Depression And New Deal Flashcards
Who became president in 1928 (officially in 1929)?
Herbert Hoover
What happened in October 1929?
The Wall Street stock market crashed and the US economy collapsed and sent the country into depression
What did this cause?
Millions of shares lost their value
People who had risked a lot of money in shares hoping it’d rise, lost most of their money
There was an immediate downturn in spending and people stopped buying things
Many had borrowed money to buy back shares that were now worthless
Many were unable to pay back bank loans and went bankrupt
Many banks also went bankrupt
How did the Wall Street Crash affect unemployment?
Many business laid off more workers and reduce wages of those that were lucky enough to still have a job
Average wages fell by 60%
By 1933, there were 14million unemployed and 5,000 banks bankrupt
Many people were left queuing for charities and bread and soup kitchens
Many people were homeless and many suffered from malnutrition due to it
How did the Wall Street Crash affect Farmers?
Prices had fallen so low that the cost of transporting the animals was higher then the price of the actual animals
Total farm income slipped to 5billion
Many farmers were unable to pay mortgages
Some farmers resisted sheriffs/banks seizing their homes and sacred them off using pitchforks
Most were forced to pack up belongings and live on road
Most land was ruined due to over farming and drought
How did the Wall Street Crash affect businessmen?
They were badly affected as many had taken out loans that they couldn’t repay
Most industries were producing far too many goods than people could afford - causing businessmen to go bankrupt
What happened to banks/businesses between 1929 and 1933?
10,000 banks closed
Over 100,000 businesses went bankrupt
Many tried to demand the repayment of loans but this forced even more businesses to close
What happened to production during the Wall Street Crash?
Industrial production fell by 40%
US exports fell from 10 billion to 3 billion
What did Hoover do at first after The Wall Street Crash?
Until 1932, he refused to believed that there was a problem
What did hoover attempt to do later?
Tried to restart economy through tax cuts
Tried to persuade business leaders to not cut wages
He set up a company which propped up banks to stop them from going bankrupt
Tried to protect US industries by introducing more tariffs but this made it worse
What did Hoover and most republicans believe was the cause of the Great Depression?
Believed it was economic problems in Europe, not weaknesses in the US.
Believed businesses should be left alone to bring back prosperity
Believed government help wasn’t needed as they believed that business went through a cycle of boom and bust and prosperity was right around the corner
Why did Hoover/Republicans not help people suffering from depression ?
He believed that social security was not the responsibility of the federal government
Believed relief should be provided by local government of charities
Believed that if the government helped individuals, they would become less independent and less willing to work
Who were the Bonus Army?
They were thousands of servicemen who had fought in WW1
What did they do? (Bonus Army)
On June 1932, they marched onto Washington and asked for their war bonuses to be paid early (a kind of pension)
They camped outside the White House and sang patriotic songs
How did Hoover react to the Bonus Army?
He refused to meet with them and appointed General Douglas McArthur to handle the situation.
Hoover asked him to treat the marchers with respect but he ignored his instructions and used tear gas and burned the marchers camps.
Two veterans died from their injuries.
Who was running against Hoover in the presidential election, and what did he believe?
A Democrat, Franklin Delano Roosevelt (FDR).
He believed in an active government to improve the lives of the ordinary people, but only as a last resort.
He planned to spend public money on getting people back to work
He promises the American people a ‘New Deal’.
Who won the presidential election?
FDR by a landslide (7million more votes than Hoover)
Democrats also won a majority of seats in Congress
What were FDR’s 4 main priorities?
Getting Americans back to work
Protecting people’s savings and property
Providing relief for the sick, old and unemployed
Getting US industry and agriculture back on their feet
What was FDR’s first action and how did he do it?
To deal with the banking crisis
He ordered all banks to close and remain closed until government officials had them checked over
A few days later, 5,000 trustworthy banks reopened and were supported by government money if necessary
What were his “Fireside chats”?
When FDR took time and explained to the American people what he was doing and why
On Sundays he would broadcast on radio to nation
An estimated 60million people tuned into his fireside chats
What is the FERA?
Federal Emergency Relief Administration
They set about meeting the urgent needs of the poor
500m was spent on soup kitchens, blankets, employment schemes and nursery schools
What was the CCC?
Civilian Conservation Corps
Aimed at unemployed young men.
They could sign on for periods of six months, which could be renewed if they still couldn’t find work
Most of work done was on environmental projects and most of money earned went back to men’s families and around 2.5m young men were employed by CCC
What was the AAA?
The Agricultural Adjustment Administration
Help problems facing farmers
Set quotas to reduce farm production in order to force prices gradually upwards
At same time, AAA helped farmers to modernise and to use farming methods that would conserve and protect the soil
In extreme hardships, farmers could also receive help on their mortgages
