APUSH The Great Depression

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Causes of the Great Depression
Overproduction/Underconsumption – Basically, companies expanded to such a degree that they had to keep producing more and cutting wages in order to keep their profits up. By cutting wages, however, they reduced purchasing power and thus limited the amount of goods they sold, so there was all this extra stuff lying around causing problems for companies.
Corporate Debt – Companies overextended themselves and lied about their assets to get loans, which got the banking system all screwed up.
Speculation – Ah, does this sound familiar? In addition to heavy investment by companies, people were buying on margin (put a down payment on stocks w/o having the money to pay the full amount, then buy more stocks on the profits), so when people tried to sell what they had bought on margin to minimize their losses prices collapsed and brokers were put into big trouble since they didn’t actually have the $ to pay people with.
Lack of Recovery in Farming – Farmers never recovered from the post-war recession, as they faced a return of foreign competition and were often unable to repay their debts.
Internat’l Problems – Following the war the US upped tariffs, which caused Europeans to stop buying our goods.
Gov’t Policies – The gov’t followed very lassiez-faire policies w/easy credit and low discount rates, which stimulated the speculation mania.

Black Tuesday and Black Thursday 1929
On October 24, 1929 (“Black Thursday”) there was an initial panic, which was rescued by a bunch of bankers who bought stocks to bring the prices back up. Once the news got out, though, there was another crash, on October 29 (“Black Tuesday”)

President Herbert Hoovers reaction to the mess
Didn’t really know how to handle it. Thought it would was part of natural flux evetually tried to repair it unsuccessfully POUR (President’s Organization on Unemployment Relief) – Asked for private donations for relief, but not very successful.
Hoover/Grand Coulee Dams – This was more successful, as Hoover’s encouragement of public works did indeed provide new jobs.
Federal Farm Board (created in 1929 under the Agricultural Marketing Act) – The FFB lent money to cooperatives so they could buy crops and thus keep them off the market.
Reconstruction Finance Corporation – Theoretically, through lending money to groups at the top of the economy, the RFC was going to help people all over (filter-down system), but it didn’t work.
w/

Hawley-Smoot Tariff
1930 i.e. one of the biggest mistakes ever, as it raised tariffs ultra high and therefore totally killed off foreign trade

Election of 1932
Democrat Franklin D. Roosevelt, beat the Republican, Herbert Hoover, who was running for reelection. FDR promised relief for the unemployed, help for farmers, and a balanced budget.

Bank Holiday
Right after being sworn in, FDR declared a four day bank holiday and called Congress for an emergency session (which would start the New Deal). The first measure was the Emergency Banking Relief Bill, which provided for the reopening of solvent banks and the reorganization of screwed up ones, and prohibited the hoarding of gold. It was still sort of conservative, though, b/c it left the same bankers in charge.

Economy Act
This act balanced the budget by reducing veterans’ pensions and federal employees’ pay.

Fireside Chats
These began in March 1933, and began with a message urging Americans to return their savings to banks, which they promptly did

21 Amendment
(Aka Beer wine Revenue Act) This deflationary measure imposed new taxes on the sale of wines/beers and Repeal of Prohibition

Agricultural Adjustment Act
Meant to restore farmers’ purchasing power, the AAA had the gov’t pay farmers to reduce the amount of crops sold (this would increase prices). The support payments would be funded by taxes on processors of farm goods. This act raised a lot of opposition from people urging more money instead of fewer goods

Farm Credit Act and Home owners Refinacing act
The FCA provided short/medium loans to farmers so that they could keep their land, and the HORA helped home mortgages.

Public Works
The CCC (Civilian Conservation Corps) put many young men to work, as did the PWA (Public Works Administration, established as part of the NIRA) and the TVA

Federal Emergency Relief Act
1933 This authorized a bunch of aid money to state/local gov’ts

Commodity Credit Corporation
lent farmers money for keeping underpriced crops off the market

Securities and Exchange Commission and the Taylor Act
established federal supervision of public lands

Brain trust
Many of the advisers who helped Roosevelt during his presidential candidacy continued to aid him after he entered the White House. A newspaperman once described the group as “Roosevelt’s Brain Trust.” They were more influential than the Cabinet.

