1. UNIT 5 TEST REVIEW

2. THE DUST BOWL A series of droughts, in the Great Plains, in the early 1930s dried up crops and topsoil, turning the soil to dust Lasting for a decade, heavy winds carried topsoil across hundred of miles, burying homes and destroying harvests Farmers were forced to abandon their farms Many moved west to California (over 1M were forced from their land)

3. CAUSES Overproduction – manufacturers were producing more goods than they could sell (cars, radios, appliances, etc.) Speculation – more and more people were speculating in the stock market in hopes of “getting rich quick” – Many began buying on margin (getting loans from a bank or stock broker) – People also speculated in Real Estate

4. PRESIDENT HOOVER AND THE DEPRESSION Remained true to laissez-faire capitalism, despite the spiraling economic problems Rejected demands for the government to provide unemployment to the needy Believed this would reduce the incentive to work and that private organizations should provide emergency relief, not the government The Federal reserve made matters worse by reducing the money supply, not increasing it and for allowing banks to fail

5. THE DEPRESSION BEGINS THE STOCK MARKET CRASH – October 29, 1929 – On October 24, stock prices began moving sharply downward – Top bankers bought stocks above current market prices to try to stop the rapid decline – By October 29, stock prices kept falling faster and faster, prices were at an all-time low, and the market crashed

6. CAUSES CONTINUED… Restricted International Trade – American tariffs were enacted to protect American markets – Tariffs made it hard for producers to sell overseas, since other countries retaliated by setting high tariffs of their own – In 1930, President Hoover signed the highest tariff in U.S. history – The shrinking of world trade contributed to the Great Depression

7. CONTINUED… With less demand for labor during the Depression, white Americans sought jobs filled by Mexican-American immigrants Hostility grew toward Mexican immigrants It was more difficult to enter the U.S. Hoover authorized the Mexican Repatriation Act to send Mexican-Americans back to Mexico (over half a million were forcibly returned, rather legal or not)

8. CONTINUED… These policies were seen as too little, too late, and his lack of leadership frustrated most Americans Shanty towns of homeless families and the unemployed became known as “Hoovervilles” and sprang up on the outskirts of many cities By the end of Hoover’s term, about 100,000 businesses failed and unemployment reached 13 million (25%) Many Americans began losing faith in democracy

9. IMPACT OF STATE & FEDERAL GOVERNMENTS Power of federal government increased Government had a positive responsibility to make sure the national economy ran smoothly and efficiently and made it possible to control citizens’ private actions Taxes rose dramatically to fund new gov’t programs States implemented their own versions of New Deal policies Established a legacy of gov’t. agencies, regulations, and procedures that remain with us today

10. THE SUPREME COURT AND THE NEW DEAL Posed the greatest threat to the New Deal Ruled that both the NIRA and AAA were unconstitutional In Schechter Poultry v. U.S. (1937), the Supreme Court ruled that even during a national crisis, Congress can not give the President more powers than those granted in the Constitution Fearing the court might declare other New Deal legislation unconstitutional, 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.

11. CONTINUED… The plan, if adopted, would have given FDR the right to appoint 6 Justices, giving him control over the court. It was viewed by many as an attempt to upset the traditional separation of powers Despite his popularity, the public condemned this move and Congress rejected it After this challenge to the court, the justices generally stopped overruling New Deal legislation