The Bubble Bursts: The Start of the Great Depression

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    (AH 12-13)

The Bubble Bursts:

The Start of the Great Depression

Essential Questions:

  1. What happens when traditional and modern cultures interact?

  2. What influences do economic excesses have on American society?

  3. What is the proper role of the government in people’s lives?

  4. Did America move closer to or further away from its founding ideals during the interwar period?

Enduring Understandings:

Students will understand that …

1. Economic excess (overspending) and the unequal distribution (uneven spreading) of wealth can lead to

instability in society.

2. Liberals (people who are more likely to want change) and Conservatives (people who are more likely to want to keep older

traditions) have different beliefs about individual responsibility and the proper role of the government.

3. As a result of the New Deal, the United States government took on greater responsibilities for promoting the general

welfare (well-being) of people and society.


All Students will know …
1. How can economic excesses contribute to hardship (challenges/suffering) and instability in America?

- Impact of the economic policies of the Harding and Coolidge Administrations on wealth distribution, investment,

and taxes.

- Basic operation of the stock market.

-Causes and consequences of the Great Depression and Dust Bowl.

- Reasons for the deepening crisis of the Great Depression and the Hoover administration’s responses.

2. What is the proper role of the government in people’s lives?

- Leadership qualities of Franklin D. Roosevelt.

- Philosophy, successes and failures of the New Deal.

- Significance of New Deal policies and their arguments.

3. Did the New Deal move America closer or further away from its founding ideals?

- How the ideals of liberty, equality, opportunity, rights and democracy were exemplified or contradicted during this

time period.

- Significance and legacy of the New Deal, including the Social Security Administration, FDIC and minimum wage.

Advanced Students will know …

1. Location of ideologies (belief systems) including conservative, liberal, moderate, radical, reactionary on the

political spectrum.

2. Basic operation of the banking system.

3. Characteristics of the First and Second New Deal.

NOTE: Almost every word in this packet that is printed in bold print is a key concept (or at least a very major point), so know them.


The Stock Market Crash and Great Depression”

Unit Outline/Organizer (for Preview and Review)

    I. Causes of the Crash

  1. over-speculation (the main cause)

    1. includes buying on margin

  2. mob psychology

    II. Stock “Crash” Actually Not the Cause of the Great Depression

    A. The “Crash” was NOT the cause of the Great Depression. It was a noticeable symptom that showed people that the

    economy had actually been sick for a long time.

    III. Long-term Causes of the Great Depression

  1. over-speculation/buying on margin E. overproduction of agricultural and industrial products

  2. uneven (unequal) distribution of wealth F. buying on margin/installment plan

  3. high tariffs and war debts G. banking system crisis

  4. farm crisis H. domino (chain-reaction) effect

    IV. Daily Life/Hard Times

  1. nation-wide unemployment up to 25% by 1932

  2. people saw Great Depression as a permanent breakdown of our economic system (capitalism/free enterprise)

  3. “Hoovervilles” pop-up in just about every major city

  4. Dust Bowl destroys farming in the West and Midwest and leads to an increased interest in conservation

    V. Hoover and the Great Depression

  1. Hoover’s belief in “rugged individualism” caused federal government not taking much direct action to stop the crisis

    1. led to him losing the election and the Great Depression getting much worse

  1. believed in indirect relief more than direct relief

    1. indirect relief [“community chests”, Boulder (a.k.a. “Hoover”) Dam, RFC, Federal Home Loan Act] not enough

    to fix economy

  1. Hoover’s handling of the Bonus Army incident helps destroy his chances of getting re-elected

    VI. FDR, the Great Depression, and the New Deal

  1. Believes government should take bold action to end the Great Depression and that it had the responsibility of helping people and society to be strong economically and socially

  2. First Hundred Days – FDR and Congress passed 15 major laws; all future presidents are measured against this

  3. FDR’s plan to end the Great Depression is called the “New Deal”

    1. based upon the “Three R’s: Relief, Recovery, and Reform”

    2. New Deal Programs You Must Know:

    a. “Bank Holiday” and the Emergency Banking Act d. Civilian Conservation Corps (CCC)

b. Glass-Steagall Act e. Social Security Act

c. Agricultural Adjustment Act (AAA)

D. Criticisms of the FDR and the New Deal

1. deficit spending (a.k.a. “Keynesian economics”) is used to “jump-start” the economy

E. Labor Unions and Workers made major gains during the time of the New Deal

1. National Labor Relations Act – protected the right of workers to create- and to be in – unions

2. Fair Labor Standards Act – maximum hours set at 44 hours, overtime pay, federal minimum wage, and

employment rules for children under age 16

VII. Significance and Effects of the New Deal and Great Depression

A. Extension of the Power of Federal Government E. Greater Concern for Workers (Labor)

B. Extension of the Power of the President F. Conservation Gains

C. Deficit Spending G. Renewal of Faith in Democracy

D. Federal Social Programs

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