Great Depression 1929

Question 1

Laissez-faire

Answer 1

The government would limit its intervention in the economy.

Question 2

Rugged individualism

Answer 2

People were expected to overcome problems and succeed by their own efforts. They were not to depend on help from the government.

Question 3

Voluntarism

Answer 3

Help for the homeless and hungry should be from charities, businesses, churches and local government, and not the federal government.

Question 4

Balancing the budget

Answer 4

The government spent no more than it earned in taxes.

Question 5

8 Causes of the Great Depression

Answer 5

1. overproduction and under consumption in agriculture;
2. overproduction and under consumption in consumer industries;
3. decline of traditional industries;
4. the government policy of laissez-faire, which led to insufficient regulation of the stock market and banks;
5. the government policy of protectionism, which reduced America’s trade with other countries;
6. increased debt, partly due to new methods of borrowing at low interest rates;
7. massive speculation on land and the stock market, leading to inflated share prices;
8. a decline in confidence in the economy.

Question 6

President Hoover’s Policies & Industry

Answer 6

1. Hawley-Smoot Act 1930, which increased tariffs by 50 per cent on imported manufactured items, aimed to help industry sell more home-produced goods.
2. The Reconstruction Finance Corporation (RFC) was established in 1932 which provided loans totalling $1,500 million to rescue businesses, banks and insurance companies.
3. Initially he cut taxes by $130 million to stimulate investment, but in 1932 they were increased on businesses to help balance the budget.

Question 7

Impact of President Hoover’s Policies on Industry

Answer 7

1. Industrial production continued to drop. It decreased by 45 per cent between 1929 and 1932.
2. House-building fell by 92 per cent between 1929 and 1932.
3. Businesses continued to go bankrupt, especially banks. From 1929 to 1932, 5,000 banks, which tended to be too small and unregulated, went out of business. 4. In New York, 10,000 of the 29,000 manufacturing firms closed.

Question 8

President Hoover’s Policies & Workers

Answer 8

1. Tax reductions on workers’ wages in 1930 were supposed to leave them with more money to spend on consumer goods.
2. The President’s Organisation on Unemployment Relief (POUR) was set up in 1931. Its purpose was to co-ordinate local welfare agencies, without spending government money.
3. In 1932, $1.5 billion was loaned to state governments, which had been bankrupted providing relief to the poor, to fund public works programmes for the unemployed.

Question 9

Impact of President Hoover’s Policies on Workers

Answer 9

1. Unemployment increased
2. Wages fell
3. Starvation grew
4. Homelessness soared
5. Reliance on charity and relief schemes escalated

Question 10

President Hoover’s Policies & Agriculture

Answer 10

1. The Federal Farm Board provided loans to farmers for seed and fertilisers. It bought surplus food to help keep prices up.
2. The Hawley-Smoot Act increased tariff on a wide range of imported foodstuffs to encourage Americans to buy the cheaper homegrown produce.

Question 11

Impact of President Hoover’s Policies on Agriculture

Answer 11

1. Agriculture continued to decline and there was great hardship.
2. Prices remained so low farmers could not afford to harvest their crops. They left the crops, like wheat and fruit, to rot in the fields and farm animals were killed instead of being taken to market.
3. 40 per cent of farms were mortgaged to banks.
4. Evictions for non-payment of mortgages increased.