Political and economic causes of the Great Depression in the Americas

“The prosperity of the 1920s in the Americas was more apparent than real.” Using examples from two countries of the region, evaluate the validity of this statement.

With reference to one country of the region, analyse the causes of the Great Depression and assess the political impact of the Great Depression on that country.

To what extent was the Wall Street Crash a cause of the Great Depression of 1929? Support your argument with specific examples from one country of the region.

I. Causes of the Great DepressionA. ProductivityB. Distribution of WealthC. Stock Market

II. EffectsA. Effects of the Stock Market crashB. International EffectsC. Hoover’s Response

In the 1920s wages lagged behind rising productivity.

1920-1929, hourly wages rose only 2% while productivity of workers in factories jumped 55%.

Adjusted for inflation, corporate profits and dividends increased 62% and 65% respectively.

1923-1929 average wages and salaries increased 11%.

Income of farmers was declining because agricultural prices were falling while taxes and living costs were rising.

1910 the income per farm worker was about 40% of the non-farm worker; 1930 is was about 30%.

Farm population in 1930 = 20% of total population.

In 1929, 42% (11.5 million) of American families made less than $1,500 a year, the government established poverty level.

21% made less than $1,000 a year. 0.1% (36,000) of the families at the

top received an income = to the 42% of the families on the bottom.

Created overproduction and surpluses

Less than 2% of the US population owned stock in 1928.

Thursday, October 24, 1929 a record 13 million shares were sold.

By the end of October the market had lost more than $30 billion.

United States Steel $262 to $22 General Motors $73 to $8

5,000 banks failed in the US July 1932 the US steel industry was

operating at 12% of capacity. 25% of US labor force was

unemployed and those that kept their jobs saw their salaries and waged reduced.

By 1932 world industrial production fell over 36%.

World trade shrunk from $68.6 billion in 1929 to $24.2 billion in 1933.

In 1932 about 21% of the world’s labor force, or about 30 million people, where without jobs.

Hoover wanted a balanced budget so he refused to approve any increased government spending.

In 1931, 2,294 banks with deposits of almost $1.7 billion went bankrupt.

Average manufacturing wages fell from $25 to less than $17 a week, and average salaries declined by 40%

Farm prices collapsed; wheat prices fell from $1.03 a bushel in 1929 to $0.38 a bushel in 1932.

By 1933 25% of all farm families in US were forced off their farms.

More than 100,000 small businesses went bankrupt

An estimated 1.5 million men looked for work by riding the rails.

P. 731-746• “Black Tuesday”• Diversification• Purchasing power• Credit structure• International trade• International debt

structure• Tariffs• “Dust Bowl”• Effects on minorities• US culture in the 30s

P. 747-760• US culture • Herbert Hoover• Agricultural

Marketing Act• Hawley-Smoot Tariff• International

financing panic of the spring of 1931

• Reconstruction Finance Corporation

• “Bonus Army”