The Response to the economic Collapse Chapter 31 The Response to the economic Collapse

Bonus Army Veterans of WWI who had been promised a bonus in 1945 marched on Washington to demand early payment. It put a face on the suffering of those during the depression.

Hoovervilles Were shantytown built around the country and made of cheap materials. It represented the plight of many Americans forced out of their homes.

Reconstruction Finance corporation Supported by president Hoover, it issued loans to banks, railroads and other businesses in an effort to provide relief from the economic effects of the depression.

New Deal Was the name of the program that Democratic Presidential nominee Roosevelt said would do whatever need to help the less fortunate in the country.

First Hundred Days The first three months of president Roosevelt's term that saw the passage of legislation aimed at reversing the economic down turn and providing help to those in need.

1 Conservatives: the economy will stabilize by itself if left alone. Liberals: Government must help by increasing spending on public works , placing new taxes on corporations and the wealthy to raise money for social welfare programs , and working closely with businesses to help them recover. Radicals-The free enterprise system should be abolished and government should create a planned economy; communists urged working-class people to rise up against greedy capitalists.

2 Trickle –down theory: Helping struggling banks and businesses to recover would allow them to hire more workers, and prosperity would trickle down to those who needed it most. Critics: Conservatives said the government should not be in the business of saving banks; liberals said the poor needed help urgently and could not wait for help to trickle down.

3 Hoover: Reluctant to provide federal relief to the needy, believing this might encourage dependence on government support; looked to local communities and private charities to take care of citizens. Roosevelt: Believed government should provide relief to unemployed and poor workers directly.

4 Relief: reforestations Relief act created the Civilian conservation Corps; Federal Emergency Relief Act gave money to states for relief projects. Recovery: Agricultural Adjustment Act set prices for farm crops and tried to reduce overproduction; Emergency Banking Act gave the federal government the power to help reopen the nations banks. Reform: Truth in Securities Act required companies to provide full and accurate information to investors; banking Act of 1933 established the FDIC to insure depositors.

5 Hoover was reluctant to involve the government in the economy, although his Reconstruction Finance Corporation was a small step in the direction of giving the federal government more power the economy. FDR’s New Deal measures, however, gave the federal government a stronger role in the economy. Examples: Emergency Banking Act gave the federal government some power over the nations banks; Federal Emergency Relief Act granted money to states for unemployment projects; Agricultural Adjustment act allowed the government to set farm prices; Tennessee Valley Authority provided for government construction of dams and power plants; National Industrial Recovery Act established government agencies to oversee building projects and business practices.