American dream lesson 4 Flashcards
when was the Great Depression
1929
what is the federal reserve system
supervising and regulating banks
what happened in the Great Depression
- it lasted a decade
- people were evicted and shantytowns appeared
- people looked to the federal government for assistance
- Hoover was blamed for the intolerable social and economic conditions
- shantytowns were nicknamed Hoovervilles
- Hoover was defeated by Roosevelt in the 1932 elections and helped the USA get out of the depression
Banking causes of the great depression
- the difficulties in the banking system became entangled with the international and financial crisis in 1931
- the banking system in the US was fragile in the extreme
- the federal reserve was crucial in controlling the amounts of money in circulation but was inherently weak
- there was a lack of bank regulation - no federal deposit insurance system existed to provide security and major banks operated independently
- small banks lacked reserve to cope with the pressure
- the federal reserve base in Washington not New York led to communication problems
- the federal system was made up of private bankers who were a fan of the old system
Industry causes of the Great Depression
- traditional industries eg coal mining began to decline
- growing unemployment as consumers stopped consuming and added to problems
- insufficient purchasing power in the economy for things such as cars
-genaral electrics income fell from 60m in 1930 to 14m in 1932
- wages didnt rise fast enough for workers to become adequate consumers
- coipition from Europe rose after ww1
Agriculture causes of the Great Depression
-farmers suffered fro debt after investment in new equipment/tech
- prices for farming goods fell
-as incomes fell farmers fell behind om mortgage repayments and tax debts increased
- by 1929 the farmers annual income was an average of $273 whereas the national average was $750
Stock market and shares causes of the great depression
- people had strong belief in stability of the Stockmarket
- many shares bought by ordinary people were bought on credit
- $14 billion was wiped of shares and there was a 14% drop in the market
- stock market corrupt - inside dealings
- new technology and production techniques saturated the market
what did hoover set up at the very beginning of the greta depression
the federal farm board system
what did the federal farm board system do
helped famers that found it hard to sell their goods because of the governments isolation tariffs
what was hoovers reason to be setting up the federal farm board system
was a one off thing for show so that it looked like he was trying to help
when hoover realised that lassiez faire wasn’t working what did hoover believe the answer was
private charities set up by businesses and the wealthy to offer help on a local and personal level
he felt all he could do was encourage people to do this
what did hoover set up in 1930
the presidents emergency committee for employment
what was the presidents emergency committee for employment
a temporary organisation to find work projects for the unemployed and to persuade businesses to create more jobs on a local voluntary basis
he encouraged business men to invest in the economy by setting up similar organisations
what happened after he made the presidents emergency committee
he decided that federal intervention was needed
what happened between 1930 and the federal elections in 1932
hoover moved from encouraging private help to federal help by first advising them on projects and then giving them money to fund some of the help
