USA Wall Street Crash Flashcards

Question

The cycle of international debt

Answer 1

America’s priority was for Europe to pay debt from WW1 Most European countries could not afford to do so Tariffs made it worse - European countries could not trade their goods to America - it was too expensive Therefore they could not make the money to repay USA

Answer 2

The boom depended on continued domestic consumption Three signs the economy was slowing down: Problems in small business: During the 1920s, for every four businesses that succeeded, three failed. It was a time for the big corporations to succeed The construction industry: By 1926, the boom in demand for construction was tailing off. This led to unemployment and a series of knock effects to their suppliers eg brick manufacturers. Falling domestic demand: The market was flooded with goods that could not be sold - people didn’t need or couldn’t afford any more goods. This then led to unemployment and low wages.

Answer 3

With growth in new industries slowing, full-time employment fell and the economy went into downward spiral. Fall in income led to fall in demand (buying), which led to fall in production, adding to unemployment. These problems were concealed by the superficial optimism and the frenzy of stock market speculation.

Answer 4

In 1929 average wages in NE was $921, SE was $365, for farmers in South Carolina it was $129 60% of Americans earned an annual income of less than $2000

Answer 5

Between 1920-26 nearly 2% of farms were foreclosed. 66% of farmers operated at a loss 85% of black AMericans still lived in the SOuth - the poorest areas of the USA Women - less then 2% of judges and lawyers, on 2 women in the house of rep, out of 145 Both groups received less wages and limited opportunities to high paid and more skilled jobs.

Answer 6

Fluctuating employment - 4 million unemployed during this period For every 4 successful business, 3 failed

Answer 7

Motivated by making quick profit from speculative ventures. The ability to buy these investments on credit made them more accessible. The Stock market speculation led to the stock market crash because more and more people were buying shares and then selling them very quickly, and dishonest brokers would artificially put the value of shares up, and then withdraw investment all at once - leaving companies without investors

Answer 8

Florida land boom - land speculation. People began to buy land in Florida as it became more popular. This was in the hope of making profit on this land as it was developed and properties were sold., However, in 1926 interest in buying properties fell due to the hurricane and stories of swindle, leading to people losing money

Answer 9

Federal Reserve board did not regulate small banks - there were over 3,000 in the USA. Because banks were small they did not have the reserves or strength to survive recession in 1926, or the crash in 1929 - losing people’s savings. Some banks would also make risky speculative investments, which would also fail The banking system was old fashioned and could not cope with the rapid economic growth Many people borrowed money which they could not pay back

Answer 10

Dawes Plan 1924, and Young Plan 1929, lent European countries lots of money. Those countries began to struggle economically largely due to lack of trade because countries had all raised their tariffs

Answer 11

Fordney-McCumber tariff raised US tariffs by 50%. This then meant other countries raised their tariffs, so during the 1920s there was less and less trade

Answer 12

After 1926 demand in consumer goods dropped due to the domestic market for goods being saturated. Companies struggled to sell goods abroad due to high tariffs. This meant that industries began to let workers go. This led to unemployment rising. These problems were concealed by the stock market frenzy which made it look like the value of industries and companies was still growing.

Answer 13

106.5 million up to 123 million in 1920s

Answer 14

By the end of the 1920s more people lived in urban areas than rural, black Americans migrated to North Eastern cities and lived in ghettos like Harlem (85% still lived in south)

Answer 15

1921 Emergency immigration - cap at 3% of population rate in 1911 Johnson Reed - cap reduced to 150,000, ban on Japanese and other Asian immigrants

Answer 16

Bolshevik revolution and rise in communism, particularly amongst workers

Answer 17

Palmer Raids, arrest of 6,000 suspected communists, many had little evidence to incriminate them. Some were deported

Answer 18

Two Italian immigrants, admitted to carrying fire arms and being anarchists, but not to murder. They were executed for armed robbery and murder despite little evidence

Answer 19

4 million | Belief in the moral decline of the country and growing immigrant population

USA Wall Street Crash Flashcards

(43 cards)