P7 | APUSH | Wiley | Great Dep. & New Deal: Note Guide, D___Name:

Introduction The nation, like all capitalist nations, had suffered economic downturns

_________________________, including long-term depressions (1837, ’73, ‘93) But the 1930s Depression was different

o Many Americans gripped by fear for their survivalo Widespread bank and business failures and unemployment o Affected both middle and working-class people

FDR was elected ________ times throughout its duration, resulting in a dramatic expansion of the federal government

The Constitution & the Economy The Constitutional basis for government involvement in the economy comes

from _____________________ of the U.S. Constitution Economic powers granted to _____________________:

o Collect taxes o Provide for the general welfareo Borrow moneyo Regulate interstate and foreign commerceo Establish bankruptcy lawso Coin money and regulate its valueo Protect writings/discoveries of authors/inventors

Historical Period Role of the U.S. Government in the Economy

Early Republic

(1787 to 1830s)

Age of Jackson

(1830s)

Civil War

(1861-’65)

Gilded Age

(1865-1900)

Progressive Era & WWI

(1900-’20)

The “Roaring 20s”

(1920s-’33)

The New Deal

(1933-’41)

Post-WWII

(1946 and beyond)

1. Do you see more continuity or change in the chart? Do you notice any patterns?

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The Business Cycle [There are 3 slides in the mix that discuss the business cycle – you should be taking down additional notes around the visual below.] The economy is never still; instead, it is _____________________, moving towards what economists have classified as the four

stages/phases of the business cycleo Cycles are irregular in length and severity; very _____________________ to predicto Use of economic indicators (GDP, inflation, unemployment) to help determine “where the economy is at”

Role of Government in the U.S. Economy (since FDR) [Take additional notes below; this material may be new to some of you.] Since the 1940s, most governments of developed nations have seen the mitigation of the business cycle as part of the

responsibility of government To stabilize the economy and fix/prevent recessions, the U.S. government uses: _____________________: How the government uses taxes and spending to influence economic conditions _____________________: Adjusting the amount of money in the economy to influence interest rates, borrowing, spending, and

production (run by the Federal Reserve)

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Fiscal & Monetary Policy: Options Available If economic times are rough (unemployment is increasing, production is going down, etc.),

the conventional thinking is that: Fiscal policy: Congress should…

o _____________________ so people have money to spend (demand increases production increases employment increases)

o _____________________ government spending (stimulate economy, create jobs) Monetary policy: the Fed should…

o Increase money supply (by _____________________ from the U.S. government and other banks) to stimulate demand

o Decrease _____________________ to encourage borrowing and spending

Fiscal & Monetary Policy: Pre-Depression Usage [Take additional notes in the margins] Congress – fiscal policy (spending/taxing):

o Tariffs : lowered during Progressive Era; increased during the ‘20s o Taxes : income tax created by the 16th Amendment in 1913;

increased taxes during Progressive Era; lowered during the ‘20so Progressive Era spending was greatly _____________________ in the ‘20s

Federal Reserve – monetary policy: o _____________________ banks to curb their loose-money approach;

tried their best to track the economy at home and abroad; increased interest rates _____________________ (’28-’29), hurting the economy

Causes of the Great Depression [explain below each factor] Old industries declined

New industries _____________________ slowed down by mid-20s

Agricultural crisis

Insurmountable _____________________ due to easy credit (from 1920-’28) which then reduced demand unemployment

Unequal distribution of income

A reluctant Federal Reserve who acted too late Stock market crash _____________________ Smoot-Hawley Tariff of 1930

Role of the Fed & the Tariff The Fed:

o Increased interest rates in ’28-’29 in an attempt to _____________________the borrowingo This was bad timing, as the economy had already started slowing down due to the problems on the previous slideo Money supply severely contracted

Smoot-Hawley Tariff of 1930:o Dramatically _____________________ tariffso Economists argued [correctly] that it would raise the cost of living, limit U.S. exports as other countries

_____________________, and damage U.S. foreign relations

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these factors will be discussed in subsequent slides

