HISTORY
By 1925, 90% of petrol, 80% of rubber, and 75% of
1.How far did the US
economy boom in the 1920s?
1.1. On what factors was the
economic boom based?
Economic boom: A period of time when the economy
improves quickly, people earn more, and the standard of
living goes up
First World War
America was minimally involved in WW1, so retained their
workforce and troops and didn’t suffer damage on their
soil
They had money and booming industries from selling
weapons, food, and ammunition during the war
Production demands and export rates were high
Iron ore production almost doubled within 3 years
Coal, petrol, and wheat industries boomed between
1914 and 1917
Coal production increased from 422 to 551 million
tons
Income from chemical export increased by over
1000%
Wheat, iron, and steel incomes more than doubled
They were paid back money they had loaned to the British
for reparations
Assembly Line
Pioneered by Henry Ford
A new method that allowed mass production at cheap
rates
Initially expanded the automobile industry, but was soon
utilised in other forms of production, like radios and
fridges
The first mass produced car was the Model T - by
1928, it was priced at only $295
One car was produced every 10 seconds
Low prices and reliable production attracted customers,
with high demand increasing production and turning
profits
Expansion of the automobile industry
Further expanded the use of the assembly line
Cars went from a privilege to a necessity, and high
demand meant more production
Stimulated production in other industries, like petrol and
glass
WWW.ZNOTES.ORG
plate glass was consumed by cars
A boom in multiple industries increased profits
Development of electricity
A cheap and effective source of power
In 1920, only 35% of households had electricity - this
increased to 68% by 1929
Prices dropped but demand increased so greatly it
created massive profits
Technological developments
Appliances like refrigerators, radios, and washing
machines became common in households
Thanks to the assembly line, mass production was able to
satisfy high demand
Electricity was able to cheaply power these appliances as
well as the factories that produced them
In the 1920s, average annual sales grew to over $7 billion
Entertainment
Newspapers and magazines became more widely
circulated
In 1919, the first tabloid newspaper was published
Sports, fashion, and cinema became popular topics
and more articles were published
By 1922, some magazines circulated amongst more
than 2.5 million people
Journalism grew as a field and an area for
employment
Sports grew as an entertainment industry
Thousands of people watched and listened to sports
matches live
With the spread of radios, they also listened to live
broadcasts
Baseball was the most popular and became a highly
profitable business
Millions of dollars rolled in through tickets to matches
Cinema grew in popularity
Hollywood was the film capital of the world
Cinema was one of the most common leisure activities
40 million tickets were sold per week in 1920; this
number more than doubled by 1930
Films became a mass production industry and 3
movies were made per week in Hollywood
Million dollar movies populated studios and contracts
worth thousands were signed
Film life gained popularity as a topic in media, helping
circulate tabloids and magazines
Advertisement
 Entertainment, technology, and other mass produced
commodities were commonly advertised
Billboards were large and colourful and catchphrases
became popular
Radio advertising was a new and popular venture
Adverts also circulated in newspapers, magazines, and
printed cartoons
Made mass produced commodities look appealing due to
low prices and encouraged consumers to buy things they
did not necessarily need
Advertisement boosted sales across the decade
and rolled in profits in multiple industries
1.2. Why did some industries
prosper while others did not?
Industries that prospered included technology,
advertisement, entertainment, metals, and automobiles.
Mechanization made mass production considerably
easier in these industries
With many of them being new developments, and with
mass advertising, products appealed to consumers and
were in high demand
Mass production also resulted in low prices and high
availability, so products were bought in millions per year
Old industries like metal boomed because of the demand
due to automobile expansion
The assembly line pioneered the expansion of the
automobile industry and made cars affordable for most
households
Many entertainment activities became popular leisure
activities, and cinema, media, and sports turned millions
in profit
Industries that did not prosper included agriculture, coal,
textiles, and factory work.
Unemployment
After the war ended, millions of troops were left without
jobs
While some found work in growing industries and factory
work, many did not
Production rates decreased as exports did, so the need
for workers was lower
Technology
The development of new technology meant many workers
were left without a job
Mass production and the assembly line also resulted in
many workers being laid off as their need decreased
New materials
New synthetic materials, like nylon and rayon, became
popular since they were cheap to manufacture and
durable
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This reduced the demand for natural materials like cotton
and wool
Though synthetic manufacturing boomed, older industries
that grew these natural materials went into crisis as there
was decreasing demand
Electricity
The development of electricity reduced the demand for
previously used fuels like coal
While coal still powered many homes and factories,
electricity was a cheaper option and so as America turned
to electricity, the coal industry began to fail
1.3. Why did agriculture not share in
the prosperity?
Overproduction
During WW1, demand for crops was high and large
exports were sold to Europe
After the war, Europe was able to meet their own needs
and leftover crops were left as a surplus in America
Fruit growers shipped their products in large quantities
but demand for this decreased as economies affected by
the war recovered
Low demand and high production meant grain prices
collapsed
Technology
Farm labourers were laid off and replaced by machinery
The industry became mechanised
This new machinery made farming more efficient, but
with such low demand, resulted in overproduction
Largely mechanised farms turned all the profits while still
losing money because of overproduction
Small farmers suffered and most were barely able to
make money at all
Many farmers had to sell their farms, or were evicted
because of low income
Between 1920 and 1930, the number of farms declined
for the first time in history
Synthetic production
Rayon became a popularly produced material used in
clothing
Raw materials like cotton and wool were soon replaced by
synthetics
Cotton and wool farmers suffered and the material aspect
of the agriculture industry was taken over by mass
producing factories
In some cotton mills, workers were paid $10 a week
 1.4. Did all Americans benefit from Car factories and other booming industries hired low
numbers of black people
the boom?
Some were all-white
Living conditions in black communities were poor
Who benefited from the boom?
New Immigrants
Old Immigrants
They had a lot of old money and many were factory Many arrived just before or after the war
Unemployment rates were high because of saturation
owners
Few worked jobs where they were at higher risk of in most industries and nearly 4 million unemployed
troops
being laid off
Often took whatever work they could find, and were
usually less educated
Assembly Line Workers
Most ended up working in construction, where wages
As the assembly line gained traction, those working in
were still low
mass production gained higher wages and were in
Mass immigration meant labour was cheap and they
higher demand
were not paid well
This included those working in automobiles and other
Labour became increasingly mechanised, and it was
commercial appliances
difficult to find jobs
Existing Construction Workers
Old Industry Workers
With expansion across the West Coast and more
Almost every industry was undergoing mechanisation,
factories being built, those working in construction
and workers were being let go
were also in high demand
While some industries, like steel, benefited, most older
A lot of these workers were Asians that had
industries suffered
immigrated from East Asia
Overproduction caused prices to drop and wages to
fall
Booming Industry Workers
Markets for old industry products were shrinking
Some old industry workers benefited from the boom,
Raw materials were losing demand and being
like those in steel and glass, which were in high
replaced by newer synthetics
demand because of technological development
Coal was being replaced by electricity, oil, and gas
New industries like synthetic materials were cheap
Mines closed
and fast to produce, were mass advertised, and were
Safety standards dropped
durable, meaning they were also in high demand
600,000 workers went on strike in 1922, but to no avail
Workers in these new industries also benefited
Unions were broken, since non-union mines charged
less and profited more
Why didn’t everyone benefit from the boom?
1.5. Who were the people of
Farmers
Most farmers were replaced by new machinery
“The Melting Pot?”
Overproduction meant there was very low demand for
crops and a surplus of farmers meant many lost their
Who were the Americans?
work
Immigration had made America a very mixed society
There was competition from Canadian farmers
By 1920, over 103 different nationalities lived there
Farm labourers were laid off since farmers could not
America became known as “the melting pot” because
afford to pay their wages
everyone became assimilated and “stirred together” to
Large farms became mechanised and did not need
lose their old identity and become Americans
workers to harvest crops
Old Immigrants
The first European settlers mostly came from
Black People
northern and western Europe
Most lived in the South and worked as labourers or
The British
sharecroppers
The Germans
75% lost their farm jobs
The Scandinavians
Many migrated north for more opportunities, but
Their descendants usually had the best jobs, the most
faced much more discrimination
money, and the most political power
60% of black women worked as low-paid domestic
They were often known as WASPS: White Anglo-Saxon
workers
Protestants
Native Americans

