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STAAR Review

Great Depression and the New Deal. STAAR Review. Causes of the Great Depression. Overproduction of crops by farmers Lost the market overseas when war ended Speculation in the stock market Risky, reckless investments to get rich quick 3. Buying on margin and buying on credit

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STAAR Review

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  1. Great Depression and the New Deal STAAR Review

  2. Causes of the Great Depression • Overproduction of crops by farmers • Lost the market overseas when war ended • Speculation in the stock market • Risky, reckless investments to get rich quick 3. Buying on margin and buying on credit 4. Bad banking practices • Lacked regulations by the government 5.Tariffs restricted international trade • Raised taxes on imported goods to promote the buying and selling of American goods

  3. Which of the following best completes this diagram? Tariff = Tax on imported goods F Led to a decrease in U.S. international trade G Helped stabilize the U.S. economy H U.S. relationships overseas J Led to a decline in U.S. unemployment The trouble with tariffs? When the US imposed tariffs on another country’s goods, that country tended to retaliate with tariffs on US goods – stops trade

  4. Which of the following best completes this graphic organizer? A Increase in consumer spending B Overspeculation in the stock market C Decrease in military spending D Government subsidization of agriculture • Causes of Great Depression: • Overproduction: supply> demand = falling prices + unemployment • Tariffs: can’t sell surplus overseas • Mistakes by the Federal Reserve bank • Unregulated banks & stock market: deposits uninsured; margin buying/margin calls • Easy credit in 20s: stop shopping in 30s to pay debt • Uneven distribution of income: too many people had to little $ to purchase goods that factories produced • Causes of Great Depression • Overproduction • High tariffs that stopped world trade • Credit culture of 1920s • Lack of Regulations of Banks & Stock Market • Mistakes by Federal Reserve Bank

  5. The Stock Market Crash • Black Tuesday: October 29, 1929, the stock market crashed. • As stock prices dropped, people couldn’t pay back their loans and frantically tried to sell their stocks driving the price of stocks down.

  6. Effects of the Stock Market Crash • Bank Runs • People panicked and took their money out of the banks • These bank runs forced many banks to close their doors. • When a bank closed its doors, the people who had money deposited there lost their money.

  7. Effects of the Stock Market Crash • As more banks closed, so did more businesses. • As businesses closed, people lost their jobs, and soon their homes and farms. • This caused a decrease in the demand for goods causing more businesses to fail leading to more people going broke.

  8. Characteristics of the Great Depression • Soup kitchens & bread lines appeared across the nation. • Churches and charities did what they could to feed the hungry. • With no ‘safety net’ such as unemployment insurance, hundreds of thousands were living on the streets.

  9. STAAR Practice – Political Cartoons • What event in American history is this political cartoon referring too? • World War I spending • Independence of flappers • Bank failures caused by buying on margin • Effects of the Dust Bowl

  10. The Dust Bowl • Causes of the Dust Bowl: • Over farming, poor techniques • Drought (a long period without rain) • Heavy winds and loose top soil • Farmers packed up their belongings and headed west to California looking for work. • Many of these migrants came from Oklahoma and became known as Okies.

  11. Documenting the Dust Bowl • John Steinbeck wrote “The Grapes of Wrath” telling the story of Okies as they became migrant workers in California. • Dorthea Lange took pictures of the effect the Dust Bowl and the Great Depression had on the American people.

  12. Which of these factors contributed most to the Dust Bowl F Flash flooding and intense deforestation G Prolonged drought and poor farming practices H High winds and railroad construction J Severe heat and rapid suburban development

  13. Effects of the Great Depression

  14. President Hoover’s Philosophy • During the early years, the government did not give direct relief. (cash or food directly to the poor) • Despite rising unemployment, President Hooverrefused to get the government involved. • Hoover believed in laissez-faire economy or limited government involvement • Hoover feared government intervention would reduce the incentive to work and undermine ‘rugged individualism’ that he believed had made America great. • Shantytowns sprang up everywhere and were called Hoovervilles, a sign of disrespect to Hoover.

