US History Great Depression & New Deal Study Guide

Buying on Margin
Paying a small percentage of a stock’s price as a down payment and borrowing the rest
Margin Call
A demand by a broker that an investor deposit further cash or securities to cover possible losses.
Speculation
An involvement in risky business transactions in an effort to make a quick or large profit.
Installment
Enabled people to buy goods over an extended period without having to put down much money at the time of purchase.
Black Tuesday
October 29, 1929; date of the worst stock-market crash in American history and beginning of the Great Depression. 16 Million shares were traded and the industrial index(Dow Jones) had dropped 43 points.
Hawley-Smoot Tariff
A law enacted in 1930, that established the highest protective tariff in US History, worsening the Great Depression and America. It was designed to protect American farmers and manufacturers from foreign competition.
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Shantytown
Due to economic downturn, problems of malnutrition and homelessness grew at an alarming rate. On the outskirts of town, these sprang up in which families lived in makeshift shacks constructed of tin, wood planks, and other debris. Other homeless people slept in freight cars, city parks, subways, or even sewer ducts.
Hooverville
A shantytown built by unemployed and destitute people during the Depression of the early 1930s.
Dust Bowl
Region of the Great Plains, stretching from Texas to the Dakotas, that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages. With no opportunity to grow crops, farmers soon were crippled by the natural disaster. Although the farm economy had continued to produce, they produced far more than American consumers could buy. Farm prices fell so low that few farmers made any profit at all from crops.
Soup Kitchens
A place where free or low cost food is served to the needy.
Okies
the farmers, who in the Great Depression, were forced to move because of the Dust Bowl; came from Oklahoma. They traveled west in search for new economic opportunity, however they found conditions to be no better than those they had left. Many worked as migrants, traveling from farm to farm picking fruit and other crops at low wages.
Public Works
The work of building such things as roads, schools, and reservoirs, carried out by the government for the community.
Relief
Cash payments or food provided by the government to the poor.
Foreclosure
The process of taking possession of a mortgaged property as a result of the mortgagor’s failure to keep up mortgage payments.
Bonus Army
10,000 to 20,000 World War I veterans and their families arrived in Washington DC to demand cash-payment redemption of their service certificates.
Emergency Relief and Construction Act
Released funds for public works projects across the country and was enabled by Herbert Hoover.
Bank Holiday
Closing of banks for four days during the Great Depression
Fireside Chat
The informal radio conversations Roosevelt had with the people to keep spirits up. It was a means of communicating with the people on how he would take on the depression. Upon taking office he established the bank holiday which shut down the banks for four days. While the banks were closed, the federal government distributed over a billion dollars from the Reconstruction Finance Corporation into the banking system.
New Deal
A phase taken from a campaign speech in which Roosevelt had promised. It focused on relief for the needy, economic recovery, and financial reform.
Hundred Days
When the Roosevelt administration launched a period of activity where they passed more than 15 major pieces of New Deal legislation.
Security and Exchange Commission (SEC)
Regulated business.
Federal Deposit Insurance Corporation (FDIC)
Government insured deposits which assured people.
Agricultural Adjustment Administration (AAA)
Sought to raise crop prices by lowering production, which the government achieved by paying farmers to leave a certain amount of every acre of land unseeded.
Civilian Conservation Corps (CCC)
Put men aged 18 to 25 to work building roads, developing parks, planting trees, and helping in soil-erosion and flood control projects.
Tennessee Valley Authority (TVA)
Provided jobs and government and tax payers pay for this.
Deficit Spending
Spending more money than the government receives in revenue.
Works Progress Administration (WPA)
Set out to create as many jobs as possible as quickly as possible.
Social Security Act
Created by Secretary of Labor Frances Perkins and insured old age insurance for retirees 65 or older, unemployment compensation system, and aid to families with dependent children and the disabled.
