1930s and The Great Depression

1930s andThe Great Depression

U.S. History

I. Underlying Causes:1. Overproduction of goods.

a. Demand for goods was high during WWI. b. Prices were up (inflation). c. After the war, demand for goods decreases. d. Prices drop and profits drop.

I. Underlying Causes:2. Unemployment

a. Factories laid off workers to meet peace time production. b. Returning soldiers replace women and minorities. c. New machines replace workers.

I. Underlying Causes:3. Old and decaying industrial base.

a. Outdated equipment made some industries less competitive.

I. Underlying Causes:4. Farm Crisis.

a. Farmers lost markets after the war.

b. Produced more than they were able to sell.

c. Demand drops, prices drop and profits drop.

I. Underlying Causes:5. Credit

a. Easy to getb. Retailers keep prices high.c. Allowed people to buy on credit instead of lowing prices.d. People wanted to buy material items - cars, radios, etc.e. People couldnt pay off their credit. Went into debt.

I. Underlying Causes:6. Unequal distribution of income.

a. Too little money in the hands of working people, who were the majority of consumers.

I. Underlying Causes:7. Banking System

a. Deeply invested in farms and factories.b. Farmers couldnt pay off debts.c. Factories couldnt pay off debts.d. Banks went bankrupt. 1929-1932 6000 banks closed.

I. Underlying Causes:8. International Trade

a. Tariffs restricted trade between countries.

b. Countries couldnt pay off war debts.

II. Immediate Cause:1. Crash of the Stock Market

a. October 29th, 1929 (Black Tuesday)

b. Event that marks the beginning of the Great Depression.

c. Didnt cause the Depression.

II. Immediate Cause:d. Speculation - investors bought on the chance that prices would go up.

e. Buying on Margin - paying a small amount of the stock price and credit to buy the rest. Worked as long as prices increased.

f. Credit allowed many people to invest in the Stock Market.

III. Presidents:Herbert Hoover (Rep) 1929-1933

1. Wins the election of 1928 - People were happy with the Republican leadership that brought the economic boom of the 1920s.2. Theme of Office - Rugged Individualism. Didnt believe in gov. intervention to help the countrys economic troubles.3. Blamed for the Depression.

III. Presidents:Franklin D. Roosevelt (Dem) 1933-1945

1. Wins the elections of 1932, 36, 40, 44 - only President to win four elections.2. Theme of Office - New Deal strongly believed in government intervention, established numerous programs, agencies, policy changes. Many still in practice today.

IV. New Deal: 1. FDRs program to get the country out of the Depression.

2. Three part plan: Relief, Recovery, and Reform.

V. Relief:CCC - Civilian Conservation Corps. (1933) - provide jobs for single males on conservation projects. Paid $1 a day.

FERA - Fed. Emergency Relief Admin. (1933) - main goal was alleviating household unemployment by creating new unskilled jobs in local and state government

V. Relief:PWA - Public Works Admin. (1933) - created jobs on gov. public works projects. It built large-scalepublic works such as dams and bridges, warships, hospitals and schools.

EMBA - Emergency Banking Relief Act. (1933) - This act allows only Federal Reserve-approved banks to operate in the USA.

V. Relief:FHA - Fed. Housing Admin. (1934) - insured mortgage loans for building and repairing homes and improved housing standards and conditions. Still here today.

REA - Rural Electrification Admin. (1935) - aid farmers in the electrification of their homes.

V. Relief:WPA - Works Progress Admin. (1935) created millions of jobs in construction building many public buildings, projects and roads and operated large arts, drama, media and literacy projects.

FSA - Farm Security Admin. (1937) - helped farmers buy needed equipment.

FCIC - Fed. Crop Insurance Corp. (1938) - insurance protection against unavoidable loss of crops.

VI. Recovery:AAA - Agricultural Adjustment Admin. (1933)- Its purpose was to reduce crop surplus and therefore effectively raise the value of crops.

CWA - Civil Works Administration. (1933) - created construction jobs, mainly improving or constructing buildings and bridges.

VI. Recovery:FCA - Farm Credit Admin. (1933) - long and short term loans for farmers.

FDIC - Fed. Deposit Insurance Corp. (1933) - insured bank deposits and loans, currently up to $250,000

VI. Recovery:NRA - National Recovery Admin. (1933) - created from the National Industrial Recovery Act. The admin. established codes for 40 hour work week and minimum wage.

NLRB - National Labor Relation Board. (1935) - settled disputes between employees and employers (unions).

VII. Reform:HOLC - Home Owners Loan Corp. (1933) - low interest loans to homeowners who couldnt pay their mortgage.TVA - Tennessee Valley Authority. (1933) - developed resources /in the Tennessee Valley.

VII. Reform:SEC - Securities Exchange Comm. (1934) - regulated Stock Market practices.

FCC - Fed. Communication Commission (1934) - regulated radio, telephone, and telegraph.

VII. Reform:BA - Banking Act. (1935) - regulated the nations money supply and the interest rates.

NYA - National Youth Admin. (1935) - provide job training for youth and students.

VII. Reform:SSA - Social Security Administration. (1935) - est. the social security system: Retirement and disabilities benefits.

USHA - United States Housing Authority. (1935) - Develop adequate housing throughout the country.

VII. Reform:FDA - Food and Drug Admin. (1938) - Responsible for approving food and drugs for widespread use.