Effects of the Wall Street Crash

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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.


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