1. What were the causes of the stock market crash of 1929 and the Great Depression?
main- Buying on Margin-borrow from brokers (pay for 10-20% of stock borrow 80-90% of stock) allowed common people to be involved with stock market
overproduction and consumption of goods-businesses kept producing more goods, common man can't afford them so only wealthy people bought, stocks then went down
banks investing-took people money and invested it in the stock market, then stocks went down and everyone lost their money and banks didn't have peoples money when they came to get it
stock pools and Watered Stock- wealthy people bought all a companies stocks, then told everyone it was doing great and so the stock would go up even if the businesses were not doing good. wealthy got wealthier. watered stock=over priced stock
*Gov't had no laws or regulation on stock market so it lead to over priced stock and all the other probs.
Unrealistic view of market- everyone thought it would go up or stay same forever. over priced stocks.
Weak Banking System- us had over 30,000 banks, prone to bankruptcy, high bank failure rate, people lost money
over speculation- a lot of people playing stock market,
Federal Reserve increased interest rates- they knew there was a prob, they increased rates to help discourage people form borrowing more money for the stock market, they knew it would hurt economy but they had to do it at some point.
Great Depression-
Stock market crash of 1929- black Tuesday-Oct. 29th, 1929, it had been going up like crazy since 1921 so they all thought it would be fine
bank failures- banks invested peoples money in stocks, when stocks crashed people lost their money. Banks stopped giving loans, this is bad because then people aren't buying anything.
over production/under consumption-unemployment above 25%, everyone stopped buying, factories overproduced wiht no buyers.
american Economic Policy With Europe- created Smoot-Hawley Tariff (1930)- we raised tax on imported goods, made less people trade with us and hurt our economy and other economys
Drought conditions- mississippi valley, couldn't pay debt or taxes, had to sell farms with no profit (a.k.a. Dust Bowl)
2. What impact did the stock market crash and Great Depression have on the lives of people in the United States?
People moving into cities (hurt agriculture), panic, withdrawing funds, 14 billion dollars lost on black Tuesday, 30 billion that week.
Steel-all time low, no one making it
Construction- no one had money to build
car sales- no one had money
unemployment- rising like crazy
Vicious Cycle of the Great Depression-many people lost homes, jobs, and many businesses closed. (when people don't buy stuff, business' lay people off and that leads to more people not spending money and more businesses laying people off & repeat)
American citizens-
unemployment-no one had jobs, competition for low paying jobs led to discrimination
Homeless- many people were homeless, hoovervilles-small area of shacks made of cardboard, sheet metal, and plywood, named after Hoover, Central Park was covered in shacks.
Boxcar Children- teenagers left their homes on trains to go away for a long period of time because they thought they were a burden to their families (another mouth to feed)
Farmers- prices fell, more production, went bankrupt and lost farms, bad weather
Starvation- 20 deaths in NY 1931- 1934-110 people died
Breadlines- people would line up to get bread at churches and such
Laissez fairre- gov't stay out of business
Rugged Individualism-
Trickle down theory-give tax breaks to the rich and it will trickle down to the poor
3. What did the United States government do to help alleviate the problems the Great Depression brought to our country?
President Hoover
Roosevelt-New Deal(Goals/1st and 2nd)
programs to help with the great depression,
1st-unemployed get jobs, stop overproduction, raise crop prices, regulate stock market, make investments safer, faith in banks-1933-35
2nd- improve use of national resources, security towards old age, unemployment and illness, in favor of the poor, old, farmers, and labor unions 1935-1940
differences-1st new deal supported more, and dealt with economics, 2nd was more to do with people and jobs.
Relief- provide help for the unemployed
Recovery- help the economy
Reforms-prevent economic crisis from happening again
How did the New Deal impact the following:
unemployed- farm tenancy act- aid to poor farmers, homestead projects, loaned money to farmers, camps, health care programs. Civilian Conservation Corps-jobs for single men ages 18-25, 3 million jobs for this, gave men shelter, clothing, and food, paid $30 a month, had to give $25 to any family. FERA- jobs for the unskilled adults, can food, garments, mattresses, bedding CWA- unskilled men, construction, PWA- construction jobs WPA- Largest of agency, construction projects
young people-
factory workers-probs-dirty, dangerous, low paying, kids work in dangerous situations. Solutions- National Industrial Recovery Act- allow businesses to set their own standards of production, prices, and wages, garenteed collective bargaining rights of workers wagner act- gave people the right to engage in collective bargaining, gave basic rights of employees to organize into trade union and take collective action if nessesary. Fair labor standords act.-max of 44 hour seven-day work week, establish a national minimum hourly wage at 34 cents, banned child labor
labor unions-
farmers-
Farmers- started before the great depression, did good in WW1 because of higher demand, but after WW1 when demand went down and prices dropped, they lost all their money, so really their probs started in the 20’s
most famous farming deal-----Agriculture Adjustment Act- paid farmers to destroy food and this eliminated excess product and drove prices up. eventually declared unconstitutional by congress.
