Economic downturn and recovery in USA

Question 1

The Great depression

Answer 1

A period of economic depression, especially in America due to the collapse of the economy
Caused high numbers of poverty and unemployment

Question 2

Other weaknesses of American economy

Answer 2

People were in debt due to buying with credit
Economic boom too reliant on consumption, which began to fall
Farm income plummeted
Very unequal wealth distribution

Question 3

What was the Wall Street Crash?

Answer 3

When investors in the stock market panicked due to the falling prices
1.3 million shares were bought/sold and prices crashed causing devastating effects

Question 4

When was the Wall Street Crash?

Answer 4

October 1929

Question 5

How was employment effected by the depression?

Answer 5

Unemployment rose drastically and by 1932 1/3 of the workforce was unemployed
This was due to the collapse in world trade and people were out of work

Question 6

How were black Americans affected by the depression?

Answer 6

Black workers were fired first due to racism
At one point:
Unemployment in black people = 50%
Unemployment in white people = 20%

Question 7

How were Farmers affected by the depression?

Answer 7

Overproduction of goods but underconsumption
Made worse by 1931 droughts and dust storms
Caused bankruptcy
Left their belongings for the West Coast to find employment

Question 8

How did the depression effect suicide rates?

Answer 8

1926 = 12.6 suicides per 1000 people
1932 = 17.4 suicides per 1000 people

Question 9

What were Hoover’s respondes to deal with these problems pre 1932?

Answer 9

Rugged individualism - you are responsible for your life, no help from anyone else
1930 Tariff Act - increased import tax decreased international trade
Met with businesses to not cut wages nor production
More on public infrastructure

Question 10

Were Hoover’s methods affective?

Answer 10

No, unemployment began to rise in 1931-2.

Question 11

Why did Hoover change his methods in 1932?

Answer 11

They were ineffective
In order to win the next election he had to change his methods

Question 12

Hoover’s Reconstruction Finance Corporation

Answer 12

$2 billion in loans to banks, insurance companies and railroads
Meant to strengthen confidence and create jobs

Question 13

Hoover’s Emergency Relief Act

Answer 13

$300 million to state governments to decrease unemployment

Question 14

Hoover’s Home Loan Bank Act

Answer 14

Increase home building and owning
$125 million to fund regional banks

Question 15

What were Hoovervilles?

Answer 15

Houses built on the outskirts of cities out of wood, cardboard and tin because of homelessness caused by the depression
Had no running water or sewage systems
Existed until 1941

Question 16

What were the bonus marchers?

Answer 16

June 1932
Protest by 12000 WW1 veterans who were promised money by 1945 for war service
Due to depression many didn’t want to wait that long and went to Washington to propose a bill for early payment, building Hoovervilles
Were calm but met with violence, 2 marchers and a baby died

Question 17

Were the Bonus marchers successful?

Answer 17

No because the bill wasn’t passed
Transportation home was payed for instead

Question 18

Were the Bonus marchers successful?

Answer 18

No because the bill wasn’t passed
Transportation home was payed for instead

Question 19

FDR’s appeal in the new election

Answer 19

Sympathy votes - had overcome polio but paralysed from the waist down? Was still impressive he became successful politician
Promised a new deal to combat the economic problems

Question 20

Hoover’s unpopularity in the election

Answer 20

Blamed by many for failing to deal with the depression
Relief schemes too small and didn’t help
Bonus Marchers incident only a few months ago
Hoover didn’t have any new solutions

Question 21

FDR’s RRR scheme

Answer 21

Relief = help those in poverty
Recovery = boost economy and create job opportunities
Reform = create new systems for helpless people ie sick and disabled

Question 22

AAA

Answer 22

Agricultural Adjustment Act
Farmers paid to produce less
Production fell, prices rose, farmers could recover

Question 23

CCC

Answer 23

Civilian Conservation Corps
Jobs for young men in Hoovervilles
Planting trees to stop soil erosion
Offered $1 a day, food and clothing
Rose to 2 million men by 1941

Question 24

EBA

Answer 24

Emergency Banking Act
Restore confidence in banks
Banks not allowed to invest savings in unpredictable stock market

Question 25

FDR’s Hundred Days plan

Answer 25

First 10 days = close all banks. If they had assets, they could reopen. If they didn’t, they’d have to wait until Government found solution
Set up organisations known as Alphabet Agencies

Question 26

Fireside chats

Answer 26

People would listen on the radio to Roosevelt explaining his plans to fix the economy every night
Built personal trust in in him and increased popularity

Question 27

FDR’s first new deals

Answer 27

Includes 3 Rs, alphabet agencies, fireside chats and one hundred days.

Question 28

Why did Roosevelt make a second new deal?

Answer 28

High unemployment remained so offered new solutions

Question 29

Second new deal = WPA

Answer 29

Work Progress Administration
$4.8 billion relief programme
Unemployed teachers back to work
Community service schemes for actors, writers and artists
Funded building projects

Question 30

Second new deal = National Labour Relegations Act

Answer 30

Protected workers’ right to join a union
Act against unfair employers who sued unfair business practices

Question 31

Second New Deal = Fair Labour Standards Act

Answer 31

Minimum wages established, 300,000 workers had increase wages
Maximum hours established, 1 million had a shorter working week
Child Labour not allowed

Question 32

Second new deal = Social Secuirty Act

Answer 32

Government accepted full responsibility for meeting necessities of citizens
Unemployment benefits funded by tax
Benefits for elderly, orphans and injured people

Question 33

Overall success of New Deal on the economy

Answer 33

Restored faith in government after Hoover
Preserved democracy
Extended role of president to helping others
Cut number of bank failures
Improved infrastructure of USA
Unemployment fell greatly

Question 34

Overall success of the New Deal on society

Answer 34

Unemployment fell drastically
Improved workers conditions
Benefits for the elderly, sick, poor, disabled etc
200,000 black Americans benefitted from CCC and housing programmes
Roles of women in important positions ie Eleanor Roosevelt and Frances Perkins

Question 35

Overall unsuccessfulness of the New deals on the economy

Answer 35

Too much power for federal government
Provided short term solutions and not overcoming systemic problems
In 1937 when FDR released the New Deal budget, the country went back into depression
Alphabet agencies were short term, after employment didn’t decrease.
Strikes still broken up by brutal violence by employers

Question 36

Sick chickens case

Answer 36

FDR ruled a poultry company couldn’t sell sick chickens
Supreme court ruled that meddling with a private company’s prices, work hours etc
Overturned NIRA

Question 37

US vs Butler case

Answer 37

Farmers were taxed on growing more and those who grew less were compensated
Supreme Court ruled he couldn’t do that = using coercive tactics
Overturned AAA