4A. Changing Quality of Life Flashcards
How did farming cause post-WW1 depression?
Surplus crops: During WW1, farmers were urged to increase production, using loans, subsidies and mechanisation. After the war, demand fell causing prices to plummet.
The boll weevil also attacked cotton farming in the South.
How did strike action cause post-WW1 depression?
There were many strikes in 1919 and 1920, local and nationwide. Most failed to get better working conditions, but still caused businesses to fail, increasing unemployment.
How was coal affected after WW1?
The coal industry began to lose out to other fuels such as water power and electricity. Although electricity plants were fuelled by coal this did not make up the overall drop in demand.
In 1900 coal had produced almost 90% of energy supplies in the USA, but by 1930 this figure had dropped to 60%.
How did the government react to the post-war depression?
The Republicans in power believed in isolationism and lasseiz-faire policies, and so did very little to stop the depression. However, US exports fell as other countries intoduced tariffs on US goods, in response to the US placing tariffs on their goods. This encouraged the purchase of US-made goods, although not always the same as those otherwise exported.
The depression did right itself under these policies, which greatly influenced government thinking in 1929 when another depression struck.
How did mass production contribute to the economic boom in the 1920s?
Mass production in assembly lines were produced more quickly and cheaply, and so were able to be sold at lower, more affordable prices. This increased the number of consumer goods bought, primary cars and radios.
What are the statistics on car ownership from 1917 to 1929?
In 1917, there were nearly 5 million registered passenger cars in the USA, by 1929 there were over 23 million.
What are the statistics on car price between 1914 and 1924?
In 1914, a Henry Ford Model T cost $825, in 1924 this same model cost only $240.
Henry could afford to pay his workers $5 a day, twice the salary of most industrial workers.
How did Federal policies contribute to the economic boom in the 1920s?
Whist the government generally avoided intervention in business, it kept some of the wartime subsidies to farmers in place, and cut taxes to businesses whilst simultaneously increasing tariffs on foreign imports to encourage ‘buying American’.
How did hire purchase and loans contribute to the economic boom in the 1920s?
Before the war, borrowing was seen as a last resort, and only banks and loan companies loaned money. In the 1920s, companies pushed hire purchase as a practical way to buy goods.
As the sense of prosperity rose, more people bought homes and farms on mortgages, and banks were more willing to lend.
What are the statistics on consumer debt betweem 1920 and 1929?
- Between 1920 and 1929, consumer debt rose from $3.3 billion to $7.6 billion.
- Before 1920, people borrowed ~5% of their income, but by 1929 this had doubled to ~10%.
What are the statistics on household connected to the grid between 1917 and 1930?
In 1917, there were nearly 8 million homes connected to the grid.
By 1930, there were over 24.5 million.
What was the main cause of the Wall St Crash?
Before the 1920s, only banks and the wealthy bought shares. However, as share prices rose rapidly, ordinary people began to buy shares, and resell for profit, creating a Bull Market (where share prices rise and are exepcted to continue). People even ‘bought on the margin’ (took loans) to buy shares, expecting to use the profit to pay back the loan.
This could not go on forever. Investors, worried by the high share prices, sold their shares. This caught on and, as more investors began to sell, the share prices fell. On the 29th October 1929, the stock exchange closed. When it repoened, prices began to fall more gradually until the 13th November.
What were the warning signs of the Great Depression?
- Most people who could buy consumer goods had bought them by 1929, but companies did not cut production enough - goods began to stockpile in warehouses
- Rising unemployment from 1927, and cuts made to working hours and wages.
- Banks highly in debt and stock market overheated
- Depression worsened by Federal Reserve Board (FED)’s attempts to control boom by tightening the money supply
What were the main effects of the Great Depression?
- High levels of government spending - huge government debts built up funding the New Deal
- Extreme levels of unemployment - as high as 25% during the Great Depression (just under 13 million people)
- Dust Bowl and migration after droughts in Midwest.
- Poverty and homelessness as people failed to secure income / keep up mortgage payments
How did Roosevelt seek to manage the Great Depression?
- Roosevelt first closed all the banks, and only let ‘healthy’ ones as inspected by the Federal Reserve Board (FED) reopen.
- He used federal agencies to create employment, help those in trouble with loans and re-establish confidence, even though this caused huge governmental debts.
- 1937 Wagner-Steagall National Housing Act set up the Federal Housing Administration to oversee slum clearance and building of housing for low-income families.
- First and Second Agricultural Adjustment Acts subsidised farmers to produce less.
How did demand for consumer goods increase after WW2?
Huge demand for consumer goods post-WW2 that people had done without during the war.
Production increased from $213 billion worth of goods in 1945 to $284 billion in 1950 which helped to keep unemployment low.
