ACE Class Report # 90 : The Great Depression
Begin: 1/8/2025
Finish: 3/26/2025
Title: The Great Depression
Instructor: Henry Ku
Why I choose to take this class:
To learn about causes and effect of the Great Depression and the US policies to combat the depression and to prevent future depressions.
What I learned from this class:
The Great Depression was a world wide economic slump on the 1930’s. The great depression had significant effect on the people’s belief and on the government policies. It caused some nations to change their leaders and type of government. Soaring unemployment and declining output led to the election of Franklin D. Roosevelt in 1932. Roosevelt’s administration introduce a number of policies that transformed the role of the government and the economy. The poor economic conditions contributed to the rise of the German Dictator Adolf Hitler and the Japanese invasion of China. The German people supported Hitler because of his plan to make Germany a world leader gave them hope for improved condition. The Japanese developed industries and mines in Manchuria and claimed that this economic growth would relieve the depression in Japan. the militarism of Germany and Japan led to world War II (1939-1945). Recovery from the depression began as many countries devalued their currency. Economic conditions improved as nations increased the production of war materials at the start of the World War II. This increased level of production reduced unemployment.
Beginning of the Great Depression:
Many factors led to the great depression. Aftermath of World War I, the Gold Standard, the Farm depression and bank failures and the stock market crash of 1929.
Aftermath of World War I:
World War I cost a total of $337 Billion. Nations raised money through borrowing and printing money to meet their needs. The increased money supply caused severe inflation after the war.
The Gold Standard:
Prior to World War I, many countries set the value of their currency to a certain weight of gold. During the war, many government abandoned these rates to help finance war debts. After the war, most government brought back the Gold Standard to provide stability and halt inflation. The return to Gold Standard also limited government ability to offset declining prices and production by increasing the amount of money in circulation.
The Farm Depression and Bank Failures:
As most economies recovered after World War I. However most US farmers did not prosper. As a result of increased global production prices of farm products fell by 40%. Many farmers lost so much that they could not pay their mortgages. Bank failures increased during the 1920’s. Most of them occurred in agricultural areas because farmers experience such poor conditions.
The Stock Market Crash of 1929:
Share prices dropped rapidly on Oct 24, 1929 and on Tuesday 29, shareholders panicked and sold a record 16.5 million shares. Thousand of people lost money as share prices fell about 80%. Increased uncertainty about the economy led consumers to cut back on spending and resulted in output and production. Higher interest rates in US helped spread the depression to other parts of the world.
Economic Breakdown:
Between 1930-1933, 9000 banks failed. The bank failure wiped out the savings of millions of people. The Federal Reserve could not increase the money in circulation because US maintained a fixed exchange rate to Gold Standard. Unemployment reached 25%. Many with jobs had to take a pay cut of 18%. World trade collapsed during the great depression due to the Smoot-Hawly Tariff Act of 1930. Other nations reacted by raising tariff on imported goods from US. Declining prices led to serious problems for farmers and business. Consumer prices fell by 25%. Farm goods fell by 50%. Falling prices led to rising debt burden for borrowers and bankruptcy for many farmers.
Human Suffering:
Many died of diseases resulting from malnutrition. Thousands lost their homes and moved to poorer sections of town and built shacks from tin cans and creates, the huddles homes were called Hooverville. Many youth travelled in freight train and lived in train yard – Hobo Jungle. Unemployment were higher for blacks and women than whites. It also brought heighten discrimination against Mexican American in the 1930’s. household of Mexican Americans were deported against their will. Severe drought and dust storms hit parts of the Midwest and Southwest during the 1930’s. The affected region known as the Dust Bowl. Thousands of families were wiped out and fled their farms to look for work in California.
US Policies to Combat the Depression:
Hoover’s policy – Declared that states and local government should provide relief for the needy. But Those government does not have enough money to do so. The people elected Franklin Roosevelt over Hoover in 1932. Roosevelt introduced the New Deal to combat the Depression.
The New Deal:
It has three main purpose. First – provide relief for the needy. Second – Aid to recovery by providing jobs by forming partnership between government, consumers and business. Thirdly – Laws to reform business and government. To prevent future depression, congress created the following agencies:
– Federal Emergency Relief Administration (FERA) – gave states money for the needy and help local charities with relief efforts.
– Civilian Conservation Corp (CCC) – employed thousands.
– Public Work Administration (PWA) – provided money and jobs for construction of bridges, dams and schools.
– Work Program Administration (WPA) – created jobs in public projects such as road building, flood control, construction, parks and work in Arts. Provided millions of jobs.
– Agricultural Adjustment Administration (AAA) – transformed agriculture by regulating farms products.
– Federal Deposit Insurance Corporation (FDIC) – insure commercial bank deposits.
– Social Security Act – provide money for retired and unemployed individuals.
The Recovery From The Depression:
The New Deal program helped relieve some of the worst human suffering. The increased trade by lowering tariff, the economy improved after US abandoned the Gold Standard, devalued the dollar, increased the money supply helped the banking system recover. Unemployment declined in 1942 when US entered World War II. The great increase in production of war material provided so many jobs. US unemployment rate fell to 1% in 1944.
How will this class contribute to my success upon release:
Knowledge about the Great Depression and how US government helped the country recover from the Depression, improved my analytical and critical think skills. This knowledge will be applied to my business to help it grow. This information will be shared with communities which I hope to volunteer my services.
