Many causes contributed to making the Great Depression as severe as it was: Farm Depression of the 1920s Prices of farm products fell about 40% in 1920-1921 and they remained low through the 1920s As a result, some farmers lost so much money they couldnt pay the mortgage on their farm They either had to rent the land or move Uneven Distribution of Income Industrial production increased about 50% but the wages of the industrial workers rose far more slowly As a result these workers couldnt buy goods as fast as industry produced them The Stock Market Crash Stock values dropped rapidly on Oct. 24,1929; now known as Black Thursday The next Monday stock prices fell again On Tuesday stock holders panicked and sold a record 16.410,030 shares of stocks Thousands people lost huge sums of money as stock values fell far below the prices paid
The relatively impoverished conditions of Americans farmers, who averaged 40% of urban laborers income, meant they couldnt afford to buy consumer products For the mining industry yearly earnings fell from 1, 700 to 1,481 dollars The top 5% of income earners in America held 33.5% of the nations total wealth
100,000 businesses failed. Stock values fell from $89 billion to $15 billion. From 381 to 41. $74 billion was lost. 25% unemployment rate [15 million](125 million in the U.S.) [Unemployment was 3% in 1929.] Unemployment stayed above 14.3% from 1931-1940. Average unemployment was 18% This migrant worker had 7 children. 10,797 banks failed out of over 25,000, taking the life savings of 9 million people.
In some cities, girls danced only for 10 cents. 333,000 could not go to school. M any schools were open only 3 days a week for 8 months. One million lost their homes. Housing starts dropped 90%. GDP dropped from $104 billion in 1929 to $56 billion in 1933.
Apple sellers could make $1.15 profit on 72 sold apples. Many factory wages went from.55 an hour to.05 an hour. Agriculture collapsed. Prices and wages dropped around 25%. Factory production dropped 50%. Auto production fell from 4.5 million cars in 1929 to 1.1 million in 1933. Those who checked into hotels were asked, F or sleeping or jumping ? [Suicides jumped 30%]
Relief: Providing immediate aid to people who had lost income Recovery: Restoring GNP to the full- employment level Reform: Providing greater security or benefits for groups of people
Federal Housing Administration (1934) Guaranteed mortgage loans of up to 30 years National Labor Relations Act (Wagner Act, 1935) Guaranteed collective bargaining Established the National Labor Relations Board The Social Security Act (1935) Established old-age pensions Established unemployment compensation Established aid to dependent children, the blind, and elderly not eligible for Social Security Rural Electrification Administration (1935) Organized electrical cooperatives to supply power to rural areas Fair Labor Standards Act (1938) Minimum wage (25 cents an hour) Maximum hours (44), additional hours to be compensated at overtime rates Restricted oppressive child labor
What were some of the reasons the New Deal was challenged? 1. Created a very powerful president that led Congress, this was a violation of checks and balances. 2. It was a radical departure from Laissez Faire ideals. Created "big government". 3. Some acts appeared interfering and at worst unconstitutional. 4. Heavy debt burden - the United States was engaged in deficit spending and this was unhealthy for the economy in the long run.
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