USA

Question 1

3 causes of the Wall st crash of 1929.

Answer 1

One cause of the wall st crash was the over-confidence of americans. In the 1920s share prices continuously rose and many americans had the impression investing in the stock market was an auspicious business that was practically a one-way bet. This elicited the over-confidence of regular americans in the stock market and even caused some regular americans to start buying shares on margin.
Another cause of the wall st crash were ‘bull pools’. Also know as ‘pump and dump’ investing, groups of traders who practiced this form of investing set out to artificially increase prices by repeatedly by shares from each other. This fooled less experienced investors who already had a tendency to invest irrationally because of their over-confidence into buying these shares. This meant that the price of shares were no longer driven by economic fundamentals but rather by the irrational exuberance of regular americans. This led to an unrealistic surge in prices - 1925 - total value of shares: $34 billion –> 1929 - 64 billion
Economic boom period of 44 months following WW1 induced the over-confidence and decadence of certain americans.

Question 2

Factors that accentuated the effects of the Wall st Crash:

Answer 2

Fall in the demand for agricultural goods after ww1 led to the fall of the price of crops which affected farmers’ income. Farmers started to migrate from rural to urban areas seeking for jobs.

Small banks that comprised most of the banking sector did not have the cash to handle the masses of customers who wanted to withdraw their savings. Customers only got 10 cents on the dollar back from their savings accounts since banks illegally reinvested this capital without their clients knowing.

Germany was one of the european countries in desperate need for US financing, and when the USA recalled their loan, Germany went in a state of chaos with imminent hyperinflation.

Question 3

Increase in number of shares available to buy from 1925 to 1929?

Answer 3

500 thousand –> 1.1 million

as a result, businesses had more capital to expand their operation and hire more people

Question 4

How many shares unloaded on ‘Black Tuesday’ and on ‘Black Thursday”?

Answer 4

13 million and 16 million shares unloaded en masse

Question 5

Evolution of the price of shares through the Crash (General motors)?

Answer 5

March 1928: 1.40$ –> September 1929: 1.82$ –> 13 November 1929: 0.36$

Question 6

How much money lost?

Answer 6

26 billion of value vanished

Question 7

Consequences of the Crash on banking?

Answer 7

From 1930 onward, 9 thousand of 25 thousand banks existing since 1925 were closed and 650 closed directly due to lack of capital.
9 million Americans lost 2.5 billion in savings
1930 - New York City Bank unable to pay 400 thousand of its clients their savings of 286 million

Question 8

Consequences of the crash on agricultural sector?

Answer 8

Farmers’ earning went from 6 billion in 1929 –> 2 billion in 1932 due to the fall in crop prices
Demand was nowhere near as high after the war despite the means of production(mechanized and improved farm practices) being able to capacitate the same high levels of production which led to the surplus of crops
Since their income was undermined, they could not maintain their business and redeem the loans and mortgages they issued to buy land and equipment –> 1/3 of farmers lost their land and rural to urban migration led to 2 million settling in sprawling cities

Question 9

Aims of FDR?

Answer 9

Recovery: End to crisis in industry(higher rates of production), banking and agricultural(increased income for farmers) sectors
Relief: Fulfill immediate need of food with short term projects, alleviate effects of unemployment by providing states with funding
Reform: reform US through Social Security and regulation of banks and businesses to protect its citizens, reorganization and expansion of the federal government, stimulation of the economy in order to restore jobs, thus consumer spending –> ‘priming the pump’

Question 10

1st 100 days?

Answer 10

‘Brains trust’ - group of specialists advising FDR
‘Fireside chats’ - evening radio addresses given by FDR to his listeners(52 million)
Emergency Banking Act - Banks forced to close for 4 days to be audited(financially inspected), and only stable ones to be reopened
Beer and Wine Revenue Act - alcoholic beverages below 3.2% to be taxed in order to raise money for New Deal

Question 11

AAA? ND

Answer 11

Offered subsidies to farmers to lower supply and prevent surplus; 11$ for each acre a farmer didn’t use –> demand staid just as low but supply decreased, thus prices rose again
Paid farmers to store products
FCA set up to improve mortgage contracting; helped 20% of farms
CCC was set up since AAA was not enough

Question 12

NRA? ND

Answer 12

Set quotas on production, controlled prices
Imposed industry-wide codes of practice; banned child labor, limited working hours, eliminated unfair trade practice –> acted like a trade union
Blue NRA Eagle raised popularity among workers
2.3 million NRA businesses by 1933

Question 13

FERA? ND

Answer 13

Passed in the 1st 100 days

granted 500 million $ to states to spend on relief; was not to be redeemed

Question 14

HORA? ND

Answer 14

Increased mortgage maturity term from 5 to 30 years –> 1 million were able to keep their homes

