Essentials for US History--Semester 2 A Novel by Austin Mumm
1. Students will understand the impact the Great Depression and New Deal had on the US.
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As we all know, the stock market crash and the ensueing great depression of the 1930's affected not just the United States, but the entire world. It was a dark time in our country's history. In many cases, mass hysteria, crime, and chaos roamed free. Last semester, we covered a good range of topics that had to do with the Great Depression. I pasted in some of my smester test blog which takes up most of what is shown below.
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Struggling industries- Industries began to struggle because they had an extra large surplus of goods. People were spending money like never before. Companies began to overproduce in compensation. However companies made too many goods and did not get enough consumers. The company’s solution was to continue to make more, and lower the prices. This failed, and many companies went out of business.
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Housing starts to fall- Because people were buying their homes and goods on credit, the banks actually owned the homes. The banks had given out too much credit, and were not getting enough money back. Credit prices began to rise, and people couldn’t keep up. Housing prices fell because people were unable to pay for them.
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Farming surplus- Farmers were facing serious problems. There was a surplus of food in the country. Because of this, crop prices dropped. Farmers tried to buy more land in order to grow more food and make up for the money they would lose. This however failed to do anything but cause families to lose their farms to the banks because they could not sell enough crops to make enough money to pay for their mortgages and bills and whatnot.
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Farm foreclosures- Farmers were forced to foreclose their farms and homes in order to pay for all of their expenses. Many farmers were unable to support themselves and their families because of the price reduction on crops.
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Less consumer $- Consumers couldn’t be consumers anymore because they had no more money to buy things with. Companies were failing which were putting their workers out of a job and into the streets. People couldn’t make money which meant that they couldn’t buy goods. Companies couldn’t sell goods because nobody had money. Companies continued to go out of business which put more people out of work, which made more people not make money, which made them unable to spend that money… This became a seemingly endless paradox that inevitably ruined American consumption and economy.
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living on credit- See Above.
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Uneven distribution of income- Their were the “very rich” and the “very poor”. The middle class was basically nonexistent. The very rich wanted in no way to give the poor any of their money. While the very wealthy lounged around in their large homes, and wealthy communities, a very large part of the population scrounged for food and work alike.
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Low standard of living for many- Homes were becoming very cheap, shanty towns were being set up that composed of shacks, people were living in filth and tatters, and their was not enough food to go around. People no longer cared about competing financially with their neighbors, they were too busy trying to survive and maintain a sense of pride.
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Speculation- Speculation is a form of investment that does not guarantee a safe return of the investment, or the promise of receiving an adequate return on your principal sum or deposit. Some people used speculation as a last resort to make at least a bit of money. Most failed.
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buying on margin- Margin is borrowing money from a broker to purchase stocks. People hoped that they would be able to use that money to buy enough stocks to make a enough profit to pay off the broker and get back on their feet if the stocks could manage a climb in profit.
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Lack of regulation of the stock market- The government backed out of the economy which became “free markets”. There were no regulations or compensations, or subsidies to aid people, except for preventing force or fraud. There was also no single monetary system. All of these problems, and more contributed to failure within the economy.
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1929 Oct 29th (Black Tuesday)- Black Tuesday was the day the the stock exchange in New York crashed. Stocks had reached an outrageously all-time high. Many people could not afford the stocks, so they borrowed from the banks and other lenders to buy the stocks. People wanted to try and sell the high priced stocks for a large profit, pay off the lenders. This was a hopeful "get rich quick" scenario. All of a sudden, the stock prices dropped to extremely low prces. Everyone tried frantically to sel what they had befor eall was lost. All of those people couldn't pay back their lenders who were forced to go out of business because they could no longer make money.
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European depression- The European depression was mainely due to World War 1. Europe was still trying to rebuild after all of the hardship and destruction that the war had left on the land and people. America had loaned billions of dollars to Europe to help rebuild, and Europe was nowhere near ready enough to repay the debt. Europe was also very resentful in paying the U.S. back because they felt that the U.S. was about the only country that had not really suffered in the War. They came in late and bought their way through many situations and through military might. Europe felt that they had suffered enough without having to repay the U.S. who hadn't lost much of anything.
