The period of great depression was from August 1929 – March 1933
Presidents linked to Great Depression.
Herbert Hoover’s policies led to poor handling and triggering some of the events of Great Depression. Despite poor economic conditions due to the Great Depression, Roosevelt united the party around him, campaigning on the failures of the Hoover administration. He promised recovery with a “New Deal” for the American people.
The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939.
Major federal programs and agencies came into existence.
- The Civilian Conservation Corps (CCC)
- The Civil Works Administration (CWA)
- The Farm Security Administration (FSA)
- The National Industrial Recovery Act of 1933 (NIRA)
- The Social Security Administration (SSA)
They provided support for farmers, the unemployed, youth and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt.
The programs focused on what historians refer to as the “3 R’s”:
- relief for the unemployed and poor
- recovery of the economy back to normal levels
- reform of the financial system to prevent a repeat depression.
Cause of Great Depression
- Stock Market Crash of 1929
- Bank failures
- Reduction of purchasing across the board
- American economic policy with Europe
- Drought conditions
The Soup Kitchens in the Great Depression served free meals to hungry men, women, and children. The soup kitchens were run by volunteers from charitable organizations and local communities with food supplies provided by benefactors and people in the neighbourhood from their ‘Soup Gardens’. Before 1935, as unemployed soared to over 25%, Soup Kitchens sprang up in every major town and city in America as there were few welfare programs to help the unemployed, starving and destitute people.
What are Stock markets & relation to great depression?
The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly held companies take place.
- The stock market crash of 1929 was one of the worst in U.S. history.
- The three key trading dates of the crash were Black Thursday, Black Monday, and Black Tuesday. The latter two days were among the four worst days the Dow has ever seen, by percentage decline.
- Overconfidence during the Roaring Twenties created an unsustainable stock market bubble.
- Overnight, many people lost their businesses and life savings, setting the stage for the Great Depression.
- The first day of the crash was Black Thursday. The Dow opened at 305.85. It immediately fell 11%, signalling a stock market correction. Trading was triple the normal volume. Wall Street bankers feverishly bought shares to prop it up. The strategy worked.
- On Friday, October 25, the positive momentum continued. The Dow rose 0.6% to 301.22.
- On Black Monday, October 28, the Dow fell 13.47% to 260.64.
- On Black Tuesday, October 29, the Dow fell 11.7% to 230.07.
- Panicked investors sold 16,410,030 shares.
- Black Monday and Tuesday were among the four worst days in Dow history. They were followed by two subsequent crashes:
- A 12.93% drop during the 2020 stock market crash
- A 22.61% decline on Black Monday 1987
Interesting Terms Discussed
What Is Laissez-Faire?
Laissez-faire is an economic theory from the 18th century that opposed any government intervention in business affairs. The driving principle behind laissez-faire, a French term that translates to “leave alone” (literally, “let you do”), is that the less the government is involved in the economy, the better off business will be, and by extension, society. Laissez-faire economics is a key part of free-market capitalism.
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