Bust Flashcards
How many banks closed in 1933?
3,927, compared to 599 in 1929
What was the rate of unemployment in Chicago?
Unemployment was particularly acute in industrial cities such as Chicago, where there was a 40% rate of unemployment.
What were Hoovervilles?
Shanty towns where thousands of families were forced to take shelter in makeshift homes as they were unable to pay rent.
What happened to the drop out rate in high schools?
Escalated - by 1933, roughly 300,000 children were out of school.
What was the situation like for African Americans?
Unemployment rates were 6 times higher than those for whites.
Low paid, menial jobs previously reserved for African Americans were now being taken by whites.
Rural African Americans were hit less hard than their urban counterparts as rural poverty was normal.
What was the situation like for women?
Women were laid off before men.
Married women had to cope with the impact of the depression on family life.
Feeding and clothing children was often their responsibility.
Many argued that women were responsible for male unemployment.
Between 1930-31 over three quarters of American school systems refused to hire women if they were married.
Relief was often only given to the “morally worthy,” meaning that single parent families, excluding widows, often suffered.
What percentage of the population were unemployed by 1933?
24.9%, compared to 3.2% in 1929
Who were the Bonus Marchers?
Late spring 1932, veterans of WWI who were without work and whose families were hungry as a result began a march on Washington demanding the payment of a veterans’ bonus approved by Congress in 1924 to but to be paid 20 years later.
How did Hoover react to the bonus marchers?
July 28, having ordered veterans to be confined to their camp, Hoover now approved plan to evict them.
One thousand armed soldiers, equipped with tear gas, tanks and machine guns, drove the veterans from the camp and burned it to the ground.
2 veterans were killed and as many as a thousand were injured
What was the react to Hoover’s attack on the bonus marchers?
The idea of an American president ordering troops into action against fellow Americans, particularly veterans, shocked millions.
Hoover was seen as cruel and insensitive to the distress that so many were experiencing.
What was the Florida Land Boom?
People bought land in Florida and sold it at a huge profit as people believed there would be a boom in land prices.
Land bought for $25 in 1900 was selling for up to $150,000 by 1925.
However, there was no foundation to the boom and much of the land was being sold fraudulently.
People were buying swamp land believing it was valuable.
It was a con and the whole thing collapsed in 1926 when it was exposed.
Many lost money.
What does it mean to buy shares on the margin?
People would buy shares but only pay 10% of their value and would repay the rest later.
Banks had plenty of money and were more than willing to lend money in this way.
What was the Wall Street Crash?
On 24th and 29th Oct 1929, share prices tumbled and their value fell by $26 bil.
There was panic selling, as people were afraid that the share prices were going to keep falling.
Why did the crash happen?
Bank of England put up its interest rates and sucked money into Britain causing selling in New York to facilitate the moving of cash to London.
Investors in New York started to realise that share prices were unrealistically high and wanted to sell before they started to fall.
US industry slowing down - profits were falling and this made shares less valuable.
Overproduction/under spending - businesses were making too much money and people were spending less - this again hit profits and the value of shares.
How did the Wall Street Crash contribute to the Depression?
Shattered confidence by making people realise weak the economy really was.
People cut back on spending.
How did underconsumption contribute to the Depression?
The rich kept their wealth in the bank - they had so much they did not spend most of it.
Their money was not being used for spending on products of the US industry.
The poor on the other hand would have liked to buy the products but didn’t have the money.
The uneven distribution of wealth meant that there was a falling demand for US products.
How did overproduction contribute to the Depression?
By late 1920s industry was continuing to make goods that no one wanted, pushing prices down and cutting profits.
Goods were stockpiled and workers laid off as businesses didn’t need to make more products.
How did international factors contribute to the Depression?
Many European countries introduced tariffs on US goods cutting demand for US products.
Countries of Europe were in debt after Great War making them less able to trade.
Many countries had borrowed heavily from US banks and were unable to pay back loans.
Many countries, starting with Britain, abandoned the gold standard making their goods cheaper, however, US didn’t.
How did the tax policies contribute to the Depression?
Allowed too much money to stay in the hands of the over-saving and under-spending rich, hitting demand.
How did cartels contribute to the Depression?
Kept prices high and stopped businesses from competing.
Lack of competition made them lazy and unprepared for problems of 1930s.
High prices damaged demand and led to overproduction.
