1. what were the causes of the Stock Market Crash?
- **because there was so much money to be made, common people began to play the stock market with money borrowed from banks.
- **stock-where people own a little bit of the company/share ownership.
- buying on credit-because people were in debt they stopped buying things and distributing money into the economy.
- overvalued stocks- investors expected the value of stocks to continue to increase. never considering that eventually the upward trend would cease.
- buying on margin-allowed more middle class people to invest large amounts of money into the stock market. buy now pay later!
- over production-the drop in value of wheat stocks greatly contributed to the stock market crash of 1929 as a whole. greatly affected the people but most of all farmers.
- no government regulations-not set good enough regulations for banks.no requirement for minimum capital to start a bank had been made. no limit to how much banks could lend out had been set. affected not only the U.S but all around the world. a lot of people played the stock market.
- **stock prices were grossly inflated, they did not have real value.
2. causes of the Great Depression?
- stock market crash- main cause of G.D. though it regained some of its losses, it was not enough by the end of 1930.
- bank failures-deposits were uninsured and as banks failed lost their savings. during the 1930's 9,000 banks failed.
- drought conditions- drought caused people not to pay their, and debts. people had to sell their farms for no profit. name is the dust bowl. dust bowl-dust storms and destroyed parts of Ag production.
- American economic policy with Europe- it charged a high tax for imports. led to less trade between America and other countries. 3.What impact did the stock market crash and great depression have on the loves of people in the U.S?
- children: children would write to presidents for help: shoes, clothing, and money. child labor laws were formed. the children would run from home. the girls dressed like boys.
- boxcar kids-children that ran from home and lived on railroads.
- men and women: men felt like failures. women felt as if their household jobs were enhanced. there was not a lot of money to live off of at that time. a lot of men just left their family.
- families: marriages were put off couldn't afford it. divorces were put off couldn't afford it. birthrates dropped. family income dropped 34%. Farmers: corn prices dropped/ they burned their corn because they could afford their own coal. children had to wear flour sacks for clothes. used what they could off of the land.
- living conditions: hoovervilles- a town made from any kind of material found. homeless- the homeless were living anywhere they could including park benches and under news papers.
- jobs: more and more people were looking for jobs and because pf that most of the obs were given out to the whites. women were usually fired die to the fact that it was thought that they were take jobs from the men. getting a job was essential to living at the time.
- dust bowl: it was a drought and over plowing. it was a total of 8 years. longest drought in history.
3. FDR presidency: new deal
- three R'S:: relief for unemployed and poor. recovery or the economy to normal levels. reform of the financial system to prevent a repeat depression.
- Agricultural Adjustment Act (AAA)- this act protected farmers from price drops by providing crop subsidies to reduce production, educational programs to teach methods to prevent soil erosion.
- Civil War Administrations- provided public work jobs at $15/week to four million workers in 1934. they hired 4 million people.
- Social Security Act- this act provided for the blind, deaf, and disabled, and dependent children and also the elderly.
- FERA (federal emergency relief act!)- provided work for over 20 million people. gave grants and loans to states to operate relief programs.
- National Youth Administration- focused on providing education work for people between ages 16 to 25.
- REA (Rural Electrification Administration)- provided federal loans for the installation of electrical distribution systems to serve rural areas on the United States.
- Glass-Steagall act-5 or more Federal Reserve System member bank (capital stock $5 million.)
- Security Exchange Commision- a government created by congress to regulate the securities makers to protected the investors. holds primary responsibility for enforcing the federal securities laws. regulates buying and selling. had to power to license and regulate stocks.
- Works Progress Administration-employed unskilled people to do public projects. provided jobs for 8 years. created 3 million jobs for men and women.
- Tennessee Valley Authority- the federal government build series of dams to prevent flooding and sell electricity. still around today.
- Railroad Retirement Act- replaced the social security act for rail road industry employers and employees and provides monthly annuities for employees based on age and service or on disability.
- Civilian Conservation Corps- provided 250,000 men with housing, food, and shelter for working on the government.
- Good Neighbor Policy- purpose was to stay out of Latin American affairs. took troops out of Haiti and Nicaragua. ended with the threat of the Cold War.
4.what long lasting impact did the great depression have on the US and the world?
- The FDIC-it started after the great depression to make sure the peoples money would be safe if the banks failed again. still around today.
- 6 values of the FDIC-integrity. competence. teamwork. effectiveness. accountability. fairness.
- SEC-was to regulate the stock market and prevent in proper gain of benefit.
- stock pool-pool everything together.
- buying on margin-borrowing
- stock watering-in an asset with an artificially inflated value.
- there was a lot of rioting
- France's unemployment went up to 15%.
vicious cycle of great depression:
- companies lose money so they lay people off.
- unemployment rates go up and less people buy goods as income has dropped.
- companies profits fall so they have to lay more people off or close.
- then the cycle repeats itself.
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