APUSH Chapter 23

Unemployment rate (1933)

Unemployment rate (1933)

The Winter of 1933 were the worst months of the Great Depression. Unemployment rates were over 25% and the nation’s banking system was on the verge of collapse. Banks holidays were declared by many of the nation’s governors and several states were approaching bankruptcy.

Herbert Hoover/philosophy on government intervention in the economy

He believed in a limited role for government and worried that excessive federal intervention posed a threat to capitalism and individualism. He felt that assistance should be handled on a local, voluntary basis. Accordingly, Hoover vetoed several bills that would have provided direct relief to struggling Americans.

Gold standard

One of Herbert Hoover’s biggest failures was his adherence to the Gold Standard (every dollar was worth a certain amount of gold - keep the currency stable and prevent the dollar from losing its values - ended up discouraging investment). He feared that abandoning gold standard would weaken the dollar, when in fact inflexible money supply discouraged investment

Smoot-Hawley Tariff

A high tariff enacted in 1930 during the Great Depression. By taxing imported goods, Congress hoped to stimulate American manufacturing, but the tariff triggered retaliatory tariffs in other countries, which further hindered global trade and led to greater economic contraction. - tariffs were already high in 1920’s to offset income tax cuts (raised tariff rates to the highest level in American history - triggered retaliatory tariffs in foreign nations which made them lose foreign consumers)

Reconstruction Finance Corporation

a little tiny amount of money loaned out was unable to overcome the failures - they did not give sufficient amounts

Reasons for Hoover’s declining popularity

After Black Tuesday and the economic disaster, Hoover’s administration didn’t do much to assist the struggling people. He stayed strong with his belief of hand off government with the economy. He believed that the economy would rectify itself with little intervention from the government. He also believed in business self regulation. As the economy worsened and the people struggled, they look to Hoover for assistance that he was not offering. They started turning on Hoover and

Hoovervilles

People turned their anger directly at Herbert Hoover and America thought Hoover was insensitive. Many became unhoused because no help programs exist and many became homeless and built shacks - shantytowns or Hoovervilles - and newspapers = Hoover blankets. Furthermore, farmers resisted eviction and overproduction of food led to the destruction of crops. There was a rise of union membership and new types of unions. The treatment of the Bonus Army (WWI veterans to demand early payment of pension award) and they built encampments of Shanty Towns around DC to support passage of legislation to give them at least some of their money. The legislation was introduced to Congress (HOR - Yes and Senate - NO). Later, Hoover asked the Bonus Army to leave and some did, but some were forcibly removed by the army - this idea stuck with American people - destroyed any popularity he had remaining

Differences between Hoover and FDR

Hoover: Small government, little government, little business regulation, no government responsibility for the economic outlook of the nation.

Roosevelt: Strong federal government, government intervention with the economy, strong recovery efforts with the New Deal legislation.

Bonus Army

A group of 15,000 unemployed World War I veterans who set up camps near the Capitol building in 1932 to demand immediate payment of pension awards due to be paid in 1945

FDR/political career before becoming president

He was wealthy and well educated throughout his life. He was previously a NY State Senator, assistant secretary of the Navy during WWI, nominated to run for VP by democrats in 1920 As governor of NY in 1928, he instituted innovative relief + unemployment programs easily defeated Hoover in 1932 election contracted polio in 1921 and both legs were paralyzed first disabled president

FDR/polio

In 1921, FDR contracted polio (often spread through water) and lost the use of both legs. Polio was very feared in these years. Polio showed FDR what struggle was as he had previously led a very privileged life. This also made him more relatable to the public.

FDR/national bank holiday

As a part of FDR’s banking reform, he declared a national bank holiday where all banks were closed for 4 days.

Fireside chats

A series of informal radio addresses Franklin Roosevelt made to the nation in which he explained New Deal initiatives.

Hundred Days

A legendary session during the first few months of Franklin Roosevelt's administration in which Congress enacted fifteen major bills that focused primarily on four problems: banking failures, agricultural overproduction, the business slump, and soaring unemployment.

“Brains” Trust

The purpose of the Brains Trust was to educate Roosevelt on current economic issues, assist in speechwriting, and help the candidate formulate his own ideas on how to approach and resolve the Depression.

Glass-Steagall Act

A 1933 law that created the Federal Deposit Insurance Corporation (FDIC), which insured deposits up to $2,500 (and now up to $250,000). The act also prohibited banks from making risky, unsecured investments with customers' deposits.

Agricultural Adjustment Act

New Deal legislation passed in May 1933 that aimed at cutting agricultural production to raise crop prices and thus farmers' income.

National Recovery Administration

Federal agency established in June 1933 to promote industrial recovery during the Great Depression. It encouraged industrialists to voluntarily adopt codes that defined fair working conditions, set prices, and minimized competition.

Public Works Administration

A New Deal construction program established by Congress in 1933. Designed to put people back to work, the PWA built the Boulder Dam (renamed Hoover Dam) and Grand Coulee Dam, among other large public works projects.

