The economic and social impact of the Depression

Flashcards cover triggers, consequences, and responses to the Great Depression in the U.S. and France, including key events, policies, and institutions from the lecture notes.

What triggered the 1929 Wall Street Crash and what were its immediate consequences?

Speculative buying on credit and a rapid sell-off led to Black Thursday (Oct 24, 1929). About 12 million shares were offered for sale with prices dropping sharply, banks failed, unemployment surged—from about 1.5 million unemployed in 1929 to around 15 million by 1932—and the Depression spread across the economy.

What were the main features of the Roaring Twenties in the U.S.?

A period of spectacular growth, a broadening consumer society, mass production, and social changes, with rising wages and urbanization in cities like Chicago and New York.

How did the Model T Ford symbolize 1920s prosperity?

Ford made cars affordable (about 850 USD) and used the assembly line to lower costs and time, expanding middle-class access to vehicles and boosting mass production.

Which group was notably excluded from the 1920s growth in the U.S.?

Farmers in rural Southern states who faced falling agricultural prices due to overproduction and limited benefits from widespread consumer growth.

What major environmental disaster compounded the Depression in the U.S.?

The Dust Bowl, caused by environmental damage from agricultural practices, contributing to rural displacement and hardship.

What is Black Thursday and why is it significant?

October 24, 1929—the day of a dramatic stock market crash with heavy selling and falling prices, marking the beginning of the Great Depression.

What role did credit play in the 1920s stock market?

Many people bought shares on credit rather than savings; loans rose from about 2.5 billion to 6 billion (1926–1929), making the market vulnerable to a debt-driven collapse.

What were the consequences of the 1929–1932 banking crisis?

Bank failures (773 in the U.S. between 1930–1932), massive reductions in investment and spending, and a dramatic drop in national income and production.

What happened to U.S. GDP and investment during the early Depression?

GNP fell from about 87 to 39 billion USD; investment dropped from about 15% of GNP to 1.5%.

What tariff policy worsened the Depression by reducing exports?

The Hawley-Smoot Tariff Act of 1930, which imposed heavy taxes on imports (about 59% on thousands of products) and provoked retaliatory tariffs abroad.

How did the Depression spread globally in the early 1930s?

Through reduced trade, financial linkages, and currency instability; the crisis affected Europe, the USSR remained relatively insulated, while countries like the U.K. and France were impacted, though to varying degrees.

What were the three pillars of the global economy destroyed by the Depression?

Production, international trade, and the international monetary system (notably the Gold Exchange standard, which countries left to devalue currencies when needed).

Who was Franklin Delano Roosevelt and what was his slogan for the New Deal?

Roosevelt, elected in 1932, implemented the New Deal with the motto 'Relief, Recovery, Reform' and used pragmatic measures to combat the Depression.

What characterized Roosevelt’s first actions in the New Deal?

A rapid legislative push in the first 100 days to restore confidence, plus programs like Public Works and banking reforms to address the crisis.

What does the term 'Brain Trust' refer to in the New Deal era?

Roosevelt’s team of advisers, mainly from Harvard and Columbia, who helped shape New Deal policies.

What was the purpose and effect of the Securities Act and banking reforms in the early New Deal?

Measures to prevent another crash, restore confidence, regulate financial markets, and stabilize banks, contributing to early economic stabilization.

What were the Alphabet Agencies, and give an example?

A group of New Deal agencies created to implement reforms; examples include the TVA (Tennessee Valley Authority), AAA (Agricultural Adjustment Administration), EBA (Emergency Banking Act), and the SEC (Securities and Exchange Commission).

What was the TVA and where did it operate?

The Tennessee Valley Authority, created in 1933 to provide electricity, flood control, and economic development in the Tennessee Valley (mainly rural Southern states).

What was TVA’s impact by 1934 and during WWII?

By 1934, TVA employed about 9,000 people; by WWII, electricity demand spurred 28,000 jobs in electricity-related work, helping lift remote areas out of poverty.

Why is the TVA considered a landmark New Deal program?

It modernized rural areas, brought affordable electricity, spurred economic development, and exemplified public-private cooperation in the New Deal era.

What were the key components of the 1935 Social Security Act?

A pioneering social insurance program creating unemployment and disability protections, marking a major expansion of social rights in the U.S.

What characterized the 1935–1938 period of the New Deal?

Escalating social pressures, strikes, and political shifts; the Supreme Court struck down some measures (like NIRA/AAA) but new programs and targeted reforms continued.

What was the Matignon Accords and when were they signed?

A 1936 agreement in France granting workers’ rights: 40-hour workweek, wage increases (7–15%), two weeks of paid holidays, and recognition of union rights within companies.

What was the Front Populaire and its impact in France?

A 1936–1938 left-wing coalition led by Léon Blum that implemented social reforms and widespread strikes, but faced inflation and external pressures (e.g., Spanish Civil War).

What event of 1934 demonstrated the threat of the far-right in France?

The February 6, 1934 riots and protests by far-right leagues, leading to deaths and the fall of the Daladier government.

What were the 1936 Matignon accords a response to, and what did they signify for workers?

A response within the Popular Front era that granted workers’ rights and social protections, signaling a shift toward a more interventionist state in France.

How did the Depression affect unemployment and wages in France (1930–1936)?

Unemployment rose (about 500,000 out of work by 1936), with a roughly 30% drop in average income between 1930 and 1935 and widespread social discontent.

What ended the early stability of the 1930s in the U.S. before WWII, and what Keynesian thinking did Roosevelt embrace?

A downturn in 1937–1938 after cutting New Deal programs; Roosevelt adopted more Keynesian policies, increasing deficits and public works to sustain demand.

What did the 1930s experience in France reveal about extremism and policy responses?

Economic crisis fueled unrest and the rise of both far-left and far-right groups; the Popular Front represented a different approach, combining social reform with capitalist structures.