USA Boom and Bust 1920s Flashcards
name two background points for the intro of the 1920s
Throughout 1920s america was economically thriving. The introduction of credit allowed people to borrow money and therefor could now buy things they wouldn’t usually be able to afford.
As the 1930s neared America began to fall into a crisis.
name some knowledge points for the banking crises
- US banking system made up of hundred of small state banks
-money is put in to be kept save an earn small amount of interest
-banks had large lack of regulations and would invest people money in stocks to make profit
-banks could not cope with demand as people began to withdraw their money since they gambled it into shares they had to close
name an analysis point for the banking crises
roughly half of americas states had no banks at one point and by the end of 1932 20% of all banks across the country had closed down
since there was no help from the government at the time banking almost ceased to exist in america
explain an analysis plus point to the weaknesses of the banks
however, it is said that the banks were merely a symptom of the other factors which lead to americas economic downfall in 1930s.
explain the knowledge point to government policies
-laissez faire, the idea that business are left alone, there is a free market
-republicans believed in low taxation for businesses and didn’t care what they did with the profits
-lead to business owners staying greedy and not improving conditions for any workers
-republican party became the business mans party
explain the analysis points for government policies
calvin coolige and herbert hoover both belived that it was not the governments responsibility to regulate any business and that ‘it will be alright’-Hoover
coolige said ‘the business of america is business’
When the republicans eventually tried to bring america out of the depression it was too late, they waited to long to act
explain the analysis plus point of government policies
however, it should be noted that business owners did very well because of these policies and america did initially thrive since the rich were able to stay rich while the poor were left to fend for themselves
explain the knowledge points of the effect of ww1
america was seen as the financial winner of ww1 since europes economy was in tatters
america uses he gap in the european market to take the trade they left behind
america offers loans to many of the countries in europe but then germany declares bankrupcy and so the usa loose out on the billions of dollars thy provided in loads
explain the analysis points of the aftermath of ww1
since america took over europes trade, europe put huge tarrifs on american good in retaliation which then meant american companies were failing to sell goods in europe
explain the analysis plus point of the effects of ww1
europe only introduced tarrifs because america did it first and so you could say that america was the architect of its own downfall
explain some knowledge points for the overproduction/under consumption of goods
lots of technical advances in america at the time such as watches, hoovers, fridges, cameras and radios
people took part in the credit scheme that was set up so that they could purchase these luxuries.
in 1920 there were 8 million model T ford crash produced but by 1929 that number has increased to 23 million
more goods produced than people could buy if they wanted to
explain the analysis points for the overproduction/under consumption of goods
by 1929 everyone who could afford these goods had already bought them
and so warehouses began to fill up with unsaleable goods=bad for economy
in 1928 42% of americans couldn’t afford basic food, clothing and shelter
explain the analysis plus points
very small amount of wealthy people stayed wealthy,
in 1928 5% owned 33% of the nations wealth
