Download Causes - Cobb Learning

Essential Knowledge
League of Nations
 International cooperative organization
 Established to prevent future wars
 United States not a member
 Failure of League because it did not have power to enforce its decisions
The mandate system
 The system was created to administer the colonies of defeated powers on a temporary basis.
 France and Great Britain became mandatory powers in the Middle East.
Causes of worldwide depression
 German reparations
 Expansion of production capacities and dominance of the United States in the global economy
 High protective tariffs
 Excessive expansion of credit
 Stock Market Crash (1929)
Impact of world depression
 High unemployment in industrial countries
 Bank failures and collapse of credit
 Collapse of prices in world trade
 Nazi Party’s growing importance in Germany; Nazi Party’s blame of European Jews for economic
collapse
U.S.S.R. during the Interwar Period—Joseph Stalin
 Entrenchment of communism
 Stalin’s policies (five-year plans, collectivization of farms, state industrialization, secret police)
 Great Purge
Germany during the Interwar Period—Adolf Hitler
 Inflation and depression
 Democratic government weakened
 Anti-Semitism
 Extreme nationalism
 National Socialism (Nazism)
 German occupation of nearby countries
Italy during the Interwar Period—Benito Mussolini
 Rise of fascism
 Ambition to restore the glory of Rome
 Invasion of Ethiopia
Japan during the Interwar Period—Hirohito and Hideki Tojo
 Militarism
 Industrialization of Japan, leading to drive for raw materials
 Invasion of Korea, Manchuria, and the rest of China
Causes
Historians do not agree on the causes of The Great Depression.
Unequal distribution of wealth.
International monetary problems.
Legacy of WWI and treaty of Versailles
Overproduction.
Under consumption due to market saturation.
Buying on credit.
Weakness in the agricultural sector and farm foreclosures.
Bank failures.
Massive loans and investment in stock speculation.
Buying on margin
Weakness in the real estate and the construction sector.
Sig. Students should understand federal decisions helped spiral the economy
into the depression
The main components disputed regarding monetary issues during the Great Depression which in
turn led to the establishment of the Federal Reserve include:
The major boom in the Stock Market
People buying stocks and then using them as collateral to buy new stocks
Hoarding money
The Gold Standard
The Smoot Hawley Tariff
The Federal Reserve Board
Income inequality
FDR’s personality and approach were different from Hoovers
The Brain Trust and Cabinet
Progressive, outgoing, experimental.
The Bank Holiday
"Fireside chat" radio addresses
The New Deal
A. What did Roosevelt mean by relief, recovery and reform?
1. Relief - Immediate action taken to halt the economies deterioration.
2. Recovery - "Pump - Priming" Temporary programs to restart the flow of consumer demand.
3. Reform - Permanent programs to avoid another depression and insure citizens against
economic disasters.
Relief
Relief Immediate action taken to halt the economies deterioration.
Bank Holiday Declared so that the panic would be stopped.
Emergency Banking Act Closed the insolvent banks and only reopened the solvent ones.
Federal Emergency Relief Act (FERA) Gave immediate help to those that needed it in the
form of cash payments.
Civil Works Administration (CWA) Provided temporary jobs repairing roads and bridges.
Civilian Conservation Corps (CCC) Temporary jobs to unmarried single adults filling sand
bags and helping out at disaster type situations. Participants lived in barracks type housing.
Sig. Students will comprehend the immediate programs that Roosevelt put into effect to launch
the national economy.
http://www.fame.org/PDF/Emergency%20Banking%20Act%20of%201933.pdf
Recovery
Recovery "Pump - Priming" Temporary programs to restart the flow of consumer demand.
Agricultural Adjustment Act (AAA)Taxed food processors and gave the money directly to
farmers as a payment for not growing food. This decreased supply so price would go up.
National Industrial Recovery Act (NIRA)Created the NRA (National Recovery
Administration) a consortium of businesses organized by the government and given the power to
set rules and regulations for the economy. Members of the NRA displayed a blue eagle.
Home Owners Loan Corp. Gave loans to home owners so they could pay their mortgages. This
prevented people from going homeless and prevented banks from going under.
Works Progress Administration (WPA)Provided long term government jobs building schools
and other public works projects.
Sig. Students will understand the programs put into effect that would potentially restart the
economic flow again.
http://www.usnews.com/usnews/documents/docpages/document_page66.htm
Reform
Reform Permanent programs to avoid another depression and insure citizens against economic
disasters.
Securities & Exchange Commission (SEC)Permanent Agency set up to monitor stock market
activity and ensure that no fraud or insider trading was taking place.
Federal Deposit Insurance Corporation (FDIC) Permanent Agency designed to insure
depositors money in savings banks. Originally insured up to $5,000 per depositor today it has
increased to $100,000.
Social Security Administration Permanent agency designed to ensure that the older segment
of society always would have enough money to survive. The key here is that they would then
also be able to spend throughout their lives.
National Labor Relations Act and National Labor Relations Board
(NLRA/NLRB)Otherwise known as the Wagner Act it helped unions and thus helped workers.
This acted created the NLRB (National Labor Relations Board) which enforced labor law and
made sure that fair business practices where upheld.
Sig. These programs were established to prevent another Depression of this caliber to happen
again.
http://www.nlrb.gov/nlrb/legal/manuals/rules/act.asp
Effects of the Depression on the
American People
Economics:
-Banks
-Unemployment Rate
-Pay cuts
-Welfare
Homeless:
-Rise in homeless population
-Hoovervilles
Families and Food
-Middle Class
-Malnutrition
-Education
-Desertion/ Divorce