Trade also helped the Wall Street to crash because the USA was unable to sell surplus goods to other countries, particularly Europe. Europe could not afford them because she was too poor after the war to afford them; she owed money to the USA already because of the loans she had taken for the war. Also, Europe could not make money from exporting goods to America because its tariffs were too high. During the 1920s America raised its tariffs because with all the industries, which had been built in the USA, they did not need imported goods from foreign countries. Therefore Europe could not afford to ship its goods to the USA to sell. However, Europe raised its own tariffs to protect its industries and to make money from the ships exporting from America, which meant that when America tried to export all of their overproduced products to Europe, the tariffs were too high to make much of a profit. This therefore helped the Wall Street Crash to occur because other countries could not afford to buy US goods, nor could the USA afford to export many goods across Europe’s tariffs.
There were many worrying economic effects of the Wall Street Crash. The rich lost most because they had invested a lot. There was therefore a downturn in spending on goods. Companies failed and went bust because nobody was buying so trade fell because the poor couldn’t afford it and Europe’s tariffs were too high. Farming also fell because the cost of transporting animals was more than the cost of animals themselves. People therefore became unemployed because companies could not afford to pay them wages. Also, many people had borrowed money in order to buy shares that were now worthless. They were unable to pay back the loans to the banks and insurance companies, so they went bankrupt. Some banks themselves also went bankrupt. Hoover cut taxes to help stimulate people to buy more goods, but confidence was lost. In 1929 banks failed and people stopped trusting in them.
There was also the human cost of the depression caused by the crash. People in undeveloped areas were hardest hit by the Depression, because they had already been unprivileged during the 1920s. Huge numbers of farmers, new immigrants and blacks were unable to pay their mortgages. To make things worse for farmers, over farming drought and poor conservation turned millions of acres into a dust bowl, which gave farmers little option but to leave their ‘desert’ lands. Unemployment was also a big problem. Because of overproduction, money had been spent on goods which could not be sold, therefore no profit could be made and companies lost a lot of money and had to sacrifice things like workers, leaving them unemployed. Most towns had so-called Hoovervilles. These were shantytowns of the migrants who were trying to find a place to work. At night parks would be packed full of homeless and unemployed. Rubbish tips were crowded with people hoping to find a meal of scrapes of food from the leftovers of more fortunate Americans. Loads of people were rushed to hospital suffering from malnutrition and starvation because of the lack of food available to them. Unemployed workers, who had once contributed to the prosperity of the 1920s, were left queuing for cheap meals of bread and soup dished out by charity workers. For Americans who were used to prosperity and believing in self- help, needing charity must have been a hard blow to their pride. It wasn’t just the fact that the Wall Street Crash had occurred and left people in poverty that was the problem. The point was that people had lost their dignity and self-respect. If things did ever get better and people got their jobs back, the golden period of the 1920s could never be repeated. The crash had destroyed the one thing that was crucial to the prosperity of the 1920s: confidence. The confidence there had once been in America and its economy had been lost and would probably never be found.
2. Compare the New Deal to Republican polices before 1932.
There were many worrying economic effects following the Wall Street Crash. The rich lost most because they had invested a lot. There was therefore a downturn in spending on goods. Companies failed and went bust because nobody was buying so trade fell because the poor couldn’t afford it and Europe’s tariffs were too high. Farming also fell because the cost of transporting animals was more than the cost of animals themselves. People therefore became unemployed because companies could not afford to pay them wages. Also, many people had borrowed money in order to buy shares that were now worthless. They were unable to pay back the loans to the banks and insurance companies, so they went bankrupt. Some banks themselves also went bankrupt. Hoover cut taxes to help stimulate people to buy more goods, but confidence was lost. In 1929 banks failed and people stopped trusting in them.
There was also the human cost of the depression caused by the crash. People in undeveloped areas were hardest hit by the Depression, because they had already been unprivileged during the 1920s. Huge numbers of farmers, new immigrants and blacks were unable to pay their mortgages. To make things worse for farmers, over farming drought and poor conservation turned millions of acres into a dust bowl, which gave farmers little option but to leave their ‘desert’ lands. Unemployment was also a big problem. Because of overproduction, money had been spent on goods which could not be sold, therefore no profit could be made and companies lost a lot of money and had to sacrifice things like workers, leaving them unemployed. Most towns had so-called Hoovervilles. These were shantytowns of the migrants who were trying to find a place to work. At night parks would be packed full of homeless and unemployed. Rubbish tips were crowded with people hoping to find a meal of scrapes of food from the leftovers of more fortunate Americans. Loads of people were rushed to hospital suffering from malnutrition and starvation because of the lack of food available to them. Unemployed workers, who had once contributed to the prosperity of the 1920s, were left queuing for cheap meals of bread and soup dished out by charity workers. For Americans who were used to prosperity and believing in self- help, needing charity must have been a hard blow to their pride. It wasn’t just the fact that the Wall Street Crash had occurred and left people in poverty that was the problem. The point was that people had lost their dignity and self-respect. If things did ever get better and people got their jobs back, the golden period of the 1920s could never be repeated. The crash had destroyed the one thing that was crucial to the prosperity of the 1920s: confidence. The confidence there had once been in America and its economy had been lost and would probably never be found.