Question 15

CCC? ND

Answer 15

Gave young men manual labor jobs for 30$/month on environmental projects
Only accepted 17-23 year old, so only employed 500 thousand by 1935, however over its entire course, it employed 3 million young unmarried men in total

Question 16

TVA? ND

Answer 16

Southern states had hot helped citizens enough, so the Tennessee Valley Authority was set up to help 7 states recover and relieve immediate needs:
Provided work
extended electrical coverage to farms
controlled flooding and improved land productivity
1936 - Completed its first project, the Norris Dam
20 dams planned to be built
Educated farmers on safe farm practices to hedge against environmental disasters

Question 17

2nd D?

Answer 17

2 years of ND since 1933 and income was still low
November 1934 Congressional elections brought reformist politicians + Supreme Court shut down some ND agencies –> 2nd Deal

Question 18

WPA? 2nd D

Answer 18

Harry hopkins in charge
Spent 11 billion$ on short-term work schemes that employed 8 million
Mostly employed unskilled workers in manual labor and built public works infrastructure projects; e.g. road building
also helped students stay in college, organised sewing classes for women, guidebook writing for artists
e.g. National Health Survey which revealed 2 million cases of serious illnesses go without treatment every year ++> WPA sends nurses to the homes of the poor, builds hospitals, provides medical and dental treatment to those who otherwise cant afford

Question 19

Shortcomings of the WPA? 2nd Deal

Answer 19

WPA’s quota limited its effects; in NY, it employed 225 thousand but left 750 thousand without help because it had reached its quota

Question 20

Housing? 2nd Deal

Answer 20

Resettlement Administration built suburban towns for the homeless
-Only 3 were constructed + Congress legalized the Housing act to replace shanty towns

Question 21

Farmers? 2nd Deal

Answer 21

AAA was revoked by SC in 1936
2nd AAA imposed compulsory quotas to limit production –> any surplus was heavily taxed –> helped FG control prices
FSA(farm security administration) set up in 1937:
Provided cheap loans to buy farms; by 1941, $1 billion had been issued in loans
set up migrant camps with doctors for migrating farmers moving into cities

Question 22

Pensions and social security? 2nd D

Answer 22

FDR created social security in 1935
Before 1935, USA had no national pensioning system:
-Employees paid 1% income to pension fund; matched contribution by the employer
-Employer of more than 8 paid payroll tax to provide unemployment insurance at half the normal rate
Federal grants to states dedicated to poor, old and disabled
Impacts –> $50 million set aside for elderly, and 25 for for children
by 1939 –> 7000 children helped

Question 23

Shortcomings of the pension system? 2nd D

Answer 23

Domestic servant and agricultural workers not included

Self-funded so could not act immediately

Question 24

NLRA (Wagner Act)? 2nd D

Answer 24

NRA was invalidated by SC in 1935
NLRA replaced it:
Strengthened trade unions: workers were legally entitled to join, firing union members unfairly was banned; NLRB (National Labour Relations Board) hosted union negotiations, legal counseling to fired workers

Union membership rose to 9 million in 1940
NLRB lawyers in 1935 = 14 –> in 1939 = 226
Many unions still went on strike to gain the recognition of companies

Question 25

Banking act of 1935? 2nd D

Answer 25

created a board of Governors for the Federal Reserve System (Fed) Entitled this board to financial powers taken away from big banks --> 1936: no national banks closed only 2500$ was bound to be payed as deposit insurance

Question 26

Rural Electrification Administration (REA)? 2nd D

Answer 26

in 1930 --> electricity in 10% of farms, 1% in less developed areas, companies didn't bother to run wire to remote farms At first, Rural elec. projects were done by TVA: Electric Home and Farm Authority aided farmers to buy electric appliances Issued loans and instalment plans to buy them From 1935, REA took over 1941 --> 35 % of farms electrified 417 co-operatives contracted loans to lay wires EHFA(a federally owned corporation) had arranged 100 thousand contracts for electrical goods by 1938 Shortcomings: companies built spite lines close to a proposed co-op line, linking up rich neighborhoods and leaving out the poor and making it harder to gain permission from the REA to build their own inclusive lines for others.

Question 27

Overall achievements of ND for recovery?

Answer 27

Farm income increased from 2 --> 4 billion RFC(gov agency to aid corporations, etc) helps 6000 banks become operational again Unemployment: 1933 = 13 million --> 1939 = 9.5 million

Question 28

Overall shortcomings of ND for recovery?

