2. Causes of the Great Depression
The top five reasons of the Great Depression
1)The Stock Market Crash of 1929
People think that the stock market crashed on a day called Black Tuesday which happened October 29, 1929. Within the two months after Black Tuesday people that had invested in stocks had lost around $40 billion dollars. In 1930 they had regained some money in the stock market but not enough to prevent the Great Depression.
2)Bank Failures
In the 1930's during the Great depression, over 9,000 banks failed and people just basically lost their savings. The banks that did survive became less willing to give out loans to people and were scared that they would fail like the other 9,000.
3)Reduction in Purchasing Across the Board
The Reduction in Purchasing Across the Board means that people just stopped buying things. People in all classes limited or just stopped purchasing things all together. It was kind of a chain of events; people didn't have money so people stopped buying things, so the companys didn't need to produce as many products. Because of the reduction in production, people were losing jobs and there weren't many jobs availiable. Families were losing money and their things were getting repossessed because they weren't able to pay off their loans from buying on credit. The uneployment rate went to 25% which meant less money being spent to help put back into the hurting economy.
4) American Economic Policy with Europe
When businesses starting falling under, the government made the Smoot-Hawley Tariff (raised U.S. tariffs on imported goods). This raised the prices of imported goods and caused the trade between other countries to decline. This, in turn, would cause people to spend more of their money on American-Made goods and put money back into our economy.
5)Drought Conditions
These conditions later got called "The Dust Bowl". It was when there were major drought conditions in the Mississippi Valley. This caused the farmers to lose all profits and they often had to sell their farms and give all of their profit to the government.
3. Story of the stock market crash-not the causes(467-469)
The roaring 20's was the decade that lead up to The Great Depression. People were buying on credit and then when the stock markets crashed they stopped paying back their credit and then their things were getting repossessed. Between 1920 and 1929, the value of stocks more then quadrupled, and more and more people were borrowing money from the banks so they could be part of the action.
When Roosevelt became president in 1933 the banks that had survived were suffering. He took action and closed every bank in the country for three days calling it a "bank holiday". When they were reopened, he put strict limits on the banks on what they could and couldn't do.
14. Hoover's philosophy/Cautious steps(479)
Hoover didn't like the idea of directly giving help to the people that needed it from the government. He believed in individualism which was being your own strength through difficult times. He also thought that the people from the higher classes needed to help the lower classes. Hoover tried to organize relief foundations like the red cross and other to help people in dire need of help. Although he tried to help the people he didn't directly try to help the economy.
Hoover called together business men, bankers, and laborers and asked that they all worked together to improve the economy.
Hoovers Cautious Steps
Establish a Reconstruction Finance Corporation, which would use Treasury funds to lend to banks, industries, agricultural credit agencies, and local governments;
Broaden the eligibility requirement for discounting at the Fed;
Create a Home Loan Bank discount system to revive construction and employment measures which had been warmly endorsed by a National Housing Conference recently convened by Hoover for that purpose;
Expand government aid to Federal Land Banks;
Set up a Public Works Administration to coordinate and expand Federal public works;
Legalize Hoover's order restricting immigration;
Do something to weaken "destructive competition" (i.e., competition) in natural resource use;
Grant direct loans of $300 million to States for relief;
Reform the bankruptcy laws (i.e., weaken protection for the creditor).
Comments
Good job! Be sure to include personal thoughts though.