1920's and Great Depression Notes - Rabourn American Lit Class
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1920's and Great Depression Notes - Rabourn American Lit Class
Reasons For the Great Depression
Farmers suffered the Depression before the rest of America
- Labor saving techniques like the assembly line were developed
- Production increased because productions is cheaper, and overproduction occured
- Companies needed to sell their supply, but there wasn't enough demand, so they started doing:
- --Advertise to get people to buy things they don't need
- --Buy on credit - buy now, pay later, which made many people to go into debt just to get the latest product
- People borrowed money to buy stocks
- Most people bought stocks on margin because they couldn't afford it, and went into debt
Farmers suffered the Depression before the rest of America
- There was a slump in prices after WWI because there was no more demand overseas in Europe
- Dust bowls formed because the ground is flat, so there is nothing to block the wind, and farmers over cultivated so it became into dust. Droughts made the ground completely dry, and then dust bowls formed
- The stock market crash caused ripples in the economy
- Increased trade barriers slowed down international trade
- British investors sold their stocks in the US stock market, which causes a panic
- Banks declare bankruptcy when everybody pulls out their money
- 1932 is the peak of the Depression, with about 25% of people unemployed
- The Depression was caused primarily by:
- --Overproduction
- --Excessive Borrowing
- --Decreased Trade
- President Hoover thought that the Invisible Hand from economics would fix the economy by itself, but it only fixes it slowly
- Created the Reconstruction Finance Corporation to help businesses borrow, but had little positive effects
- People built shanty towns in front of the White House called "Hoovervilles" to insult President Hoover
- In 1932, people were sick of Hoover and elected FDR by a landslide
- Franklin Roosevelt used the progressives as a platform for his reforms
- Passed 15 laws the first 100 days, which was a record for his time
- Creates the New Deal - 3R's (like TR's Square Deal with 3C's)
- --Relief
- --Recovery
- --Reform
- Created the Glass-Steagall Act to regulate banks
- Created the Social Security system for elderly welfare
- Built the Tennessee River Authority to build a dam for cheap energy
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