2. When we think of the Great Depression we tend to associate it with the stock market crash of 1929. Certainly the crash played a role in the economic calamity that followed, but the crash was just one of many forces leading to the Depression. Nonetheless, it’s helpful to gain a basic understanding of how the stock market works. Record key ideas from The Stock Market Explained video:

Role of the Stock Market Stock prices _____________________ throughout the ‘20s Risky transactions for chance of quick profit Many bought on _____________________, where only a small percentage of a stock price was paid – the rest was borrowed Prices peaked in ’29 Confidence wavered and investors sold stocks Stock bubble had finally burst (Oct. 29, “Black Tuesday”) Hastened collapse of the economy but was not the sole reason for it

The Great Depression People began to hoard $, resulting in a severe _____________________ in prices and incomes After the crash, Americans panicked and withdrew their savings from banks

o Those at “the back of the line” got nothingo By ’33, around ______ of the nation’s banks had failed

______% unemployment rate by ’33; ______% of black community was unemployed o Many lost their farms and homeso Suicide increased by ______%; health declined

Hoover & the Great Depression Believed the Depression would be solved with _____________________ popularity

plummetedo Charities and local communities should pitch in to care for the needy

Somewhat acquiesced by passing the Reconstruction Finance Corporation (RFC) in ‘32 to provide emergency financing to businesses, railroads, and banks

o Believed money would trickle downo Program _____________________; why would businesses expand when there’s no

demand?; the masses facing catastrophe were not helped by the program

Bonus Army, 1932 Approximately 20,000 _____________________ vets and their families set up a shantytown

in sight of the capitol building to lobby for a bill that would distribute their bonuses immediately, rather than in ’45 Senate voted down the bill; Hoover called for them to leave Gen. Douglas _____________________ blatantly ignored orders, setting tents/shacks on fire and spraying tear gas, resulting in

several deaths and major injuries _____________________: “Well…this will elect me.”

Thesis PracticeFor each question generate a thesis that incorporates specific evidence/concepts from this note guide, the vignettes on Harding through Hoover, and the 1920s packet. You will be asked to submit one of them in the mix.

3. To what extent was the Great Depression rooted in “the Roaring 20s”?

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4. Would it have been possible to prevent the Great Depression?

5. Hoover is often viewed as one of the worst U.S. Presidents, due to the way he [mis]handled the Great Depression. Is this a fair assessment?

FDR’s First Inaugural GD should be treated as an _____________________________________ _____________________________________________ to put people to work, create new projects, help farmers, put an end to

foreclosures, organize relief efforts, supervise banking industry, etc. Reassured America that the GD did not signal the fall of democracy or capitalism, as _____________________ liked to claim “I shall ask the congress for the one remaining instrument to meet the crisis – broad executive power to wage a war against the

emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe…”

FDR’s New Deal LegislationTemporary (_____________________________________________) Permanent (________________________________)

• Emergency Banking Act• Civilian Conservation Corps• Emergency Relief Appropriations Act• Federal Emergency Relief Administration• Agricultural Adjustment Administration• Resettlement Administration and Farm Security Administration• National Industrial Recovery Act

• Federal Deposit Insurance Corporation• Federal Securities Act SEC• Social Security Act• Tennessee Valley Authority• National Labor Relations Act• Fair Labor Standards Act

6. What are your thoughts on the permanent changes/programs? Revisit your Sources on FDR & the New Deal for refreshers on what these changes/programs entailed.

7. Record notes on the Social Security video:

“We have undertaken a new order of things, yet we progress to it under the framework and in the spirit and intent of the American Constitution.” –FDR

One school of thought: FDR was simply responding to calamity—fighting a war, of sorts—desperate times called for a dramatic response from the federal government.

Another school of thought: FDR was taking advantage of a crisis to completely reconfigure American government and American life.

