Please enable JavaScript.
Coggle requires JavaScript to display documents.
Great Depression, Impact (Stock Market and Banks: Half of all banks failed…
-
Impact
Stock Market and Banks: Half of all banks failed, People lost all confidence in Wall Street markets. Businesses, banks, and individual investors were wiped out.
Unemployment: Unemployment rose to 25% and homelessness increased, Almost 15 million people were out of work. That's the highest unemployment rate ever recorded in America.
Social: Housing prices plummeted 30%, Almost 6,000 shantytowns, called Hoovervilles, sprang up in the 1930s.
Trade: International trade collapsed by 65%, they erected trade barriers to protect local industries. In 1930, Congress passed the Smoot-Hawley tariffs, hoping to protect U.S. jobs.
Deflation: prices fell 10% per year, many were hurt: farmers, businesses, and homeowners.
Economy: During the first five years of the depression, the economy shrank 50%. In 1929, economic output was $105 billion, as measured by gross domestic product.
Political: The Depression affected politics by shaking confidence in unfettered capitalism. That type of laissez-faire economics is what President Herbert Hoover advocated, and it had failed. As a result, people voted for Franklin Roosevelt.
Causes
The Stock Market crash of 1929- The 1929 stock market crash lost the equivalent of $396 billion today. It was more than the total cost of World War I. It destroyed confidence in Wall Street markets and led to the Great Depression.
Banking panics and monetary contraction- large numbers of bank customers, fearful of their bank’s solvency, simultaneously attempted to withdraw their deposits in cash.
Decreased international lending and tariffs- The drop-off contributed to the contraction effects in some borrower countries, whose economies entered a downturn even before the beginning of the Great Depression in the United States
The Gold Standard- The reduced money supply, in turn, reduced prices, which further discouraged lending and investment.
Irrational optimism and overconfidence in the 1920s- The overconfidence and all the extra power is given to the Americans in the 1920s also resulted in the depression.
Dust Bowl Years: In the 1930s, drought covered virtually the entire Plains for almost a decade. Many crops were damaged by deficient rainfall, high temperatures, and high winds, as well as insect infestations and dust storms that accompanied these conditions.
People Involved
Herbert Hoover: President from 1929 to 1933. He had the misfortune to witness the start of the Great Depression in the first year of his presidency. Hoover was blamed for the Great Depression.
Franklin D. Roosevelt: Roosevelt was elected the US President in 1932 with a promise to do something about the economic impact of the Great Depression. He expanded the role of the Federal Government and increased spending on public works to try and provide unemployment by the New Deal.
John Maynard Keynes: Keynes saw the Great Depression as a trigger to create a new way of economic thinking. Keynes advocated government intervention to kick start economies in a slump.
Eleanor Roosevelt: Wife and political aide of American president F.D.Roosevelt. Roosevelt was an active First Lady, giving speeches, writing a column and meeting with the unemployed. She helped to reassure workers that the Roosevelt administration was committed to trying to solve their plight.
Charles Coughlin: A Catholic Priest who was an influential figure in American media. His radio broadcasts were widely listened to. Initially, he supported Roosevelt’s New Deal, but during the 1930s became increasingly polemic – criticising Roosevelt’s links to big business.
New Deal
The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. It responded to needs for relief, reform, and recovery from the Great Depression.
-
-
Reform: Permanent programs to avoid another depression and insure citizens against economic disasters.