AMERICA 2 Flashcards
why was there a depression
not all Americans could afford the goods and there was a limit to the amount people could buy, factories were making them faster than they could sell them (over production) and profits were falling
companies struggled to sell goods abroad because they had put taxed on US goods
how did Wall Street crash
some shareholders began to doubt whether their shares would keep making a profit
September 1929- some people began to sell their shares
more and more people sell shares, as shareholders tried to sell shares the prices of shares dropped
black Thursday 24 October 1929- 13 million shares sol, shares prices continued to drop
29 October- 16 million shares sold and average price of shares dropped by 40 cents- shareholders lost a total of $8 billion
how did the Wall Street crash affect banks
many Americans had borrowed money from banks to buy shares
when share prices fell, they couldn’t sell their shares for enough to be able to pay their loan back
banks when bankrupt as a result - 1929- 659 banks shut
some lost their bank savings
unemployment during the depression
13 million had lost their jobs by 1932, which was 25% of working people
between 1929 and 1932, factory production dropped by 45% as people weren’t buying things
house building fell by 80%
12,000 were losing their jobs a bay by 1932
20,000 US companies went out of business
250,000 Americans stopped paying mortgages in1932
in Cleveland 50 % of workers were unemployed in 1932
every town had Hoovervilles- shacks made of scrap metal which no washing facilities or toilets, migrants lived in them as they travelled around looking for work
in 1932 YMCA, was giving away 12,000 free meals a day in New York
farmers during the depression
as most people were unemployed people couldn’t buy the farmers food, farm income hd dropped to $5 billion and international. trade fell from $10 billion in 1929 to $3 billion in 1932
new farming methods meant they also produced too much food so they dropped prices to try and sell it, which further reduced their income
as a result famers didn’t have enough money to pay their mortgages and by 1932, 1 in 20 farmers had been evicted
a drought turned land into a dust bowl, making it impossible to grow crops, even in the still had their farm
some went to California to look for work on fruit farms, but many states banned migrant workers
businessmen during the depression
the stock market crashed so they were badly affected
they were producing more foods than people could afford to buy so many went bankrupt
1929 and 1933 10,000 banks closed and 100,000 businesses went bankrupt
industrial production fell by 40%
US exports fell from $10 billion to $3 billion
business en were forced to try new things, like selling apples or newspapers
hoovers response to the depression
he believed in rugged individualism so didn’t help much at the start, however eventually he did some things to help
- set up the reconstruction finance corporation which leant money to businesses in trouble and made some small loans to farmers
- in 1930 he cut takes by $130 million so people had more money to spend
- set up road and dam building program that created jobs
- in 1932 he made $300 million available to help the unemployed, however only $30 million was actually given out
- 1930- Hawley Smoot tariff which put a higher tax on foreign goods hoping it would make Americans buy the cheaper US goods, however other countries the taxed US goods so American exports dropped further
violence and protests during the depression
some people protested calling for change
1932- 25,000 unemployed ex soldiers march to Washington and asked for their war bonus to be paid early. in response hoover set. the army on them and they used guns, tanks and tear gas.
why was hoover unpopular
believed in rugged individualism- he thought people should overcome problems for themselves and didn’t do anything to help the depression until it was too late
wasn’t a good public speaker and people thought he was uncaring
republican
why was Roosevelt popular
democrat
he helped the depression- he spent $20 million helping the unemployed, promised the 3 R’s, people liked him because he was caring, he took his messages about helping the depression around the country sometimes he made 15 speeches a day, his idea for a “new deal” was liked by the people
he relied in an active government to improve the lives of people
result of the 1932 electron
Roosevelt won- out of 48 states, 42 voted for him
why did Roosevelt aims to do during the new deal
get Americans back to work
protect peoples savings and their property
provide relief for the sick, old and unemployed
get American industry and agriculture back on its feet
why did Roosevelt do during the 100 days
emergency banking act- closed banks and had them inspected. only well run banks with enough cash would be given loans and reopened. when they did people put money back into their accounts and banks could now lend money to businesses which would create jobs when they expanded
economy act- all government employees cut by 15% saving $1 billion for the unemployed
beer act- prohibition ended, the government could raise money by taxing alcohol
what was the FCA
farm credit administration- lent money to farmers who couldn’t keep up with loan payments
what was the NRA
National recovery administration- encouraged workers and employers to work out a code of fair pay and working conditions and gave workers right to join a trade union
however many employers refused to join, leading to strikes
2 million employers joined the scheme
what was the AAA
agricultural adjustment agency - paid farmers to produce less
as a result food prices rose and farmers income increased
however the AAA was criticised because food was being destroyed while millions went hungry
what was the TVA
tennessee valley authority
provided work building dams and electric power stations along the tennessee river area
