-Trade Problems, - Decline in Old Industries, - Farming Problems, - International Debt, - Stock Market Speculation and Lack of Regulation, - Unequal Distribution of Wealth
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What were the Trade Problems?
-Production Rises: Surplus couldn't be sold abroad; - Republican Protectionism led to raising of taxes and retaliation -> cut off international trade; - Surplus Agricultural produce couldn't be sold abroad (links to Farming Problems)
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What were the Farming Problems?
- Out of 5280 farms, there were 3500 foreclosures; - Crops devastated by natural disasters E.G. Bollweevil Plague; - Farmers didn't cut production after WW1 -> overproduction + lowering prices; - Average income was $477 below the national average
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Why did International Debt lead to the Depression?
-Devaluation of British and French currencies made U.S. goods more expensive in Europe; - Great Britain and France didn't have good enough economies to pay back war debts owed to the U.S.
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What were the issues with Stock Market Speculation and Lack of Regulation?
- 1927: FRB lowered interest rate by 0.5% making it easier to borrow; - Unregulated stock market, encouraged 'On The Margin' speculation (75% of a share's value could be borrowed); - Blind faith in market; - After 1927, avg of 5m transactions a day
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What were the issues with Unequal Distribution of Wealth?
- Purchasing power was held by top margins of society; - Only way poorer Americans could consume was through credit; - 60% of all American families living on less than $2000 per year; - Top 5% of Americans earned 1/3 of income
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Why was there Decline in Old Industries?
- Traditional industries E.G. Coal + Textiles couldn't compete with the oil industry; - New England Textiles Industry fell in workforce rom 190,000 to 100,000 in 1933
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Other cards in this set
Card 2
Front
What were the Trade Problems?
Back
-Production Rises: Surplus couldn't be sold abroad; - Republican Protectionism led to raising of taxes and retaliation -> cut off international trade; - Surplus Agricultural produce couldn't be sold abroad (links to Farming Problems)
Card 3
Front
What were the Farming Problems?
Back
Card 4
Front
Why did International Debt lead to the Depression?
Back
Card 5
Front
What were the issues with Stock Market Speculation and Lack of Regulation?
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