In 1936, there was still the same feeling towards the policies of the Republicans as in 1932 that had, the nation believed, been to blame for the Wall Street Crash. They still remembered the Hoovervilles - small shantytowns of ramshackle huts where the Americans were forced to live after the Wall Street Crash saw them out of a house, a job, and many of their possessions. Farmers too remembered their time under Hoover’s presidency as a very negative one, and rightly so. Farm prices had fallen so low at the time that the cost of transporting animals to market was higher than the price of the animals themselves. Many farmers had been unable to pay their debts and had been forced off their land, which was, thanks to drought and over-farming, often very poor quality anyway. Hoover had not been able to live out the bad name that he had got for himself during his last reign in presidency and in this way; he and his policies played a similar role in both the 1932 and 1936 elections. The bad feeling towards Hoover had not softened even a slight bit over time. He and his policies were still blamed for the weaknesses in the USA’s economy, which allowed the Wall Street Crash to rock America. Hoover’s policies had been the cause of other factors during the 1932 election, whilst making the public generally quite bitter when thinking of Hoover. Also in both elections, there were only two candidates that could be elected - Roosevelt and Hoover of the democrats and the republicans respectively. Therefore, there were some very clear similarities between the two elections.
Roosevelt’s New Deal meanwhile had been showing promising indications of what the public expected and desperately needed it to be between 1932 and 1936. Unlike Hoover, who seemed not to care about unemployment, Roosevelt’s policies fought unemployment right down to the bare teeth. The FEFA (Federal Emergency Relief Administration) made certain that the basic needs of the poor were met by providing soup kitchens, blankets, employment schemes and nursery schools. The CCC (Civilian Conservation Corps) allowed young men to sign up for a period of time when they worked commonly for environmental projects in national parks. Around two and a half million young men signed up for the scheme and received the money they raised to help their families survive. The NIRA (National Industrial Recovery Act) also helped to combat unemployment, by setting up the PW A (Public Works Administration), which created millions of jobs through the construction of roads, dams, bridges, schools and airports using government money. So while the nation remembered Hoover’s lack of action against unemployment, which he believed would eventually recover by itself, Roosevelt’s New Deal made important active steps towards helping people get back to work in the short-term, and allowing them to live to at least a slightly improved standard.
Between 1932 and 1936, the New Deal had become a very real success to the American people, rather than the hopeful fantasy that it may have appeared to be for some during the 1932 election. The nation now knew that they were not just supporting a man of words, but more importantly, a man of actions, when they voted for Roosevelt. He had lived up to his word by supplying his people with an active government, spending to get the USA back into work, taking advice from experts, protecting their savings and property, providing relief for the sick, old and unemployed and getting American industry and agriculture back on their feet. During the first hundred days of his presidency, Roosevelt sent fifteen proposals to congress, all of which were accepted as he worked around the clock from the first day with his advisers to make a huge array of extravagant measures to contest the problems that the Republicans had ‘caused’. The many organisations that were set up to provide relief, protect savings, get Americans back to work and start American industry and agriculture going again got people’s confidence in the government back as Roosevelt ‘primed the pump’ to get the economy going once again. The Republicans, however, still believed in much the same policies in 1936 as in 1932, with their ‘Laissez Faire’ attitude at the centre of their promotions, encouraging the government not to get involved. The American people had lost all confidence in Hoover and his old policies, and with nothing new to offer, the Democrats, who had provided confidence-building measures to combat problems in the American economy, could hardly lose. Therefore, in 1932 and 1936 while the Republicans stuck to their old beliefs that had failed in the eyes of the American people, such that they were not willing to forgive Hoover, Roosevelt, had proven himself as a worthy president by working hard to get involved and do as he had promised.
The Second New Deal- strongly on the people’s minds at the time of the 1936 election - was also highly successful when it was launched in 1936. It consisted of three main elements, one of them, the Wagner Act, allowed for trade unions and gave them the right to negotiate for better pay and working conditions with employers. The SSA (Social Security Act) provided state pensions for the elderly and for widows, and allowed state governments to try to work with the Federal government to provide much needed support for the disabled and ill. The act also set up a scheme of unemployment insurance, allowing employers and workers, who paid a small contribution to the fund each week, to receive a small amount of benefit if they could not find work. The third and final part of the second New Deal was the WPA (Works Progress Administration), which brought together all the alphabet agencies whose job it was to provide jobs for the unemployed. It also extended this by setting up projects, which created jobs for a range of professions including actors, artists and photographers, as well as office workers. The government paid artists people to paint pictures that were displayed in the city or town that they showed. Photographers worked for the New Deal’s Farm Security Administration Photographic Project, which took 80,000 photographs of farming areas during the New Deal. All these new agencies provided jobs and gave the American people the individuality that they wanted back again - to be able to make their own money rather than relying on charity or government hand-outs. In 1932, while the American people had the incentive of the first New Deal, they did not know whether to trust Roosevelt or not, but because of their situation, had no choice.
In all, Roosevelt’s New Deal looked much more promising than Hoovers polices. Although some of Hoovers polices were successful, it seemed as though he wasn’t doing much to help America; whereas Roosevelt seemed to go out there and sort it, directly intervening and helping people.
