Example exam question: Federal Government policies extended the agonies of the depression 1929-33

A mindmap on an example question for A2 history, the blue boxes are key phrases/definitions.

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  • Created by: Sophie
  • Created on: 07-01-13 19:36
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  • Example exam question: Federal Government policies extended the agonies of the depression 1929-33
    • Money Supply/Gold Standard
      • Interest rates too high
        • Made borrowing very difficult
      • Hoover refused to stop tying the dollar to the Gold Standard
    • Help for Germany
      • Hoover froze war repayments
        • Step in the right direction
          • BUT...
            • The freeze on payments was not permanent
            • Germany's economy was already in a bad way
          • Germany would be able to buy US goods
    • Balancing the  budget
      • Hoover very old fashioned
        • Believed money should not be spent that the US government did not have
        • Did not follow  Keynesianism
    • Reconstruction Finance Corporation
      • DEFINITION: U.S. government agency established (1932) to provide loans to railroads, banks, and businesses.
      • Loaned money to large businesses
        • Money should theoretically 'drip down'
          • Most of the money never reached the small businesses
          • This policy was unpopular with the public who saw it as unfair and corrupt
    • Voluntarism
      • Hoover contacted the 'key players' in America including:
        • Business leaders
          • Promised not to cut wages or the amount of people emplyed
            • Banks broke pledge
              • A year later many of the large corps. cut workforces and wages
        • State Governments
          • Attempted to start projects to employ those out of work e.g. road works
            • Some State Governments did go ahead with the projects
              • Many refused to spend money on things that weren't needed
        • Contacted large banks to establish the NCC
          • Large banks reluctant to establish the NCC
        • Increased Government spending
        • Initially cut taxes
    • Help for farmers
      • Government tried to stabilise/raise prices by buying goods above market value
        • Government bought grain at 80c a bushel compared to market value of 32c
          • Seen as a waste of money and very unpopular with tax payers
    • Success?
      • Confidence in the economy was lost
      • Banking system still badly needed reform
      • Unemployment failed to decrease
      • Hoovers reputation decreased
        • Especially after the Bonus Marches in which veterans campaigned for pensions and were eventually forced to move on with military intervention
      • In total $2 billion was given to state/local government
      • $750 billion put aside for business
    • Tariffs and Taxes
      • Introduced import tax to increase revenue
        • Hawley-Smoot Tariff
        • This policy backfired
          • Raise in taxes damaged the economy when foreign countries would not pay the tariffs to buy American goods
    • Help for Unemployed
      • $500,000,000 made available for unemployment agencies
        • But much of this was squandered by state government and was a drop in the ocean as far as the no. of unemployed was concerned

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