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The Great Depression Research
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TABLE OF CONTENTS THE STOCK MARKET CRASH OF 1929 HAD AN IMMEDIATE IMPACT ON INDIVIDUALS, FEDERAL GOVERNMENT AND STOCK MARKET REGULATION. Introduction............................................................................................................1 I. Individuals were impacted by the crash..............................................................7 1. Americans experienced rising unemployment…............................................7 2. Public education suffered as a result of the crash......................................9 3. Stagnating wages and inflation hurt Americans financially.......................10 II. The federal government was impacted by the crash.......................................12 1. Change in political control brought reform................................................12 2. The FDIC was established........................................................................13 3. Congress began investigating banking practices......................................15 III. The stock market was directly impacted by the crash....................................17 1. The Security and Exchange act of 1934 was passed.................................17 2. The Glass-Steagall Act was passed in 1934..............................................18 3. The Securities and Exchange Commission (SEC) was established….. ……….. …. .19 IV. Conclusion......................................................................................................20 Bibliography.........................................................................................................22 Introduction The 1920’s are often referred to as the booming 20’s. This is because America had just come out of the First World War and our country was getting back into capitalism. America was a poorer nation after the war than the country was before World War One (Gerdes, 37). The country faced major decisions. During the war the government had needed to control large parts of what had before been private businesses. They employed millions of people, with war time jobs; this includes the millions of American soldiers fighting the war. During the war the capitalist America that had been in place, disappeared. Private business ground to a halt and the United States became a country based far more around the central government, than the individual. After the war America switched back to hands off government, this was a universal move at the time, it had very little opposition. The main question was would it work for an America that had spent the last several years with a large controlling centralized government. During the 1920’s it did work. Women were getting the right to vote; on August 18 1920 Tennessee became the last state to ratify the woman’s right to vote (AMEX 1920's Presentations). This was pivotal to the women’s rights movement. The United States built the tallest building to date, the Chrysler building (AMEX 1920's Presentations). The first commercial radio station began broadcasting from Pittsburgh, PA in 1922 (AMEX 1920's Presentations). Radio stations quickly spread all over the country. Jazz became associated with all things mobile. The middle class boomed and the work force increased drastically. The new technologies helped fuel a large increase in infrastructure, including roads and the building of the interstates. The spread of electricity which had slowed during the war was increasing rapidly; in the United States it quadrupled. Young women known as flappers ditched the old fashions of their mothers, including the corset, and began to wear dresses that showed their knees. The hairstyle was a shoulder length bob (AMEX 1920's Presentations). Makeup, which up until then was not prevalent or socially acceptable, became common (AMEX 1920's Presentations). So throughout most of the 1920’s the hands-off government prospered and the American lifestyle steadily became better. Then near the end of the 1920’s the good times came to an end with the crash of the stock market (AMEX 1920's Presentations). On Friday, October 18, 1929, the market ended an average of 7% down, with blue chips down seriously more then that (Galbraith, 95). Some stocks were down as much as 40%, which make headline news on all the weekend news programs (Galbraith, 95). Even with these kinds of losses, the major theme to the news was that on Monday “influential” bank leaders would step in and bring the market around. They would do this in the private sector, without the help of government intervention (Galbraith, 95). On Monday the 21st, the third heaviest day of trading the NYSE (New York Stock Exchange) had ever seen, occurred with 6.8 million shares were traded in one day (Galbraith, 96). Trading was so heavy that around the country the tickers that, track the market fell behind (Galbraith, 96). People could not tell what was happening, as the information they were getting was several hours old. It was not until an hour and 40 minutes after the markets closed that the final trade was completed. People then learned that the markets had ended the day very slightly up (Galbraith, 96). However, this did not come as a relief; the Federal Reserve had done nothing all day, neither had the banks. People had traded blindly all day long and for most it was not a pleasant experience. The realization finally seemed to be reached that no one actually knew what was going on in the markets and that the banks and government were not going to make a move. The uncertainty grew, and with it the fear. From the very beginning of Black Thursday, things went downhill. By 11 o’clock tickers across the country were well behind the trading. As prices fell rapidly the tickers fell further and further behind (Galbraith, 99). Across the country, boardroom tickers showed a frightful vertical collapse (Galbraith, 99). By 11:30 everyone was trying to sell. They did not know what was actually going on and, it was a true panic (Galbraith, 99). Outside the Exchange Building in New York a huge crowd gathered. A special police force was sent out to keep the peace. All the people in the crowd were waiting, but no one knew for what (Galbraith, 99). Around the country, people gathered at their banks and stock companies trying to figure out what was happening (Galbraith, 100). The Chicago and Buffalo Exchanges closed down and at least a dozen well know traders had killed themselves (Galbraith, 100). The New York Stock Exchange closed down its visitor’s wings as the crowds grew and people began jumping out of windows (Galbraith, 100). At noon, reporters learned of a meeting to be held at 23 Wall Street, the head quarters of J.P. Morgan. It would include the heads of all the major banks, who would meet to figure out how they could come together to put a stop to the panic (Galbraith, 102). They reached a decision in record time, and by 12:30 the bankers had gone to the Stock Exchange and began strategically buying stocks, in an attempt to stop the landslide (Galbraith, 101). When the people saw the bankers buying on the floor they also began to buy; they were reassured by the fact that the banks had come together and formed a plan to stop the blood letting. The bankers also went out of their way to send high level, highly recognizable figures down to the floor to place the bids. Also, they acted very calm and self confident (Galbraith, 101). It is not known how much the banks spent that day to try to keep the economy floating. It is estimated that it was $250 million collectively (Galbraith, 101). Today that may seem like nothing. Companies buy each other for billions today. It has to be remembered; though, that the banks were not trying to single-handedly save the economy, they were just giving the people the reassurance they needed. The banks needed to show the people that they still had the influence to change the course of events if they needed to. As they had been silent for so long, they also had to act quickly and whatever they did they needed it to work quickly. If not, people would panic and their window of opportunity would be lost. There was a mini rally right after the bankers hit the trading floor, and showed everyone that they were at work, but during the last hour of trading, stocks again went down (Galbraith, 103). By the end of the day, the market was down by an average 12%, which is about what the markets go up each year (Galbraith, 103). Steel was only down about 2%. It was the first thing the banks put money in, and afterward steel prices rose 10%. General Electrics, which was at its low point down 32%, came back and closed 25% down (Galbraith, 103). There were many, at the end of the day, which was grateful to the financial leaders of Wall Street; without their intervention, the market would have easily been down twice what it was. To many, however, they would not see the relatively good news until the next morning. This was because the tickers were, at this point, hours behind and all that most people saw was a steady decline even after the market had closed (Galbraith, 104). It was not until the markets had been closed for three hours that the ticker reached the close; it was not happy watching for those who were (Galbraith, 104). Influential families gathered all over the country and tried to convince people that the worst was behind them and that the market would bounce back. People largely did not believe what they were being told about a bounce back, mainly because they were also being told that today had ended better than expected. They did not see losing decades of savings in a few days as a good thing. The crash of 1929 had immediate and long-lasting influences on every part of American life for years to come. The crash influenced who controlled the federal government, the individual investor’s outlook on the market, and the way the banks gave loans and investments. Impact on the American people After the stock market crash of 1929, there were major and immediate impacts for all of the people living in America. These impacts included rising unemployment, failing public education and stagnating wages in an increasingly expensive world. There were growing hardships for the people of America; the great majority of people grew poorer while a very small minority of people stayed rich. The unemployment rate grew quickly nationwide. There were no sectors of the United States that were left unaffected by the rising unemployment. In 1933, the unemployment rate reached its worst in the Great Depression: one in four people was unemployed ("What Followed the Crash."). However, that number is not accurate because it only counts the number of people who were still looking for a job. It does not count the people who had given up on ever finding another job (“What Followed the crash"). The people who had given up on ever finding a job took to the rails by the thousands and were commonly known as “hobos”. They illegally road the railroad system looking for odd jobs, or simply looking for somewhere to get their next meal ("A Case of Unemployment."). The number of shanty towns in the country also sky rocketed; they appeared in almost every city in the United States. These towns were mainly made up of the homeless that were living in the streets of the cities and overflowed the streets. They came together and as a survival mechanism and a protest they took up large amounts of public land with their shanty cities. The shanty towns were called Hoovervilles, named after President Hoover ("A Case of Unemployment."). Many people of the time blamed Hoover for the Great Depression and the