Stock Market Crahs and The Great Depression

Herbert Hoover

President of the U.S. from 1923-1933 leader of the US in the beginning of the Great Depression. He didn’t want the government involved in the people lives and thought that the people should express their individuals right

Buying on Margin

The purchasing of stocks by paying only a small percentage of the price and borrowing the res

Bank Run

A phenomenon in which many of a bank’s depositors try to withdraw their funds due to fear of a bank failure

Federal Home Loan Bank Act

A law, enacted in 1931, that lowered home mortgage rate and allowed farmers to refinance their loans and avoid foreclosure (gov taking house)

Hoovervilles

Depression shantytowns, named after the president whom many blamed for their financial distress

The Brain Trust

A group of FDR’s expert advisors who helped craft New Deal policies

Dow Jones Industrial Average

A major stock market index used to measure stock performance

Black Tuesday

October 29, 1929; the day the stock market crashed. Led to the Panic of 1929

Rugged Individualism

The belief that all individuals, or nearly all individuals, can succeed on their own and that government help for people should be minimal. Popularly said by Herbert Hoover.

Reconstruction Finance Corporation

An Agency established in 1932 to provide emergency relief to large businesses, insurance companies, and banks in the hopes that the money would trickle down to the American people

Franklin Delano Roosevelt (FDR)

Democratic candidate who won the 1932 election by a landslide. He pledged a present a “New Deal” in order to address the problems of the Great Depression

Speculation

Risky investment in hopes of quick profit, which helped inflate the stock market bubble

Hawley-Smoot Tariff

Protective import tax authorized by Congress in 1930

Boulder Damn

A dam on the Colorado River, now called Hoover Dam, that was built during the Great Depression as part of a public-works program intended to stimulate business and provide jobs

The Bonus Army

A Group of WWI veterans that marched to D.C. in 1932 to demand the immediate payment of their government war bonuses in cash

Eleanor Roosevel

FDR’s wife who advocated for the poor, minorities, and women’s rights. Most involved first lady!

The New Deal

A series of reforms enacted by the Franklin Roosevelt administration between 1933 and 1942 with the goal of ending the Great Depression

What caused the stock market to crash in 1929?

Over speculation, buying on margin, and inflated stock prices led to a loss of confidence and mass sell-offs

What problems would bank failures cause for the economy beyond individuals losing their money?

Businesses lost credit, people lost saving, and consumer confidence collapsed- slowing the entire economy

How did Hoover approach the problems of the Great Depression?

He believed in voluntary cooperation and minimal government interference, trusting in “rugged individualism.”

What impact did the Bonus Army have on Hoover’s political career?

The violent removal of protesting veterans made him look heartless and hurt his chances in the 1932 election

What did FDR say in his inaugural address that would encourage the American people? Did he say anything that may be cause for concern?

He said, “The only thing we have to fear is fear itself,” giving hope-but also hinted at taking broad executive power if needed

How was FDR’s approach to the Great Depression different from Hoover’s?

FDR believed in active government intervention and launched programs to create jobs and support struggling Amercians

What were the three main goals of FDR’s New Deal programs? (be able to explain, not simply list them)

Relief (Immediate help for the unemployed and poor (jobs and food)

Recovery (Rebuilding the economy through jobs and industry boost)

Reform (Fixing financial systems to prevent another depression (like regulating banks and the stock market)

FDR & The New Deal American Liberty League

A conservative anti-New deal organization. It criticized the “dictatorial” policies of Roosevelt and what it perceived to be his attacks on the free enterprise system

Francis Townsend

Critic of the New Deal; felt that the New Deal did not do enough for elderly. Proposed a planCoughlinuld require the elderly to retire and would give them money each month on the condition that they would spend it during that month

Father Charles Coughlin

Roman Catholic priest who used popular radio sermons to criticize Roosevelt

Huey Long

Proposed “Share Our Wealth” to tax the rich and help the poor-was seen as threat to FDR

Sit Down Strike

Method of boycotting work by sitting down at work and refusing to leave the establishment

Deficit spending

Government practice of spending more than it takes in from taxes

Schechter v. United States

The Supreme Court Struck down the NRA (National Recovery Administration) Help businesses recover by setting fair wages, hours, and working conditions) saying FDR overstepped Federal powers

Court Packing Plan

President FDR’s failed 1937 attempt to increase the number of US Supreme Court Justices from 9 to 15 in order to save his 2nd New Deal programs from constitutional challenges (Supreme Court had Republicans not allowing him to get his act through)

Mary McLeod Bethune

An educator who dedicated herself to promoting opportunities for young African Americans. Was a member of FDR’s “Black Cabinet”

Black Cabinet

Group of African Americans FDR appointed to key government positions; served as unofficial advisors to the president

New Deal Coalition

An alignment of diverse groups (workers, minorities, farmer, etc) dedicated to supporting the Democratic Party during the years of the Great Depression

Welfare State

The idea that the government should provide basis economic support (like Social Security)

How was FDR’s approach to the Great Depression different from Hoover’s?