Walt Disney
The champion of animation and children’s entertainment. He created the character of Mickey Mouse and other popular feature length animated films. Produced “Gone with the Wind” and “The Wizard of Oz” both released in 1939. Hollywood did little to challenge popular culture on issues of gender and race. His productions brought families and countries together.
John Steinbeck
American novelist who wrote “The Grapes of Wrath”. (1939) A story of Dustbowl victims who travel to California to look for a better life.
Dorthea Lange
American photographer who recorded the great depression by taking pictures of the unemployed and rural poor.
Herbert Hoover
a Republican known for his integrity who won the election of of 1928. He had to deal with the Great Crash of 1929, which caused the Great Depression. He signed the Norris-La Guardia Anti-Injunction Act. His belief in “rugged individualism” kept him from giving people direct relief during the Great Depression. He tried to adopt a voluntary cooperation for recovery; use government spending to end crisis (proposed tax increase). Agricultural Marketing Act/ Hawley-Smoot Tariff (1930); Democrats won House and got large amount of seats in 1930 election; he was blamed for economic problem; lost 1932 election.
Identify the causes of the great depression.
A. Black Tuesday – October 1929
-15% drop in Dow Jones(43 pts)
B. Lack of Economic Diversity
– too much dependence on basic industries
– decline in sales afflicted steel, oil, rubber industries
C. Inadequate Distribution of Wealth, Weak Demand
– consumers had little purchasing power
– proportion of profit was small
– profits principally severed capital expansion
D. Bank Failures
– wall street banks failed because of reckless investments
– tight money supply led to declining prices
– led Federal Reserve to increase interest rates
E. Declining Exports
– foreign demand of exports declined
– US increased tariffs to keep business within borders
F. Unstable International Debt Structure
– England struggled to repay American banks
– US refused to relive foreign debts
Describe how the Great Depression affected many families.
Many people found themselves out of work and searching for a better life. Children had to deal with changes in their education if they could attend school. Teenagers and their parents were traveling to search for a new life. The middle class had to deal with a life without money and security.
Discuss how the artists portrayed the effects of the Great Depression.
Artist and writers tried to capture the real life drama of the Depression in their work.
Evaluate President Hoover’s attempts to revive the economy.
* Tried to put more money into circulation
* set up NCC, The National Credit Corporation, to help rescue banks.
* Set up RFC, the Reconstruction Finance Corporation, to make loans to banks and railroads.
They all were unsuccessful because he was against spending money and putting the country into debt.
Analyze the limitations of President Hoovers Recovery Plan.
Conferences with industry leaders did not secure cooperation. Funding from the National Credit Corporation and the Reconstruction Finance Corporation was insufficient.
Explain the worsening situation in the US Banking System.
Many people had debt because of credit, there was uneven distribution of income, after the crash many
people panicked and withdrew their money from banks.
Describe the political challenges Roosevelt faced in the mid 1930’s.
The right thought that FDR was a socialist who was ruining the United States. More worrisome to Roosevelt, though, were critics on the left who thought that he should be doing more to help the working class. There were three major figures who challenged FDR in this way. They were Sen. Huey Long (D-LA), Francis Townsend, and Father Charles Coughlin.
Explain why the social Security Act is an important piece of legislation.
It helped people ages 65 or older and their spouses a supplemental retirement plan making retirement comfortable. The unemployment compensation system was created and gave $15 to $18 per week. Most importantly, it helped families with dependent children and the disabled.
Analyze how the New Deal affected Americans sense of security and their attitude toward the role of government.
Most conservatives think President Roosevelt’s policies made the federal government too large and too
powerful. They believe that the government stifled free enterprise and individual initiative. Liberal critics, in contrast, argue that President Roosevelt didn’t do enough to socialize the economy and to eliminate social and economic inequalities. Supporters of the New Deal contend, however, that the president struck a reasonable balance between two extremes—unregulated capitalism and over-regulated socialism—and helped the country recover from its economic difficulties
Stock Market
where stocks and bonds are “traded” – meaning bought and sold