"Has been a lifesaver so many times!"
- Catherine Rampell, student @ University of Washington
"Exactly the help I needed."
- Jennifer Hawes, student @ San Jose State
"The best place for brainstorming ideas."
- Michael Majchrowicz, student @ University of Kentucky
The 1930's were a sad time for many. It is the time when the stock market
crashed, banks closed, and millions were left penniless. You might think that that's all
there is to it, but what else was going on? How did America once more become a
prosperous place? To fully understand the events of the 1930's and the Great Depression,
one must first understand the economic terms of that period, as well as the many acts and
groups that contributed to helping the nation get back on its feet. Here, I will provide you
with some additional information about the 1930's.
First I'll provide you with some definitions of economic terms you will need to
know. The business cycle is the pattern of economic rise and fall. A depression is a
period of economic failure. During a depression, there is a great surplus on goods. With
all of these goods, demand falls, and with that so do prices. Companies have to fire
workers because they can't afford to pay them or simply don't need them. Since people
were jobless and without money, people couldn't afford to buy goods, so things didn't get
sold very quickly. Recession is like a mild depression. Prices and demand falls, while a
surplus is built. Workers get laid off, but on a smaller scale than an actual depression.
Recovery is the correction of a depression. During recovery, surpluses slowly become
used up. The companies rehire workers. Workers now have money, so they start to
spend, and money starts to circulate again. Prices rise with demand, and the supply falls
more. In a period of inflation, supply goes down. When the supply falls, demand
increases. With the demand up, stores can increase prices. Things are expensive in these
periods. Relief is helping people in poverty overcome it. Reforming is the act of
preventing future depressions.
In the Great Depression, everything in the nation went to pieces. The stock
market crashed. Everyone with stock lost the money they invested. Banks, who used
customers' money to gamble in the market, lost their money. People who had money in
the banks lost all or most of their money. With no money to spend, demand for goods
fell. Prices were lowered, hoping that some people would still buy at the new prices.
Businesses didn't make enough money and had to fire workers. Shopkeepers closed their
stores, and farmers lost their farms. With no money coming in to their household, these
people couldn't spend money on normal goods, causing a huge surplus. So went the
Great Depression. Franklin Roosevelt, the president at that time, wanted greatly to get
the nation back on its feet. He set up many acts and programs to try to help the people
and businesses. He called his actions the New Deal, which had three main goals. These
goals were relief, recovery, and reform. Now I will inform you of the many programs
and groups dedicated to helping overcome the Great Depression.
The FDIC, or Federal Deposit Insurance Corporation, assured the people that if
banks failed, their money would be insured up to $5000. The NIRA, or National
Industrial Recovery Act, could fix prices and limit stock in private businesses. The
NIRA also enabled workers to join unions freely, and provided rules regarding minimum
wage. All of these rules were permitted and enforced by the NRA, or National Recovery
Administration. The AAA, or Agricultural Adjustment Act, decreased the supply of
crops, causing prices to rise again. The TVA, or Tennessee Valley Authority, gained
accurate knowledge of electricity prices, and used it to measure the fairness of the costs
of electricity. The FSA, or Federal Securities Act, regulated the ways companies could
deal with stock. The HOLC, or Home Owners' Loan Corporation, helped people who
were unable to pay their mortgage. The FERA, or Federal Emergency Relief
Administration, distributed $500 million to help care for the poor. The CWA, or Civil
Works Authority, found jobs for more than 4 million people. The CCC, or Civilian
Conservation Corps, employed young men from poor families in jobs that helped with
conservation projects. The WPA, or Works Progress Administration, found millions of
jobs for idle men and women. The NLAB, or National Labor Relations Board, ran union
elections and settled disputes. The Social Security Act created a system of old-age
insurance, which would be paid for by both the worker and his or her employer. The Fair
Labor Standards Act outlawed child labor as well as setting the number of hours in a
work week to forty and creating a national minimum wage.
View Full Essay
Economy, Labour economics, Financial crises, Great Depression, Systemic risk, World economy, New Deal, Long Depression, Inflation, Unemployment, Minimum wage, Causes of the Great Depression
More Free Essays Like This