5 causes of the Great Depression

1. poor credit: buying on margin allowed everyone to think that there was more money than there really was, the value of stock goes up as more people get involved
2. lack of diversification: everything depended on the automobile industry, much like the railroads
3. misdistribution of purchasing power: owners made significantly more than workers, so workers couldn't buy anything
4. international trade crashed because, 1, the US raised protective tariffs (Fordney-McCumber Tariff of 1924 and Hawley-Smoot Tariff of 1930), and 2, all the countries were in debt and kept borrowing money to get out of debt and so everyone just accumulated more debt (Dawes Plan)
5. Bank failures and drought

1. Warren Harding (1921-23): known for scandals (Teapot Dome)
2. Calvin Coolidge (1923-29): didn't do anything except McNary-Huagen Bill for farmers parity
3. Herbert Hoover (1929-1933): tried to combat the depression through associationalism, Agricultural Marketing Act, volunterism, Reconstruction Finance Corporation, government spending. Bad name because of the Bonus Army shindig and he didn't spend enough of the governments money

as soon as he got into office, FDR said that all banks would close until they had registered with the government and the government said they could open again, this was to let the public gain confidence in the banks because they couldn't foreclose if they were closed

RECOVERY

did what the bank holdiday said to do

RECOVERY

Glass-Steagall Act of 1933

• formed FDIC (federal deposit insurance corporation)
• insured your bank deposits up ot $2,500 so that you wouldn't lose your money if the bank failed
• RECOVERY

• effort to REFORM the stock market
• all corporations issuing new securities to provide full and accurate information about them to the public
• policed this and showed that the power of businesses had fallen because before the owners of big businesses would have stopped this from happening

• told individual farmers what they should grow and sell in order to increase the price of agricultural goods
• found unconstitutional in 1936 but then the Soil Conservation Act was passed a few weeks later
• favored larger farmers over smaller ones, and many field hands and sharecroppers were fired because they were unecessary

• Hugh Johnson
• blanket codes: minimum wage, maximum hours, abolished child labor
• blue eagle
• Section 7(a): right to unionize and recognition of unions [...] Wagner Act
• Schechter Case (1935) finds NRA unconstitutional because their business is only in NY
• gives the New Dealers a nice excuse to end a policy that they couldn't enforce and was therefore meaningless
• the rest is passed in 1938 as the Fair Labor and Standards Act

• REVOLUTION
• insignificant area that was so impovrished that many didn't even have electricity
• giant civil works project to build dams and provide cheap electricity so that businesses attracted by the cheap electricity would move there and revitalize the economy
• pump-priming with so many workers
• revolutionary because this isn't capitalism: the goverment isn't hiring a company to build the dam, it's hiring the PEOPLE which some said was creeping socialism

• doling out money
• Federal Emergency Relief Administration of 1933
  •  helped unempolyed and funded states' aid to bank relief programs
• Social Securities Act
  • required pension for income
  • helps young people now when they're old enough to retire
  • entitlement

Work Relief

• Civil Works Administration (CWA)
  • made temporary jobs for people
• Civilian Conservation Corps
  • get rid of young men who would make trouble in cities
  • segregated by race

• refinanced farm mortgages

gave farmers an extension on their mortgages even after their foreclosure