The New Deal

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Summarise: how successful was the New Deal in the period up to 1941?
Didn't stop Depression, only stopped it getting worse / Was WWII that stopped the Depression
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What was the date of the 1st New Deal?
1933-5
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What was the focus of the 1st New Deal?
The banking system - getting it to stabilise
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Quote about 1st 100 days/banking system
Raymond Moley - "Roosevelt saved capitalism in 8 days"
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Why was Roosevelt able to be so powerful during the 1st 100 days?
Using his powers under the Trading with the Enemy Act to introduce a series of policies and reforms
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Who was Roosevelt advised by?
The Brains Trust - Tugwell and Berle included
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By 1932, how many banks were closing each day?
40 a day
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What percentage of banks had closed by 1932?
75%
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How much money was withdrawn from banks in the 2 days before Roosevelt's inauguration?
$500 million
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What did Roosevelt do as soon as he got into office (concerning banks)?
Declared a 4 day 'bank holiday' and passed the EBA
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What does the EBA stand for?
Emergency Banking Act
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What did the EBA do?
Inspected all banks / Only those with sufficient cash reserves which were properly managed were allowed to reopen / Govt would guarantee savers' money / RFC took over bank debts / Encouraged people to put money into banks
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How much money was deposited into banks after the banks reopened after the EBA?
$300 million of gold deposits
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What was the Economy Act?
Cut the wages of those in government and in the army by 25% / Cut budgets of govt departments by 25%
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What did the Glass-Steagall Act do?
Prevented commercial 'high street' banks from taking part in investment banking - this had been a major cause of bank collapses after the Wall Street Crash
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When was the SEC set up?
1934
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What did SEC stand for?
Securities and Exchange Commission
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What did SEC do?
Regulated the stock market: 50-60% on the margin / Tried to stop insider dealing
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What did 'on the margin' change from and to?
5-10% to 50-60%
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Who headed the SEC?
Joseph Kennedy
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When was the Banking Act?
1935
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What did the Banking Act do?
Created the Federal Reserve Board - to give the US a central banking system (M.J. Heale)
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Who said the Banking Act "gave the US a central banking system"?
M. J. Heale
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What did FERA stand for?
Federal Emergency Relief Administration
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What was FERA aimed at doing?
Helping the most desperate/starving - in 1933
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Who headed up FERA?
Harry Hopkins
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What did FERA do?
Gave state govts $500 million - 1/2 at start then for every $3 states gave out, the federal govt would give them $1 / Set up soup-kitchens, clothing banks, work schemes / 4 million men enrolled on these work schemes
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How much had FERA spent by 1935?
$4 billion
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Why did FERA face lots of opposition?
Because people in govt didn't want to contribute as they felt it wasn't the govt's job to help the most desperate
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Give a specific example of opposition faced by FERA
Governor Martin of Oregon - he disagreed with FERA and wanted to put the most desperate to death
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Why was FERA important?
Helped the most desperate / Shows Federal govt. getting involved for the 1st time
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What did HOLC stand for?
Home Owner's Loan Corporation
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What did HOLC do?
Gave loans/money to homeowners who were falling behind on their mortgage payments / Gave very low interest rates
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What other alphabet agency/act was HOLC similar to?
FCA
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What did the FCA stand for?
Farm Credit Association
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What did the FCA do?
Prevented farm foreclosures
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What was the 1st alphabet agency to be established?
The CCC
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What did the CCC stand for?
Civilian Conservation Corps
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Why was the CCC Roosevelt's favourite alphabet agency?
The idea appealed to him/brotherhood/he was brought up in the countryside
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When was the CCC established?
March 1933
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Who did the CCC employ?
(White) men aged 18-25
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How many men were recruited for the CCC?
250'000
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How did the CCC help the economy?
Less unemployed / Workers paid $30 a month, $25 of which was sent home to their families to help local economies
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Why was the CCC a success?
Less unemployed / Workers sent $25 home to stimulate economy / Gave them a purpose / Responsible for 55% reduction in crimes by young men / Discipline (WWII) / Literacy skills for 100'000 / Trees / Infrastructure / National Parks / Environment
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What were the failures of the CCC?
Only for white men / Only age 18-25 / Cycle of returning to the CCC after 6 months since they couldn't find other work / Criticised as cheap labour / Racist
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How many fire towers were built by the CCC?
3'500
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How many trees were planted by the CCC?
3 billion
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What did the CCC created/develop?
National parks
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What did the AAA stand for?
Agricultural Adjustment Act/Administration
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What did the AAA aim to do?
Control farm production / Stabilise prices / Attempt to end over-production
