Unit 5 study Guide

Great Depression/ New Deal

Key Terms

Price Supports:

Government efforts to stabilize agricultural prices by purchasing surplus goods or setting minimum prices for crops.

Credit:
A system allowing consumers to buy goods or services before payment, based on trust that payment will be made in the future.

Alfred E. Smith:
A Democratic candidate in the 1928 presidential election, known for opposing Prohibition and being the first Catholic nominee.

Dow Jones Industrial Average:
An index measuring the stock performance of 30 prominent companies in the U.S. and a key indicator of economic health.

Buying on Margin:
The practice of purchasing stocks with borrowed money, contributing to speculative bubbles.

Black Tuesday:
October 29, 1929, the day the stock market crashed, signaling the start of the Great Depression.

Great Depression:
A severe global economic downturn lasting from 1929 to the early 1940s, marked by widespread unemployment, poverty, and deflation.

Hawley-Smoot Tariff Act:
A 1930 law that raised U.S. tariffs on imported goods, worsening global trade and deepening the Depression.

Shantytowns:
Makeshift housing areas, often called "Hoovervilles," where homeless people lived during the Great Depression.

Bread Lines:
Lines of people waiting to receive free food, such as bread or soup, provided by charitable organizations or public agencies.

Dust Bowl:
A series of severe dust storms in the 1930s that devastated the Great Plains, caused by drought and poor agricultural practices.

Direct Relief:
Government assistance programs providing food, money, or services directly to those in need.

Herbert Hoover:
The 31st U.S. President, criticized for his inadequate response to the Great Depression.

Boulder Dam:
Later renamed Hoover Dam, a major public works project initiated under Hoover to create jobs and provide water and electricity.

Federal Home Loan Bank Act:
A 1932 law aimed at reducing foreclosures by providing low-interest loans to homeowners and banks.

RFC (Reconstruction Finance Corporation):
A government agency created to provide emergency financing to banks, businesses, and local governments during the Depression.

Bonus Army:
A group of WWI veterans who marched on Washington, D.C., in 1932 to demand early payment of promised bonuses. They were forcibly removed under Hoover's orders.

FDR (Franklin D. Roosevelt):
The 32nd U.S. President who led the country during the Great Depression and implemented the New Deal.

New Deal:
A series of programs and policies introduced by FDR to combat the Great Depression, focusing on relief, recovery, and reform.

Glass-Steagall Act:
A 1933 law that established the FDIC and separated commercial and investment banking.

Federal Securities Act:
A 1933 law requiring companies to provide accurate financial information to protect investors.

AAA (Agricultural Adjustment Act):
A New Deal program designed to raise crop prices by paying farmers to reduce production.

National Industrial Recovery Act:
A New Deal law aimed at stimulating industrial growth and establishing fair labor standards.

CCC (Civilian Conservation Corps):
A New Deal program providing jobs in environmental conservation projects for young men.

Deficit Spending:
The government practice of spending more money than it collects in revenue, often used to stimulate the economy.

Huey Long:
A Louisiana politician and vocal critic of FDR, known for his "Share Our Wealth" program.

Eleanor Roosevelt:
FDR's wife and an active advocate for social reform, civil rights, and women's rights.

WPA (Works Progress Administration):
A New Deal program creating jobs in public works, arts, and education.

Wagner Act:
A 1935 law that protected workers' rights to unionize and established the National Labor Relations Board (NLRB).

Mary McLeod Bethune:
An African American educator and advocate for civil rights who played a key role in the New Deal’s programs for minority communities.

New Deal Coalition:
An alliance of diverse groups, including labor unions, minorities, and farmers, that supported the Democratic Party and New Deal policies.

Gone with the Wind:
A 1939 film depicting Southern life during and after the Civil War, offering escapism during the Depression.

Orson Welles:
A filmmaker and actor known for his 1938 radio broadcast "War of the Worlds" and contributions to cinema.

The Grapes of Wrath:
A novel by John Steinbeck portraying the struggles of a family during the Dust Bowl and Great Depression.

FDIC (Federal Deposit Insurance Corporation):
A New Deal agency insuring bank deposits to restore public confidence in the banking system.

SEC (Securities and Exchange Commission):
A New Deal agency regulating the stock market and protecting investors.

TVA (Tennessee Valley Authority):
A New Deal program providing electricity and economic development in the Tennessee Valley region.

John Dillinger:
A notorious bank robber during the Great Depression, often seen as a folk hero.

Baby Face Nelson:
A Depression-era gangster involved in bank robberies and organized crime.

James J. Braddock:
A heavyweight boxer known as the "Cinderella Man" for his comeback story during the Great Depression.

Joe Louis:
A celebrated African American boxer and heavyweight champion during the 1930s and 1940s.

Jesse Owens:
An African American athlete who won four gold medals at the 1936 Berlin Olympics.

J. Edgar Hoover:
The first Director of the FBI, known for his efforts to combat organized crime and domestic threats.

NYA (National Youth Administration):
A New Deal program providing education, jobs, and training for young Americans.

Social Security Act:
A 1935 law establishing a system of pensions for the elderly, unemployment insurance, and aid for dependent children and the disabled

Questions: In order to receive full credit you must attempt to answer each.

What were the causes of the stock market crash of 1929? Which cause played the biggest role? Explain your reasoning

Causes:

• Over-speculation: Investors poured money into the stock market with the expectation of ever-increasing profits.

• Buying on Margin: People bought stocks with borrowed money, leading to inflated stock prices.

• Lack of Regulation: The stock market was largely unregulated, allowing risky investments to thrive.

• Economic Inequality: A large portion of wealth was concentrated in the hands of a few, reducing overall consumer spending.

• Declining Demand: Industries were producing more goods than people could afford to buy.

Biggest Role: Over-speculation and buying on margin played the most significant roles. As prices of stocks soared beyond their true value, a loss of confidence triggered massive sell-offs, causing the crash.

How did Dust Bowl conditions in the Great Plains affect the entire nation?

Effects:

• Mass Migration: Thousands of families, especially from Oklahoma ("Okies"), migrated to other states like California in search of work, straining resources in those areas.

• Economic Impact: The agricultural collapse worsened the economic crisis by reducing food supply and forcing farmers into bankruptcy.

• Cultural Impact: The Dust Bowl became a symbol of the hardships of the Great Depression, influencing literature (e.g., The Grapes of Wrath) and policy (e.g., soil conservation initiatives).

• Relief Efforts: The federal government expanded relief programs like the Resettlement Administration to assist displaced families.

When FDR heard about the attack on the Bonus Army, why was he so certain that he would win the upcoming election? Think about the public’s impression of Hoover, Hoover’s actions to alleviate the great depression, and how the American public judged Hoover after the attack.

Reasoning:

• The public viewed Hoover as unsympathetic and detached from the struggles of ordinary Americans.

• Hoover’s decision to use the military to forcibly remove WWI veterans damaged his reputation, reinforcing the image of a president unwilling to provide direct help.

• In contrast, FDR’s promise of a “New Deal” offered hope and a proactive government response to the Depression.

• FDR’s confidence stemmed from Hoover’s inability to address the economic crisis effectively and the widespread public discontent.

What were FDR’s 3 R’s and what was the purpose of each?

Relief: Immediate action to provide direct aid to the unemployed and those in poverty.

• Examples: CCC, WPA, Federal Emergency Relief Administration.

Recovery: Temporary programs to stimulate economic growth and restore stability.

• Examples: NRA, AAA, TVA.

Reform: Long-term changes to prevent future economic crises.

• Examples: Glass-Steagall Act, Social Security Act, SEC.