Causes of Depression
How did overproduction in the 1920's help lead to the Great Depression?
Companies were producing a lot but workers wages were not rising as fast as production leading to products just staying in stores. This lead to layoffs and pay cuts for workers.
What is the importance of the Social Security Act?
It establishes a system where workers pay payroll taxes that go to retirees keeping many seniors out of poverty. It also provides unemployment insurance for those who lose their jobs proving a stabilizer and safety net for future recessions.
What caused the Dust Bowl in the Great Plain states? Where did many migrate to as a result?
Drought and poor farming practices. Many went to California.
What was the goal of the Hawley-Smoot Tariff? Was the goal achieved?
The goal of the Hawley Smoot Tariff was to have very high tariffs on other countries to force Americans to buy American products. However this did not work as other countries responded with their own tariffs so Americans couldn't sell their goods to other countries. Spread depression globally.
In his first term and in particular his first 100 days Roosevelt was very intent on fixing the banking crisis? How did he go about doing this?
What was a Hooverville?
Named after Herbert Hoover who many blamed for the Depression it was a series of cardboard shacks for men and families who had lost their homes to live in.
How did Speculation on the stock market help cause the Great Depression?
People saw the stock market going up and wanting to make a quick buck invested in the stock market. People took loans from banks to invest (buying on margin) Eventually the stock prices were over inflated and when the bubble burst people couldn't pay the banks their loan.
How did Franklin Roosevelt's New Deal try to reduce the unemployment rate?
Job programs like the CCC and WPA employed millions of Americans over the Depression (particularly young men) to get them working but also improve roads, state parks and buildings.
Why did Herbert Hoover not push for more govt. intervention to help relieves people's pain during the Great Depression?
He believed that it wasn't the government's place (laisse faire economics) and private charity should play a role in helping people get through the Depression. He believed in volunteerism and maybe helping out business and banks.
The vast majority of Americans didn't own stock so why did the stock market collapse of Black Tuesday in 1929 have such devasting results for everyone?
While most Americans didn't own stock, most had their money in the bank. The bank lost people's life savings as the loans they had given out to people were lost with the stock market collapse. This lead to bank runs and bank closures and many Americans lost everything.
How can the philosophy of the New Deal still be seen when there are economic recessions today?
The Government usually starts spending money to either employ people, cut taxes or in some cases direct checks to keep the economy from spiraling out of control. Also many of the safety nets of the new deal are still there and many say that is a huge reason we have not had a depression since the 1930's. (Social Security FDIC)
The Bonus Marchers came to D.C. to lobby Congress to get their pensions 10 years early (for WW1 veterans) Congress did not approve of this and many stayed in D.C. Hoover told the current army to remove them and the army removed them with force. This resulted in terrible publicity for Hoover.
Even before the Depression farmers and people in Florida were already really struggling. Why?
For farmers many had gone into debt as they had bought land and equipment when times were good but during the 20's prices collapsed when WW1 ended and their was less demand. In Florida the land boom crashed and values of land and homes collapsed.
Some argued it created a dependency on the government that has never gone away. Others thought it wasn't enough (as evidenced by the Depression ending with WWII) and many of the New Deal programs discriminated against African Americans.
What was a fireside chat?
A fireside chat was the name given to Franklin Roosevelt's address to the nation which were broadcast on the radio. His broadcast restored confidence in the nation's future.