Causes

• Over production; lead to a pile up of surplus goods.

• Credit Policies; the reduction of the restrictions on credit lead to an increase in installment buying.

• Unequal distribution of purchasing power; For example, the salary of twelve top executives was equal to the total income of thirty thousand tobacco farmers.

• Decline in international trade exports; High US tariffs prevented European exports to the US and consequently US exports to Europe decreased.

• President Hoover introduced voluntary relief programs to provide employment. He later introduced a program of providing credit to railroads and financial institutions.

• Franklin Roosevelt introduced the New Deal under the principle of the 3Rs, that is, Relief, Recovery and Reform. Some of the Acts passed by the Congress include, The Agricultural Adjustment Act (AAA) to restore the purchasing power of the farmers, The Tennessee Valley Authority - was set up to reorganize the economy, The Civil Works Administration to provide employment opportunities.

The Effects of the New Deal

• These programs provided some kind of assurance and comfort to the people who had been badly hit by the depression.

• The New Deal also revived the US industries.

• Depression had a negative impact on Liberalism, Democracy and Capitalism as many of the people who were disillusioned by the present situation turned to communism.

• The one positive and important effect of Depression was an increased concern for human values and emotional security.

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Index

14.0 - Introduction
14.1 Republican Ascendancy and World Politics
14.2 The Washington Conference
14.3 Republicanism at Home
14.4 Panic of 1929
14.5 Causes
14.6 Methods to alleviate the effects of Depression
14.7 The Effects of the New Deal
14.8 Impact of Great Depression
14.9 Dates & Events
14.10 Points to Remember

Chapter 15