- What were the causes of the SMC and GD?
during 20s stock market was booming!
no one thought it could go down.
stock-share of ownership over a countryWhen companys start profiting so does the person who bought stock from that company
stock market is where you can buy and sell stock
Causes: Buying on credit-People would use money that they don't have, the bank has.
overvalued stocks- being sold for way moe then they were worth. if stock was going up but the profiting of the money is going down. of the company is loosing money and stock is goin up, Just doesn't make sense. (overvalued stock)
Buying on Margin-allowed ire mffke ckass oeike ti unvest large amounts of money into the stock market.taking an loan out on a car with "promised" money thats not there. when stock started goin down, say you have 900 dollars of stock. and the stock market was goin down and so everyone wanted to sell there stock and usually only used by rich people.
no government regulation- not set good enough regulations for banks. o requirement for minimum capitol to start bank had been made. no limit to how much banks could lend out had been set.
news- October 24th-29th, 24th-lost 11% 28th-additional 13% loss 29th-loss another 12%. slow path to recovery. theyre were rich guys that thought they could stop and save the stop market. charlie mitchell tried to go in and stop all the stock market crashing. but he came out with no money at all!
once everyone found out about the crash in wall street so everyone started selling everything!! - We talked again about interest, pooling and not getting into credit card debit.
credit card companys love college students cause we don't have a lot of money.
lowing interest rates encourages people to buy more things. and borrow money. buying things are good for buying things by businesses making money. Then the business multiplies then that means hiring more workers. increase interest rates means stock prices would go down. they thought stock market was getting low so they raised interest rates. it was booming in the 20s by borrowing money.
This is a tough topic. so we have to work really hard to understand.
buy low sell high on stocks. that's what its all about!
What are the causes of the Great Depression?
--Main Reasons:
Stock market crash
Bank failures
Reduction in purchasing across the board
American economic policy with Europe
Drought conditions
~Stock MArket crash. many people invested all their money in the stock market
lost more then 40 billion dollars all though the stock market gained back some stocks it just wasn't enough.
~Bank Failures
over 9,000 banks failed. lots of people lost their savings. Banks that survived had no idea if they were going to survive for sure now.
~Purchasing across the board
wberone stopped buying items because they feared that more economical problems would occur.
this led to a reducton in numbers of items made and reduced the workforce. K
~Economic Policy with Europe
Business began falling
Government created the smoot-hawley tariff. Smoot-hawley tariff= to protect american companies in 1930. it charged a high tax for imports
- Children: would write to president for help.. shoes, clothing, money
Boxcar kids- children that ran from home and lived on railroads. Child labor laws formed. Girls dressed like boys. Ran from home
women: Men and women were affected differnt. Men felt like failures. women felt as if their household jobs were enhanced. not a lot of money to live off.
Men: went around looking for jobs. lost self esteem. left their families alot and in a 1940's survey 1.5 million men left their wives.
families: Marriages were put off bc they couldnt afford and same with divorce and birth rates dropped bc not enough money and income dropped severly. some families it made them stronger and others i tore them apart.
farmers: corn prices dropped 5 to 10 percent a bushel and they were burning their corn for heat. they lived off their land and got all food from their. they did a lot of bartering to things they need. children wore flour sack clothing
wealthy people: they werent affected. 40% of the country were not affected and they would try to help out the poor. they didnt notice the suffering. some lost a lot of money. the bragged about their wealth.
Living conditions: hoovervilles- a town made from any kind of material found. Homeless were living anywhere they could in parks and under news papers.
jobs: white men mostly got the jobs. women were thought to be stealing jobs from men so women would get fired and men would get the jobs. You had to have a job to live. 25% unemployment.
Dust bowl: drought and over plowing. 8 years long. worse drought ever.
- Hurbert Hoover.. west branch, iowa, august 10, 1874, orphan, lived with his uncle in Oregon, attended stanford for 4 years, 2 children herbert jr and allan.
Mining, civil engineer, businessman, humanitarian.
Ignagural address- dont have fear of the future their is bright hope.
accomplishments- sent america in the great depression, made the hoover dam. he made many attempts to end the great depression but none worked. All the good things he did were overlooked bc of the great depression. Didn't get re-elected. Franklin Roosevelt was elected.
He went after mobsters and persucuted al capone. added land to national parks. prison reform. Wrote childrens charter advocating protection to every child regarding race or gender. doubled vetrans hospitals. hoover plan (1/3 reduction of the worlds naval power)
Reconstruction Finance Corporation- created in 1932. Help economic activity during the depression. Made loans to foreign governments, provided protection against war and disaster damages, and engaged in numerous other activities.
Reconstruction Finance Corporation (trickle down theory)- They gave out money to big business to be used to hire people. 2 billion dollars in aide to state and local governments.
Mexican Reperation program- 500,000 Mexican people forced to leave to reduce aid services and make more American jobs.
Hoover went down in history as- uncaring. He actually was- strong believer in laissez-faire. He was in the right place but at the WRONG time. Too much government intervention would destroy individually and self reliance. He was very progressive. He was moving ahead but they Great Depression ruined it and made it seem like he was doing nothing. Because of all he didn't do he got a bad reputation that he sort of deserved.
Regected the leave it alone approach. He tried to convince people things were getting better but lost the nations support.
He lowered taxes and started public works projects.
- Franklin D. Roosevelt- Led the US from isolationism to victory over Nazi Germany and its allies in World War 2. He died office in 1945. New Deals- Economic projrams- (Relief- for the unemployed and poor. Recovery- of the economy to normal levels. Reform- of the financial system to prevent a repeat depression.) New Deal 1- Focused on economic recovery, and on businesses to help the nation recover. New Deal 2 Focused on social justice, focused for on individual people.
Agricultural Adjustment Act (AAA)- The act protected farmers from price drops by providing crop subsidies to reduce production, educational programs to teach methods of preventing soil erosion. Payed them not to plant part of their land and to kill off excess of livestock. Crop prices were worthless and they did this to prevent over production.
Civil Works Administration (CWA)- Provided public works jobs at 15 dollars a week to 4 million workers in 1934. The jobs were temporary, for the duration of the winter. They created construction jobs for buildings and bridges.
Social Security Act- Provided aid for blind, deaf, disabled, and dependent children, and the Elderly of course.
Federal Emergency Relief Act (FERA)- Provided work to 20 million people. Gave grants and loans to states to operate relief programs. Provided direct aid to unemployed workers. Took over by social security and works progress administration.
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