Q: What were the domestic and foreign causes of the Great Depression?
A: There were many causes that led to the Great Depression. Most people think that the stock market crash of 1929 caused the Great Depression. But it was only one of the causes. Bank failures also led to the Great Depression. When banks failed, many had uninsured their funds, so they simply just lost their money. The banks that had survived became more stingy on how many loans the would give out, to protect their interests. After the stock market crashed, many feared that there would be more economic hits. This led to a decrease in spending across the board. People from all different classes stoped purchasing items, leading to less products needing to be made. Many people lost their jobs during this time because of it. The Smoot-Hawley tariff was a foreign cause of the depression. The tariff charged a high tax for imports from foreign countries. Ultimately, the United States lost a lot of business from foreign businesses.
How did President Hoover respond to the economic emergency?
President Hoover basically just put the power back into the peoples hands. He encouraged them to “tighten their belts and work hard”(Henretta. 2016) to help boost the economy. He also expressed that the business community could turn their situation around by themselves, without assistance from the government.
This is what they called the gold standard. It was this mindset that made the Depression get to the depth that it did, and why it lasted so long.
Henretta, James A. America: A Concise History, Volume 2, 6th Edition. Bedford/St. Martin’s, 9/2016. VitalBook file.
Q: What were the main programs of the New Deal?s ?Hundred Days?? What were their goals? Evaluate the success of the various programs.
A: The great depression started in October 1929. The roaring twenties had come to an end. From 1929 to 1939 the United States suffered the worst economic downturn in the history of the industrialized world. At the great depressions, lowest point nearly 15 million people were unemployed, half of the countries banks had failed, some 1.2 million people were homeless, industrial production fell to roughly half of what it was and on average 20,000 farms were foreclosed on monthly.
The president at the time Herbert Hoover, believed that the government should not directly intervene in the economy, it wasn?t the government?s responsibility to create jobs or provide economic relief to the citizens. These beliefs led to the land slide victory of FDR in the 1932 election. FDR had a plan and a calm optimism to bring the U.S out of the depression. Which he proved during his inauguration speech made famous by the line ?the only thing we have to fear is fear itself.?
The main goal of the new deals hundred days was simply to stimulate the economy once again by create jobs, stabilizing industry and agriculture production and slingshot the U.S out of the depression. In FDR?s first hundred days he passed 15 major bills. First, FDR ordered the ?bank holiday?, closing all banks for four days so he could pass reform legislation and restore the public?s confidence in the banks. A few of his other most notable bills were:
The Glass-Steagall Act that guided the banking business for over fifty years and led to the federal deposit insurance commission. Which backed all deposits of up to $2500. Bankers no longer had to worry that bank failures would wipe out their savings
The Federal Securities Act, implemented in 1934 this act regulated the stock market and still does today.
The Public Works Administration that funded the construction of public works such as, hospitals, schools, airports, dams, ports, and ships for the navy.
Overall, FDR and his bills were very successful. Many of the bills implemented in his first hundred days are either still in effect today or led to the implementation of revised bills. Furthermore, FDR continued to implement legislation policies during the second New Deal such as: social security, and National Labor Relations Act. Through his aggressive reform policies FDR was undeniably successful in ending the Great Depression and shaping the way we regulate our economy preventing this from happening again.
History.com Staff. “The Great Depression.” History.com. A&E Television Networks, 2009. Web. 23 May 2017.
Shmoop Editorial Team. “Franklin D. Roosevelt (FDR): First 100 Days.” Shmoop. Shmoop University, 11 Nov. 2008. Web. 23 May 2017.
“The First Hundred Days.” Digital History. N.p., n.d. Web. 23 May 2017.
Q: What were the domestic and foreign causes of the Great Depression? How did President Hoover respond to the economic emergency?
A: There were several factors that lead America into the Great Depression. The stock market was allowing risky means of investing that were only sustainable in a growing economy. Investors had unrealistic expectations of how their money could perform making the climate very fickle. In 1929, the market plunged. Many did not realize just how significant the fall really was for the welfare of the country. New construction, manufacturing and even crop prices fell drastically. Furthermore, the unemployment rate rose significantly. Another domestic factor in the Great Depression was the state of America?s banks. The loans that were being granted were on the rise prior to the economic downturn. As a result, the loans were being defaulted on forcing many banks to shut their doors. Internationally, Germany, Great Britain and France were all facing economic distress. The high tariffs that were instilled during the downturn only added to the foreign economic crisis (Henretta, 2014).
President Herbert Hoover responded to the economic crisis in a few ways. Unlike Britain and Germany, President Hoover decided to keep the gold standard in place. His unwillingness to alter the value of currency was quickly overturned by President Roosevelt as a solution to pull America out of the economic fall. Hoover?s administration also instilled new tariffs and government programs that would provide new jobs. In 1931, he increased the public works budget to 700 million in order to fund projects on railroads and other enhancements to public transportation. President Hoover?s response to the Great Depression was perceived as ?insensitive? (Henretta, 2014). He ended his term extremely unpopular with the citizens as his decision making was deemed very ineffective.
Henretta, James A., Rebecca Edwards, and Robert O. Self. America: A Concise
History, Volume II: Since 1865. 6th ed. Boston: Bedford/St. Martin’s, 2014.