Topic 3 Flashcards
what was the Well street Crash
a dramatic fall in stock prices over a 5 day period starting 24th October 1929
Long term causes of the Wall Street crash
> Speculation- Am. encouraged to buy stock to make quick profit. creating investment culture
President Policies- Laissez-faire meant no regulation
Buying on credit- ‘buying on the margin’ meant Am. took loans out and had to repay them -80% Am. didnt have sayings
interest rates- low interest meant more money was borrowed
short term reasons for Wall St.Crash
> Tariffs- Hoover promised increased tariffs so speculation caused pushed up share prices -> senate announed to stop increased tarriffs so people sold stock
Loss of confidence- experienced investors sold stock causing everyone to sell stock
panic selling- Oct 24th 12 million shares solf- loosing $4bn. stockbrokens called back loans ‘margin call’, people sold shared to repay loans. bankers put $40bn into eco. by 29th 16m. shares had been sold and $30bn. lost from eco.
consequences of Wall St. Crash
> destroyed confidence
underlying causes of Depression
> farming
staple ind.
easy credit
how was farming an underlying cause of the Depression
> prospered during war
as war ended other countries produced themselves
Fordney-McCumber Tariff Act meant other countries increase imports from Sm = harder to export
prohibition damaged grain ind.
US farm income 1919- $22bn. 1928 $13bn
Average farmer produced enough for 15 families
prices fell 50%
Agricultural Credits Act 1923 and Capper-Volstead Act 1923 not enough
by 1924 600,000 lost land, 16m. on income less than $2,00pa
value of farmland fell 30%
how was staple ind. an underlying cause of the Depression
> coalmining, shipbuilding, railroads, textiles
mechanisation increased unemployment
boom only benefitted consumer markets
how was easy credit an underlying cause of the Depression
> things could be paid for on monthly or weekly basis
discouraged saving (80% didnt save)
buy-now-pay-later mentality
people put into debt
short term causes of depression
> over production
Wall St. Crash
Banking crisis
how was overproduction a short-term cause of the Depression
> those who had items (car, fridge, washing machines) didn’t need another
but same rate of production continued
created a surplus
people fired
how was the Wall St. Crash a short-term cause of the Depression
beginning/trigger
> psychological blow
how was The banking crisis a short-term cause of the Depression
> banks had insufficient funds with which to repay customers as word spread people rushed to withdraw money.
10m. saving accounts lost
Impact of Depression
> GDP $104 1929 to $56bn 1932 > Workers > Farmers > Foreign policy > business failures > unemployment
what was the impact on workers in the Depression
> 25% unemployed -> 1929 2m 1933 15m > Chicago 40% unemp. >hoovervilles > Full time steel workers -> 1929 225,000 1932- 0 > 12 eggs 28c
what was the impact on farmers in the depression
> worsened state
dust bowls
Hawley-Smoot Tariff act
1/4 farmers lost land
price of wheat 1919 $2.16 1932 38c
Agricultural Farming Act 1929- loans to farmers
Grain Stabalisation Corperation 1930- good prices to farmers
sold land and left to pay off mortgages
what was the impact on foreign policy in the depression
> isolationism
no action e.g. Manchuria
Neutrality Acts
what was the impact on business in the Depression
1929 23 thou failed
1932- 32 thou
1936 10 thou
what was the impact of mass employment from the Depression
> lower consumer demand
run on the banks
school drop outs- non-attendance 300,000
suicide increased by 25%
hoovers election
won by 444 electoral votes to 87
Bonus marches
1932
> 20,000 veterans demanded early bonuses.
> Hoover sent 10,000 men with tanks, and tear gas and burnt camp.
> killed 2 and injured 1000
Federal Farm Boards
1930
> loans to farmers and stabilise prices
> however Am. Canada, Argentina overprduce so doesn’t work
Hawley Smoot Tariff Act
June 1930
> raised import duties
> other countries rose in response
> Hoovers biggest mistake
Voluntarism
Hoovers policy on charitable and voluntary aid instead of gov. intervention
> rugged individualism
> relied too much on it
PWA
1933 Public Works Admin
> large scale public work programmes created employment
> on building projects such as bridges, roads and houses
> $4bn spent by 1934 when it ended
National Credit Corperation
1931
encourage banks to loan to smaller banks
Reconstruction Finance Corporation
1932
> provide aid to railroads, business and financial instituions to stabalise ind.
> unsuccessful
Bonus marches
1932
> 20,000 veterans demanded early bonuses.
> Hoover sent 10,000 men with tanks, and tear gas and burnt camp.
> killed 2 and injured 1000
1st New Deal
TVA AAA NIRA NRA EBA FERA PWA CCC
SSA
1935 Social Security Act
> created federal retirement pensions by doubling income tax on workers wages
> created unemplyment insurance plan for those out of work.
CCC
1933 Civillian Conservation Corps
> provided employment for young unmarried men aged 18-25 in conservation work
> employed 2m.
> no women and pay only $30pm
FERA
1933 Federal Emergency Relief Act
> provided $500 million in federal funds to state agencies to make relief payments to unemployed
NIRA
> 1933 National Industrial Recovery Act
> created public work programmes (PWA)
PWA
1933 Public Works Admin
> large scale public work programmes created employment
> on building projects such as bridges, roads and houses
> $4bn spent by 1934 when it ended
TVA
1934 Tennessee Valley Authority > federal programme spanning 7 states > where the Tennessee river flowed > creating 20 dams > for cheap hydro-electric power, irrigation and jobs > preventing flooding
NRA
1933 National Recovery Admin
> provided codes setting up a system of self- government
> ensured fair pay, conditions and right to collective bargaining
> est. working hours and child labour under 16 illegal
EBA
1933 Emergancy Banking Act
> banks could only reopen if they had sufficient cash reserves
> announced in Fireside speech to 60m.
