ate REVIEW LIFORNI ONTENT STNR 11.6.2 Responses to the Great epression Specific Objective: Understand the explanations of the principal causes of the Great epression and the steps taken by the Federal Reserve, ongress, and Presidents Herbert Hoover and Franklin elano Roosevelt to combat the economic crisis. Read the information to answer questions on the next page. auses of the Great epression Tariffs and war debt policies cut down the foreign market for U.S. goods. crisis in the farm sector led to falling prices and increased debt. The Federal Reserve kept interest rates low and encouraged borrowing that led to excessive debt. n unequal distribution of income led to falling demand for consumer goods. People bought stocks on credit, which meant huge losses when stocks did not rise. The stock market crash fueled a financial panic. opyright Mcougal Littell/Houghton Mifflin ompany Hoover and ongress Respond (1929 1932) Initial inaction tried to let economy fix itself Tried to convince businesses to invest unsuccessful because of huge business losses ut government spending and raised taxes tried to balance budget but made problems worse ongress increased tariffs tried to protect U.S. businesses, but when other countries did the same, exports and demand for goods dropped. Federal Reserve lent money to banks and allowed interest rates to drop in 1930, but in 1931 it did not do enough to keep banks from failing. Roosevelt s New eal (1932 1940) Relief for Needy People Jobs programs decreased unemployment (though it remained high until World War II). Provided loans to protect people s homes; Provided direct relief to people through state and federal programs to help unemployed, aged, and ill Economic Recovery Tried to lower production to meet demand ssisted farmers by helping raise prices (paid them to destroy products and leave land unplanted) Regulated industry with rules for production, fair competition, and worker pay and conditions Increased money in economy through huge jobs programs and public building projects Financial Reform Restored faith in banks by closing them until they were inspected and found to be in order The Federal Reserve ct created the Federal eposit Insurance orporation to protect people s money deposited in banks. Supported regulation of stock market to prevent false information and financial gains to insiders with special information SS Specific Objective 11.6.2: Review 83
ate PRTIE LIFORNI ONTENT STNR 11.6.2 Responses to the Great epression irections: hoose the letter of the best answer. 1 How did the Federal Reserve affect investment in the stock market during most of the 1920s? It controlled the money supply, so only the wealthy could invest in stocks. It successfully controlled banks that wanted to speculate in stocks. It kept interest rates low, and people borrowed money to invest in stocks. It regulated companies that wanted to make money by selling stock. 2 What was the result of raising tariffs after the epression had begun? It helped protect U.S. businesses. Other countries did the same thing and exports dropped. Farmers could sell their goods overseas for higher prices. It had little effect on the U.S. and international economies. 3 What was the reaction of President Hoover and ongress when the Great epression first began? They did not take action because they believed the economy could fix itself. They cut taxes and increased spending to increase the money supply. They offered to help workers who had lost their jobs. They forced businesses to hire back workers who had lost their jobs. 4 How did President Roosevelt help farmers during the Great epression? He started a program to ship farm products to where they were needed. He set up factories in farming areas so farmers could work at other jobs. He created a government agency to buy their farms at a reasonable price. He paid farmers to destroy some crops and leave fields unplanted. 5 To help boost industry, Roosevelt encouraged foreign companies to invest in merican businesses. established rules for industrial production, working conditions, and competition. removed regulations that cost businesses too much money. had the government buy many products so that factories could be successful. 6 Which statement best describes ways Roosevelt s policies worked for financial reform? They regulated the stock market and eliminated taxes on corporations. They inspected and regulated banks and regulated the stock market. They eliminated the Federal Reserve System to make banks stronger. They gave the Federal Reserve System control over corporate profits. opyright Mcougal Littell/Houghton Mifflin ompany 84 SS Specific Objective 11.6.2: Practice
ate REVIEW LIFORNI ONTENT STNR 11.6.3 Human Toll of the epression Specific Objective: escribe the human toll of the epression, natural disasters, and unwise agricultural practices and their effect on the depopulation of rural regions and on political movements of the left and right, with particular attention to the ust owl refugees and their social and economic impacts in alifornia. Read the diagram to answer questions on the next page. The Great epression opyright Mcougal Littell/Houghton Mifflin ompany The Human Toll People in cities lost their jobs and homes, lived in shantytowns, and got food from soup kitchens and bread lines. People in rural areas lost their land and homes. Some grew food for themselves. Families suffered as men wandered the country looking for work. Women worked for low wages and had too little food at home. hildren s health suffered and many left school or left home to look for work. frican-merican unemployment was more than 50% compared to 25% for others. Latinos were targeted for attacks and deportation. The ust owl To grow more crops, farmers removed grass and trees from huge areas of the Great Plains from anada to Mexico. The land was quickly exhausted and became useless for much farming. drought for several years in the early 1930s turned soil to dust. High winds at the same time blew dust for hundreds of miles. Many farmers lost farms because of low crop prices and huge debts. Hundreds of thousands of people packed their belongings and left for alifornia to look for work. The influx of workers drove wages down and strained social services in the state. Migrants had little experience mixing with the minorities in alifornia. In addition, many alifornians looked down on the migrants, calling them Okies. Political Movements and the New eal On the right, the merican Liberty League said New eal programs spent too much on direct relief and interfered with the free-market economy. On the left, Father harles oughlin, r. Francis Townsend, and Huey Long all opposed the New eal. They said it didn t help people enough. They favored greater government support. Minorities (frican mericans and Mexican mericans) generally benefited less from the New eal and became more politically active. Roosevelt created the New eal coalition that brought many groups together in support of the emocratic Party. Labor unions, whites in the South, urban groups, and frican mericans supported the party for many years. SS Specific Objective 11.6.3: Review 85