How did a business boom contribute to greater spending in the post-WW2 economic boom?
The boom in business encouraged employers to expand their workforces and to raise wages, thus encouraging even more spending
How did government action against strikes contribute to a post-WW2 economic boom?
Government anti-strike action kept wages lower which encouraged business expansion.
- When coal miners went on strike, President Truman took control of the coal mines. When rail workers started a sympathy strike, Truman took over the railways.
- When rail workers walked out, marooning 90,000 passengers and stopping 25,000 goods trucks (many loaded with perishable foodstuffs), he asked Congress to draft strikers into the army.
After this, strikers backed down and there was little strike action afterwards.
How did the post-war ‘baby boom’ cause an post-WW2 economic boom?
Growing demand for child-centred foodstuffs and goods (profits of toy manufacturers rose from $1.6 billion in 1959 to $2 billion in 1961).
Over 2.5 million live births in USA in 1940
- This was 3.6 million in 1950,
- This reached 4.1 million in 1955
Children also to become consumers - guarantee of increased demand.
How did farmers contribute to a post-WW2 economic boom?
Continued farm subsidies after the war as well as increased demand for food, both at home and abroad mean that farmers profited from increased production as opposed to the post-WW1 depression.
How did government spending contribute to a post-WW2 economic boom?
Government spending increased under Truman’s ‘Fair Deal’ policies. It provided support to those leaving military service, including:
- Unemployment pay for a year after the war
- Loans to buy a home or business
- Medical / health care.
This left many people in a better condition to become consumers.
How was the post-WW2 economic boom managed?
- The shutdown of the Office of Price Administration (OPA) (which controlled prices throughout the war) in 1946 caused prices to rise by 25% in two weeks, as farmers and businesses sought to exploit the high demand for goods.
However, this settled to a steadier rise.
- Truman passed the 1946 Employment Act (so called because of its goal of full employment) which set up a Council of Economic Advisers (CEA) to advise the president on managing the economy.
The president was also to give a strategy report to the Joint Economic Committee of the House of Reps. and the Senate after each federal budget
How did the suburbs display economic change?
The suburbs created a new, almost all-white American idyll that many people, after cars were widely owned, bought into.
This caused development outside cities to prosper and car sales to rise, but created inner city ghettoes which filled with those who could not move out to suburbs - the poor, and minority groups.
How did the Government and corporations contribute to the development of suburbs?
- The government funded the building of roads and homes - the 1956 Highways Act allowed for 41,000 miles of interstate highways.
- The Levitt company specialised in mass-produced prefab. houses, leading to an explosion of Levittowns in NE USA where the firm was based
- One Levittown on Long Island had 17,000 homes for 82,000 residents, the cheapest of which was just under $7000 (very affordable since cheap loans made mortgages easy).
- Levitt refused to sell to black Americans, as did some other developers, leading to racial segregation within suburbs.
How did industry shift during the 1950s?
- America slowly lost its place as a centre of technological innovation. Though they developed the first transistor radio, a more miniature design was developed in Japan and exported to the USA.
- By 1958, there were 45 million transistor radios in the USA.
Government increased money supply to keep interest rates low :
1952 - $170 billion in circulation
1960 - $216 billion
Shift in industry from NE to SW due to wartime investment from war production industry in SW. Businesses moved because:
- Land, goods and services were cheaper,
- Development of better air conditioning made the area more attractive.
- Population shift as people attracted to work and more people retire there.
How did the 1960s affect the US economic situation?
- USA finally lost it’s place as world’s largest exporter.
- Vietnam War, social welfare payments and international commitments drained government finances.
- Government increasing money supply but inflation was still rising - gold reserves and paper money increasingly out of balance.
What was ‘stagflation?’
Stagflation was a period where stagnation in the US economy was met with high inflation, leading to unemployment and business cutbacks.
However, business taxes were rising due to the need to replace government spending. This was worsened by inflation, which caused decline through increases in the cost of raw materials and technology.
How much did the US’s share of manufactured goods decline between 1953-73?
In 1953, the US’s share of the world’s export of manufactured goods had been 29%; by 1963 it was 17% and in 1973 it was 13%.
Which two fuel crises affected the USA in the 1970s?
The 1973 Arab-Israeli War and the support of Palestine by the Organisation of the Petroleum Exporting Countries. This put the price of oil up by 70% and embargoed the USA (which supported Israel) - this high price never lowered after the war.
The 1979 Fuel Shortage, just as bad as in 1973 but it only lasted for three months.
What was the effect of the two fuel crises during the 1970s?
The fuel crises caused many car-dependent Americans to switch from gas-guzzling American cars to more fuel-efficient Japanese and European cars, which was both an economic and symbolic blow to America and her pride.
