Crash Flashcards
1
Q
What were the causes of the wall street crash?
A
- Stock Market /Shares
- Overproduction
- Unequal distribution of wealth
- Tariffs
2
Q
How did the stock market contribute to the Walk Street Crash?
A
- Many had bought shares of the not knowing anything about the stock market
- ‘speculation’ - people buying shares intending to sell and make a quick profit meaning share prices are highly overvalued - There is no government regulation
- 1928/9 US economy began to snow and experience investors began to sell
- This meant there is a drop in confidence and other people also began to sell their shares meaning prices dropped due to panic selling and there was a crash.
3
Q
How did overproduction contribute to the Walk Street Crash?
A
- Due to the assembly line and increase mechanisation, there is mass production of cars, radios, fridges etc.
- However by 1928/9 the domestic market is saturated as everyone who could afford a product has already bought it. By 1927 fewer house were being built, sales of cars were beginning to decline and wage increases were levelling off.
- As a result companies had to stop producing less and laid off workers.
- As there are fewer people working and earning money off you are consumers to buy products.
4
Q
How did the unequal distribution of wealth contribute to the Walk Street Crash?
A
- Black Americans, immigrants and farmers don’t benefit from the boom as well as other industries such as textiles.
- 50% of the US population did not benefit from the boom and 33% of the income in 1929 is receives by just 5% of the population.
- Therefore too much money was into few hands. Mass production required mass consumption and that meant higher wages for everyone. The domestic market is limited by this.
5
Q
How did tariffs contribute to the Walk Street Crash?
A
-Meant that the US cannot export excess goods abroad.
- As Europe recovering from the war they can’t buy anything due to these high tariffs
- This means the problem of mass production can’t be fixed.
6
Q
What impact did the crash have on the economy?
A
There is a crash and share prices meaning two things:
- Many Americans forced into bankruptcy which causes bank closures which also leads to
- Loss of confidence
Loss of confidence leads to fall in demand for American goods both at home and abroad, which leads to business is cutting production, which leads to unemployment that also fit into a falling demand for American goods.

7
Q
What was the bonus army ?
A
- The bonus army -> The biggest protest made in 1932 words by ex servicemen of the American Army who fought in World War I and had been promised they would be given bonus payments of 1945 by the government.
- However in 1932 they were living in poverty and demanded that bonuses now.
- In 1932 veterans went to Washington to protest a mini hijacked trains to get there and four battles of the police who tried to stop them.
- By June 19 32 more than 20,000 veterans arrived in Washington however Congress voted against paying them and the bonus army Stayed in protest.
- Hoover ordered the army to evict them and four companies of infantry, four trips carvery, a machine gun squadron and six tanks were led by General Douglas MacArthur.
- Soldiers cleared the veterans out of the Hooverville they were staying in and set it on fire.
- When it was over two veterans lay dead and 1000 were injured by teargas.
8
Q
Who was Herbert Clark Hoover?
A
- was the President of the USA at the time of the Wall Street crash and the Great Depression.
- He born in 1874, and was orphaned at the age of eight but through hard work he managed to become a multimillionaire and retired to take up politics.
- His main belief was that the American government should not interfere in peoples lives and he believed in the American system of a rugged individualism.
- In 1928 he stood for election As president and won easily as at the time America was the richest country in the world.
- When the depression hits Hoover believed it would not last long and life will return to normal. He famously said prosperity is just around the corner and for this reason he did not take action to end the depression until 1932.
9
Q
Who was Franklin Delano Roosevelt?
A
- Born in 1882, Roosevelt came from a rich family and attended Harvard university and became senator in 1910.
- His career was slow down when he was paralysed from the waist down because of polio that’s nearly killed him.
- He recovered and became governor of New York State and he spent $20 million of tax money helping the unemployed.
He ran for election in 1932 with the belief that something had to happen to help the country out of the Great Depression.
10
Q
How did Hoover try to combat the depression?
A
- Hoover realised that the depression would not go away by itself and realised he had to take strong action.
- So in December 1930 to Hoover announced that he would cut taxes by $130 million, cut government spending by $800 million, he would reorganise the countries banking system and he would cut spending on weapons.
- Tariffs were increased by the Hawley-Smoot Act (1930) to protect American goods.
- Money was provided for building programs to provide more jobs, such as the Hoover Dam
- Employers were encouraged to make voluntary agreements to maintain wages and production.
- The reconstruction finance corporation (1932) was set up to provide loans, amounting to $1,500 million to businesses facing hard times.
- The Federal Farm Board was set up to buy surplus produce in an attempt to stabilise prices.
11
Q
Why did Hoover lose the 1932 elections?
A
- People thought that his priority was to keep big businesses going
- Republican economic policies of Laissez Faire were unpopular
- Rugged individualism and self- help weren’t what people wanted to hear
- Hoover didn’t believe that the federal government should provide help but rather charities and local governments should. He thinks if they do help, there won’t be any motivation to work.
- Unpopular as he wasn’t reassuring or close to the people and didn’t do anything to help during his time in power.
12
Q
How did Hoover try to combat the great depression?
A
- In 1930 taxes were cut by $130 million to inject more purchasing power into the economy
- Harris way increased by the Hawley-Smoot act in 1930 to protect American-produced food and goods.
- Money was provided to finance a building program to create more jobs, the most famous project was the Hoover dam.
- Employers were encouraged to make voluntary agreements with employees to maintain wages and production
- The reconstruction finance cooperation in 1932 was set up to provide loans, amounting to 1000 and $500 million to businesses facing hard times.
- The federal farm board was set up to buy surplus produce in an attempt to stabilise prices.
13
Q
What were the consequences of the crash?
A
- there was less demand for products and so there was a decrease in production
- Because of this workers were laid off leading to mass unemployment
- As there were less people working and making money there were fewer consumers
- Some homeowners were unable to pay mortgage
- There was no government help to the poor
- Banks collapsed as people rushed to get the money out
- worsens the agricultural crisis in the south
- The dust bowl crisis in 1936 in the south/midwest
- Eight ball is in a democratic government in 1932
14
Q
Why did Roosevelt win the elections in 1932?
A
- As the Democratic Party had not been in power since 1921, they had no responsibility for the Great Depression
- Engaged with the people
- Promised a new deal
- Wants to provide:
government schemes to create more jobs
measures to revive industry and agriculture
relief for the poor and unemployed
protection for workers against irresponsible employers
end of prohibition - People believe all of this because in 1928 he became Governor of the New York State and organised schemes to help the elderly and unemployed.
15
Q
What were the social consequences of the Crash?
A
- By 1933 nearly one in four of the workforce was out of a job.
- There were no welfare benefits to assist houses that had no income but mortgages still had to be paid.
- Shanty towns were constructed on edges of towns and cities and were known as ‘Hoovervilles’
- Many people relied on Soup kitchens and public relief programmes provided by the local government but by 1932 more than 100 of these authorities had no money left.