WWW.ZNOTES.ORG
 The original inhabitants of the land
They were affected by waves of immigration and
forced off their land from 1850 to 1890
Many lived in reservations across America
Some stayed traditional and maintained their ways
of living, remaining mostly isolated from the rest of
society
Most of them assimilated amongst others
Southern and Eastern Europeans
Most immigrated to America in the late 19th century
The Polish
The Russians
The Italians
Many were escaping persecution and poverty in
Europe
Many were Jews or Catholics
They were often treated very badly
Asians
Lived throughout the USA but were heavily
concentrated on the West Coast
Most were Chinese, Japanese, or Korean
Most were low-income laborers, especially
construction workers
Helped build the West Coast cities
Constructed railroads
Hispanics
People from South America and Mexico also wanted a
better life in the USA
Shared the common language of Spanish
Many of them, especially Mexicans, worked as
cowboys on cattle ranches in the West
Why did people want to immigrate to the “Land of
Opportunity?”
Pull Factors
What did people find attractive in America?
Space
America had wide plains with lots of farm
settlements
Growing cities had room for expansion
Natural resources
Land was cheap
America had large stores of oil, timber, and minerals
Economic opportunity
American industry and business led the world
The USA had industrialized rapidly after 1850
The economy was growing fast
There were many opportunities to set up new
businesses
Wages
Wages for skilled trades and factory labor were higher
than in Europe
Farm workers were able to buy land at the time
Land of the Free
People believed they would be free to practice their
religion
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The 1791 America bill of rights guaranteed freedom of
religion, speech, and of the press
Push Factors
What made people want to leave their countries?
Overcrowding
Populations were increasing
There was a shortage of land, especially in Europe
Lack of opportunity
Europe was still a class-dominated society
The upper classes had the best land and housing and
ran the businesses
Lower classes could not improve their situation
Unemployment
Many workers were being laid off
Wages were meager due to a lack of demand
2.Intolerance
Introduction
The 1920s in USA was a period of contradictions and
contrasts.
Example of tolerance – jobs were given in Ford factories. Visa
applications were amendable.
2.1. Black Americans
a. Discrimination – black Americans moved north to work in
the lowest-paid sector. In factories where production
increased.
· Sharecropper – gives a part of his crops to the landowner in
return for land to farm
b. Segregation – black people were segregated into slum
areas such as Harlem in New York. This shows how the
people were differentiated due to their color and the height of
intolerance in the 1920s
JIM CROW Laws – enforce the segregation of black people.
Event 1 – most lived in poverty and had a permanent fear of
lynch mobs (hanging publicly)
Native Americans – Red Indians
c. Living in reservation - the republic govt made Native
Americans stay in reservations. The growing land was
poor and many Native Americans suffered from poverty,
poor education, and ill health. Not suitable for farming and
could not prosper
Communists (Red Scare) 1919-21
When the New Immigrants came from South and Eastern
Europe, there was fear of recent immigrants bringing
communist and anarchist ideas from Eastern Europe,
especially Russia.
When a series of strikes broke out in 1919, it confirmed
the fears.
A series of bomb blasts in 1919 suggested a conspiracy
against the state. One blast damaged the home of the
 Attorney General, Mitchell Palmer.
Strikers were faced with lock-outs. Suspected anarchists
and communists were arrested and many deported.’
Religious Intolerance (Catholics and Jews)
WASPS – White Anglo-Saxon, Protestant community. They
were fundamentalists. Doesn’t accept any religions
besides theirs and isn’t tolerated. They follow religion
literally. Their ideas clash with the Constitution.
Blacks, Jews, and Catholics were considered inferior to the
WASPs
Biology teacher – John Scopes – in Tennessee, the law
stated that the evolution of man is not be studied in school
but he went against this and he taught about Charles
Daven's evolution theory of man. His trial was known as
the Monkey Trial. Defended by Clarence Darrow. The
prosecution was led by Fundamentalist William Jennings
Bryan. The scopes trial was the first trial to ever be
broadcasted on the radio
The Anglo – Saxon race was considered superior
Eugenics – the theory of eugenics was the belief that the
human race could be improved by breeding.
Light skinned blond-haired and blue-eyed people were
superior
The Ku Klux Klan (KKK)
Their hatred went wider than just black people, this
included Catholics, Jews, foreigners, liberals, and
homosexuals.
Set up in 1864, felt foreigners are spoiling the culture,
after the 1920s
5 million people became members of the Klan including
many politicians and government officials