REA-gave electricity to farmers
FSA-set up to prove that farmers had it tough also.
elderly- social security, Social Welfare benefits, Elderly assistance program
poor- charity, social security, health care, long share our wealth program- pushed for redistribution and benefits for the poor (take from the rich and spread it to everyone)
homeowners- losing homes, USHA- designed to lend money to the states or communities for low-income construction,
artists- Federal art project- helped artists make art, sold and made over 200,000 products
musicians-Federal Music project-come back for musicians, music started to come back
women- nothing specific aimed at them, some groups didn't allow women (C.C.C.), they thought they should give up their jobs so the men could have them, NRA-when pay increases went up they were benefited but not as much as men, most women stayed home and stayed with the kids
African-American- no programs for them, not helped, segregation and racism won out. not really benefited at all
Native Americans- IRA-indian reorganization act-only one- they got to go back to their way of life, on reservations, children could be taught their culture, present day most are not that rich, kind of a little too late
banks- mine
stock market-mine
energy-REA- helped farmers get electricity--TVA-aimed at helping the states that are around Tennessee, it built dams (dozens) helped prevent floods, set up new town, provided electricity
4. What long lasting impact did the Great Depression have on Shelby County, Iowa, the US and world?
Iowa- farmers were failing, over producing, dust bowl hurt em. Caused the "farm strike" farmers didn't send crops and milk into town, they stopped the trucks with blockades on the roads What the gov't did for farmers- Agriculture adjustment act of 1933- sets limits on the size of the crops/herds farmers could produce. Town and cities- unemployment, refused gov't welfare, soup kitchens. help people get money- WPA, CCC, PWA- construction jobs for the unskilled unemployed
France-overvalued currency, political unrest, riots in Paris 1934
Japan- economy shrank 8%, value of their currency went down, started to be affected in 1932, Japan invaded Manchuria for resources because they needed them, Hit very hard, they depend on imports, big trading partners with us especially oil, this leads them to invade China for resources (military idea not leader), also lead them to bomb Pearl Harbor to force us to trade oil again with them.
Britian-already struggling, world trade slumped, unemployment was high, not as bad as U.S., taxes were raised
Germany- Hit hard, treaty of Versailles didn't help, international trade war-every country put on high tariffs and wold trade was cut down significantly. The depression in Germany brought on the Nazi's and Hitler.
Soviet Union/Russia- just became Communist because of Bolshevik revolution, country fared well because gov't made jobs and things for everyone (everyone is equal) cruel though because they killed 10 million people who resisted (things like getting their farms taken away so it could be a gov't farm.)
World- all notes, NOT JUST A U.S. PROBLEM, WORLD WIDE
Shelby County- people losing farms over half, didn't want to ask gov't because they were mad at gov't farmers wanted to keep their farms to themselves. co-signing-go to neighbors and other farmers and ask them to take over about half of the farm and if they would they would share the profit and the expenses. Unemployment up, towns were proud and didn't want to need help but they needed too, don't want money want work. when gov't stepped in-WPA. Everyday life- no jobs, no new clothes, no public events, no new livestock. Making money- milk cows, feeding hogs, everyone had cars, people couldn't buy tires because of the demand for rubber during WWII, drug store gas cost stamps to regulate how much gas people got
Shelby county- farm values caught in half, Hoover came to Des Moines and talked about how he was on a farm until he was 10, everything dryed up. Earling bank- I.O.U.'s they will give you something and then you pay them back later. weather- hot, then very cold, serious droughts, bad crops, some people died from the heat. wells-dug more thinking they could get more water and created jobs for people. farmers- insects invaded crops so they tried to use poison and it destroyed crops.
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