The Great Depression Flashcards
What was unemployment in 1929 vs 1931 and 1932?
1929 - 3.2%
1930 - 9%
1931 - 16%
1932 - 25%
When and what was the Hawley-Smoot Tariff?
1930
Up to 47% tariffs imposed
What did the GNP fall by in 1930?
$20 billion
In 1929, which % of the GNP was Federal Expenditure?
2% GNP
How much did share prices fall in October 1929?
Down $14 billion (14%)
Market shrunk 50% in December
What and when was the President’s Emergency Committee for Employment?
1930 - encouraged private responses to the Great Depression
When was there a serious drought?
1930 - $49million loaned to victims
When was the Grain Stabilisation Corporation created?
1930 - bought surplus wheat from cooperatives
What was an example of state action?
Detroit created food stations which fed 14,000 in 1930
How many bank collapses were there by 1931?
2,294 bank collapses
When did US Steel cut wages and what by?
1931 - 10% wage cut which affected 1.7 million workers
When was the Reconstruction Finance Corporation formed?
1932 - Gvt gave funds of $2 billion, most went to larger organisations and banks
When did work on Hoover Dam begin?
1930
When and what was the National Credit Corporation?
1931 - $500 million for financial organisations. 90% went to smaller.
When and what was the Emergency Relief and Construction Act?
- $1.5 billion to fund public works
When and what was the Federal Home Loan Bank Act?
1932 - up to 50% mortgage assistance
When was the Bonus Army march on Washington DC?
1932
When was the largest peacetime tax raise in US history?
1932
What was the GNP difference, 1929 vs 1932?
1929 - $203 billion, 6.7% growth rate
1932 - $144 billion, -14% growth rate
When was the Mississipi River Flood?
1927 - killed 300 and 600,000 made homeless
What were the LT causes of the Great Depression?
Uneven distribution of wealth Employment stability Limited opportunities (women/EMs) Agricultural issues Get Rich Quick schemes Stock Market speculation
In the 1920s, which % of farms operated at a loss?
66%
What was an issue for employment stability?
1924 - 72% families had unemployed worker at some point
What were some of the ST causes of the Great Depression?
Problems in industry Banks Agriculture Stock market crash International issues Governmental policies
What were some of the problems in industry?
Overproduction/underconsumption
Overoptimism/belief that more demand would continue
Monopolies increased costs
Lack of unionism=low wages
Profit increased 60% but wages only 8% (less disposable income lowered demand further)
When did demand begin to fall for consumer goods?
1927 - most people had bought it by then
What were some government problems?
Too optimistic/naive Failed to tackle agricultural issues Belief in rugged individualism - low regulation Isolationism in a global economy Tariffs
What were some international issues?
WW1 - Dawes Plan - cyclical lending
Stocks: banks stopped investing in Germany, they couldnt pay back
Tariffs reduced exports
WW1 reduced European economies, further reducing demand for US products
What were some Banking issues?
Lots of little banks (over 25,000 in 1929) with no central regulation
Overoptimism led to speculation and unsecured loans
Disconnect between Fed Reserve Board and Fed Reserve Bank = slow to react
Desire to keep Gold Standard stifled international trade
How many banks were there in 1929?
Over 25,000 in the US
What was a farmer’s yearly average income in 1929?
$273 pa ($750 average)
What did the net farm income fall by 1929-32?
$6.1 billion in 1929
$2 billion in 1932
What did farm debt level increase by 1910-1920?
In 1910 - $3.2 billion
1920 - $8.4 billion
What were some natural disasters affecting agriculture?
Bolt weevil hit crops in early 1920s
Mississipi Flood 1927 ( average state income fell from $239 to $117; 1/3 Mississipi banks failed, 2/3 farms foreclosed)
What did the value of farmland fall by 1920-1929?
Dropped by 20%
What was the Oklahoma wheat harvest in its worst year?
Worth only $7000 in 1933 - average of $1million yield
Which new product reduced demand for cotton
Rayon
How many regulatory bank regimes were there in the US before 1933?
52 - inconsistent
As there was no federal insurance system, deposits were not secure
What were the issues with the Federal Reserve Bank and Federal Reserve Board?
