3. USA, essays to learn BUT only 1 to write in the exam

Issue 3 An Evaluation Of The Reasons For The Economic Crisis : Factor 1: Republican Governments Policies Factor 2: Overproduction & Under-consumption Factor 3: Weaknesses Of The Banking System Factor 4: International Economic Problems Factor 5: Wall Street Crash AIMS OF ESSAY: To Be Able To Discuss the factors which contributed to the economic (financial) crisis in American between 1929 & 1933

Aims Paragraph 3: Have The Background Knowledge & Argument To Write Your Third Paragraph For Essay 3 To Understand Why The USA & Europe Introduced Import Tariffs On Trade To Explain The Impact These Tariffs Had Both At Home & In Europe

What Were Their Economic Policies? THIRDLY: The Fordney-McCumber Act 1922 created strict tariff barriers imposed on foreign imports e.g. goods from Europe It reduced the number of foreign goods being sold in America The idea behind this was to led to an increase in American own goods being bought at the expensive of foreign goods This is known as ’protectionism’ However this back fired and the Europeans did the same putting a high tariff on Americans goods! Therefore the US economy could not expand into foreign markets as rapidly as they could produce – resulting in over-production/under- consumption 3. Strict Trade Tariffs

PLAN FOR PARAGRAPH International Economic Problems 1. Start with an Opening Argument e.g. state there is a link between the isolated factor & the question 2. Put in Knowledge – Details of what the US market did after their markets became saturated & why they did it 3. Put in Analysis – Explain why this hurt America in the long term (loans) 4. Knowledge – Details of what European countries did to pay back loans 5. Analysis – Explain why again this hurt America in the long term (trade) 6. Evaluation – make an evaluation: how were the Republican policies to blame? Read Through Paragraph 3 On Handout

American Tariffs It can be argued that the Depression of the 1930s was caused by the Republican government’s desire to protect US businesses In order to protect US businesses, the Republican Governments had passed the Fordney McCumber tariff of 1922 as way to protect the countries economy from European competition This tariff was placed on imports (40%) so that now people would be inclined to only buy American goods However soon after & possibly in response, foreign countries also raised tariffs against the US goods… …which made it impossible for the USA to export their goods and get rid of the goods they had mass produced in excess However this was not the only reason Europe placed tariffs on imported goods – WWI is also to blame for international trade problems

World War One During WWI American became a major creditor and after the war she offered loans to help countries get back on their feet (rebuilding devastated areas & reviving trade and industry) Many countries bought American goods after the war as well as little was being produced at home – this greatly contributed to the boom of the 1920s However with the saturation of the US market the Americans wanted the European nations to repay the loans that they had taken out European victors owed around $10 billion in debts to America which would have come in handy at that time due to her saturated market at home but some countries had problems making the payments…

European Tariffs In order to solve their economic problems European states, EXCEPT BRITAIN, placed tariffs on imported goods from America The European states did this so that they could become economically self-sufficient and keep out the products of other countries – just like America had done These tariffs on imported goods from the US greatly contributed to the economic crisis… As a result, it was virtually impossible for America to increase exports overseas and expand its foreign markets Due to this, a stockpiling of goods at home in the USA started to develop This led to cutbacks in production which made the rates of unemployment rise and profits and the value of shares decrease

SUM UP: International Trade The First World War impacted European economies – they purchased many goods as well as loans from America = the 1920’s BOOM US Tariff barriers of 1922 meant that other countries found it difficult to pay back loans as they were struggling to sell their goods in America This resulted in all European states, except Britain, placed tariffs on imported goods This came at a bad time for America as her markets at home had saturated - US economy couldn't expand to foreign markets to solve this Therefore the Republican policies on import tariffs which were thought of as protectionist, but were actually very damaging The damaged overseas market and overproduction of goods went hand in hand as factors which also led to the depression

Q1. What year was the Fordney McCumber tariff passed? Q2. What was this tariff meant to protect from? Q3. What % were at the tariffs at? Q5. How was this to going to help America? Q6.What did Europe do in response? Q7. What problem did this have for America? Q8. Which 3 reasons was WWI good for America? Q9. Why did America recall these loans? Q10. How much did Europe owe America? Q11. Why did Europe introduce tariffs? Q12. What problem did this create in America? Q13. What contributed to the 1920s boom? Background Questions

PLAN FOR PARAGRAPH International Economic Problems 1. Start with an Opening Argument e.g. state there is a link between the isolated factor & the question 2. Put in Knowledge – Details of what the US did after their markets became saturated & why they did it 3. Put in Analysis – Explain why this hurt America in the long term (loans) 4. Knowledge – Details of what European countries did to pay back loans 5. Analysis – Explain why again this hurt America in the long term (trade) 6. Evaluation – make an evaluation: how were the Republican policies to blame? Read Through Paragraph 3 On Handout

OPENING ARGUMENT 3 International Economic Problems Another factor which contributed to the economic crisis of the 1930s was the USA’s poor foreign trade system

International Economic Problems KNOWLEDGE 1 Following the saturation of the American market the Fordney-McCumber tariff was passed in 1922 as a form of ‘protectionism’ It meant the introduction of high tariffs (40%) on imported goods So American’s only bought American goods ARGUMENT 1 However… these high tariffs hurt the US in the long run They meant other countries found it difficult to pay back the loans they owed America or buy goods as their own produce were not making profit in America Which was greatly needed back by the US

International Economic Problems KNOWLEDGE 2 With Germany & other countries struggling to pay America they had to find other ways to pay back the war loans European countries, except the UK, introduced strict import tariffs, just like in the US in 1922 ARGUMENT 2 In trying to meet their debts these European countries actually damaged the US economy by making the problems of overproduction worse Resulting in… closed factories, loss of jobs… etc

International Economic Problems EVALUATION: Overall, it can be argued that the Republican Governments desire to protect US businesses had the reserve effect as Europe's similar tariff polices meant US companies struggled to sell their goods in Europe as well as at home, resulting in businesses closing & unemployment rapidly rising. Also Europeans countries were unable to pay America back the war loans they had borrowed as they could not sell their goods in America

PLAN FOR PARAGRAPH International Economic Problems 1. Start with an Opening Argument e.g. state there is a link between the isolated factor & the question 2. Put in Knowledge – Details of what happened after the US market became saturated & why they did it 3. Put in Analysis – Explain why this hurt America in the long term (loans) 4. Knowledge – Details of what European countries did to pay back loans 5. Analysis – Explain why again this hurt America in the long term (trade) 6. Evaluation – make an evaluation: how were the Republican policies to blame? Read Through Paragraph 3 On Handout