Bust: Depression + New Deal Flashcards
Why did the wall street crash?
•overconfidence: bought shares in companies that didn’t exist/ + buyers than sellers
•overproduction/ underconsumption
•over speculation
• tariffs from abroad
•buying on the margin: shares lost value
•banks failing
How many banks went bust? (Ran out of money)
500
What was the crash?
•companies failing
•sold stocks for cheap (desperate)
•loans to banks couldn’t be paid back
What happens on Black Tuesday?
16 million shares are sold at any price and shareholders lose £14 billion
What were the outcomes of the Great Depression?
•bonus army
•depression: lost jobs/ closed factories
=1932 13 million lost, 12,000 every day
•hobos
•violence and protest e.g farmers in Iowa used guns + pitchfork to chase away bailiffs
•breadlines: huge queues for soup kitchens
•hoover increased interest
•Hoovervilles: homeless
What was the bonus army?
25,000 veterans demanded for early pay of bonuses, marched to Washington DC but hoover refused/beat them back with guns + tanks
What happened to businesses due to Great Depression?
1616 banks and 20,000 companies went out of business. Banks shut = ppl lost jobs + savings and investments
Who were hobos?
Unemployed people travelled to look for work, rode illegally in train cars or walked from town to town
How were farmers affected by the Great Depression?
•1 in 20 lost farms as they couldn’t pay mortgages as food prices were bad
•dust bowl made it impossible to farm
(20 million acres affected)
Why did FDR win the elections by a landslide?
-active gov.= 3 R’s (relief, recovery, reform)
-experienced helping poor as governor of NYC
-spent 20 mill tax money on unemployed
-travelled, speeches= propaganda
-New Deal: recovery scheme
-won 7 million votes, 42 states
-action and action now
Why did people not like Hoover?
•2 billion to help banks, businesses and farms (ppl not helped)
•gave banks money who then evicted farmers
•bonus army refused
•reconstruction finance corporation gave £ to banks+ loans to large businesses
How did the new deal help banks?
•emergency banking act: 4 days bank holiday to save/ inspect banks
•gov lent money to banks
•ppl put £ back into banks (1 billion)
•banks could lend money to well run businesses= cycle of prosperity
What was the new deal?
•banks helped
•Beer act: legal so could tax alcohol, more jobs, less crime
•economy act cut pay of gov. workers by 15%= saved 1 billion
•fireside chats: around 60 million Americans listened
•alphabet agencies
•brains trust: group of smart advisors
•priming the pump= pay to allow cycle of prosperity (not affective)
What were some of the alphabet agencies?
•AAA: paid farmers to make less + destroy food, increased food prices,
Farmers income x2, criticised
•CCC: 2.5 mill young employed to help in environmental projects, malaria ended
•FERA: £500 mill to homeless and starving
•TVA: Dam building (16) more employed and industry benefitted
Why did people oppose the new deal?
•’wealth tax’ on rich (£ for lazy)
•Supreme Court said it went against constitution
•Heuy long believed more could be done (ran in election) e.g £5000 to fam to buy house, radio and car
•most were still rugged individuals, FRD= dictator
•more help e.g over 60 retire and given £200 a month