lack of help coming from the Federal Government. Without people at work the country ground to a halt. The lack of jobs did not evenly affect all types of people. By 1932, about half of all working black people were unemployed ("Everyday Life during the Great Depression."). Black people were often forced out of jobs that they could do perfectly well. The only reason for this was so that a white person could have the black person’s job ("Everyday Life during the Great Depression."). People’s lives got worse and worse. There were, at one point, about 30 million people without a job in the 48 states that were the United States ("American Cultural History."). With unemployment so high, the standard of living went downhill for many Americans. For a great number of people, basic, expected rights were being lost, such as the right to an education. During the years immediately succeeding the great crash, the public education system, which had been flourishing so much in the 1920’s, began to fail. During that decade the United States went from having 12 million people in its education system to 27 million (Gerdes, 39). The United States, at one point had twice the number of people in college than the rest of the world combined; now for the first time in decades, the system began to shrink (Gerdes, 39). With money in short supply, parents were not able to afford necessary supplies for their children, such as clothes ("American Cultural History."). This being the case, they could not send them to school, because they could not afford the necessary supplies and they needed them to stay and work. Taxes, especially in more rural areas of the country went unpaid ("American Cultural History."). As a result of this, school boards had to make some difficult decisions. They began by shortening the school year, because they did not have the money to stay open all year. There were also fewer and fewer children coming to the schools ("American Cultural History.") They also began to cut teacher’s salaries. One teacher was paid $40 a month, for a five month school year, and that was all that the teacher made all year ("American Cultural History.") One county in Arkansas was forced to start charging tuition to keep the public school running ("American Cultural History.") Many children were forced to drop out as their families were unable to pay tuition. One farmer was able to pay by providing wood to heat the school; only because of this were his four children were able to stay in school. For those who still had a job, their wages were not increasing and the prices of goods and services were increasing. The Gross National Product is the measurement of how many products are produced by the country in a year ("What Followed the Crash.") Between 1929 and 1933 the GNP went down by over 33%, which meant that there were a third less items being produced every year, but the same amount of people trying to buy the fewer products ("What Followed the Crash.") This means that the price of nearly everything went up drastically, while the wages that people earned stayed the same, or they went down ("What Followed the Crash.") There were few government programs set up to help poor people, and they were quickly overwhelmed by the millions of people who were trying to get assistance from the government ("A Case of Unemployment.") There were people, who still had jobs, yet the jobs did not pay well enough to keep up with inflation, these people began to fall into debt. Though there were only a few people who actually died from starvation, there were many who resorted to searching through garbage dumps for food or ate weeds ("Everyday Life during the Great Depression."). The average annual salary of the time period was $1,368, which was not enough to pay for the rising cost of food and other necessities ("American Cultural History.") Some food prices of the time were Milk, 14 cents a qt.; Bread, 9 cents a loaf; Round Steak, 42 cents a pound (“American Cultural history"). Do to this; many children were forced to work from a young age to help support their families. With a salary of $1,368 a family could barely get by they would have very little food and no money left over for sending the kids to school. In conclusion, the 1929 stock market crash had a very significant and immediate impact on the people living in that time. A great percentage of people lost their jobs and it would not be until World War Two that the unemployment rate would drop under 10% ("A Case of Unemployment.") By today’s standard, a 10% unemployment rate would be extremely high; we have roughly 5.5% unemployment in America today this according to the latest government reports. With such high unemployment and so little help from the government, children were forced to work in order to keep their families fed ("A Case of Unemployment.") Those who could not find work were forced to take to the rails in the hope they could earn a little money. Most of the people who took to the rails did not end up finding the work they sought. Most of them ended up in a Hoverville living in shacks, slowly fading away ("A Case of Unemployment."). Even though some people still had jobs, most were not keeping up with inflation, so more members of the family had to work to maintain a lifestyle. There were no people who lived through the Great Crash of 1929 that were unaffected by it. Self pity and blame became widespread; during the 1920’s many Americans believed that success was given to those who deserved it. Using this logic, the economic situation led those who had lost their jobs to believe that they did not deserve success, which only deepened the depression that America was in. The Impact on the Federal Government It was not only the people of the United States that saw an immediate and substantial impact from the stock market crash of 1929; the Federal Government