The Us in Depression and War.

3/14/19

Unit 4: The US in Depression and War

The Great Depression and the New Deal

1920s: Fordism, Mass Consumer Society, Nativism and Race Consciousness, Psychology and the Self

Middle Class becomes smaller during the 1920s until many are pushed in to being destitute

Causes:

-stock market crash in 1929

-prevalence of credit and installment buying- people bought things that they could not really afford, people began to spend over saving

-mechanization and industrialization of farming with wheat and cattle-grazing caused soil erosion and destroyed grassland

-banks were weak and did not have much to back them up when things went wrong- when bank runs occurred, they ran out of money and there were credit freezes leading to deflation

-deflation led businesses to cut costs and lay off workers which led to unemployment as well

When depression strikes, President Herbert Hoover does not believe it is a huge issue, but does do some things, sets Smoot Hawley Tariff Act which increases tariffs for Europe, Europe responds with trade war which means even less people buying US goods.

-Dust Bowl hits in the early 1930s

3/19/19

The New Deal

-Great Depression causes unemployment rates up to 25%, jobs had been source of dignity and independence- this takes a psychological and economic toll on population

-Hoover failed to adequately respond to the crisis as he believed individuals were responsible for their own hardship

-FDR wins 1932 election by a landslide

-quickly declares bank holiday to try and stop the bank run

-establishes FDIC to insure money in banks

-large numbers of programs