American Society during the Depression Flashcards
When did the Wall Street Crash happen?
24th October 1929
What factor kickstarted a Cycle of Depression?
The decrease in demand for consumer goods like vacuums, cars, radios
What was ‘Speculating’?
Speculating was a type of gambling; people bought shares of a company in hopes that it will be successful, and then sell those shares to earn the money they have made.
What did ‘buying shares ‘on the margin’’ mean?
People borrowed about 90% of the money needed to purchase the share and hoped that they will be able to pay back the loan with the profit they make on selling the share.
In 1929, how much money was borrowed by American speculators?
$9 billion
How many banks went bankrupt from 1929 to 1931?
Around about 4’275 banks.
How did banks ‘collapse’?
When people went bankrupt, they could not pay back the money that they borrowed from the banks, meaning the banks themselves went bankrupt and collapsed.
By 1933, what percentage of people were unemployed?
25%
What percentage did the average wage fall by?
60%
What percentage did unemployment in African Americans reach?
- 70% in Charlestown
- 75% in Memphis
How many people lost their houses in 1932?
250’000 people
After losing their homes, what did people do?
- Some people slept rough on the streets
- Other people deliberately got into trouble with the law so that they could stay the night at a prison rather than outside on the streets
What was the most common solution for homelessness?
The homeless moved to waste ground and built shelters out of whatever materials they could find; these became known as “Hooverville’s” which was an insult to the Republican president Herbert Hoover.
In 1932, war veterans were hit hard by the Depression. What did they do?
They demanded that the government pay them the Bonus in advance.
How did the war veterans protest?
20’000 war veterans went to Washington DC and set up a Hooverville in front of the White House.
What did Congress do about this situation?
Congress voted against paying the Bonus and Hoover offered $100’000 to transport the army home, however, the veterans refused to go home.
What did Herbert Hoover end up doing?
He sent in troops to the Hooverville who used tear gas and tanks to clear the Hooverville and set fire to the tents.
What did this cause?
Two veterans were killed and thousands were injured.
This caused Herber Hoover to lose a lot of public sympathies and ended up being a significant reason why he lost the 1932 Presidential election.
When philanthropic organisations could not cope, what did Hoover do?
He refused to use federal funding as direct relief to these organisations
Why did Hoover refuse?
He believed that unemployment should be fought by voluntarism - communities should promote self-help and individual achievement.
What did many businessmen suggest to Hoover?
To leave business alone and focus on the economy and not look for guidance from businesses
What did Henry Ford say?
“stick to the strict function of governing” and “leave business alone”
What did the Smoot-Hawley Tariff in 1930 do?
Raised tariffs on over 20’000 imported goods to record levels.
What happened in 1931?
- The Federal Reserve raised interest rates
- President Hoover gave $4 billion to state governments to set up schemes to provide work, like the construction of the Hoover Dam