ate PRTIE LIFORNI ONTENT STNR 11.6.3 Human Toll of the epression irections: hoose the letter of the best answer. 1 Which statement best describes opponents of the New eal? They all thought its programs did not help people enough. They all thought its programs did not respect individual rights and property. They were mostly religious groups that opposed it on moral grounds. ritics of the New eal existed on both the left and the right. 4 How did the New eal coalition affect politics in the United States? It brought together a variety of groups that supported the emocratic Party. It was successful in mounting a conservative opposition to the New eal. It fought against the power of labor unions and rights for frican mericans. It had little effect on politics because most of its members did not vote. 2 Which statement best describes the human toll of the Great epression? Problems were greatest in cities and for whites. People in the rural South and West had the greatest problems. ll types of people suffered in all areas of the country. Women had fewer problems because they did not lose their jobs. 3 The ust owl was caused by New eal farm policies. drought, winds, and poor farming practices. farmers using too much fertilizer. farmers losing their savings in the stock market. 5 How did the New eal affect minority groups? New eal programs helped minorities more than other groups. Minority groups became more politically active during the New eal. Most minorities joined the Republicans in opposing the New eal. Minorities preferred to rely on churches rather than government help. 6 Most victims of the ust owl moved to alifornia. anada and Mexico. the Great Plains. the Southeast. opyright Mcougal Littell/Houghton Mifflin ompany 86 SS Specific Objective 11.6.3: Practice
ate REVIEW LIFORNI ONTENT STNR 11.6.4 New eal Economic Policies Specific Objective: nalyze the effects of and the controversies arising from the New eal economic policies and the expanded role of the federal government in society and the economy since the 1930s. Read the diagram to answer questions on the next page. Labor Relations The Wagner ct established rights of workers to organize and join unions. The National Labor Relations oard (NLR) required companies to treat unions fairly and to bargain with them. Fair Labor Standards ct set maximum hours and minimum pay for most workers. Opponents said programs gave too much power to unions. ontroversy arose in late 1940s and 1950s over union and employer rights. Water and Energy evelopment Tennessee Valley uthority (TV) was established to build dams and produce power using Tennessee River. The project brought power to rural areas and protected against floods. entral Valley Project in alifornia provided water for irrigation and urban use. Opponents said government programs were unfair competition for private business. opyright Mcougal Littell/Houghton Mifflin ompany Farm Programs gricultural djustment ct () paid farmers to leave land unplanted and destroy some crops and products to reduce supply and raise prices. Programs were created to provide loans to tenant and small farmers to buy land. Opponents said destroying food was wrong when many people were hungry. New eal Programs Social Welfare The Social Security ct established old-age pension for retired workers. It also provided unemployment assistance and aid for children and the disabled. Social Security still functions as a safety net for millions of elderly and disabled. Some reform is needed to help the system pay promised benefits in the future. Public Works and Jobs ivilian onservation orps () provided jobs for millions of unemployed youth building parks and maintaining national forests to protect the natural environment. Public Works dministration (PW) and Works Progress dministration (WP) targeted employment. Millions of skilled and unskilled workers helped build dams, bridges, highways, and schools. The programs also employed writers and artists. Opponents said work was make work that was not needed. SS Specific Objective 11.6.4: Review 87
ate PRTIE LIFORNI ONTENT STNR 11.6.4 New eal Economic Policies irections: hoose the letter of the best answer. 1 New eal labor policies and programs generally limited safety rules and inspections that cost businesses money. supported owners rights to prevent unions from representing workers. supported fair labor practices, including a minimum wage for workers. established rules to limit options for women and frican mericans to work. 4 Projects like the Tennessee Valley uthority and entral Valley Project in alifornia were strongly supported by members of the business community. were never completed because of a lack of skilled workers. harnessed natural resources to improve the quality of life in those areas. forced large landowners to give up many acres of valuable land. 2 The WP and the programs showed Roosevelt s belief in creating government jobs to get people back to work. providing loans to businesses to retrain unemployed workers. employing only unskilled workers in public works programs. supporting private businesses to hire unskilled workers. 3 New eal farm programs were designed to reduce supply and raise prices. Opponents objected because they thought food should be sold overseas where prices were higher. farm problems could be solved if farmers used better techniques. the country needed low food prices to compete with foreign farm products. it was wrong to limit production of food when many people were hungry. 5 Social Security was established during the New eal to provide pensions for retired workers. It also provided assistance for children and disabled people. age requirements for public schools. guidelines for medical care for workers. jobs for unemployed youth. 6 How did the New eal affect government s role in the economy? Government took steps to deregulate key industries. Government took a more active role in managing the economy. Government adopted a hands off policy for most sectors of the economy. Government s role in the economy remained unchanged by the New eal. opyright Mcougal Littell/Houghton Mifflin ompany 88 SS Specific Objective 11.6.4: Practice