Effects of the Wall Street Crash
- Created by: mimidollins
- Created on: 07-05-20 14:22
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- Effects of the Wall Street Crash
- Political
- President Hoover unsuccessful in dealing with effects
- Hoover encouraged states and cities to launch public works programmes to make jobs for the unemployed.
- President Hoover lost the 1932 election.
- Hoover's ideas weren't enough
- Hoover begged companies not to sack their workers.
- As a Republican Hoover thought he should follow the policy of Laissez-Faire. He thought they just needed to wait & everything would return to normal.
- Hoover setup the Reconstruction Finance Commission to make loans to businesses which were in trouble.
- 1929: Hoover said prosperity was just around the corner and cut taxes to encourage consumers
- Social
- no welfare system; the poor were dependent on charity.
- Families lost their homes or were split up
- By 1932, 25% of the working population were unemployed
- Breadlines emerged
- Hundreds of thousands of people wandered the streets looking for food, work or shelter.
- 1/3 of the population were members of families in which the breadwinner was out of work.
- Hoovervilles were set up by homeless people. ‘Hooverblankets’ were newspapers given to the poor for warmth.
- Shanty towns for homeless people were made out of scrap metal and tents.
- 1932: In steel city of Cleveland, 50% of workers were unemployed, and in Toledo, 80%.
- In 1931, 238 people were admitted to hospital for malnutrition.
- Millions of people were on the move looking for work.
- Businessmen tried new activities- selling newspapers, apples, or offering to polish shoes. Many committed suicide.
- Economic
- Sparked off the Great Depression
- Destroyed international trade
- Farmers were left destitute, drought turned millions of acres into a dust bowl and drove farmers from their land.
- Companies employed less as they were producing fewer goods
- 5000 banks closed because they ran out of money.
- economy went into a downward spiral of bankruptcy, slumping production and unemployment.
- Hooverput higher tariffs (the Hawley-Smoot tariff) on imports, but this made other countries do the same thing.
- Companies made fewer goods because they could no longer afford to make more.
- By 1933 production of manufactured food was 20% of what it had been in 1929.
- 1928-1933: both industrial & farm production fell by 40%, wages by 60%
- Total farm income slipped to $5 billion.
- USA’s international trade fell from $10 billion in 1929 to $3 billion in 1932.
- Huge numbers of farmers couldn't pay their mortgages.
- Over-farming & drought in the central southern states turned millions of acres into a dust bowl & drove farmers off their land.
- Between 1929 and 1933 10,000 banks closed and over 100,000 businesses went bankrupt.
- Political
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