America 1920-73 - Part two: Bust - Americans' experiences of the Depression and New Deal Flashcards
What sequence of events caused the Great Depression?
- Factories overproduced.
- Selling abroad was difficult because of foreign tarrifs.
- Profits start to drop as products don’t sell.
- People get worried and sell their shares.
- This worries others and they sell, creating a chain reaction.
- Everyone sells at once, and the market crashes.
How many shares were sold on Black Thursday?
13 million
Five times the daily average.
Why did banks go bankrupt?
- People borrowed money to invest it.
- They lost the money because of the Crash
- This led to millions of people unable to pay back their debt.
- So banks go bust.
How many banks went bust in 1929?
659
How were the very rich impacted?
- Lost money in shares
- Rest of money unaffected as property and land.
How were the ordinary shareholders affected?
Very badly. They had lost money and were indebted. Many had no money and faced homelessness.
How were the farmers affected?
(Proportion of farmers evicted)
Many had mortgages and bank loans for equiment.
They struggled to pay back their debt.
By 1932, 1 in 20 farmers were evicted.
How were businessmen and their workers affected by the crash?
Factory owners cut production, wages and jobs.
How much unemployment was there in 1932?
Around 13 million people had lost their jobs. ~25% of the workforce.
What were Hoovervilles?
Settlements of homeless people. They made shacks made of boxes, scrap metal and old cloth.
What were Hobos?
Unemployed workers who travelled in search of work.
How did President Hoover respond?
He didn’t do much. He believed in ‘rugged individualism’.
What were the few things the government did to help 1929-32?
- Reconstruction Finance Corporation made small loans to buisnesses and farmers
- A huge road and dam building scheme created jobs.
What was the Bonus Army?
In summer 1932, 25 000 ex-soldiers marched to DC and asked for their war pension ‘bonus’ early. They were driven away by the army.
Why was Hoover so unpopular in the 1932 presidential election?
- He was reluctant to help the American people.
- He was a bad public speaker
- His belief in ‘rugged individualism’ made him look uncaring.
FDR was largely the opposite of this.
Why was FDR so popular in 1932?
- He was a great public speaker.
- He called his ideas ‘a New Deal for the American people’.
- He promised the ‘3 Rs’:
-Relief
-Recovery
-Reform
By how much did factory production fall between 1929 and 1932?
It fell by 45%
By how much did house building fall between 1929 and 1932?
It fell by 80%
What was FDR’s 3R’s?
- Relief: help for the old, sick, unemployed and homeless
- Recovery: government schemes to provide jobs
- Reform: make America a better place
What day was Black Thursday?
24 October 1929
By how much did the average share price go down by on Tuesday 29th October (1929)?
The average price of shares dropped by 40 cents.
What was the Emergency Banking Act?
- Closed all banks and had them inspected.
- Only well-run banks could reopen.
What ws the Economy Act?
- All government employees’ pay was cut by 15%.
- Saved over $1 billion.
How much money did shareholders lose because of the Crash?
Shareholders lost a total of $8 billion.
How many companies had closed by 1932?
20,000 companies had closed.
How many Americans stopped paying their mortgage in 1932?
In 1932 alone, 250,000 Americans stopped paying their mortgage. Most were evicted.
What is meant by ‘rugged individualism’?
That people can overcome problems with hard work, not government help.
How many speeches could FDR make in a day?
Sometimes up to 15 a day as he was a great public speaker.
What was the Beer Act?
It ended Prohibition.
What was ‘priming the pump’?
- The government investing money into more jobs.
- People start earning money and buy goods.
- Firms and buisnesses start hiring new workers.
- Back to 2.
What does the FCA stand for?
Farm Credit Administration
What does the AAA stand for?
Agricultural Adjustment Agency
What does the NRA stand for?
National Recovery Administration
What does the TVA stand for?
Tennessee Valley Authority
What does the HOLC stand for?
Home Owners Loan Corporation
What does the CCC stand for?
Civillian Conservation Corps
What does the FERA stand for?
Federal Emergency Relief Agency
What does the CWA stand for?
Civil Works Administration
What did the FCA do?
Lent money to farmers who couldn’t keep up with loan payments.
What did the AAA do?
Paid farmers to produce less, to increase food prices.
(To increase the farmers’ incomes)
What did the NRA do?
- Encouraged the establishment of rules to be followed, to eliminate unfair trade practices.
- Gave workers the right to join a trade union.
What did the TVA do?
Provided jobs building dams and power stations along the Tennessee river.
(Tennessee was very poor)
What did the HOLC do?
Gave loans to people struggling to pay mortgages.
What did the CCC do?
Gave work to young people in the countryside.
How many jobs did the CCC provide?
2.5 million
What did the CWA do?
Provided temporary jobs building schools, airports and roads.