Boom, Bust & Recovery, 1917-41

Question 1

Post-war depression on farming:

Answer 1

During the war, farmers were urged to produce more wheat and were given subsidies to do so. Therefore after the war, they were producing way too much wheat and so prices, therefore farmers could not make enough to cover their loans.

Question 2

Cotton farmers:

Answer 2

Boll Weevil, who eats young control plants, caused them trouble

Question 3

Coal industry: (2)

Answer 3

• Lost out to other fuels, including water power and electricity.
• 1900 - Coal had produced almost 90% of energy supplied in the USA
  1930 - Dropped to 60%

Question 4

Government reaction to the post-war depression: (3)

Answer 4

• Committed to a policy of Laissez-Faire policies, so did not try to stop the depression.
• However, the isolationist tariffs it put on foreign goods led other countries to introduce similar tariff on US goods; pushed Americans to buy ‘American’
• The government felt that the depression would soon right itself. The economy did adjust and thus gad a significant impact on government thinking in 1929, when another depression stuck

Question 5

Until 1929, what were inflation rates like?

Answer 5

Always below 1%

Question 6

What did average weekly working hours fall from in 1924 to 1929?

Answer 6

47 hours - 44 hours

Question 7

What did real wages of industrial workers rise by in the 1920s?

Answer 7

Nearly 25%

Question 8

What did production of industrial good rise by in the 1920s?

Answer 8

Rose by 50%

Question 9

What did GNP rise to in the 1920s?

Answer 9

$73 billion to $104 billion

Question 10

What development was created before the war and what was the most effective example of this?

Answer 10

The division of labour - Henry Ford’s car factories

Question 11

How did the division of labour contribute to the boom?

Answer 11

Mass-produced goods were produced more quickly and cheaply, so they could be sold at a lower price. This made them more affordable and so manufacturers sold more of them and people bought more goods - especially cars and radios

Question 12

How many passenger cars were registered in the USA in 1917 and 1929?

Answer 12

1917 - Around 4,700,000
1929 - Around 23,000,000

Question 13

What was the cost of a Ford Model T in 1914 compared to in 1924?

Answer 13

1914 - $825 or $950
1924 - $260

Question 14

Tariff Act of 1922

Answer 14

Fordney-McCumber Tariff Act

Question 15

Decreases in federal taxes in 1924, 1926 and 1928:

Answer 15

Benefited the rich and the top only 2% of the population was paying federal income tax by 1927

Question 16

Federal Highway Act of 1921:

Answer 16

Assisted the movement of goods from production sites to consumer

Question 17

How did the booming car industry assist other industries?

Answer 17

Other complementary industries such as steel, glass, rubber, leather and service industries grew

Question 18

What type of purchase boomed after the war?

Answer 18

Hire purchase and loans

Question 19

Between 1920 and 1929, what did consumer debt rise to?

Answer 19

$3.3 billion to $7.6 billion

Question 20

What percentage of income were people borrowing at and what did this increase to?

Answer 20

5% of their income and by 1929, this had almost doubled

Question 21

in 1929, how much was sold on credit?

Answer 21

$7 million, which was double the amount in 1920

Question 22

What was credit mostly spent on?

Answer 22

75% spent it on cars and 50% spent it on major household appliances

Question 23

Advertising during the boom:

Answer 23

Fuelled consumerism and by 1929, advertisers were spending 5 times more than in 1914

Question 24

Car ownership in 1919 compared to 1929:

Answer 24

1919 - 9million
1929 - 26 million (nearly one per family)

Question 25

Radio ownership in 1920, compared to 1929:

Answer 25

1920 - 60,000
1929 - 10 million

Question 26

Telephone ownership in 1923, compared to 1930:

Answer 26

1923 - 15.3 million
1930 - 20 million

Question 27

Refrigerator ownership in 1920, compared to 1930:

Answer 27

1920 - 1% of households
1930 - 8% of households

Question 28

Advantages of car ownership:

Answer 28

Easier access to work, leisure and family

Question 29

Advantages of radios:

Answer 29

Home entertainment, news outlet

Question 30

Advantages of telephones:

Answer 30

Facilitated communication

Question 31

Advantages of refrigerators:

Answer 31

Labour-saving device

Question 32

When was the Wall Street Crash?

Answer 32

1929

Question 33

What is the Federal Reserve Board and did they better the situation?

Answer 33

Set up in 1913 to regulate banking but its attempts to control the boom by tightening the money supply made the depression worse

Question 34

In the 1920s what occurred in the stock market?

Answer 34

A Bull market, which is when share prices rise and people expect this to continue

Question 35

in 1929 what occurred in the stock market?

Answer 35

A Bear market, which is when share prices falls and people expect this to continue

Question 36

What caused the Wall Street Crash?

Answer 36

Stock prices began to fall and kept on falling as investors sold, and with the media exacerbating fears people kept selling.

Question 37

What were the outcomes of the Wall Street Crash? (2)

Answer 37

• On 29 October the stock exchange closed
• Banks that had gambled with their customers’ money went bankrupt

Question 38

What fraction of banks in operation before the crash were bankrupt in 1933?

Answer 38

1/3

Question 39

When did the Stock market reopen?

Answer 39

13 November

Question 40

How did the Wall Street Crash worsen the depression?

Answer 40

• As businesses and banks went bankrupt, unemployment shot up - many people could not keep up payments on mortgages and so they lost their homes - people stopped buying, prices dropped and more businesses failed

Question 41

Unemployment in 1932:

Answer 41

12,000,000