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The Great Depression
The Basics - The following has appeared on New York examinations
Causes of the Great Depression were
Overuse of Credit Purchasing (Buying on Margin) - Because the stock market had performed so well throughout the 1920s, Americans came to believe the market would continue to do well for a long period of time. Many Americans began to purchase stocks on credit - buying goods with the promise to pay later. This is also called buying on margin. Americans also purchased expensive goods for their homes in the same way. However, when the stock market crashed on Black Tuesday, October 29, 1929, people lost all of their investments, and were left only with credit bills they had no money to pay off.
Overproduction - Many companies that produced durable goods, such as cars, washing machines and other expensive, long lasting products increased the rate of production during the 20s. The problem with this is that once everyone had a washing machine. car, etc., there was no demand for these products. Thus, the companies couldn't sell them, forcing companies to lay off workers or go out of business
Lack of Government Action - President Herbert Hoover (1928 - 1932) thought that the country was going through a temporary slow down and did not take enough action unitl it was too late. This laissez-faire (leave it alone) policy did nothing to halt the Depression.
Hoovervilles - President Herbert Hoover was blamed, fairly or not, for the Great Depression. People who lost their homes lived in shacks constructed of scrap materials in public parks or vacant lots. These shanty towns were nicknamed "Hoovervilles."
President Franklin Delano Roosevelt (1932 - 1945) beat Hoover in the election of 1932 and promised Americans a "New Deal" - a government that would be very active in trying new ideas to solve the problems of the Great Depression. Roosevelt dramtically increased the sizre and power of the U.S. government during the Great Depression. Many of his policies failed, but others were so successful that they are still with us today. Roosevelt faced critcism by people who felt that he was taking away the free-enterprise system.
Some New Deal policies were (see also  http://www.bergen.org/AAST/projects/depression/successes.html
Tenessee Valley Authority (TVA)- created energy producing dams in Tennessee to bring power to thousands of people who previously did not have access to electricity. The TVA created thousands of jobs for unemployed people.
Civilian Conservation Corps (CCC) - Had unemployed young males construct public parks and nature preserves around the country.
Social Security Administration (SSA) - This act established a system that provided old-age pensions for workers, benefits for victims of industrial accidents, unemployment insurance, and aid for defendant mothers and children, the blind and physically disabled. This still exists today.
Works Progress Administration (WPA) - Provided jobs for 8 million unemployed people who built hospitals, schools, airports, and other public facilites.
Federal Deposit Insurance Corporation (FDIC) - Insured bank accounts up to $5000. This restored faith in the American banks and is still with us today. It now insures accounts up to $100,000.
The Dustbowl - As if things were not bad enough, in the middle of the Depression, the Great Plains suffered a terrible drought and powerful wind storms blew away the dusty top soil. As a result, farmers could not grow crops and saw their incomes disappear.
Unemployment - At times during the 1930s, the unemployment rate reached as high as 33%, meaning one out of three workers could not find a job.
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