US-G+Chapter+24


// Analyze the causes and consequences of the stock market crash of 1929. // The crash of 1929 is remembered as the most devastating stock market crash in the history of the United States. The Crash began on October 24, 1929, also known as the Black Thursday when a large number of investors panicked and rushed to sell their shares. Over 13 million shares were dumped into the market. On Black Tuesday, October 24, 1929 the crash began. The stock prices were cut in half, millions shares were dumped into the market. Overprice of the stocks were one of the reason why the market crashed. As more and more people bought stocks, the price eventually rose. Another reason is margin buying. People bought stocks with borrowed money and when the price of stocks crashed, they weren’t able to pay it back.


// Evaluate the causes of the Great Depression( the Great Depression is not the same as the 1929 crash!)  //

The Great Depression was the worst economic slum ever in U.S history and one which spread to virtually all of the industrialized world. Many factors played role in the cause of the Great Depression however, many people believe Global depression, gap between rich and poor, and the business cycle.  Global depression, mainly in Europe due to the aftermath of the World War I played big role in US depression. Since US heavily relies on exports, economic depression in Europe was not good. They import less American goods which eventually result the decline of world Trade. Moreover, America worsens the situation by placing high tariff on imported goods.  Gap between rich and poor was one of the core reason which caused the depression. Rich are getting richer, but poor people are becoming poorer. Many people argue that if workers got higher wages and crops were sold with higher prices which eventually help the poor and middle class to earn money could’ve prevented the Great Depression or the situation could’ve gone better.  Other than these reasons, some economist argue that Great Depression was a part of the business cycle, the regular ups and downs of a business in a free- enterprise market.


// Explain the global context of the depression and the reasons for the worldwide economic collapse. // Not only in America, but the Great Depression resulted in various other countries too. Since a lot of counties depended on the wealthy economic circumstances of America, when the US economy was destroyed, it affected Euroe as other countries as well. President Hoover started to blame WWI as the result of the war. Europe went into Global Depression because they had a lot of war debt from World War I. The World trade used to be active before the 1920s, however, after US's decline, global trade and interaction between countries rapidly declined.

Furthermore, due to the lack of trade, foreign consumers were unable to buy American goods. As a country depending on the number of exports to foreign consumers, this affected the US economy a lot. The US could have fixed this, however the business owners decided to put more tariff on American goods. This was actually a more faster way for Global depression because many countries decided not to trade with the US. The global context of the depression simply resulted from the various European countries that relied on the US economy too much during and after the war.


<span style="font-size: 80%; font-family: Verdana,Geneva,sans-serif;">// Analyze the impact of the Great Depression on various groups  : farm owners, tenants, and sharecroppers, industries and industrial workers  the American family ethnic and racial minorities // <span style="font-family: Verdana,Geneva,sans-serif; font-size: 80%;"> During the Great Depression, not only the American workers, but also various groups were affected economically, also often discriminated due to racial problems. For farm owners, they had a hard time sustaining their lives with cropping food because people in the cities did not buy any of their goods. The demand for products were decreasing day by day, therefore farmers were left with more goods than they exported from their farms. Even though the people in the cities were suffering from hunger, many let their crops to rot and livestock to starve due to the lack of money to feed them. From the lack of goods being sold let to their decrease in income. This made the farmers unable to pay their mortgage payments, and forced banks to close farms. For the tenant farmers in the south, which were mostly African Americans suffered from racial discrimination; they were forced to leave the land. Farmers who settled from immigration were the ones who experienced more difficulties due to economic problems and racial problems. Mexican-American migrant farmworkers were often encouraged to leave the country. After the Depression, the government officials pressured farmworkers to return to their native lands, and later in the 1930s, even the ones who actually became US citizens were forced to go back to Mexico.

For the industrial workers, majority lost their jobs,and a few were able to maintain their jobs; usually the ones who were more experienced. Among those who were being cut from their jobs, the African-Americans were the first ones to be cut. Even the workers who were able to maintain their jobs had hard times due to cheaper wages. Due to the cheaper wages paid, women in workforces actually increased during this time. After people became unemployed, many who lost their jobs even started to sell apples for their livings, or wandered around the streets, often called "ghosts." Industries wanted to employ others so they will be able to sustain their lives, so they started to reduce work hours, which lead to more workers with less income.

American families in the cities and farms suffered a lot too. Many men started to fight for food even in garbage cans. Charities started to provide people with food by making them stand in //bread lines//, which provided them soup and breads. The marriage rate decreased dramatically because majority of the young people were too busy working for their families, and they were not interested on starting another family when they had a hard time supporting their family incomes, which also lead to the decrease in birth rates. Women took over the families during the Great Depression, trying to earn food, and also making wearable clothes and shoes that will last for a long time for the family.