Bank based in NY, Board in Washington - ineffective communication
Were slow to react to market speculation in 1928-9, their reaction (interest rate hikes and liquidity adjustments) were ineffective
By preserving the Gold Standard in the US money was kept cheap, fuelling and accelerating the 1920s Boom
When did share values begin to recover?
Spring 1930, but then later problems emerged as the Fed kept money tight, reducing borrowing and forcing banks to call in loans and sell assets (share and property prices dropped)
When did the Bank of Kentucky collapse?
Late 1930s - triggered other collapses
How many banks collapsed by the end of 1930s?
600, including the massive Bank of the US in New York (400,000 depositors)
What were the international issues?
War debts
German reparations
International trade
How much did international trade drop?
Fell from $36 billion to $12 billion by 1931
When did European bank collapses start?
1931 - UK abandoned Gold Standard (Fed raised interest rates, further depressing the US economy)
How many banks collapsed by the end of 1931?
2, 294 banks collapsed
What were the problems with speculation?
Investors ran up huge debts, increases in stock prices outran real economic growth
September to November 1929 - what happened to stocks?
Hatry - triggered by collapse of Hatry’s financial emoires
Stock value fell 50%
23rd October 1929, what happened to the Stock Market Index?
Fell by 20% Banks tried to buy up stocks - 6 banks spent $30mil - but could not buy all 9 million shares changed hands Market dropped 14% ($14bil) Market shrunk 50% in 6 weeks
In 1931, how many workdays were lost in strikes in the old industries?
2.2million work days
What were some issues for the old industries?
New technologies
Return of European competition after WW1
Competition from oil
End of railway boom
What did automobile and electrics sales fall by?
2/3
What did the average waage fall by?
30%
Between 1923 and 1933, how many textiles workers lost their jobs?
90,000
How much was the construction industry worth in 1929 vs 1932?
$6.6bil in 1929
$1.3bil in 1932
How many farms were foreclosed?
3500 out of 5280
What did General Electric’s profits and workforce fall by?
Income of $60.5 mil in 1930 with 88,000 workers
Income of $14.7 mil in 1932 with 42,000 workers
In 1932, which % of people had no income?
28%
How many people became homeless?
About 1 million, formed ‘Hoovervilles’ (shanty towns)
How many people died of suicide?
23,000
Until 1932, how many states had pensions?
Only 11, helping only 1,000 people.
None had unemployment insurance
How many states removed voting rights from relief seekers?
10, also some churches removed them from services. The stigma of becoming destitute meant only 25% of those entitled to relief received any
In 1932, which % of relief could charities provide?
Only 6% of needed relief
Which state cut relief by 50% 1931-2?
Michigan
Which % of the 1929 figure was the 1932 wage bill?
Only 40%
Give an example of how unemployment was unevenly distributed
New York - 1 million unemployed
Toledo in Ohio - 80% unemployed
How much higher was unemployment for African-Americans?
4-6 times higher
In 1930, which % of US school authorities refused to hire women?
75%
How did women particularly struggle?
Laid off before men, esp married women
Domestic service hit very badly
US school authorities - 75% refused to hire women
Married women accused of causing male unemployment
Which % of farms were evicted?
5%
What did iron and steel production drop by?
59%
How many companies were bankrupe by 1932?
20,000
How many car sales were there in 1929 compared to 1932
1929 - 4.5 mil
1931 - 1 mil
What was the stock index in 1929 vs 1932?
1929 - 220.1
1932 - 84.8
Which % of the GNP was the Federal Budget?
Only 3
What were the reasons the Great Depression lastest so long?
Hoover’s ineffective measures (and lack of control over Congress)
Monetary policy
Inadequate Gvt intervention
The extent of the depression (old and new ind. affected)
The nature of US business
Foreign market (US did not devalue currency=products too expensive for foreign markets)
Why did Hoover’s National Credit Corporation 1931 fail?
Although it had a fund of $500 million (90% intended to go to small/medium corporations) it was controlled by conservative bankers who spent only $10 mil.
When was Hoover’s tax raise?
June 1932 - largest peacetime tax raise in US history
