Crisi del '29 e New Deal: Capitolo 5

• Chapter 5 focuses on the 1929 crisis and the New Deal

Key Terms Overview

• "Roaring Twenties" is the period between the end of the Great War and the beginning of the Great Depression of 1929
• The "Roaring Twenties" are characterized by intense development of prosperity, social vitality, artistry and culture.
• In the financial sector, a stock represents an ownership stake in a company
• The value of a stock is determined by the stock market.
• Demand is the quantity of goods and services that consumers intend to purchase in the market
• The "New Deal" is the economic policy launched by United States President Roosevelt
• The New Deal aimed to emerge from the Great Depression of 1933-34.
• Prohibizionism refers to supporting the need for laws that prohibit the production and consumption of certain substances
• Prohibizionism aims for substances considered harmful to the individual and society.
• The financial system's role is to channel funds from savers to those who need credit, like businesses
• The structure of the financial system includes markets where financial securities are traded
• The financial system also includes intermediaries, such as banks, that manage the exchange of financial activities
• Overproduction is when a system's total production surpasses the market's capacity to absorb the goods produced
• Speculation involves buying and selling goods with the expectation of profiting from market price fluctuations

Timeline of Events

• 1918-1929: "Roaring Twenties" in the United States
• 1920: Enactment of prohibition laws
• 1921-1932: Republican Presidencies in the United States
• October 24, 1929: "Black Thursday": collapse of the New York Stock Exchange and economic crisis
• 1931: 2300 credit institutions fail
• 1932: Election of Franklin Delano Roosevelt as President of the United States
• 1933: Unemployment in the United States exceeds 12 million people
• 1933: Approval of the National Industrial Recovery Act and the Agricultural Adjustment Act: start of the New Deal

Locations of Events

• New Orleans, Louisiana known as the cribe of jazz music
• Jazz represented the Roaring Twenties
• Wall Street in New York City hosted the Stock Exchange
• Wall Street major banks along with industrial and financial companies triggered the 1929 financial crisis
• The dams on the Tennessee River symbolize the reaction to the depression and crisis
• Damm construction had a major impact

Synthesis of arguments

• After the end of World War I, unlike the European countries, the United States did not experience a crisis

• American involvement in the war was short and had not been invested in its territory

• They were also creditors of large sums of money that they had lent to the Entente powers.

• The 1920s were therefore a decade of intense economic growth for the United States, characterized above all by the development of consumer goods industries

• This period was called the "Roaring Twenties", because well-being seemed to be within everyone's reach and there was a climate of lightheartedness

• A good representation of this was found in the jazz music that became widespread in this era.

• The new products that characterized the race towards consumer spending by all social classes were the automobile a rate and the radio

• Mass consumption was also made possible by the innovative method of purchasing on credit.

• In the 1920s, a sort of collective fever for stock market speculation also broke out

• The continuous rise in the value of listed securities gave the illusion of easy and consistent gains and many people even went to heavy debt in order to invest in the purchase of shares.

• In the same years, a conservative climate also spread in the United States: Republican governments adopted measures that made immigration difficult and violently racist organizations were strengthened

• There was still great discrimination against to the Afro-American population.

• The obsession that communists could infiltrate American society and take power also led governments to adopt repressive measures against any individual, political force or union of left.

• A lack of alcoholic liquors did nothing but encourage smuggling, controlled by organized crime.

• 1929: The Stock Market Crash

• On October 24, 1929, which went down in history as "Black Thursday", on the New York Stock Exchange the value of the stock indexes reversed the upward trend

• The reversed upward trend led to a crash breaking out the fall that was constatt had been constant for many years

• New economic crisis arose

• Many industries, whose shares had lost their value, and many banks, which had been overexposed in financial speculation, failed

• number of people who lost had lost their job

• The unemployed, who were 1.5 million in 1929, exceeded 12 million in 1933

• Investors lost all their savings or found themselves overwhelmed by debt

• A large number of American citizens plunged back into poverty.

• This further aggravated the economic situation, because those who had become impoverished stopped consuming, causing the crisis of the consumer goods businesses.

• The financial system had also collapsed due to a the pubic to a lack of any control and regulation by the public authorities

• a lack of any control and regulation by the public authorities and too poor to afford the new consumer goods that had flooded the system and to afford the new consumer goods

• They largely remained unsold the market.

• The crisis was therefore, first and foremost, a crisis of overproduction, and also affected the agricultural sector

• The product sector also affected the European agricultural sector

• Roosevelt and the New Deal

• After three years of serious crisis, which spread worldwide, there was a turning point in the United States following the election, in 1932, of the Democratic President Franklin Delano Roosevelt.

• To face the economic crisis, Rooservelt had a new economic policy called the New Deal

• The new economic policy was based on a direct intervention intervention of the government in the economy, for the purpose of creating the conditions for a recovery

• He believed that the government should supervise the financial and banking system more thoroughly

• He beilieved that the government should also adopt initiatives to stimulate to stimulate domestic demand