Understanding the Causes of the Great Depression- Economic Policies Trade Concerns and Banking Practices

Understanding the Causes of the Great Depression- Economic Policies Trade Concerns and Banking Practices

Explain the major causes of the great depression. (2-3 paragraphs)

The Great Depression period is known as the worst economic history in the USA, which endured a decade. According to popular belief, the financial exchange collapse in 1929 was the actual reason for the crisis, yet as opposed to that, the crash was but a triggering event. Several variables have been ascribed to bringing about this crisis; the first one is banking practices. During the 1920s, the banks had been irresponsible in letting their reserves get alarmingly low. Even the Federal Reserve was in a comparative or even worse circumstance than the banks. Keeping their interests so low in the early 20s prompted powerful expansion, but after the crash, they raised their interest by multiplying them, which only debilitated loaning and borrowing (Temin 1981).

Secondly, the trade policies were weak and questionable; for instance, monetary institutions created securities “subsidiaries” utilizing their brokers discreetly selling their stock; weak policies had created a path for a time of wild speculation on stock trades. Many investors didn’t care to investigate companies and afterward buy stock dependent on fundamentals; rather, they were betting that the stock would continue increasing. People also purchased shares on a margin of 10%, not realizing that they would pay for everything if the stock fell. Thirdly, the economic policies and international commerce; after the Great Depression choked the country, the government reacted by passing the Tariff Act of 1930, an action that enforced near-record tax charges on imported merchandise (Temin 1981). Numerous American trading associates fought back by enforcing duties on the U.S. exported merchandise. The outcome was that the world exchange fell by 66 % between 1929 and 1934.

Describe three ways that the New Deal sought to address the problems of the Great Depression. (2-3 paragraphs)

The New Deal was a domestic program during the administration of U.S. President Franklin Roosevelt in the year 1933 to 1939. The primary objective of this deal was to bring quick economic help and changes in finance, labor, agriculture, and industry and boundlessly expand the extent of the federal government’s activities. One of the ways in which the New Deal aimed to resolve the Great Depression was through significant legislation; the legislation was authorized within the initial three months of Franklin’s presidency, which prevalently became known as the hundred days. One objective of the new administration was to reduce the enduring of the millions of jobless people (Cole et al. 2004). Therefore, associations like the Works Progress Administration and Civilian Conservation Corps were formed. These organizations apportioned emergency, and the transient government helps to employ development projects, temporary jobs, and youth work in public forests.

Secondly, the government conceded authority to the National Recovery Administration to assist in shaping industrial codes that represented trade practices, collective bargaining hours, wages, and child labor. This was with the end goal of avoiding a reiteration of the stock market crash setting off the Great Depression. The Federal Deposit Insurance Corporation provided government insurance for member banks of the Federal Reserve System (Cole et al., 2004). In 1934, the SEC was set up to reestablish financial backer confidence in the stock market; the SEC did this by ending deluding sales practices and stock controls.

Lastly, with the assistance of the cabinet, which included Harry Hopkins, the previous chairman of the Federal Emergency Relief Administration, the President represented the philosophy of vast government work programs to mitigate unemployment. This program was successful; by 1939, Roosevelt had coordinated the expenditure of over 8.5 billion dollars towards joblessness relief, which supported approximately 15 million people.

Explain how the end of the Second World War contributed to the rise of Cold War tensions (2-3 paragraphs)

After the acquiescence of Nazi Germany in 1945, denoting the end of the Second World War, the uncomfortable coalition between the U.S. and Great Britain on the one hand and with the Soviet Union on the other began to unwind. The Soviet Union extended its influence and power all around Eastern Europe and despised the geopolitical obstruction and armed development of the United States (Schlesinger 1967). As both sides continued to build nuclear weaponry, in 1945, America dropped the nuclear bomb on Hiroshima without advising the Soviet Union, which fueled the distrust. The U.S. proceeded to assemble more nuclear weaponry to debilitate the Soviet Union, yet in 1949, the USSR tried its nuclear bomb, which denoted the beginning of the Cold War nuclear arms race.

