The effects of the depression: How the Wall Street crash caused the depression

Unemployment/work

Farmers

Homelessness

Poverty/charity

How Hoover tried to deal with the depression, was he successful?

The 1932 election, what Hoover did; what Roosevelt did.

The Wall Street crash, which happened in October 24th 1929, was mainly caused due to a large scale of speculation. This means people borrowed money from the bank, but they did not have enough money to pay the bank back. They used this money to buy shares. At the time USA was doing very well. The price of shares was going up and up. These speculators bought shares and then sold them at a higher price, they then gave money back to the bank, and make some profit. eventually share prices became overpriced. People loss confidence and began to panic and sell their shares. Speculators sold their shares for less than they had bought them for, they now could not afford to pay the banks back. The banks ran out of money and also went bust. Companies had also invested lots of money in shares. Share prices declined and companies lost a lot of money. These companies now lacked financial backing. They were forced to make lots of people redundant, or decreasing wages. The worst affected group were the black people, white people saw them self as superior. Before the depression, farmers had adapted more farming techniques, as well as using new cultivators. This allowed them to produce much more crops, more efficiently. Farmers were making so much, that the price of their product decreased. This was bad as they produced a lot of crops. People did not need that much produce, farmers were getting a small amount of profit, with lots of left over crops. They could not sell their produce abroad, as countries had put tariffs on American goods in retaliation, as America had put tariffs on foreign goods in the 1920's. Farmers were one of the worst hit groups. In 1932 1 in 10 farmers were evicted, this caused lots of unemployment as farms employed a lot of people. Farmers even burnt their own crops, so that they could be paid by the fire service for putting the fire out. Speculators obviously y became homeless, as they had their home and possessions repossessed. The banks now had a shortage of money, and many of them went bust. Therefore, even people who did not speculate lost their money. Lots of people kept money in banks, they lost their money when the banks collapsed. Lots of people were forced into poverty because they lost all of their money. Independent charities were set up to help the homeless. Blankets, food, water, and even homes were given out to the very poor. Soup kitchens were also set up. Lots of homeless people set u shanty towns. They were nicknamed "Hoover-vills" after the president Hoover. Lots of people blamed the depression on Hoover, due to the policy of Laissez-faire. Hoover also did not help the homeless, as he believed in "rugged individualism" Hoover did not really try to help the depression. He would not accept that there was a crisis. Hoover actually blocked the Garner-Wagner relief bill, which would have provided $2.1 billion to create jobs. He ignored peoples protests and even set the army on them, killing protesters. However you cannot really blame the depression on Hoover, he was elected in the same year that the depression took place, he could not have done much to prevent it. He set up the RFC to provide loans for the poor, and tried to persuade business leaders not to cut wages. He also offered 4000 million for major building projects to provide more jobs. but overall Hoover was not successful. Hoover set the army on the innocent protesters close to the vote. People no longer liked Hoover, or the republican policy. This is why Roosevelt and the Democrat party won by a landslide in 1932. Roosevelt got 57% of the votes, and won 52 of the states.

Roosevelt and the New Deal How it helped banking and confidence: EBA, SEC, Fireside chats.

How it helped farmers: AAA, TVA

How it tackled unemployment: CWA, PWA, CCC and WPA

How it helped industry: NRA How it helped poverty: FERA, HOLC.

When Roosevelt was elected, he began to set up lots of different "Alphabet Agencies" to help tackle the depression. Firstly the EBA was introduced. This was the emergency banking act. It gave the American people a taste of the new deal. It closed all banks and only reopened the good banks. The EBA was set up due to a lack of confidence from the American people. The SEC was the securities exchange commission. It was set up because of ruthless speculation. Its aim was to stop speculation and give confidence back to the people. Roosevelt also did "Fireside chats", Roosevelt would speak to the American people over the radio, to boost confidence and make the American people, feel secure. The New Deal helped farmers mainly through these two agencies: the AAA and the TVA. The AAA was the agricultural adjustment administration. It was set up because the price for food was too low, and lots of farmers still used old farming techniques that were not very effective. It set quotes to reduce farm production, to make prices rise. It also modernised farming. Also the TVA/ Tennessee valley authority tackled the problem of the dust bowl. Nothing could grown on it as it was a wasteland. To make the soil fertile, they make a series of dams on the Tennessee river. This provided the USA with fertile soil, electricity and jobs. The New Deal tackled unemployment through the agencies on the left. Firstly the PWA/ the public works administration, tried to tackle the lack of jobs. It used government money to build schools, roads, dams, bridges and airports which would be useful to America in the future. Therefore it also produced jobs. There was also the CCC/ civilian conservation corps. It tackled the problem of unemployed young men. It provided these men with temporary jobs until they found a substantial one. They did things like cleaning up national parks, and they got paid for doing it. The New Deal helped industry through the NRA/ national recovery administration. It tackled child labour, unfair wages and bad working conditions. It improved these areas and also set up trade unions. The New Deal helped poverty through FERA/ federal emergency relief administration. It provided food and shelter for the poor and homeless. Also HOLC/ home owners loan corporation. Lots of people could not pay off the mortgage for their houses, therefore they were repossessed. HOLC solved this problem, as they took over the mortgage of middle income Americans who struggled to pay their mortgages.

Was the New Deal successful?

Evidence for and against

Opposition to the New Deal

How WW2 ended the depression 1939-1941

Overall I do think that the New Deal was successful. Firstly the New deal helped banking, as it made sure all banks were reliable. It helped production. It tackled unemployment. It helped industry and it helped people in poverty. Also lots of new useful things were made, such as dams, and bridges. The new deal seemed to help solve the depression. Unemployment went down drastically. Also new things were being built ready for the future success of America. However unemployment went back up again, this showed that the effects of the new deal were only temporary, and that it could have been WW2 that solved the depression. Lots of people opposed the New Deal, they thought it was a huge waste of money that didn't really work. For example the CCC. They provided men with temporary jobs, they got paid for cleaning up national parks etc. But lots of the men who had been taken on by the CCC, just stood around doing nothing. There were no checks to see if they were working, yet they still got paid. Also during the process of the new deal, there was in effect a second depression. Unemployment rates rose. This is because Roosevelt cancelled the second quota. Some people think that the reason America recovered was because of WW2. Lots of people were employed in munitions factories and lots of men conscripted by the army. This reduced unemployment. But also, America sold lots of weapons to other countries, making huge profit.