Economic Downturn And Recovery Flashcards
When did the Wall Street crash happen?
October 1929
What was the Wall Street crash?
Panic selling of shares which led to a loss of confidence in the financial markets
Share prices crashed which caused a collapse of the US stock market
Led to the Great Depression
What was the impact of the Wall Street crash?
Rising unemployment: factories, banks and businesses are collapsed because of fall in demand for goods both home and abroad. Unemployment rose from 1.5 million in mid 1929 to 13 million in 1932.
Family life: no system of social security and many were forced to rely on charity and handouts, sharp rises in suicides, fall in number of marriages and fall in birth rate
Depression in the cities: By 1933, 1/3 of the workforce was unemployed, count not afford rent and became homeless so were forced to live in shanty towns called Hoovervilles
By 1932 100,000 businesses had gone bust
Depression in the countryside:
- Farmers unable to sell produce so became bankrupt
-Many were evicted and became hobos searching for work
- Drought in 1931 caused soil in Oklahoma, Colorado, New Mexico and Kansas to turn into dust
-Dust storms affected 20 million hectares of land and created the dust bowl
Who was Herbert Hoover?
Republican who became president in 1928
What did Hoover do to help those who were affected by the depression?
Believed in balancing the budget and refused to borrow money to create jobs
Rugged individualism
Bonus army
Who were the Bonus Army
15 000 First World War veterans who marched into Washington in may-June 1932 to demand for early payment of war bonuses which were due to be paid in 1945 . With their wives and children
Set up huge Hooverville outside White House and Hoover sent down troops to remove them and burn the shanty town down
In desperate need of money
Hoover accused them of being communists and criminals
Dispersed with tear gas, troops and tanks , 2 babies died
In 1932 what measures did Hoover introduce to relieve the crisis?
Reconstruction Finance Corporation (FEB 1932): 2 billion dollars of federal aid to ailing banks, insurance companies and railways
Emergency Relief Act (June 1932) : 300 million to state governments to help unemployed
Home Loan Bank Act (July 1932) - 12 regional banks set up to stimulate house ownership and building
These had little time to work before the next presidential election but the policies were implemented by Roosevelt
Who won the 1932 presidential election?
Democrat Franklin Delano Roosevelt securing 42 of the 48 states
Why was the Republican candidate Hoover unpopular ?
Blamed for the depression
Criticised for harsh treatment of bonus army
Relief schemes were too small and late
Seemed to offer nothing new
Public lost faith in him
Left business alone to recover from depression
Rugged individualism that success was only available through hard work
Why was the Democrat candidate Roosevelt popular?
Democrats offered more caring image
Had overcome personal hardship of polio -was a fighter
Continued mood of optimism to break despondency
Kept message simple
Promised American people a new deal for creation fo jobs and government help
Give confidence
Alphabet agencies lots of success
Ended prohibition
Went around country speaking to people of all classes
Good public speaker
Government schemes and measures to revive industry , protection for workers against employers
What was the New Deal based upon?
Introduced in 1933 to deal with effects of Great Depression
Relief, to help homeless and unemployed , recovery by rebuilding the economy and reform creating a fairer society
First hundred days ( 9 march -16 June 1933) he introduced large number of government programmes to support shattered economy
Created alphabet agencies which were government bodies to tackle us’s problems and get Americans back to work
Restored publics faith in banking
Successes of the new deal
Helped restore confidence and faith in government, stimulated economy, and put the country back on its feet
America avoided swing to communism and fascism that took over Europe.
Millions of jobs were created through the alphabet agencies.
4 million people were employed on public work schemes created by the PWA and WPA
2.5 million were employed in the CCC
The TVA improve the lives of 7 million people. Thousands of jobs created , power stations with cheap electricity , built 33 dams
Income of farmers doubled between 1932 and 1939, as a result of the AAA.
The new deal stabilise the US banking system understood confidence to the market.
Workers were protected by codes of practice and trade unions were allowed.
Created a semi welfare state, providing pensions for the elderly and windows and state help for the six disabled and you are and unemployed 
The second new deal
Works, progress administration which store job creation schemes, such as putting people to work building roads, schools, hospitals airports.
Social Security act for poverty, providing pensions for the over 65s and aid to the disabled widows and orphans. 
Criticisms of the new deal
 Some believe that the new deal did not go far enough.
The agency discriminated against black people who either got no work or lower wages than the white people who earned less and faced discrimination
Huey, Long, the governor of Louisiana criticised Roosevelt, for sharing the nations, wealth and proposed his own share our wealth campaign by using public money and proposed government taxes to be shared amongst all Americans with. Maximum income imposed
Charles Coughlin criticised it for not doing enough to help the needy and his weekly radio broadcast attracted more than 40 million people and created a national union for justice
Dr Francis town shed argued that who Isabel did not do enough to help old people, and he proposed a picture of $200 a month for everyone over 60
Anger against pointless jobs like pigeon scaring
Business men thought the new laws went too far and cost too much and didn’t like paying higher taxes so wanted a return to rugged individualism with less government intervention
Some believe that the new deal undivided import all American values and principles are laws
So fat that the federal government interfered too much is the affairs of American people as the new deal went against the belief in rugged individualism.
The new cell social welfare issues measures encourage people to live off the state.
Republicans were highly critical claiming that Roosevelt was changing the accepted role of the government in the USA and Roosevelt was acting like a dictator by controlling the economy too much
Factory owners though government was interfering too much and did not like workers having more rights and having to pay social security contributions for workers
Some conservative Democrats were critical to much power is given to trade unions.
In 1935, the supreme court ruled that the AA was unconstitutional in 1936, because it was claimed that Roosevelt had a federal powers that the constitution had not given him..In 1935 much of it was ruled unconstitutional and that Roosevelt only had the right to pass national laws for all states not for individual states as Ross let stopped the freedom on the American constitution through the new des.
Later, historical reflections concluded.
The alphabet agencies were only short-term solutions that provided cheap labour I did not solve the underlying economic problem.
Unemployment did fall both America’s entry into the Second World War in 1941 ultimately lifted the country out of depression. 
What was the Great Depression?
Time of hardship in America
High unemployment
No social security - many people living in extreme poverty