  15. Franklin Delano Roosevelt “FDR” • By 1932 the American public had lost faith Hoover and the 1932 presidential election saw Franklin Roosevelt (FDR) win • FDR and his “Brain Trust” (his advisors) had a plan to end the depression and put the American people back to work, FDR called it the New Deal.

  16. Changes to the Government • The New Deal established the idea that the government was responsible for the needy • Expanded the role of the government permanently • The New Deal permanently increased the size and power of the federal government!

  17. FDR a New Style of Leadership • FDR used the radio to speak directly to the American people in his ‘fireside chats’. • When FDR was 39, he was struck by polio and he was unable to walk by himself. • FDR’s wife Eleanor, served as his eyes and ears by traveling the U.S. in his place. • Eleanor spoke strongly for women’s rights, the peace effort, and the poor.

  18. President Franklin D. Roosevelt sought to reassure the American public during uncertaineconomic times by — F publishing a weekly news editorial titled “The Road to Prosperity and Peace” G holding weekly town- hall meetings with average citizens H making short appearances in a variety of Hollywood films J delivering a series of evening radio speeches known as fireside chats

  19. “We have nothing to fear but fear itself” New Deal LegislationRelief, Recovery, Reform • In FDR’s 1932 inaugural address he reassured the American public with his famous quote : “we have nothing to fear but fear itself” • n the First Hundred Daysof office FDR was able to get Congress to pass many new laws he proposed. • Three R’s of the New Deal • Relief, Recovery, & Reform.

  20. New Deal LegislationRelief, Recovery, Reform • Banking Crisis – banks had been failing during the 1930s. • Depositors feared banks were unsound and removed their $$$$. • FDR closed all banks and put them on a Bank Holiday until new laws could restore faith in the banks. • Bank closings soon deceased.

  21. New Deal LegislationRelief, Recovery, Reform • Relief for the Unemployed • Federal Emergency Relief – gave money for emergency relief to those in need. • Civilian Conservation Corp. – gave young men jobs planting trees, cleaning up parks, etc. • Public Works Admin. – created jobs building schools, roads, bridges, other public projects • Works Progress Admin. – created jobs for artists, writers, and musicians to create murals, plays, etc. Programs like the CCC, PWA, WPA, were called the Alphabet Soup Laws

  22. New Deal LegislationRelief,Recovery, Reform • FDR felt the way to recovery was to stimulate demand for goods by putting money in the hands of the people in need. • Priming the Pump – • FDR differed from Hoover’s policy of giving money to the public. • FDR wanted to put money into consumers hands hoping to increase their spending thereby increasing demand.

  23. New Deal LegislationRelief,Recovery, Reform Is this laissez-faire? • National Recovery Admin. • Set business codes regulating wages, pricing, and practices. (should government tell businesses what to do?) • Agricultural Adjustment Act • paid farmers to plant less to increase crop prices. Supreme Court ruled both the NRA and AAA were unconstitutional.

  24. New Deal LegislationRelief, Recovery, Reform • Reforms were aimed at fixing the defects in the American economy so the Depression would not happen again. • These reforms were based on belief that government should protect individuals against risks they could not handle on their own. • This would increase the power and presence of the national government in the lives of all Americans into the future. • Obamacare is an example of this today.

  25. New Deal LegislationRelief, Recovery, Reform • Federal Deposit Insurance Corp. – insured banks so people would not lose any savings in the event of a bank failure. Restored faith in banks! • Social Security Act - provided the safety net to provide workers with unemployment insurance, an old age pension, or if they died early.

  26. New Deal LegislationRelief, Recovery, Reform • Security & Exchange Comm. • To regulate the stock market and prevent fraud and future crashes. • Tennessee Valley Authority • Government owned dams to generate electricity. • National Labor Relations Act • Gave workers right to form unions.

