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Great Depression-New Deal Vocabulary

Stock  Speculator  On Margin   Stock Market  Wall St.   Broker   Margin Call   Black Tuesday   The Crash

Boom-Bust Cycle    Inflation/Deflation    Recession   Depression   Federal Reserve   Fiscal Policy  

Rugged Individualism    Laissez-Faire    Hoovervilles   Bonus March    First Hundred Days    Bank Holiday

New Deal    Alphabet Agencies   Dust Bowl   Okies   Keynesian Economics   Prime the Pump   Relief

Recovery   Reform    Hawley-Smoot Tariff   Demagogue

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Categories: student information
  1. John Petty
    October 20, 2008 at 3:32 am

    Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948

    In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression.
    Our current situation is eerily similar.

    Eccles wrote:

    “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery.

    Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

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