History B GCSE AQA Unit 6 - Depression and the New Deal (6.1)

How serious were the effects of the Depression on the American people?


  • 1929- Prices fell, confidence destroyed, businesses and banks bankrupt and millions of people unemployed
  • 1932, nearly one quarter of the workforce was unemployed
  • Hoover had failed to end the Depression
  • 1933, Roosevelt took office; he promised a new deal
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The Wall Street Crash

  • 24th October, 1929
  • New York
  • "Black Thursday"
  • 1.3 million shares sold
  • Shares over 3 years had lost 80 per cent of their value
  • 1929-33 100,000 companies went bankrupt
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Unemployment and its effects

  • 12 million people unemployed in 1932
  • Working people suffered pay cuts and therefore had a lower standard of living
  • ALL of America was affected by the depression economically and psychologically
  • Unemployment really high among blacks and heavy industry workers
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  • By 1933, farm incomes had dropped by 60 per cent
  • Farmers had to sell up as they couldn't repay their bank loans
  • 1930s - droughts - didn't help the farmers
  • Children of the unemployed suffered as well with a lack of proper clothing and a not suitable diet
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The attempts of Hoover's government to deal with t

  • Become President in early 1929
  • Had great confidence in the business system of the USA
  • Believed the USA should interfere as LITTLE as possible
  • When faced with the crisis in late 1929, he believed that voluntary cooperation between the government and business would solve the problems
  • He offered $4,000 million for major building projects - to provide more jobs
  • Helped farmers by buying up food at above-market prices, this led to overproduction though rather than encouraging them to buy less
  • Hawley-Smoot Tariff (1930) had average duties of 40 per cent on agricultural and industrial goods, was meant to discourage imports
  • HOWEVER alike the Fordney-McCumber Tariff countries retaliated and less was exported from the USA


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Hoover's Attempts Part 2

  • In 1930, Hoover insisted that helping the poor was the role of local communities and local government
  • However by 1931, many cities were bankrupt from relief programmes they had been operating to provide food and shelter
  • In 1932, Hooever approved the Emrgency Relief Act (ERA) which provided $300 million to states to help the unemployed
  • By 1932, with unemployment at 12 million, Hoover set up the Reconstruction Finance Corporation (RFC), provided loans of $1,500 million to businesses to help them recover
  • This failed to have much impact
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Unpopularity of Hoover

  • Hoover was blamed for the Depression - mostly unfairly
  • He had been elected by the Republicans to remain with the policy of little interference 
    • Laissez-faire
    • Rugged individualism
  • He did not consider direct action
  • He believed that the economy would right itself
  • Image of Hoover was badly hurt after an incident in 1932 with the war veterans


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June 1932 - The War Veterans

  • After WW1 the goverment was pauing annual amounts to the war veterans (fought and suffered disabilities) In 1945, they should be paid a 'bonus' due to the Depression they said they wanted the bonus immediately
  • A march to Washington was organised and in June 1932, 20,000 camped outside Washington.
  • The House of Representatives voted in favour of immediate payment but the Senate overruled it on grounds of cost
  • Hoover offered $100,000 for their transport home, however they did not leave and moved their squat close to the White House
  • Hoover feared the outbreak of violence and called in troops under General Douglas MacArthur and he used tanks, infantry and tear gas to remove the squatters and destroy their camps
  • Many were injured and two babies were killed, it was a major political blunder and Hoover lost a lot of public sympathy
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  • Contrastingly, Roosevelt (Democratic) was full of enthusiasm and charisma
  • Had a repuation of listening then acting
  • He has previously tried to improve the economy in New York
  • Roosevelt created the impression that he would act immediately
  • He used the radio effectively and spoke about the need for the government to help 'the forgotten man'
  • Roosevelt also used whistle-stop tours across America and states he would cooperate with big business as well
  • Election in november 1932, gave Roosevelt a large majority
  • He received 57 per cent
  • More significantly Roosevelt had won in 42 of the 48 states
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