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Who was the head of the AAA?
Henry Wallace
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What were some of the things done by the AAA?
Encouraged farmers to grow less crops / Controlled supply of seven basic crops (e.g. corn and wheat) / 6 million piglets slaughtered
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What were the failures of the AAA?
Killing of 6 million piglets (became known as Poor Little Piggies) / Sharecroppers left their lands / Dust storms destroyed the farms anyway / Butler Act
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What were the successes of the AAA?
Prices rose / Improvement in lives of farmers / Less over-production
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Which act declared the AAA unconstitutional?
Butler Act
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What did the WPA stand for?
Work's Progress Administration
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Who was the head of the WPA?
Harry Hopkins
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When was the WPA set up?
1935
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What was the purpose of the WPA?
To employ people in any jobs (mostly construction though) - less unemployment, felt like they were contributing to the economy
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How many people did the WPA employ by 1936?
3.5 million
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How much did the WPA spend?
$10.5 billion
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Give 2 examples of WPA projects
Federal Writers Project - guidebooks written on cities / Federal Art Project - painters produced pictures for displays in schools/public buildings
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What were the successes of the WPA?
Gave workers' jobs / They had money to spend / Stimulates economy / Self-respect / Morale / Feel like they are contributing to the economy / Made many buildings and roads etc.
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What were the failures of the WPA?
Cost more money than would have been used just to give dole money / Workers paid out of public money / PWA built more / Boondoggles / Wasteful?
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Give 2 examples of boondoggles
Scaring away pigeons / History of the safety pin
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What did the PWA stand for?
Public Works Administration
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Who ran the PWA?
Harold Ickes
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What were the aims of the PWA?
Create work / Reduce unemployment / Build useful things / Revive economy
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What did the PWA do?
50 airports (including La Guardia) / Electrification of railways / 4 dams / 70% of nation's schools / 35% of nation's hospitals
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What were the failures of the PWA?
Didn't reduce unemployment significantly / Too picky / Only jobs for skilled workers / Didn't build enough houses (only 180'000)
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What were the successes of the PWA?
Reduced unemployment / Infrastructure / 50 airports etc / Buildings still standing today
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What did the NRA stand for?
National Recovery Administration
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Who ran the NRA?
Hugh Johnson
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What did the NRA aim to do?
Stimulate business recovery / Set up codes of work for employers / Establish minimum wages, maximum hours / Ensure workers rights / Establish trade unions
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What did the NRA do?
Minimum wage established / No child labour under the age of 16 / 556 codes established / Wagner Act - trade unions
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What were the failures of the NRA?
Destroyed by Supreme Court - Schechter/Sick Chickens Case / 556 rule impossible to regulate and keep to / Ford hated trade unions / Small firms lost out to bigger businesses
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What did the TVA stand for?
Tennessee Valley Authority
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What did the TVA do?
20 dams / Electricity / Modernisation / Helped farms (2% to 75% electrified) / Plutonium for nuclear bombs / Revitalised a vast area of rural America (7 states)
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What were the failures of the TVA?
Racist (whites only model town) / Nuclear warfare / Communist or Socialist ideology - taking away states rights
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Why did the AAA not help sharecroppers?
They weren't needed anymore (since less was needed to be produced) so they were forced to leave and went to the cities
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Name a person who benefitted from the WPA
Dorothea Lange
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List all of the alphabet agencies set up in 1933
EBA, Glass-Steagal, Economy Act, HOLC, FERA, CCC, AAA, TVA, PWA, NRA
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When did Roosevelt move to the left?
1935
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Why did Roosevelt move to the left?
Mid Congressional Elections (they become more left wing and radical) / Opposition from Supreme Court / Opposition of Big Businesses / Threats from the Left - fear of losing 1936 election
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Who came up with the idea that from 1935 onwards, the '2nd' New Deal had been established?
Arthur Schlesinger junior
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What was the date of the 2nd New Deal?
1935-7
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What was the date of the Roosevelt Recession?
1937-8
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What was the date of the 3rd New Deal?
1937-9
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Why was the 3rd New Deal almost non-existent?
Roosevelt was busy with the Supreme Court so did very little
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Why was there a Roosevelt Recession?
Out of fear of the budget deficit, Roosevelt stops spending, but unemployment goes up again
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What was the main focus of the 2nd New Deal?
Reform / Helping the disadvantaged / Redistributing wealth
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Which quote suggests that Roosevelt was trying to redistribute wealth?
"Helping the forgotten man at the bottom of the economic pyramid" (Roosevelt)
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What was the threat from the left known as?
The Thunder of the Left
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Who were the 3 individuals that made up the Thunder of the Left?
Huey 'Kingfish' Long, Francis Townsend and Father Coughlin
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Why did the opposition of the Supreme Court make Roosevelt become more left wing?
They declared things unconstitutional and made him want to become more left wing