8. Based on the New Deal legislation, FDR’s speeches, etc., which do you think is more accurate? Why?

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The Dust Bowl, 1935-’40

Severe _____________________ ruined crops on the Great Plains Poor farming practices coupled with high winds blew away millions of tons of

dried topsoil Farms turned to dust and health was compromised Thousands _____________________ towards CA in search of farm or factory work Federal government created the Soil _____________________ Service in 1935 to

teach and subsidize plains farmers to stop soil erosion and conserve water

FDR & the Supreme Court, 1937 FDR was concerned that the New Deal was in danger of being dismantled by a _____________________ Court Felt the Court was too old and out of touch with reality and the _____________________ “Court _____________________ Scheme”:

o Add 1 judge to the Court for each judge at retirement age (70)o Set maximum # at 15 (would have permitted FDR to add 6 judges!)o Never passed by Congress and was a political _____________________ for FDR; seen as an abuse of power

9. What do you suspect was the perspective of the cartoonist, given the symbols, title, etc.? Do you agree with them? Why or why not?

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Wrapping up the New Deal By ’37, economic _____________________ convinced many that the

Depression was ending FDR faced pressure from Congress to scale back on the New Deal, which he

did New Deal had required tremendous deficit spending, which was urged by

leading economist of the day, John Maynard _____________________ Keynes and FDR agreed that deficit spending should only be used in time of

economic crisis When economy expanded, the idea was to cut back and pay off the deficit,

keeping the checkbook balanced

As a result of cutbacks and an increase in taxes, the deficit dropped but so too did industrial production and employment

The _____________________ tightened credit (increased interest rates and stopped buying bonds)

“Roosevelt _____________________” By ’38, FDR was increasingly concerned with foreign affairs

Impact of the New Deal Did not end the Depression but helped to reduce the suffering of millions, and when in effect,

generally improved economic indicatorso Wouldn’t come to an end until massive _____________________ federal spending o Provided jobs, food, money, and _____________________o Prevented the collapse of capitalism

Created new roles and responsibilities for government:o Protector of workers, farmers, depositorso Provider of jobso Created regulatory safeguards for later crises

The New Deal Coalition Created the “New Deal Coalition” which would dominate politics of the 30s – 60s; most of this coalition continues to be the base

of the Democratic Party today (_____________________: traditional minded white Southerners) Urban immigrants Traditional minded white Southerners Big-city machines Intellectuals Industrial workers Farmers _____________________

LIMITATIONS(?) OF THE NEW DEALWomen Blacks Mexicans

• Widespread criticism of working women

• Many New Deal programs excluded women or _____________________

• Yet FDR did appoint many women to federal positions

• Frances Perkins, first female _____________________ member (Secretary of Labor)

• Afraid of upsetting Southern whites, FDR _____________________ committed himself to full civil rights

• Many New Deal programs discriminated against blacks

• Yet FDR did appoint many blacks to _____________________ positions

• Hundreds of thousands of Mexicans were _____________________ during the ‘30s

• Was believed that removing Mexicans would reduce relief expenditures and free jobs for native-born

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FDR & Native Americans _____________________ were provided to local school districts, hospitals, and social welfare agencies to assist Native

Americans New Deal agencies hired many Native Americans FDR persuaded Congress to pass the ______________________________ in 1934:

o Terminated the allotment program of the _____________________ Act; offered government recognition of tribal constitutions; authorized the creation of new reservations; _____________________ prohibitions on Native American languages and customs

OPPOSING NEW DEAL PERSPECTIVESOpposition on the Left (Liberals) Supporters Opposition on the Right (Conservatives)

• FDR failed to eliminate social/economic inequalities

• Failed to solve unemployment crisis, redistribute wealth, reduce poverty, or extend equality

• Needed _____________________ spending!

• FDR struck a reasonable _____________________ between two extremes – unregulated capitalism and overregulated socialism

• Unemployment decreased, GDP increased

• FDR made government too _____________________

• Stifled free enterprise by unfair competition with private industry

• Led to destruction of food, higher prices for food, greater costs for businesses

Depression Era Culture/Arts Golden age for _____________________ Art and literature subsidized by federal government through WPA’s

Federal Art Project, Theater Project, and Writers’ Projecto Government felt as though art played an important role in

national lifeo Artists _____________________ work relief as much as

other unemployed Americanso Writers wrote state/city guides and _____________________

of various immigrant groups and former slaveso Artists paid living wage to produce public art

10. Was subsidizing the arts justifiable during the Great Depression? Why or why not?

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