Answer 28

Tenant farmers evicted from land and depended on grants 1929 --> 3% unemployed; 1939 --> 17% unemployed reliance on government; FDR tried cutting federal spending dedicated to re-stimulate the economy --> unemployment rose to 5%

Question 29

Achievements of ND on relief?

Answer 29

WPA employed 8 million | people that received financial aid --> 35 %

Question 30

Shortcomings of ND on relief?

Answer 30

Only 40% of applicants accepted into WPA; 750 thousand left unemployed compared to only 250 thousand accepted in NY since quota was already reached

Question 31

Achievement of ND on reform?

Answer 31

Social Security: federal help for the 1st time Electrification of farms Recognition of unions Banking reforms: Banking Act 1935 Women's division in the WPA gave specific help: sewing classes, etc 30% --> black families received relief aid Indian Reorganisation Act --> re-entitled 7.4 million acres of land to Indians

Question 32

Achievement of ND on reform?

Answer 32

Social Security: federal help for the 1st time Electrification of farms Recognition of unions

Question 33

Shortcomings of ND on reform?

Answer 33

Many ND relief programs paid by workers' wage rather than just taxation of rich CCC --> 2.5 million jobs for men - only 5 thousand for women AAA racism: black tenants thrown off farmlands Indians heavily-dependent on WPA; left without income when closed

Question 34

Judicial opposition to ND?

Answer 34

SC could block New Deal laws; most justices were against FDR: "Sick Chicken Case" - poultry company sued NRA for fining them for not respecting sanitation codes, claiming NRA had no right to inspect this --> case supported by SC and effectively ended the NRA 1936 --> cotton producer challenged AAA, claiming it could not tax him --> SC supported case once again and dismantled AAA 1937 --> FDR demands the appointment new judges for everyone over 70, meaning replacement of 6 of 9 SC judges --> Congress, angered, prevents this but SC receives message and stops challenging ND

Question 35

Republican Opposition?

Answer 35

FDR was democrat Reps. believed FDR admitted too much power and [money] to alphabet agencies; reps. known for believing in laissez-faire policy and volunteerism(government can only encourage, not force) 1936 --> little success, as policies did not appeal to the population ++> 1937 - Recession reacted against by voter by voting Republican, FDR demand to fire SC justices --> loss of support

Question 36

1938 Elections?

Answer 36

Reps. form coalition with dissatisfied southern Dems and garner enough strength to oppose ND Budget of relief programs cut Investigation of alphabet agencies --> try to weaken WPA and NLRB through accusations of being communists New measures such as housing plan and relief programs blocked in 1939

Question 37

Huey Long? Opposition to ND

Answer 37

Member of Senate and ex-governor of Louisiana from 28 to 32 Left-wing populist member of Dem. known for: Heavily taxing big businesses and the rich --> instituting social services and welfare programs with money obtained; free textbooks for students, etc "Share our Wealth" - 1934: Proposed in a national radio address; capping personal fortune at 50 million, annual income to 1 million, and inheritance to 5 million Took all annual income over 1.8 million --> distributed it to the poor households who were bound to receive at least 2500$ a year ++> not enough rich to fund the program Over 8 million joined Could have had an influence in the 1936 elections but was assassinated in 1935

Question 38

Objections of Huey Long?

Answer 38

Objections: NRA controlled by big businesses AAA left poor tenant farmers homeless Social Security Act did not reduce the wealth gap

Question 39

Father Coughlin? Opposition to ND

Answer 39

Catholic priest near Detroit Addressed 30 million listeners on his radio show, 'the Golden Hour with the Little Flower' --> politicians took him seriously because of the magnitude of the effect of his show Blamed Depression on Wall St and international bankers --> claimed ND was influenced by them, rendering it ineffective 1934 - set up National Union for Social Justice Calls for currency and banking reforms + nationalisation of certain parts of economy More just taxation system 1936 - Teamed up with 'Share our Wealth' and Francis Townsend --> form National Union Party; William Lemke as presidency candidate ++> FDR beats Lemke with 27.8 million to 828 thousand votes Lost support as his broadcasts became increasingly anti-Semitic

Question 40

Objections of Father Coughlin? Opposition to ND

Answer 40

Objections: Depression caused by Wall St financiers Claimed ND was influenced by Wall St, thus was rendered ineffective Believed FDR was communist puppet

Question 41

Increase in spending on leisure activities?

Answer 41

1.8 billion more in 1929 than ten years ago

Question 42

Cinema tickets sold?

Answer 42

in 1924, 40 million tickets each week --> figure more than doubled in 1929

Question 43

First film with sound?

Answer 43

the Jazz singer, 1927()

Question 44

Revenue of film industry?

