1. What were the causes of the stock market crash of 1929 and the Great Depression?
Stock Market:
Buying on margin, overproduction and under consumption, banks investing, stock pools and watered stock, unrealistic view of the market, weak banking system, Federal Reserve increased interest rates (to get people to stop borrowing money from the banks, but lowered the economy, people weren't spending money), No government regulation of the stock market.
Great Depression:
Stock Market Crash of 1929-lost all money, couldn't buy goods, budgeting money and trying to get by with what they had.
Bank Failures-Bank invested people's money, and bank accounts were uninsured. Throughout the 30's 9,000 banks closed. Banks were no longer as willing to give people loans.
Overproduction and Under Consumption-unemployment rose above 25%. People from all classes stopped purchasing items. Factories produced too many goods. Factories lost money because of under consumption.
American Economic Policy with Europe-government created Smoot-Hawley Tariff (1930). purpose was to help protect farmers against agricultural imports. Massive agricultural overproduction in 1920's, led to declining farm prices. Raised US tariffs to historically high levels(around 40%) Led to less trade.
Drought Conditions-not a direct cause. Occurred in Mississippi Valley in the 30's. Many couldn't pay taxes or other debts. Had to sell farms with no profit. This part of history is known as the Dust Bowl.
2. What impact did the stock market crash and Great Depression have on the lives of people in the United States?
Stock Market Crash: Left lots of panic, had no money, lost it all in the crash. Lost 14 billion dollars on Black Tuesday and 30 billion lost throughout the week.
Steel business-at an all time low.
Construction business-no one had the money to build.
Car sales-no one had money to buy, sold cars to get money for something else
High debt, owed money to Brokers, but didn't have the money to pay. Unemployment, no spending of money, so no one could afford to run a business. People lost homes, jobs, sold cars. Businesses were hurt the most, overproduction and under consumption, laid people off so raised unemployment rate. Vicious Cycle of the Great Depression:people didn't buy goods, businesses laid off people, which lead to businesses closing/laying more people off. Reason depression got worse and worse.
Great Depression:
Unemployment-cause of a lot of hardships. White men held the most high paid jobs, but during Depression white men took low paying jobs. Caused discrimination. Blacks thought that they were being discriminated against because they weren't getting jobs and were getting fired to have whites take their spot.
The Homeless-sue to the unemployment, the number of homeless people was on the rise. Many people lost their houses, and many moved to "Hoovervilles".
Hoovervilles-shacks made of cardboard, sheet metal, and plywood. Named after president Hoover. Central Park was one of the biggest Hoovervilles of the great depression.
Boxcar Children-teenagers left their homes and rode on trains for long periods of time. Felt like a burden to family, didn't want to be that so they ran away to benefit family.
Farmers-WWI produced record numbers. Prices fell, so they produced more. Many went bankrupt and many lost their farms, weather was also terrible for crops(Dust Bowl)
Starvation-Hoover,"Nobody is actually starving. The hobos are better fed than they have ever been". 1931-20 NY deaths from starving. 1934-110 Deaths from starvation.
Breadlines-many breadlines were formed during the Great Depression. supported by churches, missions, and charities.
3. What did the United States government do to help alleviate the problems the Great Depression brought to our country?
Laissez fairre-"Let alone" government stays out of business. Need to have some regulation of business. This really hurt businesses in 1930's. Hoover didn't help out the businesses and many failed.
Rugged Individualism-people should fend for themselves. Find success if you work for it. Lots of people who worked hard, still didn't have any money during depression.
Trickle Down Theory-Government give tax breaks to wealthy who own businesses, and in return the wealthy create jobs for those who need them.
Reconstruction Finance Corporation (RFC)-1932-Gave loans to banks, state and local governments and business' to create project/jobs for people. Gave states loans for emergency relief needs. Started under Hoover. Not as successful as Hoover had hoped and it dissolved in 1946 after WWII.
President Hoover
Federal government did as little as they had to. They left a lot of the choices and decisions to the people.
Repatriation-Hoover wanted immigrants to go back to their home country so more jobs were available.
National Credit Corporation-was to help save small banks.
Roosevelt-New Deal(Goals/1st and 2nd)
New Deal-Programs created by Roosevelt to help with the devastation of the Great Depression. Made Roosevelt a hero for millions of Americans.
1st New Deal-created to help people get jobs, end overproduction and raise price of crops, regulate the stock market, make investments safer, put more faith in the banks. 1933-1935
2nd New Deal-improve use of national resources, increased security towards old age, unemployment and illness, in favor of the poor, old, farmers, and labor unions. 1933-1940
3 R's-Relief. provide help for the unemployed. Recovery. help the economy bounce back after the depression. Reform. prevent a crisis from happening again(reforming economic system, economic crisis)
Differences between two-programs were supported more in the first new deal, first deal tried to restore economics and the second deal was to help people's lives, first deal dealt with banking reform and the second deal dealt with jobs.