Glass-Steagall Banking Reform Act, 1933
Created the Federal Deposit Insurance Corporation, which insures the accounts of depositors of its member banks. It outlawed banks investing in the stock market.

Gold Clause Act, 1935
It voided any clause in past or future contracts requiring payment in gold. It was enacted to help enforce 1933 legislation discontinuing the gold standard and outlawing circulation of gold coin.

American Liberty League
Led by conservative Democrats and corporation leaders who claimed that the New Deal was destroying the American individualistic tradition

Father Charles Coughlin
A Roman Catholic priest who specialized in anti-communism, anti-capitalism, and anti-Semitism – “conspiracy of Jewish bankers.”

Francis Townsend
Old Age Revolving Pensions Plan, where the gov’t would give old people $ on the condition they spend it fast (to pump $ into the economy).

Huey Long
Every Man a King, but No One Wears a Crown.” At first a ND supporter, Long switched to the idea of the Share Our Wealth Society in 1934, which was basically a 100% tax rate on incomes over a million. Long was on the way up politically, but was assassinated.

Schechter v. US (1935)
they got rid of the NIRA (federal gov’t has no right to regulate intrastate business)

Relief Reform Recovery
Philosophy of the New Deal

Indian Reorganization Act
1934 – Restored tribal ownership of lands, recognized tribal constitutions and government, and provided loans for economic development

Recognition of the U.S.S.R.
November 1933 – In an effort to open trade with Russia, mutual recognition was negotiated. The financial results were disappointing.

Election of 1936: candidates, issues
Democrat – Franklin D. Roosevelt, Rebublican – Governor Alfred Landon, Union Party – William Lemke
Issues were the New Deal (which Landon criticized as unconstitutional laws), a balanced budget, and low taxes. Roosevelt carried all states but Maine and Vermont.

Second New Deal
Some thought the first New Deal (legislation passed in 1933) did too much and created a big deficit, while others, mostly the elderly, thought it did not do enough. Most of the 1933 legislation was ineffective in stopping the Depression, which led F. D. R. to propose a second series of initiatives in 1935, referred to the Second New Deal.

Wagner Act
May 1935 – Replaced Section 7A of the NIRA. It reaffirmed labor’s right to unionize, prohibited unfair labor practices, and created the National Labor Relations Board.

National Labor Relations Board (NLRB)
Created to insure fairness in labor-managment relations and the mediate employers’ desputes with unions.

Fair Labor Standards Act, maxium hours and minimum wage
June 1938 – Set maximum hours at 40 hours a week and minimum wage at 20 cents an hour (gradually rose to 40 cents)

Congress of Industrial Organizations (CIO), John L. Lewis
Originally formed by leaders within the AFL who wanted to expand its principles to include workers in mass produciotn industries. In 1935, they created coalation of the 8 unions comprising the AFL and the United Mine Workers of America, led by John L. Lewis. After a split within the organization in 1938, the CIO was established as a separate entity

Memorial Day Massacre
Occurred when strikers in front of the Republic Steel plant in Chicago were shot by the police in 1937.

Dust Bowl, Okies, John Steinbeck, The Grapes of Wrath
1939 – Steinbeck’s The Grapes of Wrath was about “Okies” from Oklahoma migrating from the Dust Bowl to California in the midst of the Depression.

Secretary of Labor Frances Perkins
The nation’s first woman cabinet member

Keynesian Economics
The British economist John Maynard Keynes believed that the government could pull the economy out of a depression by increasing government spending, thus creating jobs and increasing consumer buying power.

Social Security Act
One of the most important features of the Second New Deal established a retirement for persons over 65 funded by a tax on wages paid equally by employee and employer.

