Study Review- Great Depression

1. One of the gloomiest times during American history occurred in the 1930s- The Great Depression times. With new products, increased demands, and faith in the stock market, the U.S. prospered during the '20s, but soon crashed afterwards as these demands lessened and the stock market eventually crashed. In a sense, Americans had so much confidence in their nation that they made over-confident decisions...over-speculation and the Hawley-Smoot tariff are just a few of the factors that triggered the Depression. This left many jobless/or economically suffering, banks closed, and other countries were affected, as well, when Congress issued the Hawley-Smoot tariff, particularly affecting farmers and business workers. Two presidents served during this time, but one of them, Franklin D. Roosevelt would help the nation restore its pride and build up its suffering economy.


2. Causes
The causes of the Great Depression were an unstable economy, uneven prosperity, overproduction, government policy, worker and farm issues, and over-speculation.
A. Over-speculation: People had too much faith in the stock market and put a lot of their money into purchasing stocks. This was very important because all of these people were effected (heavily in debt) when the stock market crashed.
B. Government Policy: Hawley-Smoot has negative effects on U.S. trade, AAA program hopes to raise prices and stop overproduction. These were important because the Hawley-Smoot tariff worsened the Depression, while the AAA helped to improve it a little.

C. The economy became unstable due to the stock market crash. This forced banks to close and become in debt, and consumer spending dropped because people couldn't afford to buy goods anymore.
1. Uneven prosperity: Most people were very poor (average workers) because overproduction forced prices much lower, while only business bosses were still quite rich.
2. Overproduction: The mass production of consumer products. This just added to the increased economic depression, and is extremely important because it hurt workers and farmers alike.
3. Worker issues: Because of mass production, workers receive less pay and get into deep poverty, go on strikes.
     Farm issues: Because of increased trading taxes, issued by the Senate, less farming sales plus overproduction hurt farmers greatly.

3. Effects
A. Poverty: Thousands of people unemployed causes extreme poverty, esp. for workers and farmers who were poor to begin with before the Depression, but grew even poorer as the Depression continued on.
B. Society: Many people jobless, dependent upon government and New Deal acts
C. World: Decreased trade w/other countries (Hawley Smoot tariff), all banks effected

IV. Solutions
A. Hoover- American president during the Great Depression.
1. Volunteerism: Hoover's way of obtaining 'non-governmental funds' to aid the economy. Hoover's plans were actually too passive, and ended up inefficient.
2. Public Works: Created by the government to raise employment rates, but really did not help the economy.
3. Hawley Smoot: Tariff on American goods, causing world trade to decrease. This cut really hurt farmers and business workers, and just added to the Depression.
4. The RFC: This was set up by Hoover to try and help companies through loans.
B. Roosevelt- American president following Hoover.
1. The New Deal: Set up to help restore the nation, as well as American citizen nationalism.
A. Alphabet Soup
   - HOLC: bought mortgages- lessened repayment due dates & interest
   - FCA: Lent mortgage money to farmers, lessened interest
   - CCC: Provided outdoor labor work for young men, helped unemployment rate drop, helped economy progress a little
   - CWA: Employed workers to work on public works
2. Second New Deal
A. CIO: Union organizer group
B. Social Security also greatly helps jobless, poor
C. WPA: financed projects including plays, art
     FSA: Farmers work to stop mass production, prices raise

V. Criticism
B. Political criticism came from both the left and right.
A. Conservatives (right): Republicans who disliked government spending, argued too many regulations on the states and business
B. Liberals (left): Democrats wanted a more aggressive New Deal
-more federal government involvement
-disliked unequal distribution of wealth

VI. Effectiveness
A. Changes in US- Social security introduced, more reliance on federal government, New Deal system providing benefits to citizens
B. Unions- ALLOWED, significantly grow in number, strikes
C. Culture- Schools close (education can't be first priority in a lasting depression), migration brings different cultures to other parts of US ("Okies"), new art/literature

VII. The US has definitely had its "ups and downs" throughout history, but the Depression had many lasting effects that seemed to keep on spiraling from one bad event to the next. The nation was certainly not perfect after the New Deal acts were established, and it certainly has had other economic problems since. Although the Depression was an enduring and agonizing time, it exemplifies the U.S.' strength and determination to overcome terrific obstacles along the way.