How did the New Deal impact the following:
unemployed:
Farm Tenancy Act(1937). Aid to poor farmers, homestead project, loaned money to the farmers, created camps and healthcare programs.
Civilian Conservation Corps (CCC). Provided jobs for single men, ages 18-25. 3 million men had jobs from this program. They gave the men shelter, clothing and food. They were paid $30 a month, but had to send $25 to their family.
Federal Emergency Relief Administration (FERA). jobs for unskilled adults. They would can food, garments, matresses, bedding.
Civil Works Administration (CWA). Mostly unskilled workers. Helped fix/build roads bridges schools.
Public Work Administration (PWA). Helped build dams, bridges, hospitals, schools, roads, railroads.
Works Public Administration (WPA). Largest of any agency. Provided more jobs than any other administration. Construction jobs, orchestra jobs.
young people: Kids didn't have jobs, so they were leaving home so they were no longer a burden to their families.
Civilian Conservation Corporation (CCC)-INFO ABOVE
National Youth Administration (NYA)-provided education, jobs, counseling, and they provided aid. Some students worked part time in the schools, they did this so they could continue to attend school. They also provided part-time jobs for people who dropped out of school.
energy:
Rural Electrification Administration-Nearly 90% of urban houses had electricity by the 1930's. Private companies argued that it was too expensive to string electric lines to isolated rural farmsteads. Took business from private companies, which led to competition. Helped get electricity to rural farmsteads.
Tennessee Valley Authority (TVA)-created in 1933. It provided navigation, flood control, electricity generation, fertilizer manufacturing, etc. Was a result of Senator George W. Norris of Nebraska.
factory workers:
Factory Conditions-Dirty, crowded, and dangerous. Factory jobs were low paying and unethical. Children were working just as long of days as their parents and also put into dangerous situations.
Nation Industrial Recovery Act(1933)-The act was designed to allow business to set their own standards of production, prices, and wages. Guaranteed collective bargaining rights to the workers. (a process of negotiations between employers and a group of employees aimed at reaching agreements that regulate working condition.) Supposed to assist the nations economic recovery during the Great Depression
Wagner Act (1935)-Fave people the right to engage in collective bargaining for better terms and conditions at work. Guaranteed basic rights of employees to organize into trade unions. Gave people the right to take collective action.
Fair Labor Standards Act(1938)-Introduced a maximum 44 hour work week. Established a national minimum hourly wage at 35 cents. Banned child labor.
labor unions: Organization or workers formed to protect their rights and interests. The number of employees in labor unions was going down. Not enough employees had enough money. In 1933 about 3 million in were in unions compared to 5 million earlier.
Fair Labor Standards Act- work a maximum of 44 hours a week. In 1949 made minimum wage $0.75. Under 16 years old cant work during school hours. Roosevelt called this the most important part of the new deal.
National Industrial Recovery Act-attempted to raise prices after deflation. Remained in effect for only 2 years. Created new labor standards such as higher wages and shorter hours. Supported and enforced an alliance of industries.
Section 7A-Federal government gave labor unions the right to exist. Workers/Employers can't put down labor unions. Can't discriminate against you for being a labor union.
farmers: Depression for farmers started even before the Stock Market Crash. Farmers were blossoming during WWI, because they had to make a lot of food. When prices dropped after WWI they couldn't pay back their loans.
Causes: over-production of crops during WWI era, high prices caused farmers to expand at the cost of borrowing from the bank, after war prices dropped.
Agricultural Adjustment Act (AAA)-paid farmers to farm less. They ruined their crops/livestock to get money. They wanted to drive crop prices up by getting rid of the surplus.
Rural Electrification Act (REA)
Farm Security Administration-took pictures of farmers and showed that the farmers didn't have it easy. Gave small farmers and tenant farmers money to purchase farms, tractors and other farming supplies.
Farm Tenancy Act-moved people from the city who were having problems and they became farmers.
Soil Conservation and Domestic Allotment Act- allowed the government to pay farmers to reduce production so as to "conserve soil" and prevent erosion. Educated farmers how to use their land without damaging them. Wanted to teach farmers how to prevent a future dust bowl.
elderly/poor:
Elderly-Social security:pays money to the elderly because they no longer have a job to get paid. Social Welfare Benefits, Elderly assistance program
Poor-lots of charity for the poor because the government didn't have any programs. Long Share our Wealth program: pushed for redistribution and benefits for the poor.
homeowners: Many people/banks were loosing money and couldn't pay mortgage. Couldn't pay for homes, banks took them over. Couldn't get loans to pay for homes.
