Great Depression:
Causes:
- Stock Market Crash-October 24 1929. (Black Tuesday). Many people were , lost about $40 billion. Only affected about 5% of the population. Major causes buying on credit, buying on margin, and agricultural recession.
- Buying on credit allowed people to buy things now and pay later.
- Buying on margin allowed people to buy shares for 10% to 20%of their actual value.
- Bank failures-people began to lose their savings due to the deposits in the bank. They became more careful on who they gave loans out to. Over 9,000 banks failed.
- Reduction in purchasing across the board
- American Economic policy with Europe
- Drought conditions
Impact on the lives of people:
- Homelessness
- Hoover ville (towns of shacks made by homeless people)
- Starvation and illness
- unemployment
What the government did:
- Tried to create jobs. "the new deal"
- Roosevelt created the Agricultural Adjustment Act which paid farmers no to sell their products
- A typical ration by the government included flour, pork, split peas, corn meal, molasses, and cocoa.
- When Roosevelt took office
Long lasting impacts:
- People were not buying as many products
- People didn't take out as many loans
- lots of unemployment
- Started the Social security system
- the government set up a system that drained on taxpayer money
- families were separated
- tariffs increased quickly
- The FDI was set up so your money would be safe if the banks failed
Impacts on the stock market crash:
- Had a rippling effect throughout the economy and the nation
- The crash caused banks, then businesses, unemployment to raise, consumers to lose money, and businesses to lower prices.
- Stock holders lost money very quickly
First New Deal:
- intended to fix the economy from top down
- formed the Agricultural Adjustment Act which paid farmers to produce less
- Anti-monopoly laws and price fixing was also part of the new deal along with stabilizing wages
The Second New Deal:
- National Youth Administration-worked on getting unemployed youth jobs.
- National Labor Relations Act-focused on stopping employers from using intimidation to break up unions. As a result wages of the ordinary person rose.
WW2:
- as soon as the war began the new deal ended
- the same year US joined the war in 1941; the great depression ended
- The war ended because Roosevelt spent all the money needed to win the war which put more money into circulation
Europe:
- Smoot-Hawley tariff it raised US tariffs to historically high levels.
CCC:
- provided jobs for 2.5 million young Americans in forest and conservation program
- stands for Civilian Conservation
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