The most extreme prosecutions were hanged people,
mutilating people, and lynching.
In 1925 – the membership of the Klan declined due to one
of the Klan leaders being convicted of rape and murder of
a woman on a train
Immigration Policy
Emergency quota act (1921) – 357,000 immigrants
National origins act (1924) – 150,000 immigrants.
Immigrants from China and Japan were barred entirely.
Preferred people from Western Europe and not Southern
or Eastern
America is an immigrant society
\
Sacco and Vanzetti
Italian – Americans that had been arrested in 1927 for armed
robbery and suspicion of murder in Massachusetts. They
were self-centered anarchists.
This led to an international protest to prevent their execution.
Prohibition
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2.2. Introduction
A period of time in the USA HISTORY between 1920-1933
when alcohol was banned \n Introduction
16th January 1918, the eighteenth amendment (the law
that was changed due to the current situation) in USA'S
constitution made it illegal to manufacture, sell and
transport alcohol in the USA.
Over half of states in the USA had some type of ban on
alcohol with 13 being completely dry. \n Valstead Act - in
1919, this act outlined what prohibition meant and what
the punishments were for breaking the law.
Drink with over 0.5 percent alcohol were banned.
Aim - also known as "the noble experiment" was to stop
the trade in alcohol.
Why was prohibition introduced?
Social and Political reasons
Temperance groups
1. Anti-saloon League (ASL)
2. Women’s Christian Temperance Union (WCTU)
Religious groups •
Methodists
Baptists
They joined the crusade to campaign for
Prohibition
Why?
Liquor was responsible for crime and violence
With the breakup of families, men waste wages on drinks
and abuse wives and kids
Affect people's health
Seen against God's will
Fundamentalist preacher - Billy Sunday, persuaded
conservatives alcohol was evil
\
Economic reasons
Industrialists - Henry ford supported Prohibition as he felt
alcohol reduced the efficiency of workers
Difference between Brewer and distiller - brewers said
beer is healthy.
No unity between brewers and distillers hence no united
front by the liquor industry against Prohibition.
Patriotism - big liquor manufacturers example Budweiser
and were seen as unpatriotic to consume it (patriotic
reason).
Anti-immigrant feelings - Americans disapproved of
immigrants due to their drinking in their communities
such as Irish, German, and eastern European areas. Link
this to anti-immigrant hate.
Political considerations - politicians who drank in private
supported Prohibition in public to not lose votes in the
election.
 Financial considerations of the government - money from
the new tax on people’s incomes would make up for the
loss of money from the tax on alcohol.
Attitudes towards Prohibition \n "dries" - these are the
people who supported Prohibition. Alcohol did severe
damage to family life. \n "wets" - these are the people
who disliked Prohibition. Drinking was a popular pastime
and a major part of communities' culture and thought the
govt shouldn’t interfere.
The manufacturing of alcohol was an important source of
employment and also helped farmers because it used up
their surplus grains.
Impact of Prohibition
Illegal activities came into being. Illegally manufactured
moonshines in places known as speakeasies (a bar that
sold alcoholic beverages illegally during prohibition).
Soon there were more speakeasies than normal bars. In
1929, New York has 32,000.
Illegal bootleggers (deal in illicit goods), moonshiners
(brews alcohol illegally), and rum runners (smuggle or
transport alcohol illegally).
Alcohol-related deaths increased from 98 in 1920 to 760
in 1926. Homemade moonshine caused death - too
strong or contaminated. Industrial alcohol had poison
added to it to discourage people to drink but people stole
and resold for drinking.
People switched from beer to more potent spirits.
Increase in corruption - bribing of police, judges and
politicians were common.
Prohibition reduced respect for the law.
Between 1926 and 1927, 130 gangland murders in
Chicago which were linked to al Capone.
Organized crime for example the mafia expanded.
Split the democratic party. The "dries" from the rural
south and west and the "wets" from the urban north and
east.
Boosted spending on other items such as guns and cars.
Why did Prohibition fail?
It was impossible to enforce the Valstead act.
There was a lack of public support - many people were
"wets" and it was impossible to persuade them to change
their habits. Non-WASPS resented the government
interfering with their freedoms.
Alcohol was readily available. Supplied by bootleggers,
moonshiners, and rum runners. There were around
30,000 speakeasies in New York by 1929. 280,000 illegal
stills were seized.
The enforcement of Prohibition by govt officials were very
ineffective. Patrolling thousands of miles of us borders
with Canada and Mexico, both major routes for smuggling
liquor was impossible. Blocking 29,000 km of the
coastline was also very difficult. Rum continued to come
from the
WWW.ZNOTES.ORG