Answer 44

$2 billion each year

Question 45

What were the three main popular forms of leisure in the USA?

Answer 45

Sports Cinema Jazz and dancing Radio and advertising

Question 46

Effect of economic boom?

Answer 46

Americans had more money and time to spend; average income had risen by 30% in the 1920s, but work hours were shorter. This induced americans to partake in leisure activities

Question 47

Baseball world series - Sport?

Answer 47

300 thousand people in 1921 went to watch the event

Question 48

Number of radios in the USA?

Answer 48

60,000 in 1920 --> 10,000,000 in 1929

Question 49

combined value of all shares traded on wall St?

Answer 49

1925: $34 billion --> 1929: $64 billion

Question 50

effect of the Great Plains drought?

Answer 50

17 million Americans in the eastern USA affected, ruined crops in the summer of 1930, dust storms rendered the land uncultivable ---> farms failed because of how little land was available for growth and livestock --> no income, 1 million left their farms on the Great Plains and migrated to states with available jobs

Question 51

Economy Act? New Deal

Answer 51

reduced government running costs by 25% which lowered federal spending by around $450 million

Question 52

Volume of advertising sector?

Answer 52

by 1929 - $2 billion spent on advertising and 600,000 people employed in the industry.

Question 53

Impact of depression: Banking?

Answer 53

banks had to close - from 1930 to 33, 9 thousand of 25 thousand banks that existed since 1925 had to close --> 400 banks went bankrupt directly due to a lack of cash 9 million americans lost 2.5 billion in saving New york city bank leaves 400 thousand americans without savings of 286 million in 1930

Question 54

Immpact of depression: Agriculture?

Answer 54

farmers' earnings went from 6 billion in 1929 --> 2 billion in 1932 farmers could pay the mortgages and loans they took out to increase efficiency --> 1/3 of farmers lost their land protests and a rural exodus; 2 million settling in sprawling cities 1930 - drought affecting 17 million created huge dust storms in the Great Plains --> stripped top soil --> midwest unable to grow crops --> 1 million 'Okies' emigrated to California and worked in starvation wages and ramshackle settlements

Question 55

impact of depression: Industry?

Answer 55

national business profits went from around 10 million in 1929 to 3 million in 1932 Wages were cut by 50% from 1929 to 1933 half of Ford's detroit workforce was made redundant --> despite cutting running costs, 70 thousand factories were still closed by 1933

Question 56

impact of depression: people?

Answer 56

unemployment: 3% in 1929 to 25% in 1933 20 thousand malnourished children in NYC in 1932 Families resorted to relief, such as soup kitchens, charities or local government --> However, there were no national benefit programmes 1931 - 20 thousand homeless children in NYC 1 million had to travel around by foot or train, seeking work

Question 57

impact of depression: Hoovervilles?

Answer 57

aggregation of homeless people to make shanty towns Seattle - Jesse Jackson declared himself mayor of Hooverville government officially acknowledged Hooverville settlements of 9 acres

Question 58

impact of depression: Bonus marchers?

Answer 58

Congress law in 1924 stated WW1 veterans would receive a $625 bonus in 1945 Veterans in hardship because of depression demanded the bonus immediately 1932 - 20 thousand marched on Washington and settled outside the city After fierce debate, Congress rejected their demands but granted 100 thousand to help Bonus marchers pay for their journey home 5000 veterans stayed behind First, police were sent in but were attacked and killed two veterans then, Hoover sent in the US army --> troops burnt tents and teargassed marchers --> 100 marchers injured and one of their children killed Hoover's reputation was destroyed

Question 59

Hoover's measures: banking?

Answer 59

National Credit Corporation - raised 500 million to help banks/ investors were afraid to lose their money and spent little of it Reconstruction Finance Corporation - 2 billion raised by government to rescue banks/ criticised for helping banks and not the people + only 30 million had been lent by 1933, due to stringent requirements

Question 60

hoover's measures: agriculture?

Answer 60

Agricultural Marketing Act, 1929: set up Federal Farm board to buy up crops/ did not stop falling prices Hawley- Smooth tariff, 1930: raised import duties on foreign food by 40% to force people to buy American/ other nations did the same, which reduced international trade Federal Farm Loan Act, 1932: 125 million budget to provide farm mortgages/ it did not help repay the mortgages

Question 61

Hoover's measures: Industry?

Answer 61

NBSC: conference of 400 executives to make promises about wages and employment/ many of the promises made were broken when the depression worsened

Question 62

hoover's measures: unemployment?

Answer 62

Public Works: government doubled spending on public works over 3 years --> made project like Grand Coulee Dam/ Federal spending on public works was only 210 million, eclipsed by states' annual spending of 2 billion