America: Opportunity and Inequality - American Society during the Depression Flashcards
1
Q
what caused the Wall Street Crash?
A
- overproduction - by 1929, American factories were overproducing, making goods faster than they could sell them - profits were beginning to fall
- foreign governments had put tariffs on US-made goods to encourage consumers to buy goods made in their own country
- speculation - in September 1929, a few cautious people began to sell their shares. they were worried that they wouldn’t get their share of the company profits at the end of the year
2
Q
what was the wall street crash?
A
- on 24 October 1929, 13 million shares were sold (5x more than a normal day) - this is known as “Black Thursday”
- on the 29th of October 16 million shares were sold, the Average price of a share dropped to 40 cents, and shareholders lost $8000 million
3
Q
why did banks go bankrupt?
A
- when share prices fell, investors couldn’t sell their shares for enough to be able to pay their bank back in full
- when lots of people couldn’t pay their loans back, banks went bankrupt
4
Q
how were factory owners affected by the Wall Street Crash?
A
- in 1927, Americans bought 4.5 million cars but car factories could not sell a quarter of that total by 1930
- this is called underconsumption
- factory owners were forced to cut production, then wages, and eventually started to sack workers
5
Q
how were factory workers affected by the Great Depression?
A
- many factory workers lost their jobs. The closure of one factory could affect all sorts of other businesses in the area too
- there were no workers to eat at a local restaurant or visit the newsagent or hairdresser
6
Q
how were ordinary shareholders affected by the Great Depression?
A
- they often had to pay off their bank loans by selling their valuable belongings such as cars
- some people even struggled to pay their rent and faced homelessness
7
Q
how were bank managers affected by the Great Depression?
A
- banks loaned out huge amounts of money in the 1920s
- many people spent it buying shares
- when they couldn’t pay the money back, the bank went bankrupt and bank managers and their staff lost their jobs
8
Q
how were the very rich affected by the Great Depression?
A
- some of the upper classes lost some of their wealth but they often had lots of property and land to fall back on
- they did still have to make some changes, e.g. sacking chauffeurs and cleaners doing the work themselves
9
Q
how were farmers affected by the Great Depression?
A
- with less money coming in, some farmers couldn’t afford to pay their debts or mortgages
- they faced losing their farms and having to sack their workers
10
Q
which party did Hoover belong to and which political idea?
A
- Republican party - believed it wasn’t the government’s role to interfere too much in the daily lives of citizens
11
Q
what was Hoover’s early political career like?
A
- he did a lot to help the starving in Europe after WWI
- he became president in 1928 when many Americans were making loads of money and could afford luxuries
12
Q
what idea did Hoover have for dealing with the Depression and why were these so poorly received by Americans?
A
- he believed Americans were “rugged individuals” and decided to let America recover on its own - this made him look uncaring
13
Q
how did Hoover respond to the Depression?
A
- in January 1930, Hoover confidently announced that America had now passed “the worst” of the Great Depression
- eventually, Hoover took steps to improve things. He set up the Reconstruction Finance Corporation, which lent money to businesses in trouble and made small loans to farmers
- Hoover also set up a huge road and dam building programme that created construction jobs
- in 1930, Hoover introduced the Hawley-Smoot Tariff Act, which made foreign goods even more expensive, hoping this would force Americans to get out and buy again. Other nations tax US goods brought into their countries, so American exports dropped dramatically and even more businesses failed
- in 1932, Hoover made $300 million available to states that they could use to help the unemployed - but the states didn’t want help from the Federal Government and only $30 million was ever actually given out
14
Q
how were unemployment rates affected by the Great Depression?
A
- around 13 million people had lost their jobs by 1932 - nearly 25% of the labour force
- around 250,000 Americans stopped paying their mortgages in 1932 alone and within weeks most were evicted from their homes
- many took to living on the streets
- one family in New York moved it a cave in Central Park
15
Q
what were “hobos” and “hoovervilles”?
A
- hobos were people who travelled illegally on the tops of trains
- the camps, made of urban waste ground, were called Hoovervilles, a sarcastic reference to President Hoover, whom many felt wasn’t doing enough