west indies, rum runner's boats were faster than those
used by the government.
2,300 special Prohibition agents appointed by the
Prohibition bureau, but they were too few in numbers and
were low on salaries ($2,500 per year) which meant they
were prone to corruption.
One in twelve agents was sacked for taking bribes.
Judges and politicians were also often taking bribes.
Only Elliot Ness and his Untouchables were a group of
Us federal agents assigned to bring bootlegging to an
end and were above corruption.
Prohibition led to the growth of Organized crime gangs.
Crime, violence, and corruption
1. Organized crime
Mafia families took advantage of Prohibition to make
fortunes
They fought each other for control of cities
In New York, the Castella Marese war gave organized
crime figure, Salvatore Moranzano dominance. He
became the boss of the bosses and also had a mafia
code of conduct.
Gangsters in every city
In Chicago, Dion o' bannion controlled the bootleg
business in the south of the city, and john Tario in
the north
2. Al Capone
Most notorious gangsters were al "Scarface" Capone
Ran massive bootlegging, prostitution, and gambling
rackets in Chicago in the late 1920s
Dominated a range of ethnic gangs, Italians, Irish,
Jews, and black Americans
Controlled city officials like judges through bribery or
intimidation. During elections, he stationed gunmen
on the roofs
Most notorious events. The "st Valentine's day
massacre" in 1920 when he ordered the murder of
seven of his main rivals. "the last supper" in 1929
when he personally battered three Sicilians with a
baseball bat
In 1931 al Capone was arrested for tax invasion.
\
3. Corruption in government
Warren Harding gained a reputation for giving
important and influential posts to his political friends
and members of his cabinet.
Members of this "Ohio gang" were in positions of
power.
At the beginning of 1924, soon after Harding's death,
congress began investigating reports of corruption
and bribery during Harding's administration.
Several members of the Ohio gang were charged and
imprisoned for corruption.
\
The end of Prohibition
The twenty-first amendment to the constitution in
1933 ended Prohibition. In the future, laws on
alcohol
 were to be stated not federal.
Reasons for ending Prohibition (financial and
practical)
The national commission on law observance and
enforcement also known as the Wickersham
commission, set by president hoover, said Prohibition
was unenforceable.
Unregulated production of alcohol was leading to too
many deaths
Pressure groups, such as the women's organization
for national Prohibition reform campaigned vigorously
for it to end
Prohibition had an increase in crime rate, not a
decrease
The cost of enforcement was very high (13.4 million)
Government income from taxes on alcohol had
decreased by 11 billion
Rising unemployment in the late 1920s meant jobs
were needed and the alcohol industry could provide
them
Influential industrialists such as Jd Rockefeller junior
wanted Prohibition to end.
2.3. Before the World War
Tradition women – WASPS believed more the kids more
religious u are.
Most women couldn’t vote and any paid work was limited
to occupations such as domestic service, secretarial work,
and teaching.
Restrictive dresses - corsets and full-length skirts along
with dresses with tight waists.
Controlled public behavior - modest, polite, and discrete.
No drinking or smoking and if unmarried, no male
company without a chaperone.
During the First World War
Women performed men’s work in the war industries as
men were required in the armed services
After the First World War
Women were becoming more independent and got the
right to vote. Made up 50% of the electorate.
Many women entered the workplace – nurses, and
librarians. The number of people in employment
increased by 25% to 10 million by 1929.
Modern women did not believe their job was to only raise
kids. The birth rate declines.
Flapper – emancipated young women (wealthy, middle,
and upper-class women) who were free and embraced
the new fashions and urban attitudes.
Corsets were abandoned, and shorter, lighter skirts and
dresses that were often sleeveless were introduced.
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The new fashions and materials permitted greater
movement and self-expression.
Lifestyle
Women from richer families had better living standards
and more free time sure to labor-saving devices being
introduced
Women began smoking, drinking, and kissing in public.
Chaperones were no longer required.
Women drove cars. Henry Ford introduced colored cars in
1925 for them.
Short hair and makeup became symbols of new freedom.
Women were acting with more independence.
The role of the average American woman changed very little
during the 1920s.
the difference was only in upper-middle-class women who
made up only a minority of the women population in America.
Roaring Twenties
2.4. Introduction
Many American wealthy families spent their money on
entertainment •
Women from richer families had better living standards
and more free time sure to labor-saving devices being
introduced
