Research Project
Great Depression
Cause
-Stock Market Crash of 1929 - Stock Market Crash had occurred on October 29, 1929. It affected not only America, it affected most of countries.
-Bank Failures - More than 9000 banks failed.
-Millions of Americans were left unemployed
- American Economic Policy with Europe
-The government created Smoot - Hawley Tariff in 1930 to help companies to not to fail. Due to that policy started, it charged a high tax.
-Drought Conditions
• Occurred in the Mississippi Valley in 1930s
• Crops and plants dried up
• Smoot Hawley Tariff policy between Europe, they had to pay a high amount of tax
-Bank Failures - More than 9000 banks failed.
-Millions of Americans were left unemployed
- American Economic Policy with Europe
-The government created Smoot - Hawley Tariff in 1930 to help companies to not to fail. Due to that policy started, it charged a high tax.
-Drought Conditions
• Occurred in the Mississippi Valley in 1930s
• Crops and plants dried up
• Smoot Hawley Tariff policy between Europe, they had to pay a high amount of tax
Effect
·Unemployment during the Great Depression rose from 3% in 1929 to 25% by 1933.
•Banks closed, causing millions of people to lose their life savings.
•From 1929 to 1933, the U.S. Gross National Product (goods) dropped by 33%.
•At the start of the Great Depression, there were no federal welfare or social programs in place
•The FDIC was created to insure that people’s money would be safe and protected against bank failures.
•Changes were made to the stock market to prevent rampant speculation and further crashes, the most notable of which was that people could no longer buy stocks on margin.
•Banks closed, causing millions of people to lose their life savings.
•From 1929 to 1933, the U.S. Gross National Product (goods) dropped by 33%.
•At the start of the Great Depression, there were no federal welfare or social programs in place
•The FDIC was created to insure that people’s money would be safe and protected against bank failures.
•Changes were made to the stock market to prevent rampant speculation and further crashes, the most notable of which was that people could no longer buy stocks on margin.
Comparison
· After the large increases in federal spending under Roosevelt and Obama, unemployment remained high. In the 1930s unemployment fluctuated, but recovery never occurred. Annually budget rised
· Critics of Roosevelt and Obama insisted that it was impossible to spend our way out of a recession.
· Tax rates raised. During the Great Depression Roosevelt raised both income and excise taxes. In 1935, with FDR’s push, the top marginal tax rate hit 79 percent.
· Thus far we have seen proposed tax hikes on products such as cigarettes, liquor, plane tickets, and soft drinks. He wants the tax cuts enacted under President Bush to expire. That will mean a spike in the capital gains tax, the income tax, and the estate tax. As FDR showed, tax hikes eventually follow large spending increases.
· Obama has followed FDR’s playbook of attacking Wall Street bankers and various corporate leaders
· “class warfare” may be an inevitable part of redistributing wealth from one group to another. Perhaps Roosevelt and Obama believed that by increasing envy and resentment toward some Americans, they could capture the votes of larger groups of Americans and thereby win reelection (in FDR’s case there is evidence of this)
· Critics of Roosevelt and Obama insisted that it was impossible to spend our way out of a recession.
· Tax rates raised. During the Great Depression Roosevelt raised both income and excise taxes. In 1935, with FDR’s push, the top marginal tax rate hit 79 percent.
· Thus far we have seen proposed tax hikes on products such as cigarettes, liquor, plane tickets, and soft drinks. He wants the tax cuts enacted under President Bush to expire. That will mean a spike in the capital gains tax, the income tax, and the estate tax. As FDR showed, tax hikes eventually follow large spending increases.
· Obama has followed FDR’s playbook of attacking Wall Street bankers and various corporate leaders
· “class warfare” may be an inevitable part of redistributing wealth from one group to another. Perhaps Roosevelt and Obama believed that by increasing envy and resentment toward some Americans, they could capture the votes of larger groups of Americans and thereby win reelection (in FDR’s case there is evidence of this)
Terms
Great Depression
: The economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s
Bank Holiday
: Closed all banks until government examiners could investigate their financial condition; only sound/solvent banks were allowed to reopen.
Dust Bowl
Region of the Great Plains that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages.
Black Thursday
The day the stock market crashed. Lead to the Panic of 1929.
: The economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s
Bank Holiday
: Closed all banks until government examiners could investigate their financial condition; only sound/solvent banks were allowed to reopen.
Dust Bowl
Region of the Great Plains that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages.