also saw some very influential and long lasting changes. These included a change in the party that controlled the executive branch the founding of the Federal Deposit Insurance Corporation (FDIC) and the United States Congress launching investigations into major bank practices during the time of the Depression. From 1920 to 1932, the Republicans had controlled the executive branch of the United States government (1929-1941: the Great Depression, 6min). This was because during the 1920’s the Republican’s message of ‘less government is better’, appealed to many Americans. The appeal mainly stemmed from the fact that during the 1920’s America was in a national economic boom. People did not see the need to pay high taxes if the government could create a safety net. The thinking of the 1920’s was that America is doing so well right now we could not possibly need government programs to insure our money on a federal level. After the World War One the government put the private sector back together with almost no checks and balances (Gerdes, 32). This was how Republican President Hoover, who was orphaned at age six and therefore had an extreme view of individualism, wanted the country to be run (Gerdes, 30). When Hoover campaigned for the presidency he, argued that America needed to let the private sector flourish (Gerdes, 30). He believed that government weakened free enterprise and that with private business America could wipe out poverty (Gerdes, 30). At this time in the country’s history, both the Democrats and the Republicans saw eye to eye on the issue of giving power to the private sector. Both parties agreed that the United States needed to stay far away from socialism. The Republican Congress worked with the Democratic administration to give the private sector most of the power they had held before the war (Gerdes, 32). Then when Hoover was president, the Republican-controlled government gave the private sector even more power (Gerdes, 32). He believed that the private sector could run the country much better than a bureaucracy could. He was a free market man through and through and, he was against government regulation in any economic way. He thought that the government should be the referee in the economic game, not a player (Gerdes, 30). All this changed after the 1929 stock market crash. In 1932 there was a presidential election, and because of the crash and the coming tide of a Great Depression Hoover did not win re-election. In 1932, Roosevelt, a Democrat, was elected to the presidency of the United States (1929-1941: the Great Depression, 6min).The country was looking for a new direction for the country and after 12 years of a Republican and a great crash in the market, the people elected a Democrat to the presidency. Roosevelt, unlike Hoover, believed that the government needed to step in and help out the people of America (1929-1941: the Great Depression, 16min). Roosevelt also believed that he not only needed to get people working, but he needed to get people confident again Roosevelt was a great believer in the power of confidence (1929-1941: the Great Depression, 16min). When Roosevelt was on the campaign trail, he was very vague about how he would end the Depression; he just said that he would (The Great Depression and New Deal, 1929-1940s). Once FDR was in office, he said “yes” to almost every plan put forward by his advisors and almost every plan put forward by the House of Representatives and the Senate (The Great Depression and New Deal, 1929-1940s). In the first few months of his presidency, there were scores of bills passed, including relief bills, which were designed to provide short term relief to the immediate problems, recovery bills, which were longer term relief bills designed to get cash flowing in the economy, and reform bills which were permanent changes to the structure of the economy designed to stop a crash from happening again (The Great Depression and New Deal, 1929-1940s). After the stock market crash, thousands of banks failed (The History of the FDIC). This spurred the government to found the Federal Deposit Insurance Corporation (FDIC) in 1933 (The History of the FDIC). The Federal Deposit Insurance Corporation is a government agency that is tasked with guaranteeing deposits of money in checking and savings accounts; all accounts do not have this guarantee just those of member banks (FDIC Chapter 1 Introduction). The theory behind the founding of the FDIC was that when a bank failed, the people who had money in that bank did not lose all of the money they had put into it, which had been the case before the FDIC was in existence. This would not only help those who would lose their money, but it would help on a larger scale to restore faith in the banks. From 1934 through 1941 the FDIC handled 370 bank failures. Most of these were small banks, but thanks to the FDIC, the people who had their money in those banks did not lose all of it (FDIC Chapter 1 Introduction). At its inception, the FDIC guaranteed up to $2,500 that was quickly raised to $5,000 and today it is up to $100,000 (The History of the FDIC). In 1935, the Banking Act was passed, which was designed to limit banking behavior and give the FDIC more regulatory power (FDIC Chapter 1 Introduction). This power included the right to deny guarantees to non member banks (FDIC Chapter 1 Introduction). The reason for this was the government wanted to have not only the small banks, but the big banks as part of their system. Denying non-members the guarantee gave an incentive for all banks to join. Along with higher incentives to join with the FDIC came higher standards to getting into the FDIC (FDIC Chapter 1 Introduction). All this was an attempt to keep the Great Depression from happening again. The Senate was spurred on by the people to launch investigations into some of the larger