Women were becoming more independent and got the
right to vote
Flapper – emancipated young women who were free and
embraced the new fashions and urban attitudes.
Many women entered the workplace – nurses, and
librarians.
Modern women did not believe their job was to only raise
kids. The birth rate declines. Tradition women – WASPS
believed more the kids more religious u are.
The roaring twenties introduce new cultural aspects.
The cars were an advantage to allow people to travel to
jazz shows and to the cinema.
Cinema
Advantages
Provided opportunities to escape from daily routine
Dressing styles from movies influenced people to dress
up. Disadvantages
Corrupted films 1920’s – Hollywood and Walt Disney 1927
– the Talkies came out
Music/jazz
Tin pan alley – a section of New York, all musically inclined
people came over there to come together and create music.
 Jazz was the black American music – also known as the
Harlem Renaissance
Radio
The vaudeville and variety theatres were closing down as
their attractions declined. Radio was a popular
replacement and became a national network.
3. What was the New Deal
as introduced in 1933?*
The First Hundred Days – between March and June 1933
3 main aims of the new deal
1. Relief or assistance for the unemployed or poor
2. Rebuilding the American economy
3. Reforms to create a fair and just society
Roosevelt gave a deal for 100 days and it was known as
the 100-day deal.
The new deal marked a Change away from the laissez-
faire attitude the govt had previously taken w the
economy
It established the idea that the govt was responsible
The new deal permanently increased the size and power
of the federal government
New deal legislation Relief, recovery, reform in this order
ONLY
In 1932, in an inaugural address, he reassured the
American public with his famous quote “We have nothing
to fear but fear itself”.
In the first hundred days of office FDR was able to get
Congress to pass many laws he proposed
The program would become known as alphabet agencies
Relief
Recover
y slaughtered
FDR felt the way to recovery was to stimulate demand
for goods
FDR differed from Hoover's policy of giving money to the
public.
FDR wanted to put money into consumers’ hands hoping
to increase their spending thereby increasing demand.
improve working conditions and pay.
Reform
Reforms were aimed at fixing the defects in the American
economy so the depression wouldn't happen again
These Reforms were based on the belief that the
government should protect individuals against risks that
could not handle on their own
This would increase the power and presence of the
national govt in the lives of all Americans into the future.
Banks
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relief was given to all banks
Shut down all banks and gave a bank holiday. 4-day
national bank holiday
Bank closings soon decreased as he gave the people time
to process and have faith. Public confidence was restored.
FDR explained what he was doing through national radio
broadcasts.
1. Federal Deposit Insurance Corporation - insured
banks so people would not lose any savings in
the event of a. bank failure restored faith in
banks.
2. Emergency banking act – 5% of banks shut down
completely, the rest helped with grants and advice.
13 million people were unemployed in 1933, 25% of the
workforce
Civilian conservative cooperation (CCC) gave young men
voluntary employment.
Jobs included planting trees, cleaning up parks, etc. living in
government camps.
Low-wage paying jobs but provided 2 million men with jobs.
a. Public works administration (PWA) - created jobs initiating
major public construction projects like building schools,
roads, and bridges.
Spent $7 billion creating jobs
Civil Works Administration (CWA) provided temporary works
during the winters of 1933-34. 4 million jobs were created.
The scheme ended in April 1934.
National labor relation act- gave employees permission
from trade unions
Norris-la Guardia Act- prohibited courts or the govt from
stopping peaceful union strikes
Agricultural adjustment act - paid farmers to plant less to
increase crop prices
Million acres of sown land plowed and 6 million piglets
Prices rose and farmers’ incomes doubled
However many farm laborers ended up unemployed.
I
- set business codes to stabilize production and price, and
Voluntary codes for each industry for regulation of prices,
output, hours, and wages.
The public was encouraged to buy from businesses that
implemented these codes.
This led to improvement in working conditions and
reduced child labor.
However, favored large firms and forced smaller firms
out of business.
Supreme Court ruled the scheme unconstitutional and
wasn’t revived again.
 The Poor The New Deal was seen to undermine core American
values
Federal emergency relief Administration (FERA) - gave
TVA and NRA were compared with the Stalinist economic
money for emergency relief to those in need. Budget -
planning of the USSR.
$500 million.
Claimed that Roosevelt became too powerful and was
Funded soup kitchens, and set up work schemes and
acting like a dictator
nursery schools.
.