Black Thursday
The day the stock market crashed. Lead to the Panic of 1929.
Characters
Calvin Coolidge
A conservative from Massachusetts who became the thirtieth U.S. president upon the death of Warren G. Harding in 1923. In 1924, Coolidge was elected president in his own right, but in 1928 he declined an offer to run again. Like both his predecessor, Harding, and his successor, Herbert Hoover, Coolidge’s policy was to sweep away the remnants of progressive legislation and reward big business instead.
Warren G. Harding
The twenty-ninth U.S. president, whose election in 1920 brought about a decade of conservatism and benefits for big business. Harding’s isolationist stance also stifled former president Woodrow Wilson’s hopes to have the United States join the League of Nations. Under Harding, Congress passed the Esch-Cummins Transportation Act and the Fordney-McCumber Tariff, and the United States signed the Five-Power Naval Treaty, the Four-Power Treaty, and the Nine-Power Treaty for disarmament and the maintenance of the status quo in East Asia. Harding’s term was marred by scandal, most notably the 1923 Teapot Dome scandal. Harding died that same year, however, before he was fully implicated.
Herbert Hoover
A former engineer and millionaire who became the thirty-first U.S. president in 1928. He was guiding the nation out of the Great Depression. After the stock market crash of 1929, Hoover encouraged Americans not to panic and promised there would be no recession. He took some action in an attempt to halt the economy's freefall. But his policies generally failed, and millions of Americans eventually lost their jobs and homes. Many historians believe Hoover might have been able to curb the severity of the Great Depression had he made different decisions.
John Maynard Keynes
A British economist in the early twentieth century who believed that deficit spending during recessions and depressions could revive national economies. Keynes’s theories went untested until Franklin Delano Roosevelt applied them in the New Deal to bring the United States out of the Great Depression. The success of the New Deal converted Democrats to Keynesian-minded policy makers for the next several decades.
Franklin Delano Roosevelt
Served as governor of New York before becoming the thirty-second U.S. president in 1933. Roosevelt’s main goal was to end the Great Depression. His New Deal programs and policies focused on immediate relief, long-term recovery, and reform in order to revive the economy. Despite the fact that he was usually wheelchair-bound (he was stricken with polio as a child), his optimism and charm did much to convince Americans that they had “nothing to fear but fear itself.”
A conservative from Massachusetts who became the thirtieth U.S. president upon the death of Warren G. Harding in 1923. In 1924, Coolidge was elected president in his own right, but in 1928 he declined an offer to run again. Like both his predecessor, Harding, and his successor, Herbert Hoover, Coolidge’s policy was to sweep away the remnants of progressive legislation and reward big business instead.
Warren G. Harding
The twenty-ninth U.S. president, whose election in 1920 brought about a decade of conservatism and benefits for big business. Harding’s isolationist stance also stifled former president Woodrow Wilson’s hopes to have the United States join the League of Nations. Under Harding, Congress passed the Esch-Cummins Transportation Act and the Fordney-McCumber Tariff, and the United States signed the Five-Power Naval Treaty, the Four-Power Treaty, and the Nine-Power Treaty for disarmament and the maintenance of the status quo in East Asia. Harding’s term was marred by scandal, most notably the 1923 Teapot Dome scandal. Harding died that same year, however, before he was fully implicated.
Herbert Hoover
A former engineer and millionaire who became the thirty-first U.S. president in 1928. He was guiding the nation out of the Great Depression. After the stock market crash of 1929, Hoover encouraged Americans not to panic and promised there would be no recession. He took some action in an attempt to halt the economy's freefall. But his policies generally failed, and millions of Americans eventually lost their jobs and homes. Many historians believe Hoover might have been able to curb the severity of the Great Depression had he made different decisions.
John Maynard Keynes
A British economist in the early twentieth century who believed that deficit spending during recessions and depressions could revive national economies. Keynes’s theories went untested until Franklin Delano Roosevelt applied them in the New Deal to bring the United States out of the Great Depression. The success of the New Deal converted Democrats to Keynesian-minded policy makers for the next several decades.
Franklin Delano Roosevelt
Served as governor of New York before becoming the thirty-second U.S. president in 1933. Roosevelt’s main goal was to end the Great Depression. His New Deal programs and policies focused on immediate relief, long-term recovery, and reform in order to revive the economy. Despite the fact that he was usually wheelchair-bound (he was stricken with polio as a child), his optimism and charm did much to convince Americans that they had “nothing to fear but fear itself.”