Depression Of The 1930s

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credit
(created, in part, by low-paid workers buying on credit) and high profits
for a few industries, concealed basic problems. Thus the U. S. stock market
crash that occurred in October 1929, with huge losses, was not the
fundamental cause of the Great Depression, although the crash sparked, and
certainly marked the beginning of, the most traumatic economic period of
modern times.

By 1930, the slump was apparent, but few people expected it to continue;
previous financial PANICS and depressions had reversed in a year or two.
The usual forces of economic expansion had vanished, however. Technology
had eliminated more industrial jobs than it had created; the supply of
goods continued to exceed demand; the world market system was basically
unsound. The high tariffs of the Smoot-Hawley Act (1930) exacerbated the
downturn. As business failures increased and unemployment soared--and as
people with dwindling incomes nonetheless had to pay their creditors--it
was apparent that the United ...

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"the only thing we have to fear is fear itself." But though
his NEW DEAL grappled with economic problems throughout his first two terms,
it had no consistent policy.

At first Roosevelt tried to stimulate the economy through the NATIONAL
RECOVERY ADMINISTRATION, charged with establishing minimum wages and codes
of fair competition in every industry. It was based on the idea of
spreading work and reducing unfair competitive practices by means of
cooperation in industry, so as to stabilize production and prevent the
price slashing that had begun after 1929. This approach was abandoned after
the Supreme Court declared the NRA unconstitutional in SCHECTER POULTRY
CORPORATION V. UNITED ...

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