American Bust IDEA✏️ Flashcards
Wall St Crash What was it and when did it take place? Why did the crash happen? How were the banks affected? How did the collapse of the banks affect the wider American society.
Rising share prices causing the stock market to crash 1929.
Inequalities of wealth: people not being able to afford goods and factories making goods faster than they could sell them so the profits fell.
Companies struggled to sell their goods abroad because taxes were being put on US-made goods (tariffs).
Lack of confidence caused people to sell their shares and drop their prices to attract a buyer.
Black Thursday October 1929 13 million shares sold on New York stock exchange on Wall St and share prices continued to drop. After Black Thursday shares dropped another 40%.
Many Americans borrowed money from the banks to buy shares hoping to pay them back when share prices rose. Investors couldn’t pay back the banks because of low share prices so banks went bankrupt and in 1929 659 banks went bust.
Some people lost all their bank savings: jobs were lost due to failing businesses.
Great Depression
4 types of people affected?
Why did these people lose businesses, homes and jobs?
What did farmers do as a result of their problems?
What did the unemployed do as a result of losing their jobs?
Shareholders- lost fortune and struggled to pay rent and faced homelessness.
The very rich- some lost part of their wealth but weren’t affected greatly.
Farmers- couldn’t afford to pay debt so lost farm and sacked workers. The drought and lack of farming turned land into a dust bowl.
Factory owners- fewer goods were sold after the crash so factory owners cut production, wages and jobs.
Around 13 million people lost their jobs by 1932 because businesses fired people and who were therefore unable to pay rent so couldn’t spend money leading to failing businesses.
Farmers in Iowa used guns and pitchforks to chase away government officials who tried to evict them from their homes.
In 1932 25,000 unemployed ex-soldiers marched to Washington DC and asked for their war pensions to be payed early. Hoover set an army on them (tear gas, tanks, guns). The general unemployed were evicted from their homes and became homeless: queueing for soup kitchens and becoming hobos travelling the country looking for work.
1932 presidential election
2 candidates and their parties?
Why was republican candidate unpopular?
What 3 R policies helped the Democrat candidate to win?
How did Democrat candidate’s early life endear him to voters?
Herbert Hoover- Republican ‘laissez-faire’
Franklin D Roosevelt- Democrat
Due to his view of rugged individualism he believed America would recover soon and didn’t do much to combat the Great Depression except lend money to businesses and farmers, make $300 million available for each states unemployed and begin large scale construction to create jobs. The tariffs he put on foreign goods made the situation worse. He wasn’t a good public speaker either which made him unpopular.
Relief: help for old, sick, homeless and unemployed.
Recovery: government schemes to provide jobs.
Reform: to make America better for ordinary people and ensure no future Depression.
He was a good public speaker and took his message around the country.
Because he succeeded despite his disability so American people thought he had the right experiences to help America recover.
New deal first 100 days
3 actions Roosevelt took in first 100 days?
Why was it Important to close the banks down?
What beneficial impact did each of his three acts have?
Banks
Economy act
Beer act
The emergency banking act: temporarily closed all banks and only opened honest + well run banks. Well run banks had people putting money in them so they could loan money to businesses.
The Economy Act: Government employees’ pay was cut by 15% saving $1 billion.
The Beer Act: prohibition ended putting gangsters out of business and government taxed alcohol.
So that only honest and well run banks could reopen upon inspection giving people the confidence to put their money back in the banks.
Banks: having well run banks meant money could be loaned to well run businesses which would create jobs as businesses expanded.
Economy Act: cutting government employees’ pay saved nearly $1 billion.
Beer Act: the government could raise money by taxing alcohol and cut organised crime.
New deal alphabet agencies
3 alphabet agencies and what did they do?
How was each agency designed to provide either relief, recovery or reform?
What did each agency achieve?
How did these have a beneficial impact?
AAA- paid farmers to produce less.
CWA- provided temporary jobs for 4 million people building schools, airports and roads.
NRA- encouraged workers and employers to find code of fair conditions, pay and the right to join a trade union.
AAA- food prices rose and farmers’ incomes increased.
CWA- providing jobs decreased homelessness and increased goods bought which helped businesses.
NRA- designed to make the workplace fairer for workers which shows the new deal catering to improve the lives of ordinary people.
AAA- criticised because food being destroyed while millions went hungry.
CWA- providing jobs for 4 million people who could afford to buy goods leading to wealthier businesses and more jobs being created.
NRA- it was a voluntary scheme and many employers refused to join leading to strikes.
They provided help for farmers, industry, workers and the unemployed and homeless which led to the increase in buying of goods leading to businesses getting back on their feet and re-opening jobs.
2nd New Deal
4 measures introduced in second new deal 1935?
Why were these introduced?
What was the significance of each of these measures?
Wagner Act, Social security act, works progress administration, resettlement administration.
FDR was facing criticism for doing too little, businesses lost enthusiasm for the NRA (Henry Ford cut wages) and America was recovering from the Depression less quickly than Europe. He was persuaded to take radical steps to make USA a fairer place for all Americans.
Wagner Act: made it illegal to sack workers for being in a trade union.
Social Security Act- A national system of pensions for the elderly, widows, and disabled people and payments for the sick and unemployed.
Works Progress Administration- to create jobs beyond building: office workers, actors, artists and photographers.
Resettlement Administration- helped smallholders and tenant farmers who hadn’t been helped by the AAA. Moved 500,000 families to better land and housing.
Opposition to the New Deal
What groups of people were opposed to the New Deal?
Why was there opposition?
What were the results of the opposition?
How would this damage efforts to improve the economy?
The rich, business people, Republicans and the Supreme Court.
Taxes for the rich were increased to pay for the new deal.
Business owners didn’t like the new deal’s interference with businesses and the increased rights for workers.
The Supreme Court argued that AAA was a matter for the state government and declared many NRA codes illegal.
AAA help for farmers stopped and NRA codes became illegal. FDR was criticised for interfering too much so America couldn’t stand on its own two feet.
Farmers wages and the rights of workers didn’t change and the unemployment issue wasn’t solved (1/10 people still unemployed in USA throughout the 1930s)
Effectiveness of the New Deal
Aims of the New Deal
Which groups of people was the New Deal trying to help and how?
To what extent were the 3 Rn reached?
Relief: help old, sick, unemployed and homeless.
Recover: the government and schemes to provide jobs.
Reform: making America a better place for ordinary people.
Workers: alphabet agencies provided work and Wagner Act gave workers the right to join trade unions.
Farmers: measures to increase price of crops and make loans available to save farmers from eviction for large scale farms (small scale farms weren’t effected by the New Deal much).
African Americans: 200,000 African Americans gained jobs in CCC (though still segregated) and one African American woman was appointed to an important government post.
American Indians: government loans were provided to set up businesses, buy land and farming equipment. The Indian Reservation Act gave American Indians the right to manage their own affairs.
Women: many found work with SSA.
Relief: New Deal created jobs (2.5 million 18-25 YO got work in CCC) but didn’t solve unemployment.
Recovery: Number of bank failures dropped dramatically due to the New Deal. Number of strike days for workers increased in 1934 but dropped by 1938. Gross National Product rose from 1933 to 1941.
Reform: even though the New Deal created jobs in CCC for A-As, it was still segregated and not much was done to end segregation. Employers treated trade unions with suspicion. Women still faced discrimination as NRA set women’s wages lower than men’s. There was still severe poverty in rural America and American Indians were treated with discrimination and lived in great poverty.
