act: provides an old-age insurance program, unemployment compensation system, and aid for the disabled and families

    2. Second Agricultural Adjustment Act (1938): loans were made to farmers by the Commodity Credit Corporation

      1. The value of the loan was determined by the amount of a farmer’s surplus crops and the parity price-a price intended to keep farmers’ income steady

  1. Agricultural price supports are still used today-subsidies

    1. Tennessee Valley Authority (TVA): harnessed water power to generate electricity and to help prevent disastrous floods in the Tennessee Valley

      1. Civilian Conservation Corps (CCC): planted trees, created hiking trails, and built fire lookout tours

      2. Soil Conservation Service: taught farmers how to conserve the soil through contour plowing, terracing, and crop rotation

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