EDXCEL HISTORY- America boom bust recovery detailed notes

Notes i made- covers all the effects of world wars, boom, crash, depression, new deal&opposition, 1950s mccarthy ect. in great detail

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  • Created on: 15-06-12 18:01
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Woodrow Wilson (1913-1921) ­ Democrat
Democrats believe in government intervention and centralised power. They prefer federal
legislation to local ones. They recognise that the economy is too complex for individuals to navigate
on their own; therefore government should guide business decisions. They also implement taxes to
enable government intervention.
Decision to remain neutral- 12 million Europeans living in the US- some of whom were German
US trade would benefit from selling to all belligerent nations
Wilson remained neutral during election to win support; however there were signs America would
become involved because of the preparedness policy, 1915. This suggested that America should
prepare for war and establish an army of 25000 in case of a crisis. The Council of Defence was
established in 1916 to advise the president how to prepare for potential war. 5 months after the
election, the US entered the war, fighting for the allies.
Why the US joined the war on the side of the allies?
1) More support for the allies because of traditional ties, many rich and influential Americans
were pro British, and they shared a common language
2) The US traded more with allies than Germany, particularly since the allies blocked German
ports. In 1914 US exported $40 million munitions to Britain; by 1916 they exported $1290
million. If they joined Germany- they would lose this trade and profit
3) US invested more in the allies- they loaned Britain $2.3 bn and only $27 mn to Germany,
therefore they had more to lose if the allies lost.
4) Germany winning would threaten the US policy of liberal democracy, Wilson wanted peace
after war, but Germany would start more wars to invade and take over land, therefore the
allies needed to win to establish peace. In 1917, Russia withdrew and this was looking
5) German submarines operating in the Atlantic practice unrestricted submarine warfare, and
sank the Lusitania in 1915 killing 128 American civilians. After promising not to sink any more
US boats, Germany broke their promise and resumed their policy of unrestricted submarine
warfare, causing Wilson to break off diplomatic ties with Germany in 1917.
6) The Zimmerman telegram was intercepted, proving that Germany disliked the US as they
encouraged Mexico to overthrow US, and offered them support in doing so if they became
allies. This caused the US to declare war on Germany.
Effects of the war on the economy:
Brought the US out of their mild depression in 1916
During war period the value of American trade increased from $2bn to $10bn
US gave $4bn worth of loans each day- and the war meant countries like Britain were
spending $10 million a day on US goods- this caused their companies to boom and turned the
country from a debtor to creditor nation, however they did accumulate their own debts as a
result of the war
New York replaced London as the world's financial capital
The US government taxed its people to fund the war through the 1916 and 1918 Revenue
Acts ­ at their highest the lowest earners were taxed 6% and the highest were taxed 77%
compared to being only taxed 7% in 1913. Overall, 33% of the war was funded through
Liberty Bonds sold to public allowed them to support the war and redeem their purchase at a
later date with added interest. This helped to raise $21bn.

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Industrial production increased by 39%, and farmers profiteered massively as the exported
300% more to allied countries and prices doubled. Overall, unemployment dropped and 1.3
million found work as a result of war.…read more

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Warren Harding (1921-1923) ­ Republican
Appointed very strong people such as Andrew Mellon- Treasury Secretary and Herbert
Hoover as Secretary of Commerce. In Wilson's term government spending increased from
$500 mn in 1913 to $5000 mn in 1920. Harding passed the Budgeting and accounting act to
increase federal aid and expenditure fell to £3373mn ­ allowing tax reduction.
Appointed people who were later arrested for corruption like Albert Fall whose $12000
salary was scarcely comparable to his spending.…read more

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Just tactical way of ensuring voters in the elections.
General points ­ BOOM
The 20's were also known as the Jazz age because it was an era of indulgence, change and
new attitudes. - A post war social revolution. There were changes in fashion as many young
women were now referred to as `flappers'. They wore shorter skirts and low cut tops, they
wore their boot flaps undone and cut their hair into a short bob- like Louise Brookes.…read more

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St Valentine's day massacre- 6 killed by Al Capone's gang- violence in society
High demand- charge high prices- cost of highball increased from 15 cents in 1915- $3 in
1920. Al Capone- earned $60million by 1927 (allowing gangland dominance over society as
bribery of government officials and police offers took place)- rise in organised crime- money
invested into `new industries'- increase in drugs, prostitution and gambling (however was
this because of change in attitudes) In Chicago alone 227 gangland murders each year.…read more

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Urbanisation- 1920 census showed for first time more people living in towns than villages.
People living in rural areas saw this as a threat to American way of life- people in towns `wild
and sinful'. One of many divides within society.…read more

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Problems with the economy (making the depression more likely)…read more

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Herbert Hoover (1929-1933) ­ Republican
Very determined to stick to his principles of `rugged individualism' and `voluntarism'. He would never
shift from his fundamental beliefs. Ignored warnings about the economy- tried to make few
interventions during the depression- some argue this was too little too late whereas his right wing
critics believed he intervened too much and should have left the market to correct itself.…read more

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Charities could only provide 6% of necessarily
relief, state couldn't help and federal didn't. (In 1932 Hoover set aside funds)
As a result by, 1932 2 million Hoboes lived in shanty towns which were nicknamed Hooverville's.
28% receiving no income not including 11 million farmers in acute poverty- many of population
starving.…read more

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Roosevelt got new deal ideas from)
Hoover was seen as aloof but he did care and tried to implement policies. He rigidly stuck to his
beliefs, but gave up his own money to help (maybe not being cruel- he genuinely believed it was for
the best). He seemed distant when people were starving and said they didn't work hard enough
alienating people. The `us' and `them' divide was worsened by the treatment of bonus army.…read more



This is an incredibly detailed set of notes on US political and economic developments from Woodrom Wilson to Dwight Eisenhower. There is a great deal of factual information and and even key historical perspectives from different historians on the key controversies, making this particularly useful for A2 Unit 4.


Really helpful

thank you


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