> diposits exceed withdrawals
Glass Steagall Act
1933
> separated investment and commercial banking
> investment banks were allowed to speculate the Stock market
> provided insurace deposits up to $5000 under FDIC
2nd New Deal Acts
WPA SSA NLRB NYA REA FSA FLSA NHA
WPA
1935 Works programme admin
> replace PWA
> employed 8m.
> building roads, buildings, parks, hospitals, schools
reasons for 2nd ND
> radical forces
voter turning to radical forces
Supreme Court
BB and wealthy -> 1935 publically opposed FDR policies
NLRB
1935 Wagner Act
> allowed collective bargaining
NYA
1935 National Youth Admin
> set up by WPA
> provide education and training to young people
REA
1935 rural electrification Admin
> provide cheap elec. to farmers
> 773 systems spanning 348,000 miles
> 1935- 10%farmers had elec
1940- 50%
1950 - 90%FSA
1937 Farm Security Admin.
> guarenteed loans to farmers to buy or rehabilitate farmland
FLSA
1938 Fair Labour Standards Act
> set min wage to 40c
> min working week to 40hrs
> raised wages for 12. people
NHA
1938 National Housing Act
> housing projects for poor
successes of 1st ND
> stabilised banking
protected farmers and home owners making loans easier
employment
created infrastructure> positive psy impact
How did Huey Long oppose the New Deals
> Share our Wealth
$5000 homestead allowance and min wage of $2500
increase income and inheritance tax -> 1% over 1m increasing 1% per million up to 8m.
over 8m =100% tax
27.5 thou clubs set up with 4.6m members
could threaten FDR as 3rd party opposition
assasinated 1935
successes of 2nd ND
> Gov. intervention improved labour rights and union membership doubled
30% more farms had electricity
Impact of opposition to Supreme Court
> court packing-> FDR proposed to appoint 1 new judge for every judge over 70 = (9->15 judges) -> failed and damaged reputation
ruled NIRA unconstitutional -> Schechter Poultry
ruled AAA unconstitutional -> Butler taken to court for not paying taxes SC defend him.
reasons for 2nd ND
> radical forces
voter turning to radical forces
Senate
BB and wealthy -> 1935 publically opped FDR policies
how did a shift in pubic opinion help end prohibition
> morality of increasing productivity, reducing crime and health not happened
noble experiment had failed
Organised Crime
opposition to New Deals
> left > communists > Supreme court > Liberty League > EPIC > Townsend > Coughlin > Huey Long
how did Communist oppose the New Deals
> wanted to end capatalist economic system
> looked to USSR for insperation
how did economic consideratiions help end prohibition
> NY got 75% of revenue for alcohol tax
cost Gov. $11bn lost in tax
cost $300m to enforce
How did Liberty Leaguers oppose the New Deals
> 1934
> rich, pro-private property, Democrats
How did Townsend oppose the New Deals
>Old Age Revolving Pensions Inc. > proposed veryone over 60 should get $200 pm that they had to spend within 28 days >1/2m supporters > would have cost 50% of NAtional income > SSA small version??
How did Coughlin oppose the New Deals
Father Charles Coughlin
> weekly radio programme ‘Golden hour of the little flower’
> 35m listeners
> accused FDR of being socialist and became anti-semetic
> nationalistaion of industry and use of silver coinage
> National Union for Social Justice 1934 set up
> church told him to stop or face being defrocked
Impact of oppositon from the right
> Rep. stated gov. intervention too far = un-american and socialist-> Alfred Langdon
South as helped Af-Ams when Elenor Roosevelt spoke out against racial discrimination
ND allowed unions = BB angry
Liberty League -> Al Smith -> failed when Smith was defeated in election
Reasons for ending prohibition
> shift in public opinion > pressure groups > Bussiness elites > economic considerations > political factors
how did a shift in pubic opinion help end prohibition
> morality of increasing productivity, reducing crime and health not happened
noble experiment had failed
Organised Crime
how did a shift in pressure groups help end prohibition
> Womens Organisation for National Prohibition Reform -> led by Pauline Sabin -> 1.5m members
crusaders
association against the prohibition ammendment -> Pierre Du Pont (general motors) leader
Republican Citizens Committee Against National Prohibition
how did Business Elites help end prohibition
> J.D.Rockerfella
given $500,000 for Anti Sloon League
NOW expressed disappoinment in groeth of speakeasies and grime and disregard for law
Pierre Du Pont for AAPA
how did economic consideratiions help end prohibition
> NY got 75% of revenue for alcohol tax
cost Gov. $11bn lost in tax
cost $300m to enforce
how did political factors help end prohibition
> washington post -> ‘man with the green hat’
George Cassidy
supplying senators and congressmen, the ones making prohibition laws, with illegal alcohol for 10 years
Responce of Gov. to organised crime
Homer Cummings, Atorney General, declared war on crime 1933
FBI
J.Edgar Hoover
1935 named FBI
> forensic lab 1932
>’G-Men’ -> hollywood idolised them
> Machine Gun Kelly- arrested 1933
John Dillinger -> shot 1934 outside cinema after escaping prison x2
Alvin Karpis from Barker Karpis Gang arrested 1936
myths of organised crime
> defeated by Eliot Ness and his Untouchables
> Dillinger, Kelly and Karpis were landmark events
reality of organised crime
> no clear victory
end of prohibiton = gangs harder to catch
Al Capone arrested for tax evasion not charged for murder by Inland Revenue Service not FBI
organised crime was still very powerful
why was the fight organised crime so difficult
> restricted money to FBI compared to gang money
bribery and corruption
Murder, robbery and host came under state law not FBI = corruption and could cross state borders
