C4 - American Society During the Depression Flashcards
What caused the Wall Street Crash?
- not everyone could afford certain goods (radios, telephones, cars etc), and those that could afford them would only buy one
- this caused overproduction and falling profits
- companies struggled to sell their products abroad due to foreign governments putting taxes on US-made goods
- a few people started selling shares in September 1929, worried they wouldn’t get dividends
- more and more people sold their shares, so share prices fell
What was ‘Black Thursday’?
On 24 October 1929, 13 million shares were sold on the New York Stock Exchange - five times as many as on a normal day. Share prices in nearly all companies continued to drop.
What happened on the 29th October 1929?
There was another mad rush to sell shares, with 16 million shares being sold during the day and the average price of shares dropped by 40 cents. Shareholders lost a total of $8 billion.
What happened to banks as a result of the Wall Street Crash?
- many Americans had borrowed money from banks to buy shares but when share prices fell, they were unable to pay the bank back in full
- this led to many banks going bankrupt. In 1929, 659 banks went bust
- this meant that some people lost all of their life savings
What was the Great Depression?
The time after the Wall Street Crash in which factories closed, banks failed and unemployment reached record levels.
What was the effect of the Great Depression on ordinary shareholders?
- millions of investors lost a fortune
- they tried to pay back bank loans by selling valuables
- some struggled to pay rent and faced homelessness
What was the impact of the Great Depression on the very rich?
- some rich people lost part of their wealth because they had invested in shares or owned factories that had closed
- however, many owned lots of property and land and were not greatly affected
What was the effect of the Great Depression on businessmen and their workers?
- factories had been overproducing
- after the Crash, people had less money to spend so fewer goods were sold (underconsumption)
- factory owners cut production, wages and finally, jobs
What were the effects of the Great Depression on farmers?
- many farmers were struggling before the Crash
- farmers with bank loans for equipment had to pay back the money, but some couldn’t afford to do so. By 1932, 1 in 20 farmers had been evicted
- a combination of drought and poor farming methods turned the land into a ‘Dust Bowl’. Huge dust storms blew away millions of acres of dry topsoil, making it impossible to farm.
What were the effects of the Great Depression on bank managers?
- when banks went bust bank managers and staff lost their jobs
Unemployment - facts and figures
- around 13 million people had lost their jobs by 1932, nearly 25% of the labour force
- between 1929 and 1932, factory production fell by 45% and house-building fell by 80%
- by 1932, 12,000 people lost their jobs a day and 20,000 companies had closed
What were Hoovervilles?
Settlements on urban waste ground with shacks built with boxes, scrap metal and old cloth.
What were ‘breadlines’?
Queues of homeless people at soup kitchens waiting for food.
What were hobos?
Unemployed workers who travelled the country looking for work
How many Americans stopped paying their mortgages in 1932?
Around 250,000. Most of them were evicted.