Another cause of the Cold War was the differing ideologies between the USA and the Soviet Union; The U.S. ideology was based on capitalism and democracy, while that of the Soviet Union was about dictatorship and communism (Schlesinger 1967). These two sides were incongruent; the U.S. wanted Europe’s economy to be largely free-state control and a democratically elected government with freedom of speech, while the Soviet Union wanted Europe to be a communist state in control of the economy with the society strictly in the hands of said government led by a particular party. This incompatibility increased the chances of the Cold War happening.

With America’s focus on the Cold War and the constant fear of a war starting anytime, Americans went into survival mode. One of the effects of the Cold War was in the domestic policies and the culture. Domestic and foreign fear was introduced into the everyday lives of Americans, especially after the Cuban Missile Crisis. The way of life changed to being nuclear prepared, whereby most people started building bomb shelters, others installed air raid alarms, drills were frequently practiced even in schools, and the interstate highway was constructed for troop movement in case of an invasion. Some politicians only exacerbated the situation by alleging Soviet covert operatives were everywhere in America. Distrust was created between neighbors; thousands were forced to testify before authorities after being accused recklessly, the wrong imprisonment, and job loss if one were suspected of being a spy even without proof.

Explain two changes that came about as a result of the civil rights movement. (2-3 paragraphs)

One of the changes that occurred as a result of the civil rights movement was a legislative one. The Civil Rights Act of 1964 is also known to be the most delegated legislative achievement of the civil rights movement. This Act ended segregation in public places; in addition, it interdicted employment segregation founded on sex, race, religion, color, or national origin (Rodriguez et al., 2002). President John Kennedy proposed this Act, and despite the fact that it faced solid opposition from the southern individuals in Congress, it was endorsed into law by the next President, Lyndon Johnson.

The second change that occurred after the civil rights movement was a shift in American culture. As more African Americans became politically active and gained equality with the white people, their culture began impacting American culture (Romano et al., 2006). For instance, mainstream musician James Brown used his music to stop riots, and one of his songs became an anthem for the new Black Nationalist movement. His music is the foundation of the genre of Hip Hop. Black people had been prohibited from featuring in American television; however, many African Americans were cast after the civil rights movement in numerous television shows. All in all, the civil rights movement brought about changes that are still being impacted to date.

References

Schlesinger, A. (1967). Origins of the Cold War. Foreign Affairs, 46 (1), 22-52.

Temin, P. (1981). Notes on the Causes of the Great Depression. In the Great Depression revisited (pp. 108-124) Springer, Dordrecht.

Romano, R. C., & Raiford, L. (Eds.). (2006). The civil rights movement in American memory. University of Georgia Press.

Rodriguez, D. B., & Weingast, B. R. (2002). The Positive Political Theory of Legislative History: New Perspectives on the 1964 Civil Rights Act and Its Interpretation. U. Pa. L. Rev., 151, 1417.

Cole, H. L., & Ohanian, L. E. (2004). New Deal policies and the persistence of the Great Depression: A general equilibrium analysis. Journal of Political Economy, 112(4), 779-816.

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Explain (suggested length of 2–3 paragraphs) the major causes of the Great Depression (e.g., economic
policies, trade concerns, banking practices, international commerce).

B. Describe three ways (e.g., major legislation, organizations, relief and recovery efforts) that the New Deal
sought to address the problems of the Great Depression (suggested length of 2–3 paragraphs).

Understanding the Causes of the Great Depression- Economic Policies Trade Concerns and Banking Practices

C. Explain how the end of World War II contributed to the rise of Cold War tensions (suggested length of 2–3
paragraphs) by doing the following:
1. Discuss the effect of the arms race on the rise of Cold War tensions.
2. Describe how differing ideologies led to increased Cold War tensions.
3. Explain the effect of Cold War tensions on American culture and domestic policies (e.g., security concerns,
organizations, discrimination).

D. Explain two changes (e.g., legislation, cultural shifts, economic shifts) that came about as a result of one of
the following historical events (suggested length of 2–3 paragraphs):
• civil rights movement
• feminist movement
• gay rights movement
• rise of the religious right