Part 3: America in Depression, 19291933

1
Part 3 America in Depression, 1929-1933

• Key Issue
• Why did the USA fall into depression in 1929?
• Subject Content
• You need a knowledge of-
• Over production
• Lack of credit control
• Unequal distribution of wealth
• Tariff controls

2
Previous knowledge

• Mass production
• Credit facilities
• Tariffs
• Confidence buying shares
• Cycle of Prosperity
• Wall St Crash (impact on Germany)

3
Why did the USA fall into depression in 1929?

• The Stock Market The basics
• If a company wants to join he stock market it
  sells shares in itself. The shares at first are
  bought at a fixed price (e.g 2). Once all the
  shares have been sold the value of the shares
  fluctuates (goes up or down). If a company does
  well and makes a profit the value of the shares
  will go up because more people will want a part
  of a successful company.
• In 1920s America, people believed that the value
  of shares would always go up. Therefore buying
  shares was a quick and safe way of making money.
  However, people paid too much for shares in
  non-profitable companies and this created a
  problem in the future

4

• Overproduction
• Unequal distribution of wealth
• Tariff Policy
• Financial Crisis - SPECULATION

5
Why did the USA fall into depression in 1929?

• Make notes under the following 4 headings
• Overproduction
• Unequal distribution of wealth
• Tariff Policy
• Financial Crisis SPECULATION
• Copy out Cycle of Depression (P.232)
• Answer 1) What caused the Wall St Crash?
• 2) What were the effects of the Wall St Crash?
• Copy out summary p.233

6
What were the effects of the depression?

• Read Pp234-236
• Complete diagram on effects of the depression.
• Then write a definition for the following key
  words
• Dust-bowl Bonus Army
• Hoovervilles Rugged Individualism
• Hobos Herbert Hoover
• Breadlines Hoover Dam
• Emergency Relief Act Hoover leather
• Hoover Blankets
• Reconstruction Finance Coorperation

7
The Republican government and the Depression

• In Hoover we trusted, now we are busted
• When the Depression struck in the United States
  the Republican Government took very little
  action. Herbert Hoover and his party believed in
  Rugged Individualism and Laissez Faire
  policies. They believed that the government
  should not interfere in peoples lives or try and
  help businesses and the economy. Hoover kept
  saying that Prosperity is just around the
  corner, he believed that the Depression would
  come to an end by itself and the best thing a
  government could do was not interfere.

8

• Hoover took no action to relieve the Depression
  and help those worst affected, to begin with at
  least. By 1931 Hoovers government began to take
  action. The Hoover Dam was started. In 1932 the
  Emergency Relief Act gave 300m to help the
  unemployed the Reconstruction Finance
  Corporation provided 1500m in loans to business.
  BUT, it was too little too late. The America
  people had already begun to blame Hoover and were
  looking for a change of government.