22-1 The Nation's Sick Economy: Economic problems affecting industries, farmers, and consumers lead to the Great Depression.
pp. 642-649.
Essential Question: What caused the Great Depression?
Subquestions: ...don't shy away from including your opinion...just root it in fact!!
a. Which problems threatened the American economy in the late 1920s? Identify acute problems, both short- and long-term. (Acute means most severe, in this case.)
b. Which of the problems in a (mostly the section's green headings) is the most destructive?
c. How did Congress react to the economic slide? Were their (Congress's) actions logical or illogical?
d. What happened to ordinary workers during the Great Depression?
e. What were the ramifications (effects) of the Depression worldwide?
Opinion questions:
a. Which graph(s) are most helpful to you in understanding the economic troubles of the 1920s? Include title and page number in your response.
b. Would better information help the average citizen contribute more effectively to the economy's health? Or is that too unlikely in a capitalist system (profit-oriented)?
c. Are government price supports wrong?
d. Judging from the events described in this section, how important is consumer confidence to the health of the economy?
Subquestion E:
ReplyDeleteThe cause of the major causes that caused the Great Depression was WWI. Farms produced more than they could sell and WWI demanded crops, people were in debt from installment buying which reflected the humanistic feeling after WWI and many other reasons. Because this was a world war, it must have had the same effect on other countries involved in WWI. Especially Germany, because they had to pay reparations of billions of dollars, and suffered from billions of dollars worth of property damage like other European countries, such as France and Britain.
In 1930, Congress passed the Hawley-Smoot Tariff Act, which according to Danzer 649, "...Congress made a bad situation worse...". "This act prevented other countries from from earning American currency to buy American exports" - Danzer 649. Then other countries raised their tariffs in retaliation of the Hawley-Smoot Act. "Within a few years, world trade had fallen more than 40%..." - Danzer 649.
Another way the Great Depression effected the world was the fact that many countries fell below the gold standard and couldn't trade with other countries because their value of money was so low.
Opinion question A
ReplyDeleteOn page 645, the America's Declining Wealth graph helped me understand the economic troubles of the 1920's. It makes sense that the less you make the less you will spend, but that in turn led to even worse economic problems because there wasn't enough consumer spending. Without consumers spending money on products, big companies can't do well which means the stock market can't do well either. This became an almost never ending cycle of poverty.
Sub question E)
ReplyDelete- european countries also suffered.
- they had high debt from ww1
- America's ability to export was limited.
- congress passed the Hawley-smoot tariff act, established the highest protective tariff in united states history.
- the tariff made unemployment worse, with in a few years world trade had fallen more than 40 percent, which reduced overall economic activity.
- vast amounts of property had been destroyed in europe.
- europeans reduced purchase of american goods
- for the countries that produced food and raw materials suffered
After the end of WW1 Europe the economy was already pretty bleak. The United states did have the roaring 20s but then it came crashing down with the rest of the world. I think that to have a big depression it will effect the whole world, because markets are connected.
sources:
The Americans Danzer
http://history-world.org/great_depression.htm
http://www.english.illinois.edu/maps/depression/about.htm
Consumer confidence is extremely important to the health of the nation because if he/she is not confident then they will not invest and if they do not invest the businesses will not make any money. The answer to this question can be seen in the stock market collapse of 1929 because the consumers were not confident in their economy and they therefore wanted to get their money out. The following line from Danzer shows just how much faith the Americans had lost in the economy through the number of shares that they unloaded, the number is staggering. “The number of shares dumped that day was a record 16 million.” (Danzer 644) The idea of people unloading 16 million shares of stocks in one day is incredible, that's 185 shares of stock every second. As you can see Americans lost all faith in the American economy as they tried to dump shares to try and keep from losing all their money. The consumers faith was even more important during this time because they were dealing mostly with credit instead of actually money, and if they did not have faith in credit then they would not invest the large amounts of money that the companies wanted them to, and they would instead only invest the money that they had. Despite the fact that it seems like you should not outspend your income on credit it was being done in increasing numbers due to the low incomes of people in the 1920s. In 1920 the average male production worker made around $1,500 a year, which works out to about $4.88 a week, assuming that the person works 6 days a week. A farmer on the other hand made about $2.82 a day. (http://eh.net/encyclopedia/article/smiley.1920s.final)
ReplyDeleteSources:
The Americans
http://eh.net/encyclopedia/article/smiley.1920s.final