Tennessee valley authority – aimed to restore the prosperity
of the Tennesee Valley area as its local agriculture was badly
affected by floods and 4.5 million were dependent on govt
relief schemes.
Forests were planted, dams were built and flood prevention
schemes were introduced.
New industries attracted and hence became a showcase for
the New Deal.
Created by business leaders to unite opposition to the
New Deal
FDR was accused of becoming socialist and destroying the
free enterprise spirit of America.
Businessmen disliked his support for trade unions and the
various codes of NIRA.
c.

State governors argued that the new deal rules conflicted

Did not seek for communist and socialist solutions to
combat the depression.
No nationalization and major redistribution of wealth.
Some thought that FDR did not go far enough
However, conservative Americans thought FDR was too
radical.
Radical opposition
a.
Father Coughlin from Detroit broadcasted his ideas on the
radio every Sunday evening to an audience of 40 million
Americans.
Was originally a supporter of the New Deal but then felt it
was doing enough for the poor.
Dr. Francis Townsend – author of Townsend Plan
People over 60 receive a pension of $200 a month
given they spent the money within the month. Pension
funded by taxation.
Created to help older people, create jobs for the young,
and inject money into the economy.
with the state govt rights to manage their own affairs
Objected to the TVA as it compelled state govts to
cooperate with federal govt.
d. Supreme Court
The main task – see if measures passed by President and
Congress were consistent with the American constitution.
Most of the nine judges were old, conservative, and
Republican
Natural political dislike for the New Deal and declared
NRA and AAA constitutional.
He tried appointing 6 judges who would agree with his
policies in 1936 but was accused of trying to pack the
court and overthrow the Constitution.
Supreme Court began to drop its opposition and
supported two key measures in 1937, one of them being
the pensions section of the Social Security Act.
Did the fact that the New Deal did not solve unemployment
mean that it was a failure?
The New Deal as a failure

Senator Huey Long planned the redistribution of wealth to

stimulate the economy
His scheme included confiscation of large fortunes, lump
sums for families, pensions, minimum wages, and free
education.
7.5 million supporters in 1935.
Assassinated in September 1935 by the son-in-law of his
political opponents.