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<span style="font-size: 80%; font-family: Verdana,Geneva,sans-serif;">// Explore the reasons for the deepening crisis of the Great Depression and evaluate the Hoover administration’s responses. // There are many theories as to why the Great Depression happened, but the main three are: 1. The orthodox classical economics: monetarist, Austrian Economics, and neoclassical economic theory, which revolve around the macroeconomic effects of the money and gold supplies which backed many currencies before the Great Depression, 2. The structural theories that are based on the ideas of the underconsumption and overinvestment, a.k.a. economic bubble, the corruption of bankers and industrialists, and the incompetence of government officials, 3. The Marxist theory that emphasizes the tendency of capitalism to inflate in unbalanced accumulations of wealth then plummet, a cycle of economic crises. Despite the failing economy and the struggling people, President Herbert Hoover remained optimistic and even characterized the depression as “a temporary halt in the prosperity of a great people”. In response to the Great Depression, Hoover’s administration had a laissez-faire¬ approach to revive the economy. Hoover believed that “a voluntary deed is infinitely more precious to our national ideas and spirit than a thounsandfold poured from the treasury”, and refused to directly help the people; although many people agreed with his idea, communities lacked the resources to cope with the misery. What Hoover did do to help was create the President’s Committee for Unemplyment Relief (PCUR) that was designed to assist state and local relief efforts, which appointed experienced philanthropists and businessmen to encourage donations. However, the PCUR did little beyond urging the Americans to contribute to charity, and the misery of the Great Depression continued on. Hoover also tried to help the people by arranging many public work programs that would help with the unemployment, such as constructing the giant Boulder Dam (later to be renamed the Hoover Dam), building more than 800 public buildings, and assisting states in building 37,000 miles of highway. Hoover also created the Federal Farm Board (FFB) and granted it a budget of 500 million dollars; they instructed the farmers to help themselves, but helped them by allowing them to purchase materials in bulk, which reduced the farmers’ expenses. However, the crop prices continued to fall, and in order to help out the farmers, the government bought surplus of crops to raise the prices (low stock, high demand, result in higher prices), but the farmers simply planted more to meet the demands; Hoover’s plan failed miserably. In another attempt, Hoover called a meeting at the White House, inviting all the top business, labor, and political leaders, to ask them to maintain the preDepression levels of production and employment, but to no avail; Hoover’s indirect approach to reviving the economy and the spirit of the people was simply not enough. He soon became the most hated man in the USA. Despite this, Hoover stood firm by his decisions, stating that “this is not a showman’s job, I will not step out of character.”

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<span style="font-size: 80%; font-family: Verdana,Geneva,sans-serif;">// How did popular culture offer an escape from the Great Depression? //   Psychologically, many suffered during and after the Great Depression. Then, Americans started to look for other entertainments that were enjoyable and inexpensive. Popular culture developed during this era, and entertainments such as movies and radios became exclusively popular. Movie theaters started to offer cheap tickets for movies; films were replaced with those that were silent during the 1920s and added more fun to people. Then, cartoons started to become popular among many Americans. Walt Disney, developed during this era added more fun towards various people. The cartoon movies of Mickey Mouse and Donald Duck was as popular as those films that were acted out by people.

Free entertainments such as radios became very popular during this era. It was offered free at home, which was one of the reasons why the number of listeners of the radio became more than double. Other than radios, literature also depicted the hard times during the Great Depression. Due to the poor conditions, the American culture started to offer comic books that reflected a strong hero such as Tarzan and Flash Gordon. Books such as //Lost Horizon// by James Hilton depicted Utopia, which was what the citizens longed for during the Great Depression. Books often reflected the society's hope, portraying the American dream, utopia, and even realistic events that occurred during the Great Depression. <span style="font-size: 80%; font-family: Verdana,Geneva,sans-serif;">

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//<span style="font-family: Verdana,Geneva,sans-serif;">Contrast the background and leadership abilities of Franklin D. Roosevelt with those of Herbert Hoover. // Herbert Hoover was born in Iowa between Jesse Hoover (a blacksmith) and Hulda Hoover; they were both Quakers. Both his parents died, leaving Hoover an orphan at the age of 9, and as a result of this, he lived with his uncle Allen Hoover in West Branch, Iowa. Although he never attended high school, he went to night school and learned typing and math. He later on worked as an office boy in his uncle’s real estate office before attending Stanford University in 1891. Franklin D. Roosevelt, often called FDR, was from a prominent New York family of the Roosevelts, sired by James and Sara Roosevelt. As an only child, FDR enjoyed a luxurious life, attending boarding school in Massachusetts and later attending Harvard. It was when he was a student at Harvard when his fifth cousin Theodore Roosevelt became the President of the United States. At a White House Reception, he met his future wife Eleanor Roosevelt, Theodore Roosevelt’s niece. FDR was a handsome, active, and charismatic man that would later on lead the country as one of the greatest presidents of the USA. The leadership abilities of Hoover and FDR were as different as could be. While Hoover believed that directly helping the citizens of US would weaken their self-confidence and decrease the merit of the money they earned, he failed to see the immediate relief the people desperately needed. He stood firm with his laissez-faire¬ approach, despite being hated and criticized severely by his people. Although he did try to help the US citizens in many different ways by providing all the indirect help he could to help them “pull themselves up by their own bootstraps”, what the people of the United States needed was a direct push to help them cope with their miseries. This is what Hoover failed to acknowledge, thus resulting in a not-so-great leadership as the President during the hardest times the US had ever faced. FDR, it is safe to say, was a relief for the people from Hoover. As soon as he became the president, Roosevelt created the New Deal to provide relief for the unemployed. He also recovered the economy and reformed the banking systems. He also initiated many programs such as the Federal Deposit Insurance Corporation, Tennessee Valley Authority, The United States Securities and Exchange Commission, and the Social Security System. FDR also aided Winston Churchill even before entering the WWII, and during the war, he introduced price controls and rationing. He also made the United States the principal arms supplier and financier of the allies, which brought about full employment as well as new opportunities for women (especially African-American Women). FDR and his wife, Eleanor Roosevelt, were constantly praised for their hard work, and to this day, FDR has been ranked by scholars as one of the greatest US Presidents. He was the perfect President for such a vast but shaky nation.