The making of a Superpower USA - Economy (1920 - 1933)

By how much did the 1922 Mellon plan reduce the taxes of large companies?

$3.5 billion - undos the work of progressives (73% - 25% high earners)

What was the highest tariff level introduced?

The 1922 Fordney-Mccumber tariff

What were the impacts of the 1922 Fordney-Mccumber tariff?

Allies struggled to pay off war debts but American industries benefitted

What was the impact of the 1922 Mellon plan?

Sparked recovery + ended 1920 - 1921 depression

What % of the world’s oil did the US produce and consume?

70%

How were US farms efficient?

They produced 1 / 3 of the world’s wheat + 2 / 3 corn (not smaller farms)

Who did not benefit from the economic boom?

Lower classes - millions did not benefit as wealth was unevenly distributed

How did technological advances improve the economy?

The development of electricity led to widespread use in cities + labour saving devices

How was the wealth unevenly distributed in the US?

By 1929 200 corporations possessed 20% of the nation's wealth

How many homes had electricity by 1927?

2 / 3 - in 1912 it was 16%

How much was being spent annually on advertising?

$3 billion by 1929

What % of goods were bought with hire purchase?

50%

How many cars were on the road by the end of the 1920s?

4.5 million

How did Ford impact the economy?

Doubled wages to $5 per day, + encouraged hire purchase

When did the value of shares rise dramatically?

Between 1928 and 1929

What was the impact of share prices rising?

Ordinary people bought them - $451 million shares sold in 1926 + $1.1 billion 1929 (bull market)

How much was spent on radios?

33% of all money spent on furniture by 1927 - sales grew from $60 million in 1923 to $842 in 1929

Why did the consumer boom end in 1928?

Spending slowed - by 1929 those who wanted a car had one + tariffs made it difficult to sell to European countries who were in debt

What was the impact of the Florida land boom Ponzi scheme?

Thousands scammed until scheme ended in 1926

Why did farmers face problems after WW1?

Prices rose by up to 25% during war but fell to $1 per bushel of wheat + they over produced

What % of farmers lived in poverty?

50% by 1928

What did Historian John A. Garraty argue about the boom?

“The boom rested on unstable foundations.”

How did the banking system lead to the crash?

Out of date by 1920s, 30,000 (small banks) not a part of the system + in order to keep the market “buoyant” low interest rates were used

How did overspeculation lead to the crash?

Stock prices did not rise as much as previously in 1928 (loss of confidence), little regulation allowed speculation to continue + by 1929 stocks were valued at $87 billion

How many became unemployed due to the crash and depression?

16 million by1933

How did economic growth slow?

It was -6.7% in 1929 and -14.7% in 1932 + iron / steel production reduced by 50%

Was the 1930 agricultural marketing act a success?

No, it failed as Hoover was paying farmers artificially high prices + tariffs reduced foreign trade

What is an example of what the AAA did?

Paid farmers to reduce the 400,000 acres of land they had by 1932 / 6 million piglets slaughtered (public outcry)

Was the AAA successful?

Yes, farm income rose from $4.5 billion in 1932 to $6.9 billion in 1935

Was the TVA successful?

Yes, increased average income by 200% between 1929 + 1949

Was the 1933 EBRA successful?

Yes, $1 billion was returned to bank deposits + the crisis ended

How much funding did the PWA receive and why?

$3.3 billion, to “pump + prime”

What is the definition of “pump + prime” ?

Devolving a business / programme by providing it with money

Was the PWA successful?

Yes, created 13,000 schools + 50,000 miles of road + pumped billions into the economy

Was the CWA successful?

While 4 million were put on public works projects, projects closed when winter finished + unemployment continued