banks in the country to see if they might be hiding something or evading taxes. One of these was an investigation into the Morgan bank and specifically Mr. Morgan, the bank’s president. The media expected the senate to tear apart Morgan and his company on the company’s practices (Thorndike, Joseph J). They were not disappointed: the senate launched a series of investigations into banking policies lead by Pecora, who was the fourth and final Chief of the United States banking counsel. The committee revealed some riveting facts about the large banks of the time, including their leader, like in this New York Times headline from 1933: "Morgan Paid No Income Tax for 1931 or 1932." (Thorndike, Joseph J). It was true the head of one of the largest banks in the country had not paid any income taxes during those years; he had fallen through a loop hole. So while the country was falling apart, he was not even paying his dues to the American government. The investigation focused on a range of issues including inside deals made with Wall Street friends and sweetheart deals with political figures that supported the bank (Thorndike, Joseph J). "Rich men of the country should not be able to escape income taxes at the very moment when the rest of the country is burdened with increased taxes and when the Government is so desperately in need of revenue," was part of a Washington Post article from the time (Thorndike, Joseph J). The New Republic was also very harsh on Morgan saying, "What has rankled most in the hearts of the vocal public," "is that when millions of persons with small incomes were straining every nerve to meet their income taxes, these princes of wealth, who personally enjoyed luxuries denied to almost everyone else, did not pay any income tax at all." (Thorndike, Joseph J). FDR was a huge supporter of the investigations and he met multiple times with the leader of the investigations to give them tips (Thorndike, Joseph J). The National Industrial Recovery Act (NIRA) was passed within the first 100 days of FDR’s presidency. It closed the hole that Morgan had fallen through and made tax evasion much harder and much worse to commit (Thorndike, Joseph J). On June 10, 1933 the committee that had been looking into the banks was broken up into smaller subcommittees and so ended the investigations. In the end, the United States government was massively affected by the immediate aftermath of the stock market crash. Not only did the executive branch switch hands after over a decade in the same hands, but once it had, dozens of major laws were passed within a short number of years. The government back then seemed able to work far faster than the one we have now. There were major restrictions put in place by the government on banks and money lending. This could never have come about under Hoover, who did not believe in government interference. The FDIC was created, which was a major step for the government; they were stating that they were willing to guarantee, to a point, everyone’s money. Lastly there were the investigations into the malpractice of the large banks of the country. This revealed major holes in this country’s tax laws, and spurred the government to pass major tax reform laws. In conclusion, the stock market crash had a major impact on all levels of the federal government. The Stock Market was directly impacted by the Crash The stock market had been almost totally unregulated since the war. With the Crash, however, people saw a need for the government to look into regulation of the stock market and the banking industry. Citizens pressured Washington into the Securities Exchange Act of 1934, the Glass-Steagall Act and the creation of the Securities and Exchange Commission (SEC). The people of the United States did not have to push very hard to get the government to look into regulation, because the federal government’s controlling party had changed and the Democrats were much more open to idea of the government regulation of the free market. The Securities Exchange Act of 1934 was a broad law that gave the government more power for regulating the stock market (The Securities Exchange Act of 1934). It covered the creation of the Securities and Exchange Commission, anti fraud laws, a full and transparent disclosure system for the government and a regulating system for markets and those who traded on them (The Securities Exchange Act of 1934). The anti-fraud measures provide major protection for investors who have been on the receiving end of fraud (The Securities Exchange Act of 1934). The law allows the fraudsters to be punished no matter how clever the scheme was; it also allows for private law suits to be brought against the fraudsters (The Securities Exchange Act of 1934). It also outlined different types of trading that would from then on be considered illegal, such as insider trading. This occurs when one person has knowledge that another person does not and acts upon it in order to make a lot of money, or avoid a loss (The Securities Exchange Act of 1934). The 1934 act requires that all securities that are traded on the market, such as a stock, be able to show some amount of financial information so that people will know something about what they are investing in (The Securities Exchange Act of 1934). It also allows people to see whether the security they are investing in has any bad apples or skeletons in the closet (The Securities Exchange Act of 1934). It also required that all currently traded securities be reported on a regular basis to the government and their investors (The Securities Exchange Act of 1934). The act also required that the brokers of the world register with the SEC if they wanted to continue doing business within the United States. This was to insure basic competency from the broker and to make sure everything the broker was doing was above board (The Securities Exchange Act of 1934). The Securities and Exchange Commission was created as part of the 1934 act. The agency is charged with protecting the public from bad investment policies (Securities and Exchange Commission). There are five members of the SEC’s board, all of whom are appointed by the president (Securities and Exchange Commission). They serve a five- year term and no more then three of them may be from the same political party (Securities and Exchange Commission). In addition to regulating securities, the SEC also regulates all United States takeovers (Securities and Exchange Commission). If a single person or company buys more than 5% of a company at one time it must be reported to the SEC within ten days of purchase (Securities and Exchange Commission). The SEC is made up of eight different divisions (Securities and Exchange Commission). The Division of Corporate Finance is in charge of overseeing all acquisitions or mergers (Securities and Exchange Commission). The Division of Market Regulation oversees markets and their participants (Securities and Exchange Commission). The Division of Investment management is in charge of enforcing three laws, the Investment Company Act of 1940, Investment Advisers Act of 1940 and the Public Utility Holding Company Act of 1935 (Securities and Exchange Commission). The Division of Enforcement is the investigating arm of the SEC, acting as its police force (Securities and Exchange Commission). The Office of Compliance, Inspections, and Examinations insures that all investments and companies are in compliance with federal laws (Securities and Exchange Commission). The remaining branches are the Office of Municipal Securities, and the Office of Investor Education and Assistance (Securities and Exchange Commission). The operations of the SEC include rulemaking and enforcing. If a industry or party is found to be in violation of the law the SEC can fine them, sue them or turn the case over the Department of Justice (Securities and Exchange Commission). The SEC gave the American people back some confidence in the system. The Glass-Steagall Act (GSA) was passed in 1933 and its main purpose was to separate the commercial banks and the investment banks (What Was the Glass-Steagall Act?). The reason for this was that commercial banks had been too risky with their investor’s money (What Was the Glass-Steagall Act?). Once it became law, banks had one year to deicide whether they would be a commercial bank or an investment bank (What Was the Glass-Steagall Act?). The idea was that an investment bank was backed partially by the government and a commercial bank was not. The Act also stops banks from taking debt and then selling it to make a profit. This was seen as one of the main reasons that the market crashed. The Act did not prohibit the banks from these practices outside the United States, and most continued to (Understanding How Glass-Steagall Act Impacts Investment Banking and the Role of Commercial Banks). The GSA has been amended several times and it has been seen by some as an overreaction to a problem that it did not cause. In conclusion, the stock market was immediately and lastingly impacted by the stock market crash of 1929. Before the crash the market had been almost completely free and un-regulated. After the crash, the people wanted regulation and they got it, in the form of the Securities Exchange Act of 1934, the Glass-Steagall Act and the creation of the Securities and Exchange Commission (SEC). All three of these live on today, and though they have been altered in some form or another, they have been mainly seen as a good thing for the market. Conclusion In finality, the stock market crash of 1929 was a terrific and horrific awakening for the American people, a people who had been living the American Dream during the roaring 1920’s. After the crash of 1929, all aspects of American life were significantly altered. Individual’s lives were impacted by rising unemployment, falling public education and stagnating wages. At one point in the 1930’s, 33% of Americans were without a job. Parents could not feed their children, so the children were needed to stay home and work with their parents to put food on the table. A negative side affect of this was the great decrease in the public education system. For those Americans who did keep their jobs, wages did not increase and in many cases wages decreased. This did not help families keep up in an increasingly expensive world. For years after the stock market crashed, people did not trust the system and this made it increasingly hard for the government, when it did finally step in, to get people back to work. The federal government was impacted by the stock market crash, with a change in the party that controlled Washington, the creation of the FDIC and the Senate launching investigations into banking practices. For the first time in twelve years, the Republicans lost control of the federal government. Their hands-off approach to government was seen as one of the main reasons that the stock market crashed. The FDIC was created to provide limited federal backing of money in the banking system. And the Senate encouraged by public outcry, launched a series of investigations into some of the world’s largest banks, to see if they had followed all of their rules and paid all their taxes. They found major tax evasion and many other immoral practices. The Stock market was impacted by the Depression with the passing of the Securities and Exchange Act of 1934, the founding of the Securities and Exchange Commission and the Glass-Steagall Act. The Securities and Exchange Act of 1934 set major ground rules for the regulation of the stock market. The SEC was founded as part of the Securities and Exchange Act of 1934; it is an organization of the government responsible for enforcing the