In April the Court also ruled clearly in favor of a key element of the Wagner Act. In May it declared Roosevelt's Social Security plan to be constitutional. The favorable rulings pleased Roosevelt. They effectively killed any remaining support for his court-packing plan, however. Recovery in doubt In the fall of 1937, the nation's economy suffered another setback. It began in a familiar way with a sharp drop in the stock market. By the time the year was over, about 2 million more Americans had lost their jobs. The return of hard times changed Roos-evelt's plans. He had hoped to cut back on gov-ernment spending, fearing the growing federal budget deficit. A deficit occurs when a gov-ernment spends more money than it takes in through taxes and other income. But as unem-ployment rose in late 1937 and early 1938, Roosevelt again found himself seeking large sums of money to help the unemployed. Roosevelt may have been troubled by defi-cits, but the new spending was supported by the theories of British economist John Maynard Keynes. Contrary to classical economic theory, which stressed balanced budgets, Keynes argued that deficit spending could provide jobs and stimulate the economy. In fact, the economy did begin to rebound in the summer of 1938. By then, however, the positive feelings about Roosevelt and the New Deal had begun to fade. Sequencing What events made 1937 a troubled year for President Roosevelt? CI:13 11.6.2, 11.6.4, 11.8.5 Reviewing Ideas, Terms, and People 1. a. Identify Identify the significance of the following terms: 4. a. Identify Identify the significance of the following: deficit, John Maynard Keynes Second New Deal, Social Security b. Make Inferences What lessons did Roosevelt draw from the 1934 election? c. Evaluate What do you think of Roosevelt's decision to cut back on programs that provided relief without work? 2. a. Identify What was the CIO? b. Explain What factors contributed to labor's growth after 1935? c. Rank Which do you think was more important in labor's success: the passage of the Wagner Act or the success of the sit-down strikes? Explain. 3. a. Recall What was Roosevelt's 1936 election strategy? b. Summarize What were the results of the 1936 election? 364 CHAPTER 12 b. Summarize Why did the court-packing plan cause so much damage to Roosevelt? Critical Thinking 5. Understand Cause and Effect Copy the chart below and use information from the section to fill it in. )(I)( )( ) --... 1N!'£J·ll([email protected]!il[. mJw1.1, 1.3 6. Persuasive Deliver a speech in which you argue for or against Roosevelt's court-reorganization plan.
BEFORE You READ ~ MAIN IDEA READING FOCUS The Great Depres-sion and the New Deal had a deep impact on American culture during the 1930s. 1. How did the public roles of women and African Americans change dur-ing the New Deal? KEY TERMS AND PEOPLE Frances Perkins Black Cabinet Mary Mcleod Bethune Dorothea Lange CL13 11.6.3 Discuss the human toll of the Depression.