1.4 Flashcards
What were 3 things that contributed to the post war depression
Farming
Industry
Government action
How did farming contribute to the post-war depression
During the war, farmers were urged to produce more wheat and were given subsidies to do so
Mechanisation meant fewer workers were needed, so some became unemployed
After the war, farmers produced too much; prices fell
Many were left unemployed or bankrupted
Farmers growing cotton did not escape trouble, due to the boll weevil
How did Industry contribute to the post-war depression
There were many strikes in 1919 and 1920 - most failed to get better working conditions for strikers
Older industries like coal started to decline - in 1900 coal had produced almost 90% of energy supplies in the USA, on 1930 it was 60%
How did government reaction contribute to the post-war depression
Due to their laissez-faire policies, they didn’t feel the need to stop the depression
The isolationist tariffs on foreign goods led to other countries introducing similar tariffs on US goods; US exports fell
The government felt that the depression would soon right itself
What 5 factors contributed to the boom
Mass production New management techniques Federal policies Hire purchase and loans Changing industry
How did mass production contribute to the boom
Mass produced goods were produced more quickly and cheaply, so could be sold at a lower price
In 1917, there were 4727468 passenger cars registered in the USA; by 1929, there were 23060421
How did new management techniques contribute to the boom
Some employers began to use ‘scientific management’ ideas (as set out by Frederick W. Taylor) to make the production line worked as effective as the production line itself
Scientific management advised paying good wages and creating good working conditions
How did federal policies contribute to the boom
While the government generally avoided intervention in business, it kept some of the wartime subsidies to farmers in place and also cut taxes for businesses to encourage buying American
How did hire purchase and loans contribute to the boom
In the 1920s, companies pushed hire purchase as a practical way to buy
Companies such as Sears sent out huge catalogues, promising ‘easy payments’
Between 1920 and 1929, consumer debt rose from $3.3 billion to $7.6 billion
Before 1920, people borrowed on average 5% of their income; by 1929, this had almost doubled
How did changing industry contribute to the boom
New Indian were more efficient and used a higher level of mechanisation
Older industries, like textile manufacturers, became less important
Many of the new industries, and the goods they produced, ran on electricity - in 1917, there were 7889000 homes and businesses wired for electricity; in 1930, there were 24555732
How did the stock market lead to the post war boom
Stock trading had become something that only banks did, however it became increasingly popular with regular households
As share prices were constantly increasing the media encouraged people to buy shares through buying on the margin. This increased demand for shares sent the market into a bull phase
Banks also used customers’ investments to trade in shares
How did the collapse of the stock market happen
Most people who had bought consumer goods0 had, so this led to a saturation in the market. Firms did not cut production so stock piled up in warehouses
The government did not intervene as they thought it would be similar to 1919
In September 1929 people sold their shares as they were seen as too high
The media started talking of a crash so people panic sold heir shares which caused a bear market to occur and on the 29th October the stock exchange closed
What was the impact of the stock market crash
Small investors lost everything
Banks gambled people’s savings when shares fell
What contributed to the bust
A
Describe the Recovery process after the depression
Roosevelt’s first action as president was to close all the banks, have FED officials inspect them and then only reopen the ‘healthy’ ones
He also set up the alphabet agencies, like AAA and TVA
Natural disasters hampered recovery, e.g. droughts in the early 1930s made the Great Plains a dust bowl; many farmers lost their farms and became migrant workers)
Recovery was slow and bumpy, with an economic decline (the ‘Roosevelt Recession’) in 1938-39, but confidence held
In 1937, the Wagner-Steagall National Housing Act set up the Federal Housing Administration to oversee slum clearance and the building of housing for low-income families
The SWW led to an increase in war production in 1939, and the USA joined the war in 1941, which led to a further increase in employment
What factors fuelled the boom after the SWW
A
How did inflation change post SWW
A
What fuelled the baby boom of the 1950s
It was fuelled by men returning from the war, fewer women working and the buoyant economy
How did the suburbs change post SWW
The suburbs were a visible sign of the impact of economic change in the USA
The government funded the building of roads and homes - 1956 Highways Act allowed for 41000 miles of interstate highways
There was an explosion of ‘Levittowns’ in the North East
On Long Island, there were 17000 homes for 82000 residents, the cheapest of which was just under $7000
Levitt refused to sell to black Americans, which led to the building of black suburbs
