Term
| Isolationism? The effects? |
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Definition
| At the beginning of the 20th century many Americans felt that they did not need the rest of the world, and after the First World War, the USA returned to its policy of isolationism. This meant that the USA would avoid being involved in any dispute that could lead to war, even though it still encouraged trade with other countries. |
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Term
| Why Isolationism? How was it possible? |
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Definition
Why?
- Economic problems – the Depression
- Did not trust Europe
- Geography – the Atlantic Ocean and the Pacific Ocean surrounding the USA
- Bad memories after the First World War
How was it possible?
How was isolationism possible?
- The USA did not join the League of Nations.
- The USA did not join the Second World War in 1939.
- A series of Neutrality Acts were passed in the 1930s.
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Term
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Definition
Introduced in 1922, but high tariffs on imported goods to encourage Americans to buy American goods.
This meant American goods were cheaper and the act gave the President the power to change the rates if necessary.
European countries soon retaliated by putting tariffs on American made goods. |
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Term
| Why was there a boom? Explain each factor |
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Definition
WW1
Mass production
New technologies
Government policies
Confidence
Buying on credit |
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Term
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Definition
| American farmers faced growing problems during the 1920s. Thanks to new technologies, machines and techniques, farm production increased dramatically. This resulted in lower prices for their goods. At the same time, after the war, agricultural output in Europe recovered and the demand for American exports fell steeply. As a result, American farmers' incomes were drastically reduced and they fell into debt. |
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Term
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Definition
The massive collapse of share prices on Wall Street in October 1929 has often been seen as one of the main causes of the Depression. It certainly had an impact on the crisis which followed. The terrifying fall in share prices dealt a massive blow to American business confidence. Thousands of shareholders were ruined, businesses collapsed and bankruptcies reached record levels. It would be years before investors recovered confidence in American economic growth.
However, it can also be argued that the Crash on Wall Street was more of a symptom, than an actual cause of the Depression. Other factors also contributed to the Depression. |
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Term
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Definition
| The boom of the 1920s was based on credit. People borrowed huge sums of money, expecting to repay it easily, because they would continue to earn good wages. When the Stock Exchange collapse came, they were unable to pay their debts and the consumer boom came to a dramatic end. The fall in demand for goods led to huge lay-offs from factories. The number of people unemployed and without incomes increased rapidly. |
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Term
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Definition
| During the 1920s huge numbers of banks had opened in response to the demand for hire purchase credit. Because of the laissez faire policies of the government, the reliability of these banks was never checked. The banks happily loaned out huge amounts of their investors' cash, expecting to make big profits. When the crash occurred, panic-stricken investors demanded their money back. Many banks lacked resources to fulfil these obligations and as a result large numbers of banks collapsed, adding to the economic crisis. |
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Term
| Saturation of the market & protection |
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Definition
Towards the end of the 1920s the boom times were coming to an end anyway. People had bought what they needed. The American market had become saturated with consumer goods. As confidence slipped and consumers began to try and save money, sales figures went down. The economic crisis worsened.
Foreign countries had set up tariff barriers against imports from the USA, in response to similar policies from the US government. As a result, it was virtually impossible for the USA to increase exports overseas, leading to further falls in production and increased unemployment. |
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