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Hawley-Smoot Tariff Act- The U.S. was trying to be the greatest powerhouse in the world. They wanted to be nearly completely dependent on itself with little help from the world. Tariffs were being put on foreign goods that were being imported into the country. The Hawley-Smoot Tariff Act raised the tax on imported goods to such high prices that no European merchant could sell goods to America. This crippled much of Europe's industry and economy until they too were forced into depression (along with the other factors of course). The European Depression did nothing but further the United States's depression.
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1. What is Pooling- Pooling is when a group of high up investors would pool together their money to buy a stock, inflate the price, and then sell the stocks for a large profit to the public. M.J. Meehan was the leader of one of the most successful stock pooling in history. He and his buddies made about $100 million worth of today's standards for about one week of work.
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2. What did the Federal Reserve Board do during this time- The Federal Reserve system realized that the stock market was about to fail unless dramatic action took place to prevent it. The Federal Reserve Board raised interests rates to try and prevent people from buying on margin. People saw the attempt to raise interest rates as a bad thing.
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People started trying to sell all of their stocks so that they would not lose everything they had. This was known as a panic. Interest rates continued to rise and more and more people panicked.
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The New Deal was an FDR's attempt to get America back onto its feet during the Great Depression. The second New Deal was aimed more at helping the the smaller people in society and the First New Deal was aimed at helping the high flung of society like big businesses and whatnot.
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The three R's were Relief, Recovery, and Reform. There were critics to the New Deal. People felt that FDR was doing way too much and that he was becoming a communist socialist. Others felt that Roosevelt was not doing near enough with his plans. Townsend was a critic who felt that FDR was not doing enough for the elderly.
FDR was upset with the Supreme Court because they kept declaring multiple New Deal plans unconstitutional. Tey were doing this to protect the rich and powerful. FDR responded by adding new Supreme Court Justices that would pass everything that he had to offer. This never went through because it would have given him power to do whatever he wanted to do. Roosevelt lost some support from this.
During the first 100 days was FDR's promise to do as much as he could to help the country and then report to the country on how he and the country were doing. He would do this through his firseside chats. These were radio broadcasts given by Roosevelt himself that would give the citizens of the country an idea of how the rest of the country was doing.
Priming the pump was the governments attempt to throw money back into th economy. Deficit spending is when the country spends more money than we have.
What was the New Deal(1st and 2nd) and it's goals(3 R's)?
3 R’s: Relief, Recovery, and Reform.
Relief- Roosevelt Felt that immediate action needed to take place in order for the economy to stop declining. He ordered a four day bank holiday so that the situation could be assessed and that people would not continue to try and sell everything which would continue to put the economy to crap.
Recovery- Both temporary and permanent programs were set up to provide aide to the poor and those who were likely to become poor. Some of these include the Agricultural Adjustment Act, Public Works Administration, and the Home Owner's Land Corps.
Reform- These were more of the permanent organizations permanent that were to be set up to further protect what American society had left and could not afford to lose completely. The Soil Conservation Act, Federal Deposit Insurance Corporation, and the Social Security Administration were included with the large number of organizations and relief groups that were established.Why did people criticize the New Deal? Why did people criticize the New Deal? Huey Long was a critic of the New Deal. He was a lawyer who vowd to fight for the poor people. Long started the "Share Our Wealth" He voted for a better distribution of wealth in the country. He wanted the rich to give up their wealth to give it to the poor who did not have to work for it. Long was a socialist on the verge of communism. He was the Robin Hood of his day. I know it sounds terrible, but it was a good thing that Long was shot and killed because he may have brought communism to America.
Why was FDR upset with the US Supreme Court and what did he do to try to solve
this issue? FDR was upset with the Supreme Court because they kept declaring multiple New Deal plans unconstitutional. They were doing this to protect the rich and powerful. FDR responded by adding new Supreme Court Justices that would pass everything that he had to offer. This never went through because it would have given him power to do whatever he wanted to do. Roosevelt lost some support from this.
How did the New Deal help:
Unemployed- PWA- Created new jobs, especially construction jobs like building
schools, dams, roads, bridges, hospitals, courthouses, and much more. The USHA
gave over 650,000 jobs to low income people. These jobs were contruction
projects for apartment complexes for the poor. It was a good program that
basically paid for itself. The USHA led to the PWA. The NYA is the NAtional
Youth Administration.
Civil Works Administration- Created November
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