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The Great Depression and the New Deal

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University of Toronto St. George
Dr.Liamvan Beek

HIS271 The Great Depression and the New Deal February 16 2011 What were the causes of the Great Depression? How did Americans respond to the crisis? Did their responses change over time? Was the New Deal a success? The Election of 1928 1928 election between Al Smith and Herbert Hoover Smith, Democrat, was a 4 time governor of New York, liberal in his thinking, very urban, Catholic, decedent of GermanIrishItalian, came to embody the modern side of the US (the side that emphasized change, difference, foreign, urban, etc.) Hoover represented more of a traditional side, came from a rural Quaker background, believed in industry, thrift, and self-reliance He wanted free enterprise and small government and was what one may call a businessmans candidate he wanted to balance federal regulation without direct intervention In the election itself, Hoover won by a landslide One of the first radio campaigns Smith, because of his background and accent, threatened the traditional American identity and made him unappealing The election thus reflected the split in American society urban vs. rural, traditional vs. modern, wet vs. dry But while Hoover won, it didnt resolve these debates While many Americans recognized that these conflicts existed, they werent really equipped to deal with them at that time ,and it was made worse by the market crash of 1929 Black Tuesday October 20 1929, the day that the stock market crashed www.notesolution.comHIS271 The Great Depression and the New Deal February 16 2011 Over the past previous year, Wall Street had been on a boom, but by the fall it became clear to many traders that the market was beginning to fall Stock prices were declining and it hit rock-bottom by October This was followed by panic selling and further complicated by the fact that much of the stock that had been purchased in the 20s and been purchased on loans This worked to devalue what little was left This wasnt the first time the States had experienced this kind of economic crisis But, this was different The crash of 1929 was far more severe and lasted a lot longer than anyone anticipated The Causes The crash undermined business confidence, it saw decreases in manufacturing followed by job losses which then led to a decrease in consumer spending international elements Argued that dependence on international trade had played a significant Since the War, there was an international decline in the demand for American goods, meaning there were fewer markets for American There was also a crises of debt repayment in Europe, the European countries were having a hard time paying back America Lack of diversification in the economy The economy in the 1920s was dependent on a small number of large industries, and when these industries began to struggle the decline effected the entire economy Over production Part of the problem was that these big firms were overproducing more than could be consumed Unequal distribution of wealth
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