Wall St Crash

Wall St Crash

The Wall Street stock market crashed in October 1929, the world economy was plunged into the Great Depression. By the winter of 1932, America was in the depths of the greatest economic depression in its history
1. The number of unemployed people reached upwards of 13 million
2. America had lent huge sums of money to European countries. When the stock market collapsed, they suddenly recalled those loans. This had a devastating impact on the European economy.
3. Republican President Herbert Hoover was personally blamed for failing to deal with the consequences of the Wall Street Crash
The American economy did not fully recover until the USA entered the Second World War in December 1941.
Franklin D Roosevelt promised, "A new deal for the American people."
1. The New Deal
  1. At the start of 1934 there was still 11.3 million people out of work
    1. Failed to deal with unemployment
    2. Created Alphabet Agencies
  2. Success
    1. Roosevelt restored confidence in the American people. Millions of people were given work in government projects. A lot of valuable work was carried out by the in building schools, roads and hospitals. Roosevelt rescued the banking system from collapse and saved capitalism
  3. Failures
    1. There was a new recession - the 'Roosevelt recession' in 1937. Unemployment was not conquered by the New Deal. Many of the jobs created by the New Deal were only temporary. The New Deal was the most costly government programme in American History and some of its projects could be accused of wasting money.
Great Depression
1. 13 to 15 million Americans were unemployed and nearly half of the country’s banks had failed.
2. Matters continued to get worse over the next three years. By 1930, 4 million Americans looking for work could not find it; that number had risen to 6 million in 1931.
  1. Tennessee Valley Authority (TVA), which built dams and hydroelectric projects to control flooding and provide electric power to the impoverished Tennessee Valley region of the South
    1. Works Project Administration (WPA), a permanent jobs program that employed 8.5 million people from 1935 to 1943.
    2. In 1935, Congress passed the Social Security Act, which for the first time provided Americans with unemployment, disability and pensions for old age.
      1. When the Great Depression began, the United States was the only industrialized country in the world without some form of unemployment insurance or social security.
  2. After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP (adjusted for inflation) grew at an average rate of 9 percent per year.

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