The Great Depression

Question 1

What is an investor?

Answer 1

Someone who buys (invests) into a business by purchasing shares in it. This gives the company money to expand. You then become a share holder as you have a share of the company.

Question 2

What caused the Great Depression?

Answer 2

Some people started selling their shares because they were worried they wouldn’t get their share of the company profits at the end of the year. Word of fall in profits of leading companies spread. These were rumours.

Question 3

Why were profits falling?

Answer 3

Companies profits were falling because factories were overproducing goods. It was unlikely a family home was going to have more than one hoover. Factories were making goods faster than they could sell them and therefore profits were falling.

Question 4

What happened on the 24th October 1929?

Answer 4

13 million shares were sold on Wall Street stock exchange (5 times the normal day) and share prices on companies dropped. This was called the Wall Street Crash.

Question 5

What happened on Tuesday 29th October?

Answer 5

There was another mad panic to sell shares at any price. People wanted cash instead. 16 million shares were sold and share holder lost a total of $8 billion.

Question 6

What was an immediate affect of the Wall Street Crash?

Answer 6

Banks immediately went bankrupt and people started to commit suicide as everything they had worked for and saved for there whole life was gone.

Question 7

Main affects of the Great Depression (Immediate affects)

Answer 7

• 6000 banks went out of business
• 2600 schools were closed
• 13 million were unemployed
• Draught caused crops to die
• Huge dust storms killed crops and farmland
• 8500 businesses failed.

Question 8

When did the Great Depression end and why?

Answer 8

In 1941 the depression ended when America joined WW2.

Question 9

How did the Depression affect unemployment?

Answer 9

• stock market crashed and factories started to fire workers, cut production and give lower wages between 1928-1933. Both industrial and farm production fell by 40% and wages by 60%.
• workers were laid off or payed less so bought less. By 1933 there were 14 million unemployed and 50,000 bankrupt.
• people in towns also suffered. In 1932 in the steel city of Cleveland 50% of workers were now unemployed.
• in every city people queued for bread and soup dished out by charity workers.
• through 1931 238 people were admitted to hospital for malnutrition.

Question 10

What was the effects of banks going bankrupt?

Answer 10

banks were going bankrupt it resulted in bank staff and managers loosing their jobs and people who saved with banks lost their savings.

Question 11

What were Hoovervilles?

Answer 11

Every city had Hoovervilles that was built from tin and wood for people with no homes. It was named after the president as they were angry at him.

Question 12

How did the Depression affect the very rich?

Answer 12

• the upper class lost some of their wealth but had lots of property and land to fall back on.
• They had to make some changes such as sacking chauffeurs and cleaners and doing the work themselves.

Question 13

How did the depression affect businessmen?

Answer 13

• between 1929 and 1932 they were badly affected. A lot of them who had expanded their businesses had taken out loans that they could not afford to pay now.
• as a result of the crash, industries produced more good than people could afford. - causing go bankrupt.
• between 1929-1933 10,000 banks went bankrupt this also happened to 100,000 businesses.
• banks in desperate situations demanded loans back from business men who had closed their businesses.
• A lot of business men committed suicide while others tries selling newspaper or polished shoes.

Question 14

How did the Depression effect farmers?

Answer 14

• farmers prices had fallen so much that the price of transporting animals were more than the animals themselves.
• The USA international trade fell from $10 in 1929 to $5 billion in 1932.
• huge numbers of farmers couldn’t pay mortgages so when the banks came they resisted and protested holding pitch forks and hangman nooses so they would retreat.
• most farmers lived on the road and picked up work where they could.
• draughty in central and southern states turned millions of acres into dust, killing crops. So they moved to California with their families desperate for work.

Question 15

What did people recognise about their shares?

Answer 15

Their shares were only pieces of paper entitling them to a share of the company’s profit was only worth something if someone was willing to but it.

Question 16

Why were farmers angry, what did they do, what did they want and what were the consequences of their actions?

Answer 16

They had no money to support their families. 500 men in Arkansas stormed a shopping centre and smashed everything up until they got free food. They also blocked roads with chairs and logs and smashed windscreens of trucks been driven to market.
(They thought if they did this then food won’t reach food market, food prices would rise and so would farmers incomes.)
They wanted food prices to rise so their incomes would rise as people would be dependant on them for food.
The consequences were that they got evicted form their land due to lack of money.

Question 17

Why was the bonus army angry? What did they do?

Answer 17

As a result of them protesting Hoover put General MacArthur to deal with the situation so he burned down the Hoovervilles the men had made. 2 protesters and a baby were killed.
In retaliation 250,000 ex soldiers marched to the government in protest to help them to survive. They campaigned peacefully outside the White House as more Hoovervilles were burned down. They came back with bayonets, gas bombs and fired. Tanks and soldiers guarded the bridge back to Washington so government officials could sleep peacefully.

Question 18

what did the bonus army want and and what were the consequences?

Answer 18

They wanted their war bonus (pensions) which was $500 to be payed to them early to stop them from starving.
Consequences were that because they were angry about not getting their early pensions and as a result their Hoovervilles were burned so they attacked shacks on the edge of their camps and fired.

Question 19

Why were the unemployed angry? What did the do? What did they want? And what were the consequences of their actions?

Answer 19

They had no money, no job and therefore no money to support and feed their families.
So 1500 men stormed the factory of fruit growers express and demanded they get given jobs to keep them from starving. Consequences were that the company’s answer was the call the city police who used clubs to force them to leave.