American society during the Depression Flashcards
why did Wall street crash?
- people began selling their shares for cheaper than they bought them due to fears that they wouldn’t get profit but as more people began to sell shares, no one was buying shares anymore. Share prices rapidly fell
- overproduction on factories
- foreign tariffs
how many shares were sold on the 24th October 1929(black Thursday)
13 million (5x than a normal day)
what was the price of a Woolworth share in November 1929?
57 cents
why did banks go bankrupt?
many investors bought in the margin meaning they payed for shares on loan and normally made enough to pay the loan. However, due to decrease in share prices during panic selling, people couldn’t pay their loans so banks went bankrupt
how many banks went bankrupt in 1929?
659
how were ordinary people affected by banks going bankrupt?
people who put their savings in banks lost everything as the bank gave out their savings as loans, expecting to receive that money back in interest. Even people who didn’t buy shares were affected.
what were the limitations of the affects of the Great Depression?
although the very rich may have sacked some workers, they had generational wealth and property
how much money did shareholders lose in total by the 29th October 1929?
$8 billion
how did the great depression affect ordinary shareholders?
lost a fortune and list their valuable belongings which sometimes led to homelessness
how did the great depression affect factory workers?
the closure of factories meant that not only did factory workers lose jobs but all related businesses eg.the restaurants the workers ate at. Also may have lost savings as bank loans to speculators.
how did the Great Depression affect Factor owners?
factories which had previously struggled with overproduction now struggled with underconsumption in USA and struggled to sell their products abroad due to foreign tariffs so factory owners cut production,wages and eventually sack workers
why did factories struggle with underconsumption?
people couldn’t afford to buy goods
example of underconsumption
Americans bought 4.5 million cars in 1927 but that number decreased to around 1 million by 1930
how did the Great Depression affect farmers?
food prices decreased even more so farmers couldn’t pay their mortgages or the banks loans taken out for equipment so they had to live on the road. For those who kept their land, drought and over farming created Dustbowls making it impossible to farm
what did the total farm income fall to during the Great Depression?
$5 billion
how much did wages decrease by between 1928-1933?
the average wage fell by 60%
how did unemployment rates change between 1929 and 1933?
1.6 million to 14 million
how many banks had gone bankrupt by 1933?
5000 banks had gone bankrupt
what is a Hooverville?
shanty towns where migrants lived whilst searching for work named after Hoover whom the people felt wasn’t doing enough to help
by 1932 how many farmers had been evicted from their homes?
1/20
what was Hoover’s response to the Great Depression?[5]
- Hoover believed in ‘Rugged Individualism’ and believed that America would recover without Government intervention.
- he set up the Reconstruction Finance Corps which gave money to businesses and farmers
- he cut taxes in 1930 and 1931
- he made $300 million available to give the unemployed in 1932
- he introduced tariffs
what were the limitations to Hoover’s response?[3]
- some local governments felt that the federal government shouldn’t interfere in their affairs so only $30 million/$300 million was given out
- Hoover’s Hawley-Smoot tariff led to foreign nations implementing revenge tariffs so American exports fell dramatically and more businesses failed.
- Hoovers taxes decreased international trade which fell from $10 billion in 1929 to $3 billion in 1932
examples of public reaction to Hoover during the Great Depression[2]
negative as shown through
1. the creation of Hoovervilles
2. protests
how did farmers protest their evictions?
farmers chased off government officials with pitchforks
