The Wall Street Crash and The Great depression Flashcards
When was the Wall St. Crash?
1929
When was the beginning of the great depression?
1930
What happened to African Americans that had jobs during the depression?
Their unemployment rate was six times greater than it was for white Americans
How did working class woman suffer from the depression?
They lost their jobs before men and women in domestic services were dismissed as their employers could not pay them.
Why was the USA unable to cope with the immediate effects of unemployment prior to the depression?
Before the depression people thought if you were able bodied and lost your job it was your fault so there was no system they could fall back on.
By 1929 how many people owned shares?
1.5 million people
What is a bull market?
When the value of shares rise and they are sold for more than they were bought for.
What is a bear market?
When the prices of shares are falling
What are speculators?
People who gamble with shares and take a chance.
How is a bear market caused?
Speculators gambling on future prices
How do speculators turn a bear market into a crash?
They try to get rid of their shares before they fall further
What is meant by buying on the margin?
Buying with credit
How did Hoover respond to the Great depression?
Gave aid to farmers
Delayed war debts owed from other countries
Why was there a crash in 1929?
- Speculators had huge loans and worthless shares
- On Thursday 24th Oct, 13 million shares were sold in panic
- The value of shares rose 5 times between 1924 and 1929
- Share prices rose beyond what they were worth
- Many became speculators
- There was corruption and secret trading between the bankers and brokers
Who was the economist that predicted a crash?
Roger Babson
Why was there a depression in the 1930’s?
- World trade slumped
- Some thought there was a drop in spending and people wanted to begin to save
- Maldistribution of wealth
- 40% of the population were already living in poverty
- Cycles of depression
Some thought the Great depression was the fault of the US federal reserves, why?
In 1931 they raised interest rates which led to a reduction in money
What was Herbert Hoover’s reason for the depression?
He blamed it on the financial collapse of Europe in 1931
Why couldn’t just the Wall st. Crash have caused the Great Depression?
There were only 1.3 million shareholders and only 600,000 speculators so how can their bad luck could not have caused a depression for a country of 123 million.
How did tariffs contribute to the Great depression?
World trade slumped, due to too many American tariffs which damaged industry and agriculture
How many countries avoided the USA’s tariffs?
60
What was the Great Depression? (6 Marks)
- Collapse in demand
- Industrial decline
- Mass bankruptcy
- Collapse of banks
- Farm closures
What acts did Hoover set up to respond to the GD of the 1930’s?
- Reconstruction Finance Cooperation
- 1932 Emergency Relief and Construction act
- 1932 Federal Home Loans act
