Summary a mind map of everything you need to know about the effects of the great depression on the US from
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AQA A-level History: The Making of a Superpower: USA 1865-1975
This mind map provides an easy to read, simple and condensed sum of information about the effects of the great depression in America from . All of this information has been checked over by the head of the history department and ensured that all key points are present. This mindmap would be suitable...
Economic changes from 1920-1945/ boom, bust and recovery
September 14, 2023
1
2023/2024
Summary
Subjects
problems in agriculture
structural weakness
economy
economic
economics
great depression
the great depression
the new deals
1920s boom
the impact of the great depression
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emerged from ww1 as dominant world economy. brief recession in 1920-21n ut years of growth and modernisation followed. war in
europe displaced their economies so agriculture and manufacturing boomed in the US. mobilisation of wartime economy
stimulated agricultew and manufacturing. for most 1920s boom meant rise in living standards and easier access to consumer
goods automobiles household goods and leisure and entertainment. constantly rising stock market. US economy already
ooutstripping eyrope before the war started. war aided US exports in foreign markets.republican policies and andrew mellon
minimal govt. intervention and low taxes. morew Americans lived in urban areas. factories taken over by mass production and
more efficiency. hwenry ford first cheap mass produced car model T. same with Chevrolet. boom in consumer goods, cheap motor
car, radio and vacuum cleaner. model t car symbolic of boom. growth if consumer boom helped by growth of advertising. radios in
al;mist every home aided advertising. cinema provided boost to entertainment.
1920s boom
from 1922 annual unemployment never rose above 4% and GDP grew by 2% a year, double than av increase in prifces. real
wages went up 30%.
long established sectors eg coalmining, shoemaking,textiles, railroads, shipbuilding in stagnation or decline.
due to long term structural weaknesses and revival of foreign competitors after ww1. soignificant expansion in energy industry. new oilfeilds in oklahoma louisiana and texas. oil vital to growth of motor
industry. heating and generation of electric power. already big business before war- general electric monopoly sam tilden. by
structural weaknesses 1929 16 holding companies provided basis of US electricity production.
weakness of staple industries undermined trade unions mostly die to technological une,mployment, mass staple economy
production and mechanisation led to job losses demand for skilled labour decrease. estimated mechanisation
took away 2 mill jobs a year . united mine workers has 5 mill members in 1920 and only 75,000 in 1928. AFL lost US becoming urban country so fiest time ever 1920 sensus showed more than half lived in urban areas. wealth
1.7 mill members. weakened also by anti union policies. shifting away from staple crops. symbol of this; most fsarmers lived without electricity. 1920s seemed so bad
because 1900 years of boom. when boom cut off in 1920 wheat prices fell 50% and similar for livestock sand cortton.
real economy did not match rise in paper value of stocks and investment. stock market used to
finance many things but often had little regulation. credit encouraged high risk borrowing and structural problems also. mechanisation meant fewer farmers needed and less land. value of farmland fell by more
lending. psychological effect of bull market led to frenzy of speculation on bull market. than 30%, earnings per capita for farmers around a third of national average. overproduction issue. by 1929 workforce
problems in agriculture. reduced by 5%. about 13 mill acres had to be taken out of production, fertilisers, pesticides and tractors meant more
was produced. . efficiencies kept prices low but investment machinery costs stayed the same. farmers became heavily
late 20s prosperity peaked =. 1927 share index NY times at 245. rose to 331 in 1928 and 452 in 1929. system of financial
dependant on lons to to cover their annual losses. situation worse for sharecroppers + wage labourers.
regulation not capable of coping with stock malert panic. banks undercapitalised, lacked money in reserves to pay out is too
instability in financial
many people withdrew depositis. 1929 barely 200 mill of govt money backed by gold. 8 biullion usd in call loans outstanding. system
mellon believed economy would fix itself. demands for gvt to intervene. 1922- fordneuy mcumbert tarrif act raised tarrifs protective tarrifs on foreign imports.
1923 federal govt brought in agricultural credits act to make low interest loans available. great depression hit around
1930s ish.
impact of crash emergency in banking centre and financing industry. affected business confidenceslowed boom bust and recovery reasons: Credit Boom - easily available credit led to more people investing in shares.
consumer spending and stifled production. by 1930 though prices of stick were back to same ;level as before 1920-45 Buying on the Margin: meant you only had to pay 10 or 20 percent of the value of shares . It meant you were borrowing80-90
1929. other reasons for depression: construction boom slowed, automobile sales slowed sharply. industrial
percent of the value of the shares .This enabled moremoney to be put in shares, increasing their value. They had made huge
production fell including steel. hoover blamed for doing too little too late, FDR blamed for not doing anything
profits by buying on the margin and watching share prices rise Left investors exposed when proces fell and inflation of shares.
before inauguration. great depression
Irrational exuberance: everyone thought stock market one way bet. share prices rose and people borrow more money to invest in
wall st crash stock market. share prices ckept rising and people felt would continue to do. stock prices divorced from real value. av earning per
share rose by 400% 1923-29. some comps posted disappointing result then people started to panic and cash in on profits. led to
unemployment to 25% oin 1933. unemployment remained stubbornly high until ww2. banking and
fa;; om prices. jp morgan tried to restore confidence by didn't work. oct 29 share prices fell 40 billion in one day. 1930 value of
credit crisis and agriculture bad.
shares fallen by 90%. mismatch between production and consumption- mechanisation led to more efficiency. demand did not
reach supply, firms struggle to sell all products. despite this people still buy shares. inadequate regulation and intervention under
already depressed before wall st crash. hoover took action federal farm board 1928 to provide loans for farmers imapct of great harding coolidge and mellon.
cooperatives. grain stabilisation copr to help prices for raw materials. . new deal FDR reinstated policies on a more depression on
radical scale. dustbowl conditions pushed farmers into bankrupcy. aggriculture.
impact of great depression on banking and finance. 1933 banking holiday suspended all banking sytem. bank failures
however were regular occurance even in good times, 600 banks failed every yar in the 1920s/. four banking crisis
very slow recovery. after interventionmist policies in new deals economy back to where was before 1930,31,32 and 33. these has delayed effect. march 1933 1 in five banks had failed nationwide.
29. howver agriculture still depressed and unemployment high.
impact of great
depression on banking federal reseve increased interest rats in 1931. deflation. 1930-33 supply of monmey sharnk 30%. hoover intervention
roosevelt recision 1937-38 industrial production dropped sharply back to levels 1932, unemployment to nearly impact of new deals and and finance. slow.
20% by 1928 new deals not ensured complete recovery. 1939 economy boosted by ww2. rearmane tincrease ww2 on recovery
production. millions of new jobs created to fill places by people at war. motor industry switched from cars to
national credit corporation 1931 provide smaller banks with capital. reconstruction finance corporation 1932 provide
production of military vehivles. middle of the war- aircrafts being produced at rate of 1000 a day. 1942 war
federal loans to banks and companies 1932. glass steagal act pump money into economy.
protection board set up to supervise allocatio n of war resources, petrol, rubber, steel. full employment in ww2.
end of great depression. was it the new deal or was it WW2 that ended the great depression?
slowdown in industry not fixed until ww2. high unemployment depressed demand for goods, no one coild afford. .
extractive industries suffered. automibile reduced demand
impact of great
depression on industry.
some industres had rapid growth- household foods, home appliences, oil refining, chemicals. glass production of lightbulbs
and food containers. realtive success partly due to govt intervention.
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