Court-packing plan
Because the Supreme Court was striking down New Deal legislation, Roosevelt decided to curb the power of the Court by proposing a bill to allow the president to name a new federal judge for each who did not retire by age 70 and 1/2. At the time, 6 justices were over the age limit. Would have increased the number of justices from 9 to 15, giving FDR a majority of his own appointees on the court. The court-packing bill was not passed by Congress.

Chief Justice Charles Evans Hughes
Began to vote with the more liberal members in the liberal-dominated Supreme Court. In June a conservative justice retired and Roosevelt had an opportunity to make an appointment, shifting the Court’s stance to support of New Deal legislation.

“Conservative Coalition” in Congress
1938 – Coalition of conservative Democrats and Republicans who united to curb further New Deal legistators. Motivated by fears of excessive federal spending and the exspansion of federal power.

Robinson-Patman Act
1937 – Amended federal anti-trust laws so as to outlaw “price discrimination,” whereby companies create a monopolistic network of related suppliers and vendors who give each other more favorable prices than they do others.

Miller-Tydings Act
1937 – Amended anti-trust laws to allow agreements to resell products at fxed retail prices in situations involving sales of trademarked good to a company’s retail dealers.

Hatch Act
1939 – Prohibited federal office holders from participating actively in political campaigns or soliciting or accepting contributions.

Adkins v. Children’s Hospital
1923 – The hospital fired employees because it didn’t want to pay them what was reqired by the minimum wage law for women and children.

Gitlow v. New York
1925 – Benjamin Gitlow was arrested for being a member of the Communist party. The New York court upheld the conviction.

Scottsboro Trial (1931)
Nine black teens were arrested for throwing white hoboes off a train and were then accused and convicted (by a white jury) of rape. An SC ruling intervened, but they were still imprisoned.

Brotherhood of Sleeping Car Porters and Harlem Tenants League
Fought for civil rights and attacked discrimination, but they were for the most part ignored.

Dawes Plan
(1924) increased the cycle by providing more loans and reducing the yearly repayment.

Young Plan
(1928) reduced Germany’s reparations but was too little too late.

Reciprocal Trade Agreements Act
which empowered the president to reduce tariffs through special agreements with foreign countries (most-favored-nation-principle entitled us to the lowest tariff rate set by any nation with which a friend nation had an agreement).

Good neighbor policy
(nice imperialism).
– In order to avoid having to use our military power, we trained people to do it for us (nat’l guards) and supported dictators (“He may be a SOB, but he is our SOB” – FDR)

Montevideo Conference
The first of several Pan-America conferences held during the period between World War I and World War II concerning mutual defense and corporate between the countries of Latin America. The U.S. renounced the right to intervene in the affairs of Latin American countries.

Rio de Janeiro Conference
1933 – Delegation of 21 Latin American leaders, including Summer Will and Aswalina Avanna. Led to the break in diplomatic relations between the U.S. and the Latin American powers.

Buenos Aires Conference
1936 – The U.S. agreed to submit all disputes from the Americas to arbitration

Lima Conference
1938 – Last of the Pan-American conferences held before the outbreak of World War II. Issued the Declaration of Lima asserting the unity of the Latin American nations and their determination to resist al forms of foreign agression.

Declaration of Panama
1939 – Latin American governments drew a security line around the Western hemisphere and warned away foreign agressors.

Act of Havana
1940 – Approved by the 21 delegates of the Pan-American Union. Declared that any Latin American nation was permitted, in the name of defense, to take over and administer any European possession in the New World.

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy Election of 1932 The Republicans nominated Herbert Hoover to run for president in the election of 1932. The Democrats …

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy Hundred Days Period in which the Congress an inconceivable large amount of legislation Glass-Steagall Banking Reform Act Act that …

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy Election of 1928 Al Smith – Dem Herbert Hoover – Rep Hoover victorious because he was Rep (2 previous …

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy buying on margin one of the cause of the stock market crash before great depression where consumers can buy …

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy Great Depression the economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s stock …

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy Causes of the Great Depression ♦Uneven distribution of wealth ♦Stock market speculation “buying on the margin” ♦Excessive use of …

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