Believed in minimal govt intervention, low taxes, love govt

expenditure, self-help, and individual responsibility.

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 · Businessmen and industrialists weren’t
happy with the encouragement under the
Wagner Act.· Violence was opted by some
businesses to break up strikes.
· Tenant farmers, laborers, and
sharecroppers forced off the land by govt
plans to reduce agricultural production.
· Didn’t end racial discrimination· Support
of the democrats in the south was needed,
hence civil rights laws couldn’t be passed
as
they would oppose it.
· Recovery was held back due to an increase
Industry in rules and regulations, taxation, and the
formation of trade unions

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 Schemes to provide employment for artists, actors, and
writers.
National Youth Administration – part-time work and
· Dec 1941 – America began defense
spending and supplying armaments to vocational training for young people.
Britain and France· Arguably said that this
Focused on the plight of farm laborers, sharecroppers,
was the reason for the economic revival of
and tenant farmers who were made unemployed.
1940 and 1941 rather than the New Deal.
Aimed to move 500,000 families to areas with better land.
The New Deal as a success
Why did unemployment persist despite the New Deal?
t · When Roosevelt became president, unemployment was at
· Memberships increased to 7 million 12.8 million, 25% of the workforce.
following the Wagner Act· Disputes settled By 1941 unemployment was down by 5.6 million.
in workers’ favor.· Working conditions and In the 1930’s it was never below 5 million despite Roosevelt’s
pay improved efforts.
· Large-scale farmers benefited. Acreage Reasons
and livestock reduction, price increases. a. The home market
· Welfare payments and other emergency
Low incomes during the 1930s hence less money spent on
benefits helped millions of Americans·
American goods.
America was seen as more
This happened in rural areas as they depended on the
compassionate.
recovery of the farming industry. Wheat and cattle prices
· Many were saved by Roosevelt’s
reached 1929 levels after the US entered WW2.
Emergency Banking Act.· Future
Industry
industrial development and prosperity b. The foreign market
from the
construction projects. Overseas customers also suffered from the depression
· FDR’s policies gave people hope, hence expanding the exporting industries was limited.
confidence, and a sense of purpose.· Firm tariffs reduced the scope for international growth.
Morale
New Deal ensured the survival of America
without resorting to extreme c. Improved production methods
How far did the character of the New Deal change measures.
after
Agriculture – more machinery (assembly line productions
1933?
and automatic tools), less labor hence reduced working
More work had to be done
opportunities.
Second New Deal introduced between 1935 and 1937
Emphasis on victims of depression and creating a fairer d. The business cycle
American society
The Wagner Act, 1935 The world economy improved between 1933 and 1937 but
back into recession in 1938.
Replaced the NRA, introduced by Senator Wagner
Supported rights of employees to form trade unions and e. Self-inflicted unemployment
outlawed unfair practices used by employers to prevent
Business efficiency is most important for surviving
union employment like dismissal of trade union member
through a recession.
workers.
If there is overproduction, production capacity has to be
National Labor Board – referee between trade unions and
reduced hence the loss of jobs.
employers.
This happened in the farming industry
5 f. The limitations of the New Deal

Provided people with unemployment insurance and old

Roosevelt couldn’t take complete control of the economy
age pensions and help for the sick and disabled.
as Congress wouldn’t allow this so he took parts of the
Funded by taxes levied on employers and workers.
problem and gave solutions for individual parts.
Hence the economy recovered at a very slow pace.

Addressed the problem of unemployment

Provided a range of projects and work programs – 4. What are shares?
building schools, hospitals, and highways.

