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The USA 1919–1948: The People and the State

Economic and social effects of the Great Depression and government response

  • 3 things to know
  • Paper 1

Overview

Buying on the margin, unemployment and bank failures, Hoovervilles and the Dust Bowl, Hoover's response, the 1932 campaigns and Roosevelt's landslide, the Hundred Days, the banking rescue, and the AAA, CCC, FERA, NRA and Tennessee Valley Authority.

What you need to know

Answer each one before you reveal it.

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Key term

Why did the collapse of the banks hurt ordinary families so badly?

Key term

What were Hoovervilles?

Key term

How decisive was the result of the 1932 election?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What was buying ‘on the margin’, and why did it make the crash worse?

    Model answer

    Buying shares with borrowed money, hoping to repay from the profit; when prices fell in October 1929 the debts remained and buyers were ruined.

  2. 2

    What happened to unemployment in the United States between 1929 and 1933?

    Model answer

    It rose until roughly a quarter of the workforce had no job, with millions more on short time or low wages.

  3. 3

    Why did the collapse of the banks hurt ordinary families so badly?

    Model answer

    Thousands of banks failed, and savers lost their deposits because there was no insurance to protect them.

  4. 4

    What were Hoovervilles?

    Model answer

    Camps of shacks built from scrap on the edges of cities by families who had lost their homes, named in mockery of the President.

  5. 5

    What was the Dust Bowl?

    Model answer

    Drought and dust storms that stripped the ploughed soil of the southern plains in the 1930s, driving ruined farming families west to look for work in California.

  6. 6

    How did Hoover respond to the slump, and why did his response ruin his reputation?

    Model answer

    He trusted to self-help and charity, though the Reconstruction Finance Corporation of 1932 did lend public money to banks and businesses. He was then blamed for sending troops to burn out the unemployed veterans camped in Washington to demand their war bonus.

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