Wall Street Crash

Question 1

WALL STREET CRASH

WHAT WAS THE WALL STREET CRASH?

Answer 1

• Oct 1929
• People worried that the economy was not as strong. Some started to sell. Price of shares started to fall.
• Led to a huge drop in prices as investors panicked and sold = Wall Street Crashed!

Question 2

EFFECTS OF WALL STREET CRASH

EFFECT ON BUSINESSES

Answer 2

• Banks recalled loans. Businesses who could not repay went bankrupt.
• Bankrupt businesses laid off workers = unemployment increased rapidly.
• Unemployed people bought less = more businesses struggled = more workers being paid less/ laid off.
• Businesses lowered their production of goods – it fell by 40% 1929-33.

Question 3

EFFECTS OF WALL STREET CRASH

EFFECT ON WORKERS

Answer 3

Unemployment
• Unemployment high = 14 million.
• Average wages fell by 60% for those who were still employed.
• Bonus Army = war veterans marched to demand/fight for war pension.
Debt
• Speculators could not repay the money they borrowed to buy shares.
• People could not afford to pay their rent or mortgage = debt.

Question 4

EFFECTS OF THE WALL STREET CRASH

ECONOMIC DEPRESSION

EFFECT ON WORKERS

Answer 4

Homelessness and Hunger
• People lost their homes as they failed to pay their rent or mortgage.
• Hoovervilles were formed = shanty towns where the homeless lived.
• Many people relied on charities, such as soup kitchens.
• Bread lines were formed as people queued for food.
• 1931: 238 people were taken into hospital suffering from malnutrition.

Question 5

EFFECTS OF WALL STREET CRASH

ECONOMIC DEPRESSION

Answer 5

EFFECT ON FARMERS
Money
• Demand for food dropped. American exports fell $10 billion in 1929 to $3 billion in 1932.
• Demand for meat dropped = cost more to take animal to market than farmer could sell for.
• Many farmers went bankrupt.
• Lost their farms/ homes – taken by bank to cover debts.
Weather
• Dust bowl in southern states. Soil in bad condition.
• Drought and wind = erosion. Dust storms destroyed farms.
• 2.5 million farmers migrated to look for work.

Question 6

EFFECTS OF WALL STREET CRASH

EFFECT ON WEALTHIEST/UPPER CLASS

Answer 6

• Some suffered = unemployed/ lost home.
• Some had to adapt their lifestyle = fewer cleaners, maids, chauffeurs.
• Some of wealthiest = little difference. They had their money in property/ invested in gold/jewellery. Did not work/ need a job to survive.

Question 7

EFFECTS OF WALL STREET CRASH

EFFECT ON POLITICS

Criticism of Hoover/ Republicans

Answer 7

• Hoover = belief in self-help/ rugged individualism
• Gave tax cuts/ encouraged businesses to keep wages high. Put tariffs on overseas goods = ineffective for businesses/ unemployed.
• Hoover accused of ‘doing nothing’.
• Hoover’s reputation damaged by his treatment of Bonus Army march on Washington (for war pension) – Hoover sent troops and used tear gas.
• Hoover lost 1932 Presidential Election.

Question 8

EFFECTS OF WALL STREET CRASH

EFFECT ON POLITICS

Popularity for Roosevelt/ Democrats

Answer 8

• Roosevelt promised a New Deal for America = exactly what millions of desperate Americans wanted.
• Promised active government = spend money to create jobs/ boost economy
• Huge election campaign = travel & speeches.
• Big victory for Roosevelt & Democrats. Majority of 7 million.
• Biggest ever defeat for Republicans.