Book 2: The Crash And The New Deal Flashcards Preview

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Flashcards in Book 2: The Crash And The New Deal Deck (39):

What 6 things caused the Wall Street Crash?

Unequal distribution of wealth
Republican Policies


Evidence and explanation for unequal distribution of wealth causing the Wall Street Crash?

1/3 of the income went to the top 5% of the country

As poor people could buy more goods because of hire purchase, companies misjudged the distribution of rich/poor people, causing them to overproduce


Evidence and explanation for industry causing the Wall Street Crash?

Textiles and coal industries had been declining for years

People were losing their jobs, shareholders were losing money because the worth of their shares went down so they sold their shares in mass panic


Describe how the stock market works?

Most companies get money from INVESTORS to raise money to run the company

Investors own a share of the company and are called SHAREHOLDERS they get a share of the profit

Shareholders make money by receiving a yearly profit payment called a DIVIDEND

some people gambled and borrowed money to buy shares to sell on to make a profit, this is called SPECULATION


What happened on the 5th September 1929?

' the Babson break '

Rodger Babson warns of crash
Sensible people sell shares


What happened on 29th October 1929?

16.4 million shares were sold



What did Hoover keep reassuring the people?

Prosperity was just around the corner


What happened with banks in the Wall Street Crash?

1930 - 1352 banks went bankrupt

The bank of New York was included


Evidence and explanation for overproduction causing the Wall Street Crash?

The farming industry was overproducing

Farm income dropped from $22 billion in 1919 to $13 billion in 1928

People lost money that had shares in the industry

There wasn't enough people to buy the goods


Evidence and explanation for banks causing the Wall Street Crash?

Banks lent out $9 billion for speculating in 1929 and people could use hire purchase

This caused the crash as people were buying things they couldn't afford to pay back. Banks also speculated so lost money in the process


Evidence and explanation for Republian Policies causing the Wall Street Crash?

High tariffs reduced international trade ( fordney mccumber 1922 )

They didn't interfere with banks or businesses

When people couldn't afford US prices, it was then difficult to import, banks were left to make poor decisions and speculate causing them to lose money.


Evidence and explanation for speculators causing the Wall Street Crash?

By 1929, there were 20 million share owners out of 120 million people

The stock market went down as nobody was buying goods so many people lost money as shares became worth very little so were sold for very little. Causing the crash


What does "on the margin" entail?

Many speculators bought shares on the margin which mean that only needed to put down 10% of cash needed and could buy the rest from banks

This meant people could buy shares they couldn't afford


What is a Hooverville ?

Shanty downs built on wasteland by homeless people during the depression

Named after Hoover who was widely blamed


What is a dust bowl farm?

Farm destroyed by dust storms , drought and over farming


Evidence that Hoover was a do nothing president? ( 4 mark )

He blocked the Garner-Wagner Relief Bill in 1932 that would have allowed congress $2.1 billion jobs

He still believed in Laissez- faire

He refused to accept there was a problem until 1932

He believed that people should rely on themselves and not the state ( rugged individualism )


Evidence Hoover wasn't a do nothing president? ( 2 mark )

He cut taxes in 1931 and 1932

He set up the reconstruction finance company to prop up banks


Describe the War Bonus Marchers situation? ( 4 mark )

Veterans who were widely loved marched on Washington asking for their war bonuses to be paid early

General MacArthur thought of them as communist agitators

He went against Hoover's instruction to be respectful and used tear gas and burned their camps

Hoover did not admit he could not control the general and thanked God America could still handle a mob


How did the War Bonus Marchers go down with the public?

It showed Hoover to be not in control of his general so he would not be voted in


Describe Roosevelt's campaign and win of the 1932 election?

Hoover was a do nothing president and Roosevelt
promised a "new deal"

He travelled 20,800 km during his campaign making 26 major speeches and 60 from the back of his train

He won by 7 million votes - landslide


What were the 100 days?

Roosevelt got emergency powers from congress which started on the 9th of March.

He wanted to restore confidence and get America out of the depression

He presented his alphabet agencies


What was the AAA?

Agricultural Adjustment Administration

First new deal


Take fields out of production and help with morgages


What was the FERA?

Federal Emergency Relief Administration

First new deal

Poor people

$500 million was spent on in soup kitchens, blankets and nursery schools


What was the CCC ?

Civilian Conservation Corps

First new deal

Young unemployed

2.5 million people helped
They could sign on for six months and work on environmental projects


What was the PWA ?

Public Works Administration

First new deal

Other unemployed

Ran projects like building airports and schools

Short term jobs


What was the NRA ?

National Recovery Administration

First new deal


Businessmen would join a roll of honour
Blue eagle

They cut production and got 2.5 million firms, 22 million employed


What was the TVA ?

Tennessee Valley Authority

First new deal

People of Tennessee in drought

Build 21 dams across the valley
Providing jobs and electricity


What were fireside chats?

Roosevelt's radio chats to talk to the public and build trust

Started in the 100 days , 12th March


Downsides to the 100 days ?

No trusts to help women

Roosevelt spent $16 billion ( taxed from rich )


What was the emergency banking act ?

The day after Roosevelt came into power he shut down all the banks until they were assessed

5000 trustworthy banks were allowed to reopen


What were the dates of the new deals?

1933 - 1st
1935 - 2nd


What was the Wagner act?

Second new deal

It made it illegal to sack workers for being in a union, let workers negotiate for better pay and conditions with employers


What was the Social Security Act?

Second new deal

Elderly and widows and disabled

Gave benefits to help if they couldn't work, paid by employers and workers


What was the WPA ?

Works Progress Administration


Second new deal

Create jobs for unemployed actors, office workers and photographers, government paid artists to paint pictures to put in cities


What was the RA ?

Resettlement Administration


Second new deal

Help those not helped by AAA
moved over 500,000 families to better quality land and housing


What was the FSA ?

The Farm Security Administration

Farmers/ migrants

Second new deal

Replaced the RA in 1947

Gave living conditions for migrants
Loaned farmers to help them buy land


What was the opposition from the Supreme Court?

Republicans dominated the court and didn't want the new deal being passed
They believed in Laissez faire


Who opposed the new deal?

The republicans - thought the government was getting too involved , they believed in Laissez faire

The rich - they were being taxed to help poor people who in their view " do nothing l"


What were the 3 R's?