Herbert Hoover believed in limited government intervention (voluntary action resulting in people seeing him as too slow and not effective as the Depression got worst) , FDR believed in strong government action. FDR was willing to spend money (deficit spending).

What was the purpose of each of the 16 New Deal Programs we discussed in class?

To help us get out of the Great Depression

What were the major criticisms of the New Deal?

Conservatives said it gave government too much power; radicals said it didn’t do enough to help the poor

What was the story behind FDR’s attempt to “pack the Supreme Court”?

After the Court blocked some new deal laws, FDR tried to add more justices who supported him-but it backfired and hurt his image

How did the New Deal impact the role of the federal government in terms of our theme of “struggle for government control & power”?

It greatly expanded the federal power, creating a more active role in the economy and people’s daily lives-shaping the modern government

FDIC (Federal Deposit Insurance Corporation)

Protected people’s money in banks by insuring deposits, so customers wouldn’t lose their savings if a bank failed

NRA (National Recovery Administration)

Help businesses recover by setting fair wages, hours, and working conditions

WAGNER ACT

Protected workers’ rights to join unions and bargain collectively with employers

PWA (Public Works Administration)

Funded large-scale public works projects like dams, bridges, and schools to create jobs and boost infrastructure

SEC: (Securities and Exchange Commission)

Regulated the stock market to prevent fraud and future crashes like the one in 1929

FERA: (Federal Emergency Relief Administration)

Gave direct aid and work programs to the unemployed and poor during the early New Deal

CWA: (Civil Works Administration)

Created short-term jobs building roads and public buildings during the winter emergency of 1933-34

AAA: (Agricultural Adjustment Act)

Paid farmers to grow less to raise crop prices and help the agricultural economy

SOCIAL SECURITY

Created pensions for the elderly, unemployment insurance, and support for the disabled

TVA: (Tennessee Valley Authority)

Built dams and power plants to bring electricity, jobs, and flood control to the rural South

WPA: (Works Progress Administration)

Provided millions of jobs through public works like building roads, schools and parks

NYA: (National Youth Administration)

Offered jobs and education to young people, helping them stay in school while earning money

FLSA: (Fair Labor Standards Act)

Set a minimum wage, banned child labor, and established the 40-hour workweek

EBRA: (Emergency Banking Relief Act)

Allowed the government to inspect banks and only reopen those that were stable, restoring public trust in the banking system

USHA: (United States Housing Authority)

Gave federal loans to improve housing for low-income families during the Great Depression

CCC: (Civilian Conservation Corps)

Gave young men jobs working on conservation projects like planting trees and building trails

HOLC: (Home Owners Loan Corporation)

Lowered mortgage rates to keep people in their homes

REA: (Rural Electrification Administration)

Brought cheap electricity to rural areas

FHA: (Federal Housing Administration)

Insured loans for building and repairing homes

What new deals program listed involved housing?

USHA (Federal loans to improve housing for low income), HOLC (Lower mortgage for housing), FHA (insured loans for building and repairing House)

What new deals program listed involved banking?

FDIC (Fail bank you will still get money), SEC (Stocks), EBRA (Emergency Bank, inspect banks and only reopen that were stable, restoring public trust in banking system)

What new deals program listed involved jobs?

WPA (Work broad), CCC (Conservation projects), CWA (Civil jobs, short term jobs), PWA (large scale Public work project) , NYA (Nation Youth: jobs and education helping them get money and stay in school), FERA (Emergency Relief gave direct aid and work programs to unemployed and poor during the Early Deal)

What new deals program listed involved relief?

FERA (Federal Emergency Relief Administration): Gave direct aid and work programs to the unemployed and poor. CWA (Civil Works Administration): Created short-term jobs during the winter emergency of 1933–34. CCC (Civilian Conservation Corps): Gave young men jobs working on conservation projects.
WPA (Works Progress Administration): Provided millions of jobs through public works. NYA (National Youth Administration): Offered jobs and education to young people. SOCIAL SECURITY: Provided pensions and support for the elderly, unemployed, and disabled

What new deals program listed involved recovery?

NRA (National Recovery Administration): Helped businesses by setting fair practices. AAA (Agricultural Adjustment Act): Raised crop prices to help farmers. PWA (Public Works Administration): Funded large-scale infrastructure to create jobs. TVA (Tennessee Valley Authority): Boosted the rural economy with electricity, jobs, and flood control. REA (Rural Electrification Administration): Brought electricity to rural areas. HOLC (Home Owners Loan Corporation): Helped people keep their homes. USHA (United States Housing Authority): Improved housing for low-income families.

What new deals program listed involved reform?

FDIC (Federal Deposit Insurance Corporation): Insured bank deposits. SEC (Securities and Exchange Commission): Regulated the stock market. EBRA (Emergency Banking Relief Act): Stabilized the banking system. WAGNER ACT: Protected workers' rights to unionize. FLSA (Fair Labor Standards Act): Set minimum wage, banned child labor, and set the 40-hour workweek. FHA (Federal Housing Administration): Insured loans for building and repairing homes. SOCIAL SECURITY: Long-term reform for economic security in old age and unemployment.