Wall Street crash
- Laissez faire attitudes- little regulation so it could easily go opver the top
- overproduction of agriculture and consumer goods
- Nature of the bull market : buying shares on the margin; buying of stocks and shares went out of control and value was higher than real worth; lack of credit control meant reliance on share prices rising
- lowering of US interest rates led to an increase of speculation
- strong confidence in share prices due to boom of the 1920s
- september 1929 prices beghan to edge down
- shares owned were worth less than what they were bought for
- everyone started worrying and tries to sell their shares for less and less
- Black Tuesday 29th October 1929 share prices collapsed
1933, 100,00 companies had become bankrupt and so business confidence reduced and consumer spending decreased. Those who did survive cut production due to the decrease in consumer spending; this led to less jobs, less working hours and lower wages. WIth certain business closures such as the car industry industrial workers became unemployed. Unemployment then led to failure to paying mortgages. Banls repossessed homes which led to homelessness. unemployment reached almost 25% in 1933 and there was stagnation. Farm prices dropped to less than half of the price of 1920 by 1929. there was thechnological unemployment which took about 2 million jobs each year. Hoover and Mellon thought deflation was the right answer. Agricultural Banking Act did not sort the international food price drop and the Hawley Smoot Tariff Act 1930 pushed import duties to extremely high levels having a harmful effect on international trade and so farming. Hoover did little to help the "dust bowl" conditions even after Black Sunday, 20 blizzards in one day. By 1932 25% of farmers had lost their land. Hoover's use of voluntarism, the use of voluntary action was unhelpful. 7 million were unemployed in 1931 and 11 million in 1932.
1935-forbade the sale of munitions to all belligerent nations. came about due to us being dragged into WW1 because of its heavy sales of US arms to the allies. undermined by war breaking ou between china and japan as China was dependent on US arms so they supplied in order to defeat Japan
1936- banned all loans and sales of US goods on credit to belligerents. Came about for same reasons as first. Undermined by the US business openly trading with Nazi Germany there investment there increasing by 40% 1936-1940
1937- extended provisions of previous act to cover civil wars. Came about so that America would not have to become entangled in Spanish civil war. Undermined by Britain running out of money to buy American goods
1939- forbade US citizens to travel on ships of belligerent naitons. Came about due to the sinking of the Lusitania caused a public outcry. Undermined by sinking of the American ship "Reuben James" in October 1941 by a german submarine
USA possessed almost unlimited natural resources in both the energy and raw mateirials for industry. Huge increase in manpower and markets that came with immigration. The impact of technology enabled rapid development of transatlantic steamship companies and the mechanisation of industry. The rise of big business due to natural resources, railways and communications improved. High tariffs kept out foreign goods such as the Mckinley tariff 1890. Iron and steel production rose from 920,000 tons in 1860 to 10.3m tons in 1900. By 1919 the US production two-thirds of the world's oil. Investors like Edison and Ford contorlled all stages in the production and marketing of their product "vertical integration". Trusts were formed when companies worked together to control manufacture supplies and process to ensure other firms couldn't compete. Monopolies formed when one company had control of one particular business area- General Electricity supplied 85% of America's electricity.
Open door policy
Aimed to keep Chinas free of colonial control and preserving free trade. The collapse of imperial rule in China led to instability and extensive foreign interference. USA was keen to see free trade in China and to avoid china being divided up by European powers as America would benefit. The boxer rebellion 1900 led to foreign embassies in Beijing being seiged. The USA joined the interenational force that was sent to break the seige and restore order. With defeat of the rebellion it seemed certain that China would be partitioned between the European powers. The USA saw this as a threat to American trade interests . This resulted in the Open Door policy to prevent China being carved up and to keep the principle of free trade in China.
Why did America join WW2?
In 1937 war broke out between China and Japan and in Europe in 1939. IN sept 1938 Hitler met Britsh, French and Italian leaders in Munich- Hitler was only allowed to keep the parts of Czech that he invaded, but Hitler broke the promise and took the whole country. Japan invaded Manchuria in 1931 and by 1937 the US became openly anti-Japanese. Exacerbated Japanese sinking the USS Panay off China, 1937- Japan apologised and paid £2 million. After 1939 Japanses expansion went south aimed at what is now North and South Korea, America wanted to prevent this. In sept 1940 Japan, Germany and Italy signed the tri-partite pact which FDR saw a threat. France fell to the Nazis in June 1940 and Britain seemed on the verge of collapse. In dec 1938 the US began rearming: 1941 military budgets were four times the size of 1940. Churchill became PM in 1940 and asked FDR for help in particular warships to protect Atlantic convoys. JPK the ambassador in London believed Britain would have to surrender. FDR ensured an increase in documentaries and movies made showing the Nazis as villians. Newspapers and magazines fuelled fear of Germany writing of long range bombers and the gas bomb thaty could kill everyone in Manhatten. In sept 1940 America lent Britain 50 old warships. Rumours of Nazi Germany building atomic weapons and so FDR authorised the USA's own research into nuclear fission. Lend-lease in March 1941- America lent supplies to USSR, Britain, France and China of war materials from 1941-45. Pearl Habour.
Causes of the Spanish American War 1898
The cubans had tries to get rid of Spanish rule in their country but had so far failed. USA had sympathy for these Cubans in tryng to overthrow Spainish rule. Two New York newpapers used the Cubsn revolt to gain readers by printing ever more sensational stories. It ws a process that became known as "yellow journalism"- stories were all strongly anti-spanish and many were clearly untrue. In February 1898 the American warship USS maine exploded in Havana in Cuba, 266 US soldiers died, the Spanish were blamed for planting mines even though the sedond investigation blamed sparks ignightng the ammunition hold. A letter from the Spanish ambassador to his government fell into the hands of the Cuban rebels, the letter was highly critical of President Mckinley this once again inflamed public opinion. Congress and Mckinley were both reluctant to go to war but the mid terms in 1898 meant they sided with the public as they wantd to remain in congress.
Opposition to the New Deal
Left wing thought that FDR hadn't gone far enough whereas the Right wing opposition believed that he was too radical.
Huey Long- share the wealth scheme. Left wing wanted more for the poor. He was a governer and therefore could and did use intimidation.
Dr Francis Townsend- proposed own policies for pensions. Appeared in the 2nd New Deals the Social Security Act showing huge success and an actual influence, left wing
Congress- most powerful opponent; power to reject policies
Supreme Court- very powerful opponent ; can declare acts unconstitutional influencing FDR to go back and change his mind.
Father Charles Coughlin- "Radio priest" had 30 million listeners ; orignally liked New Deal but changed his mind calling FDR "communistic" and his policy dominated by "jewish bankers".