Homeowners Loan Corporation Act-this act helped the banks out and helped them refinance their bands with money so homeowners were able to pay for their homes again. This act also gave each homeowner 15 years to pay off their loans, with low interest rates.
Federal Housing Administration(FHA)-insured loans made by banks and other private lenders for home building and home buying. The goals of this organization are to improve housing standards and condition and to provide and adequate home financing system for middle and lower class people.
United States Housing Authority(USHA)-lent money to states or communities for low-cost home construction. Homes were designed for low-income and homeless people.
artists/musicians: Many banks were shutting down, and the musicians weren't earning enough money. Music was falling apart, nobody wanted their music. Many artists kept painting, but nobody had the money to buy their works. They ended up losing money, and had no way of income.
Federal Music Project (WPA)-this project helped musicians become employed and earn money. This project helped musicians earn money.
Federal Art Project-this project helped artists with making art. People from all over helped make and sell over 200,000 products. These products were posters, paintings, signs, etc. Almost all paintings were about the New Deal and Great Depression.
women/African-American/Native Americans:
Women-some sexism involved during great depression. More and more women were out in the workplace, but many felt that they should give up their jobs for the men to make money for the family. Most women stayed at home and took care of the kids. No program designed specifically for them
African Americans-No programs designed specifically for them. Weren't really helped by any programs.
Native Americans-IRA:Indian Reorganization Act. Trying to undo bad things we did in the past. wanted them to go back to their tribal ways of life. Children could be taught old ways, helped Native Americans go back to their culture.
banks/stock market:
Problems with Banks-bank runs(people would get worried about their investments, so they would go withdraw their money. No faith in banks. Banks invested money in the stock market and when it started to crash, they lost a lot of people's money.
Bank holiday-banks close down because Roosevelt wants people to stop having bank runs
Emergency Banking Act-stated that only the federal reserve backed bank and allowed them to operate in the U.S.
Federal Deposit Insurance Corporation(FDIC)-insurance on your deposit. Banks could no longer invest people's money.
Ended the use of the gold standard-you could trade your money in for gold. Today our money is backed by confidence in the dollar.
Problems with the stock market-no buying, all selling. Prices plummeted. 12.9 Million lost on Black Thursday. 16.4 million lost on Black Tuesday. Stock prices went down by 20%.
Securities Act of 1933-companies had to register stock sales, regular financial disclosures(had to show people past stocks.
Securities Exchange Act of 1934-Created SEC. Government organizations that make sure people/companies are following the rules of the Stock Market.
1935 Public Utility Holding Company Act-limits the activity of utility companies.
US Securities and Exchange Commission 1934-stock prices match with companies actual value.
4. What long lasting impact did the Great Depression have on Shelby County, Iowa, the US and world?
Shelby County: Lots of people lost their farms. Government tried to step in, but the farmers wanted to keep their farms to themselves. Co Signing-share the farms expenses and profits to keep the farms until the end of the depression. Unemployed didn't want welfare from the government, but eventually they had to. It was a last resort, they were embarrassed.
Everyday Life:nobody spend money, no new clothes, weren't buying more livestock, no public events, more than half lost their jobs and farms.
In Earling IOU's were popular. Banks would allow people to have an IOU so that they could purchase some of their needs.
Weather:Dust Storms, Extreme weather, high and lows, crops couldn't handle the weather conditions, death because of the weather. Droughts. Crops would die out, dug wells to get water, but wasnt as successful as they had hoped. Bran poison was used to kill bugs that were destroying crops.
Iowa: economic falls led to Great Depression. Dust Bowl caused crop damage. Farm prices dropped after WWI.
Iowan Farmers: during WWI farmers worked to produce record amounts of crops and livestock. Prices were very low during the 10's. people tried to produce more. Prices dropped very low in the 30's. people began to burn corn instead of coal because it was cheaper. Farmers wanted government to help, went on Farm Strike. AAA would pay farmers to farm less.
Works progress Administration and Public Works Administration-lots of construction projects helped many people.
Civilian Conservation Corp.- helped with parks
Japan: Economy shrank 8%. Devaluation of Japanese Currency, Affect by the depression in 1932. Depended on the US especially for oil. Depended on imports, but with the high tariffs they couldn't afford to trade.
France: weren't affected until 1930. Overvalued currency. Political unrest. Riots in Paris in 1934.
Britain: Economy was already struggling because of WWI. US stock market crash caused world trade to slump, prices fell, taxes were raised.and credit dried up. Some parts of the economy thrived however like the suburbs building boom.
Germany: Still struggling after WWI. International trade war. Stopped a lot of goods from being traded among countries.
Soviet Russia: Turned into Communist Economy. Stalin Led the country. Wasn't has heavily impacted by The Depression, but people of the country were affected.
Was a World-Wide Depression. Hit all around the world.
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