Economic downturn and recovery in USA Flashcards
The Great depression
A period of economic depression, especially in America due to the collapse of the economy
Caused high numbers of poverty and unemployment
Other weaknesses of American economy
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
What was the Wall Street Crash?
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
When was the Wall Street Crash?
October 1929
How was employment effected by the depression?
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
How were black Americans affected by the depression?
Black workers were fired first due to racism
At one point:
Unemployment in black people = 50%
Unemployment in white people = 20%
How were Farmers affected by the depression?
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
How did the depression effect suicide rates?
1926 = 12.6 suicides per 1000 people
1932 = 17.4 suicides per 1000 people
What were Hoover’s respondes to deal with these problems pre 1932?
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
Were Hoover’s methods affective?
No, unemployment began to rise in 1931-2.
Why did Hoover change his methods in 1932?
They were ineffective
In order to win the next election he had to change his methods
Hoover’s Reconstruction Finance Corporation
$2 billion in loans to banks, insurance companies and railroads
Meant to strengthen confidence and create jobs
Hoover’s Emergency Relief Act
$300 million to state governments to decrease unemployment
Hoover’s Home Loan Bank Act
Increase home building and owning
$125 million to fund regional banks
What were Hoovervilles?
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
What were the bonus marchers?
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
Were the Bonus marchers successful?
No because the bill wasn’t passed
Transportation home was payed for instead
Were the Bonus marchers successful?
No because the bill wasn’t passed
Transportation home was payed for instead
FDR’s appeal in the new election
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
Hoover’s unpopularity in the election
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
FDR’s RRR scheme
Relief = help those in poverty
Recovery = boost economy and create job opportunities
Reform = create new systems for helpless people ie sick and disabled
AAA
Agricultural Adjustment Act
Farmers paid to produce less
Production fell, prices rose, farmers could recover
CCC
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
EBA
Emergency Banking Act
Restore confidence in banks
Banks not allowed to invest savings in unpredictable stock market