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What did the Wagner Act do?
Allow people to join trade unions
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What agencies were part of the 2nd New Deal?
WPA, NRA, Wagner Act, SSA, ADC (set up by SSA)
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When was the SSA set up?
1935
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What did Roosevelt call the SSA?
'The Cornerstone of my Administration'
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Which countries at the time had social security systems that protected the most vulnerable?
Britain and Germany
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In 1931, which was the only state to have unemployment benefit?
Wisconsin
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How many states originally had pensions?
27/48
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What did the SSA set up?
Pensions, unemployment benefit, sick pay
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How did the payment/pay out system in the SSA work?
Employees and employers contributed, benefits based on what you paid in, nothing paid out until 1942
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How much pension could you receive?
$10-$85 per month
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How much unemployment benefit could you get?
$18 a week for 16 weeks only
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Who couldn't get pensions?
Domestic servants
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What were the drawbacks/failures of the SSA?
Very basic / Payments based on what you put in / Received nothing until 1942 / Poor people couldn't benefit / Range on pensions / Limited / Not for everyone (domestic servants) / Needed an employer to contribute / Embarrassing to collect ADC
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What did ADC stand for?
Aid for Dependent Children
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What was bad about the ADC?
African American women couldn't claim it / Embarrassment of collecting it / Had to queue and wait for hours to get it / People didn't bother collecting it in the end
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List specific ways that alphabet agencies were racist
NRA - 'Niggers Ruined Again' / CCC employed only white men / TVA model town for whites only / PWA only employed skilled workers / AAA kicked sharecroppers of their land / ADC couldn't be claimed by African American women
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What happened to lynchings during the time of the New Deal?
They increased - Roosevelt never made it a federal crime
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What was Roosevelt's positions concerning race relations?
He put them in better positions in politics but wasn't prepared to solve the racism issue and didn't make lynching a federal crime
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Why was racism particularly bad in the cities?
Sharecroppers left their lands, migrated north and to cities, looking for work, paid less, signs saying "No *******, no Mexicans, no dogs" on peoples houses and businesses
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How many banks were going bankrupt each day by 1936?
0
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How many men were in the CCC between 1933-1941?
3 million
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How many women were in the CCC between 1933-1941?
8000
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How many were still unemployed in 1940?
8 million
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Why was the SSA significant?
Represented a huge break from US tradition
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How much did trade union membership increase after the Wagner Act?
Increased by 3 times (trebled)
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By how much did the residents of the TVA's average income increase?
200%
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Which type of farmers did very well because of the New Deal?
Commercial/large farmers
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How many schools were built by the PWA?
13'000
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How many miles of road were build by the PWA?
50'000 miles
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How much did the WPA spend on helping unemployed artists?
$46 million
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How many people did the WPA employ?
8 million
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What is a clear indication that the CCC was successful?
It was extended for an additional 7 years in 1935
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How did women benefit from the New Deal?
ADC / Learn to type opportunities under FERA / Some (8000) in CCC
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How much had been returned to bank deposits by April 1933?
$1 billion
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What 3 issues/problems were not solved by the New Deal?
Racism, housing and the mal-distribution of wealth
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Why was FERA limited?
In 1935 it paid only $25 a month to families that needed $100
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What did the WPA become known as and why?
'We Piddle Around' - because many of the people that it employed carried out useless, wasteful jobs known as 'boondoggles'
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What percentage of people were unemployed in 1932 and in 1940?
23.6% to 14.6 % (difference of 9%)
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What was the traditionalist view on the New Deal?
Positive - the New Deal was good
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What was the revisionist view on the New Deal?
Negative - the New Deal failed to bring about recovery
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What was the post-revisionist view on the New Deal?
Positive and Negative - the New Deal had successes and failures
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What was the new-left view on the New Deal?
Negative - the New Deal wasted an opportunity to bring about radical change
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What was the traditionalist view on the Depression?
The Depression was caused by international problems and Hoover
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What was the revisionist view on the Depression?
The Depression was caused by Hoover
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What was the post-revisionist view on the Depression?
The Depression was caused by a wide range of factors
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Card 2

Front

What was the date of the 1st New Deal?

Back

1933-5

Card 3

Front

What was the focus of the 1st New Deal?

Back

Preview of the front of card 3

Card 4

Front

Quote about 1st 100 days/banking system

Back

Preview of the front of card 4

Card 5

Front

Why was Roosevelt able to be so powerful during the 1st 100 days?

Back

Preview of the front of card 5
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