  27. What does the sticker in this illustration represent to patrons of this bank? FDIC = Federal DepositInsurance Corporation A Restrictions on the federal government’s ability to set prime interest rates B The power of the federal government to privatize the bank in order to stimulate economic growth C Limitations on the role of the federal government in providing home loans D The federal government’s assurance of protection on individual bank deposits

  28. Why did the federal government create this program in 1933? A To establish industrial centers in the region B To promote organic farming practices C To offset the effects of urbanization and rapid population growth D To provide jobs and improve the regional standard of living Standard of living: The level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area

  29. For the purpose of enabling each State to furnish financial assistance, as far as practicable under the conditions in such State, to aged needy individuals, there is hereby authorized to be appropriated . . . for each fiscal year a sum sufficient to carry out the purposes of this title. —Social Security Act of 1935, Title 1, Section 1 How did the legislation excerpted above affect the relationship between the U.S. governmentand its citizens? A It allowed the government to tax investment income. B It allowed people to have more direct input in government decisions. C It made most people distrust the power of the government. D It made the government more responsible for the people’s economic welfare. Social Security = a safety net for those, who through no fault of their own, are unable to work: the old, the very young, the disabled, the laid-off

  30. Reactions to the New Deal The New Deal was generally popular with the American public, but FDR did face criticism. • Liberty League said FDR was a traitor to his class and was attempting to establish a popular dictatorship with his new powers. • Dr. Francis Townsend thought FDR didn’t go far enough and wanted to give citizens over 65 an additional $200 a month.

  31. Reactions to the New Deal The New Deal was generally popular with the American public, but FDR did face criticism. • Huey Long – ‘The Kingfisher’ ran for presidentpromising each American family $5,000 a year paid by taxing the rich, he was later assassinated before he ran. • Father Coughlin – Catholic priest who gave radio speeches that were popular with nativists who distrusted Wall St., were anti-Jewish, and wanted the government to take over the banks.

  32. The Supreme Court and the New DealPolitical Cartoons

  33. FDR’s Court-Packing Scheme Who is ‘The Old Nine’? • After the Supreme Court decision of Schechter, FDR feared they might declare other New Deal laws as unconstitutional. • FDR believed the Supreme Court Justices, most of who were over 70 years old – were out of touch with the needs of the nation. • FDR proposed a plan to allow the President to add a new appointment to the Supreme Court for each Justice over 70 ½ years old.

  34. FDR’s Court-Packing Scheme • IF, FDR’s court-packing plan was adopted it would give him the right to appoint six Justices, giving him control over the Supreme Court. • FDR’s court-packing scheme was viewed as attempting to upset the traditional separation of powers outlined in the Constitution. • Despite FDR’s popularity, Congress rejected the plan but the Supreme Court did stop overruling New Deal legislation.

  35. The creator of this political cartoon was expressing his concerns about — A the Senate confirmation hearings of Supreme Court nominee Clarence Thomas B the U.S. declaration of war on Japan after the bombing of Pearl Harbor C the expansion of executive power during the Great Depression D the involvement of U.S. government officials in the Iran-Contra scandal

  36. This satirical cartoon expresses a sentiment that eventually contributed to — A the passage of a federal statute prohibiting foreign companies from contributing to presidential campaigns B the issuance of a Supreme Court ruling declaring it unconstitutional for members of the same political party to serve consecutive terms as president C the establishment of a congressional committee to investigate private presidential conduct D the ratification of a constitutional amendment establishing term limits for presidents 22nd Amendment: President limited to two terms

  37. The Impact of the New Deal Reforms • Under FDR’s New Deal the power of the federal government increased dramatically. • The federal government went from a regulatory role to one of taking responsibility to make sure the economy ran smoothly & efficiently. • The New Deal agencies and their regulations made it possible for the government to control its citizens’ private lives! • Taxes rose to fund these new government programs.

  38. New Deal Helps End the Depression • Spending on the New Deal helped bring an end to the Great Depression. • But, it would take more than just this spending to bring an end to this Great Depression, it would take a war. • As Hitler continued to become more aggressive in Europe, the U.S.A. became more concerned. • It would finally take the massive spending of our involvement in what would become World War II to finally end the Great Depression.

  39. Which of the following was a defining characteristic of the United States during the 1930s? F A sharp increase in the power given to state governments G An extended period of economic depression H The adoption of an interventionist foreign policy J The formation of a national Civil Rights movement Depression: a long and severe recession in an economy or market.

  40. Lines like the one shown in the photo were partially the result of - A growing demand for payment of military pensions B a sudden increase in agricultural exports C the passage of the Selective Service Act D widespread business failures

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