What were the causes of the Great Depression, and what did FDR try to do to stop it?

Answer 1

People who had invested in the stock market pretty much decided to sell their stocks and when they did that, money was almost non-existent in the economy. Therefore, people couldn't work because they weren't getting paid and people just had a hard time.
FDR came up with many different programs to get people working for the government, building roads, planting trees, basically anything they could do to be paid.
These were big steps which really helped. But, the depression wasn't over until WW2 because the country had to mechanize for the war effort.

Answer 2

The Great Depression was an economic downturn which started in 1929 (although its effects were not fully felt until late 1930) and lasted through most of the 1930's. It centered in North America and Europe, but had devastating effects around the world, particularly in industrialized countries.

Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago. Current theories may be broadly classified into two main points of view. First, there is orthodox classical economics, monetarist, Keynesian, Austrian Economics and neoclassical economic theory, which focuses on the macroeconomic effects of money supply, including production and consumption. Second, there are structural theories, including those of institutional economics, that point to underconsumption and overinvestment (economic bubble), or to malfeasance by bankers and industrialists.

There are multiple issues—what set off the first downturn in 1929, what were the structural weaknesses and specific events that turned it into a major depression, and how did the downturn spread from country to country. In terms of the 1929 small downturn, historians emphasize structural factors and the stock market crash, while economists point to Britain's decision to return to the Gold Standard at pre-World War I parities ($4.86 Pound) (Peter Temin, Barry Eichengreen).

Although some believe the Wall Street Crash of 1929 was the immediate cause triggering the Great Depression, there are other, deeper causes that explain the crisis. The vast economic cost of World War I weakened the ability of the world to respond to a major crisis.

From 1932 onward President Roosevelt argued that a restructuring of the economy—a "reform" would be needed to prevent another depression. New Deal programs sought to stimulate demand and provide work and relief for the impoverished through increased government spending, by:

* reforming the financial system, especially the banks and Wall Street. The Securities Act of 1933 comprehensively regulated the securities industry. This was followed by the Securities Exchange Act of 1934 which created the Securities and Exchange Commission. (Though amended, the key provisions of both Acts are still in force as of 2006). Federal insurance of bank deposits was provided by the FDIC (still operating as of 2006), and the Glass-Steagal Act (which remained in effect for 50 years).
* instituting regulations which ended what was called "cut-throat competition" which kept forcing down prices and profits for everyone. (The NRA—which ended in 1935).
* setting minimum prices and wages and competitive conditions in all industries (NRA)
* encouraging unions that would raise wages, to increase the purchasing power of the working class (NRA)
* cutting farm production so as to raise prices and make it possible to earn a living in farming (done by the AAA and successor farm programs)

The most controversial of the New Deal agencies was the National Recovery Administration (NRA) which ordered:

* businesses to work with government to set price codes;
* the NRA board to set labor codes and standards.

See more on Wikipedia at http://en.wikipedia.org/wiki/Great_depression#New_Deal_in_the_United_States