Civilian Conservation Corps

Federal relief program that provided jobs to millions of unemployed young men who built thousands of bridges, roads, trails, and other structures in state and national parks, bolstering the national infrastructure.

Federal Housing Administration

An agency established by the Federal Housing Act of 1934 that refinanced home mortgages for mortgage holders facing possible foreclosure.

Securities and Exchange Commission

A commission established by Congress in 1934 to regulate the stock market. The commission had broad powers to determine how stocks and bonds were sold to the public, to set rules for margin (credit) transactions, and to prevent stock sales by those with inside information about corporate plans.

Liberty League

A group of Republican business leaders and conservative Democrats who banded together to fight what they called the "reckless spending" and "socialist" reforms of the New Deal.

Schechter v. United States

ruled NIRA unconstitutional (also later struck down other New Deal programs like the AAA)

Townsend Plan

A plan proposed by Francis Townsend in 1933 that would give $200 a month (about $3,300 today) to citizens over the age of sixty. Townsend Clubs sprang up across the country in support of the plan, mobilizing mass support for old-age pensions.

Huey Long/Share Our Wealth Society

Huey Long: Louisiana senator and previously governor, flamboyant and popular, increased taxes on corporations, lowered utility bills, built highways/schools/hospitals, he established a national movement with the hopes of taxes on the wealthy and large sums of money - wealth should be redistributed against poor people and planned to run against FDR in 1936, but was assassinated

Share Our Wealth Society: plan in 1932 which was a 100% tax on yearly incomes over $1 million to give everyone a comfortable living.

Welfare state

A term applied to industrial democracies that adopt various government-guaranteed social-welfare programs. The creation of Social Security and other measures of the Second New Deal fundamentally changed American society and established a national welfare state for the first time.

National Industrial Recovery Act

Suspended antitrust laws + allowed business, labor, + gov’t to cooperate in setting up voluntary rules for each industry

Wagner Act or NLRA

An act that gave unions the legal right to exist in America, first time that government ensures that workers have rights to organize unions, established National Labor Relations Board, set up a process called Binding Arbitration where workers could challenge if their job was not following the contract

Social Security Act

A 1935 act with three main provisions: old-age pensions for workers; a joint federal-state system of compensation for unemployed workers; and a program of payments to widowed mothers and the blind, deaf, and disabled. - old age pension system, system of unemployment insurance, provided limited welfare to disabled individuals or single mothers with dependent children

Classical Liberalism v. Liberal Welfare State

Classical Liberalism: The political ideology of individual liberty, private property, a competitive market economy, free trade, and limited government. The idea being that the less government does, the better, particularly in reference to economic policies such as tariffs and incentives for industrial development. Attacking corruption and defending private property, late-nineteenth-century liberals generally called for elite governance and questioned the advisability of full democratic participation.

Liberal Welfare state: a larger government that is responsible for assisting the needy and guaranteeing basic welfare

Works Progress Administration

Federal New Deal program established in 1935 that provided government-funded public works jobs to millions of unemployed Americans during the Great Depression in areas ranging from construction to the arts. - FDR presidency and actually financed historians to document experiences of former slaves

Federal Number One

TBD

New Deal coalition

new voters were energized by the Democratic Party under FDR and

the party was able to attract voters from the North, the Midwest, organized labor, white ethnic groups, northern blacks, the middle class, + many southerners

Court Packing Plan

tensions with conservative Supreme Court NIRA + AAA both declared unconstitutional cases pending on NLRA + Social Security FDR asked for changes to the Supreme Court = wanted to add a new member for every Court member over age 70 unpopular among American citizens + Congress = appeared FDR was interfering with Constitution’s separation of powers

Roosevelt Recession

A recession from 1937 to 1938 that occurred after President Roosevelt cut the federal budget. - second economic collapse - reversed by government spending a lot of money again

Keynesian Economics

The theory, developed by British economist John Maynard Keynes in the 1930s, that purposeful government intervention in the economy (through lowering or raising taxes, interest rates, and government spending) can affect the level of overall economic activity and thereby prevent severe depressions and runaway inflation.

Frances Perkins

the first woman named to a cabinet post, served as secretary of labor throughout Roosevelt’s presidency

Growth of federal power/federal intervention in the economy

TBD

Sit-down strike/GM plant in Flint, MI

United Auto Workers strike - automobile industry was completely unorganized with labor unions, CIO forms and they seek to organize unions where they do not exist - workers are willing to protest and strike to force changes, develop a new type of strike - sit down on the job and stop working - this prevented them from hiring scab laborers - stopping all the work and manufacturing so the company can not make any money

Dust Bowl

A series of dust storms from 1930 to 1941 during which a severe drought afflicted the semiarid states of Oklahoma, Texas, New Mexico, Colorado, Arkansas, and Kansas.

Tennessee Valley Authority

An agency funded by Congress in 1933 that integrated flood control, reforestation, electricity generation, and agricultural and industrial development in the Tennessee Valley area.