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 A share is a percentage of ownership in a company or a
financial asset. Investors who hold shares in any company are
known as shareholders.
During the 1920s, the American stock market was steadily
rising.
Speculators bought shares and sell them within a few
weeks to pocket an easy gain.
In the mid-1920s – speculators bought shares “on the
margin” – borrowing money from banks to fund the share
purchase.
The loan was repaid when shares were later sold. Banks
lend up to 90% of the share price.
In October 1929, panic selling of shares in the market led to a
“crash” which marked the beginning of the Great Depression.
Timeline of the crash.
18th October - prices began falling.
19th October - 3.5 million shares sold. Prices fall.
21st Oct - over 6 million shares change hands.
24th Oct-'Black Thursday - 13 million shares sold. No
buyers
26th October - president hoover the fundamental
business of the country is on a spend and secure basis
29th Oct - 16 million shares sold. No buyers.
Prices on the stock market collapsed
4.1. Causes of the Wall Street Crash
a. The actions of speculators
People started selling stocks altogether and the market
collapsed as anticipation of stock market prices going down
scared people.
b. Exports
The US has limited opportunities for exporting its product.
European customers were impoverished and had not yet
recovered from the financial strains of the First World
War.
American tariffs – tariffs set by customers that made it
difficult for American exporters to operate in foreign
markets.
Between 50 and 60% - of Americans were too poor to take
part in the consumer boom of the 1920s
Low wages and unemployment in traditional industries
and among blacks and immigrants.
5% of the population was receiving 33% of the income in
1929.
Too much money in too few hands.
Mass production – mass consumption – higher wages.
d. Overproduction
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By 1929 – the production of more consumer goods than there
were consumers.
The market saturated as Americans with the money bought
everything they need.
Signs of boom ending before October 1929
By 1927 – fewer new houses were built, sales of cars
declining, and wage increases leveling off.
Stock levels in warehouses increasing suggesting the
economy slow down.
Made investors nervous and anxious to sell shares at the
first sign of serious trouble.
First bank and business failures – general reduction in
trade and demand for American goods.
Businesses reduce operations by sacking workers and
reducing the wages of the remaining.
Vicious cycle – these actions took more money out of the
economy and reduced demand for goods.
Business confidence collapsed – expansion projects were
put on hold.
Consumers – were unwilling to make expensive
purchases, and jobs were insecure.
\
America could no longer afford to buy any foreign imports
meaning other countries lacked dollars to buy American
exports.
Rising unemployment in Europe and Japan increased
unemployment in America.
November 1932 – Democratic Party candidate, Franklin D
Roosevelt defeated Hoover’s attempts to win a second term
by a landslide victory.
Roosevelt polled 7 million votes than his rival who won 6 out
of 48 states.
He was elected just as the 1920s boom was beginning to
end so his presidency was associated with banks and
business closures, a failing economy, and rising
unemployment.
His early reaction to the depression was misplaced. He
thought it was a normal business downturn.
The actions he took when he realized that the economy
was in serious trouble were considered too late and too
little.
Against the federal govt giving welfare support to the
unemployed as it undermines American values of self-
help and rugged individualism.
It made him seem unsympathetic and indifferent to
humans.
In the 1932 campaign, he couldn’t project himself as a
man of vision ready to experiment with new ideas. Came
across as grim-faced and conservative.
 1930 – taxes cut by $30 million for more purchasing
By 1933 – one in 4 of the workforce was out of a job
power in the economy
No welfare benefits to assist households that were out of
Hawley-Smoot Act (1930) – tariffs introduced to protect
income but rents and mortgages still had to be paid.
American goods.
Some survived with help of families, friends, and
Money to finance building programs to create more jobs.
neighbors.
Hoover Dam on Colorado River.
Others were evicted from their homes and reduced to
Employers make voluntary agreements with employees to
begging on the streets.
maintain wages.
Reconstruction Finance Corporation (1932) – provide
loans to businesses facing hard times, up to $1500 million Shanty towns made up of makeshift huts and tents on the
edges of towns and cities became known as “Hoovervilles”.
Federal Farm Board – buys surplus produce to stabilize These communities were dependent on soup kitchens and
prices. public relief schemes provided by local govt.
By 1932, more than 100 of these authorities had no money
left.

He was a Democrat hence he had no responsibility for the

policies that led up to the Great Depression.
4.4. “Bonus Army” protest
1928 – he became Governor of New York State, and
25000 army veterans were promised a war service bonus
organized schemes to help the elderly and unemployed. It
to be given in 1945 but following the economic issue,
gave him a reputation for understanding the plight of the
they wanted it bought forward to 1932.
poor.
They began a peaceful protest opposite the White House
He had an upbeat personality and appeared warm,
after Congress refused to pass the Bonus Bill.
charming, and optimistic on the campaign trail.
Hoover took this as a threat and asked the army to clear
He was admired for the way he fought against the polio
the site.
he contracted in 1921.
The camp was destroyed with tanks, machine guns,
The electorate was infected by his confidence and
and tear gas.
determination to fight against the odds.
Two veterans were killed and thousands were injured.
The crash led directly to bank and business failures and a
rise in unemployment.

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CAIE IGCSE
History

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