laws passed in the Securities and Exchange Act of 1934. And the Glass-Steagall Act was passed into law, which helped keep commercial and investor banks separated, which protected individual investors against fraud. Overall the Depression had an enormous and long-lasting effect on all parts of life at the time. Many of the regulations that were put in place during the Depression are still in effect now, though some have been altered. Today, Wall Street continues to investigate, and in some cases send to jail people who have been found guilty of insider trading. The government still holds the companies and makes them release quarterly reports to the public and the government. The reason for this is to make sure all of their financial information adds up, if it does not the government launches an investigation into the inequality. Despite these changes made in regard to stock market regulation and federal government actions, the great depression would not fully come to an end until the Second World War. When the country would again be out to work fighting or manufacturing materials needed for the war. Works Cited 1929-1941: the Great Depression. Videocassette. National Geographic Society. "A Case of Unemployment." 20 May 2008 "American Cultural History." Kingwood College Library. 20 May 2008 AMEX 1920's Presentations. 10 June 2008. Bernstein, Michael A. The Great Depression. New York: Cambridge UP, 1989. This book may not be very helpful but I will still try it. It seems like it might be more about the long term effects of the depression and I am doing more of the lead up to, and the economic reasons why the depression happened. It does have an introductory chapter that seems to focus on what I want to cover. It may have new information I will have to read more of it. Michael A. Bernstein the author of this book teaches at The University of California. If this book helps at all it will be in getting details of what happened directly after the 1929 crash. It could also help in writing a conclusion. "Depression, the Great, 1929-1939." 28 May 2008 "Everyday Life During the Great Depression." 20 May 2008 "FDIC Chapter 1 Introduction." 28 May 2008 Galbraith, John K. The Great Crash 1929. Boston: Houghton Mifflin Company, 1988. This book seems almost perfect. It details all of the possible reason for the crash of 1929. It focuses almost completely on the crash and what came before it. This is exatlty what I want. It has details while at the same time giving me a overall picture about what was happening. This will be great for getting a thesis and bing, bang, bongo. Gerdes, Louise I. The Great Depression. San Diego, 2002. This book will be instrumental in giving me a step by step knowledge of the early crisis of the depression. It details different economic tactics taken by the government. It will help in seeing how the government saw the depression in comparison to the people and what each party tried to do about it economically. It also tells how the Government tried to help out the workers in America. It also goes through major speeches made during the time period and analysis’s them so you can see there impact and what they are trying to get across. Louise I. Gerdes has written over 60 books other than this. "Great Depression Political Movements and Social Change." 28 May 2008 "Hobos." 20 May 2008 Kennedy, David M. Freedom From Fear. New York: Oxford UP, 2005. This book is a massive index of great depression information. The first few chapters will be especially helpful “the American people on the eve of the great depression” and “panic”. These detail the major reasons that the stock market crashed and we went into a depression. It follows the same ideas that the first book did but it goes into much greater detail and it will be useful once I know the basics of my topic and need more depth. The book also one the Pulitzer surprise. David M. Kennedy teaches at Stanford University. McElvaine, Robert S. The Great Depression America, 1929-1941. New York: Times Books. The first 125 pages of this book are all about the lead up to the Great Depression and then the very beginning of it. They focus on the economics and the social sides of the problem. This book will help me form the basis for my entire paper especially a lot of detailed information about economic plans tried by the government. It also goes father back in time to trace the entire lead up to the great depression, detailing how every economic move by the government could have added along the great depression. Robert S. McElvaine has written over ten books. This book will be mainly used for my introduction. Prosperity, Depression, and War: 1920-1945. New York: Greenhaven P, 2003. The most important part of this book is the chapter called “ The causes and Consequences of the Stock Market crash”. This will help me gain perspective and it gives be alternative views of the way it happened from other books. Also helpful is the detail that this book provides to the response by Hover to the crash. It does not go very far back in time but starts with the few months leading up to the crash and then right after it. "Responsibilities." Infoplease. 1 June 2008 "Securities and Exchange Commission." Answers.Com. 1 June 2008 "Securities and Exchange Commission." Infoplease. 1 June 2008 "The Great Depression and New Deal, 1929-1940s." 28 May 2008 "The History of the FDIC." 28 May 2008 Thorndike, Joseph J. "Historical Perspective: Pecora Hearings Spark Tax Morality, Tax Reform Debate." 28 May 2008 "The Securities Exchange Act of 1934." SIFMA. 1 June 2008 "Understanding How Glass-Steagall Act Impacts Investment Banking and the Role of Commercial Banks." 1 June 2008 "What Followed the Crash." Farming in the 1930s. 20 May 2008 "What Was the Glass-Steagall Act?" Investopedia. 1 June 2008 See Also
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