Causes & Reactions to the Great Depression

1. Causes & Reactions to the Great Depression Unit 7

2. Causes of The Great Depression#1 on your Non-Negotiables -Overproduction Businesses produced too many goods, the prices went down -Underconsumption People were not buying as much, the businesses slowed down -Credit/Installment Payments People were paying for goods monthly instead of all at once. Businesses would not receiving full payments for years -Stock Market Crash 1929 Businesses began to slow and people sold their shares all at once. The market crashed. -Bank Failures People panicked and wanted to get all of their money out of the bank, but the banks did not have all of the money.

4. Differences of Opinion#6 Non-Negotiables • As the depression grew deeper three main ideologies emerged to combat this epic situation. • The three ideologies were Conservatives, Liberals, and Radicals. • Each had their own ideology: • Ideology: is a set of basic ideas, beliefs, and values.

5. Conservative Response #6 • Conservative: Is someone who cherishes and seeks to preserve traditional customs and values. • Values in the 1930s: Self-reliance, individual responsibility, and personal liberty. • Opposed: Large governmental efforts to effect change. • Strongly believed in laissez-faire government – government does not interfere with business • Believed in the business cycle – a pattern in which economic growth is followed by decline, panic, and finally recovery.

6. Liberal Response #6 • Liberal:Someone who is committed to the expansion of liberty and government. • Government should play a role in regulating economic affairs. • Wanted the government to expand its powers to protect individual liberty. • Increase spending on public works: government – funded construction projects provide for such local needs as roads, bridges, and dams. • Increase taxes on corporations and the wealthy to raise money for social welfare programs – provide aid to those in need.

7. Radical Response #6 • Radical: Someone who wants to make sweeping social, political, or economic changes in a society. • Radicals seek change by democratic means or through revolution. • Socialists and Communists are two branches of the radical movement. Carl Brooks was a major leader. • Communists wanted to replace capitalism with communism; where economic decisions would move out of the marketplace and into the hands of government planners. • Wealth would be distributed to people according to their needs. • Encouraged working – class citizens to rise up against the “greedy capitalists.”

8. Hoover’s Response #2 Non Negotiables • Leave the economy alone and it will fix itself. • Hawley-Smoot Tariff • Bonus Army March • Hoover Dam • NCC & RFC

9. Bonus Army • Consisted of WWI Veterans who had fallen on hard times during the Great Depression. • Started in Portland, Oregon, traveling east on board empty boxcars and cattle cars. By the time they reached Washington, D.C., WWI veterans flocked to support their cause. • Goal of the Marchers: Convince Congress to pass a stipulation that would allow for half of their already promised bonus to be paid in 1932 and the other half in 1945. • Results: President Hoover orders the Cavalry to fix bayonets and drove them out of Washington, D.C.

10. Midterm Shellacking and Change – 1930 • Hoover asked Congress to establish the National Credit Corporation (NCC). • NCC created a pool of money to enable troubled banks to continue lending money in their communities. • Established because Federal Reserve refused Hoover’s request to put more currency into circulation. • Hoover requested that Congress set up the Reconstruction Finance Corporation (RFC). • RFC. would be used to make loans to banks, railroads, and agricultural institutions

11. Roosevelt’s First 100 Days • While campaigning for the White House, Roosevelt promised a new deal for the American people. He promised relief, recovery & reform. • This New Deal would do whatever was needed to help the needy and promote recovery.

12. Roosevelt’s First 100 DaysPart of #4 Non Negotiables • Emergency Banking Act gave the federal government broad power to help reopen the nation’s banks. • Beer-Wine Revenue Act legalized the sale of beer and wine • Reforestation Act established the Civilian Conservation Corps – provided work for 250,000 men. • Federal Emergency Relief Act granted money to states for relief project to help unemployed. • Agricultural Adjustment Act set prices for farm crops while trying to reduce overproduction. • Tennessee Valley Authority funded construction of flood control dams and power plants in the Tennessee Valley States. • Federal Securities Act regulated the sale of stocks and bonds • Home Owners Refinancing Act provided aid to families in danger of losing their homes. • National Industrial Recovery Act established the Public Works Administration to supervise building projects and the National Recovery Administration to encourage fair business practices. • Banking Act of 1933 established the FDIC (Federal Deposit Insurance Corporation) to insure depositors from losses with banks failed.