UNIT 3 (USA 1918-41) - 1-2 Flashcards
Wall Street Crash - Intervention and Volunteerism
How much worth of shares was there by 1929
$64 billion on Wall Street
Why did many people sell their shares quickly
Loss of confidence in the stock market
What happened on Black Thursday
Prices fell rapidly as people panicked and sold; shares lost $26 billion and banks had to call back loans as they didn’t have enough money
What is deflation
General decline for goods and services
What happened to businesses after the crash
Businesses failed, over-production meant that prices fell, and companies couldn’t pay wages, so more workers were laid off
What happened to banks after the crash
Banks failed so people had no savings and couldn’t afford food; Europe cut trade with the US
Why did Hoover believe that volunteerism would help the US
He believed the government shouldn’t interfere in the economy and that markets would fix themselves (laissez-faire attitude).
What is meant by “rugged individualism”
The government shouldn’t interfere with people’s lives, and so shouldn’t give out handouts to help them
What was the tariff raised for Americans to buy American food, and not from other countries
The 1930 Hawley-Smoot tariff raised import taxes on food by 40%, causing prices to increase
What was the act that gave loans to promote building
The 1932 Emergency Relief and Construction Act, promoted building by giving loans, e.g. built the Hoover dam
What was the benefit of the 1932 Emergency Relief and Construction Act
It increased the number of jobs and helped the economy
