Chapter 14- The Great Depression Begins

“a chicken in every pot and a car in every garage”
Hoover’s 1928 campaign pledge. Left Americans disillusioned and demanding the governments help

Herbert Hoover
President from 1929 to 1933 (time after the Great Depression), called on businesses to help solve the economic situation rather than the government. Americans felt he did little to help them.

business cycle
recurring fluctuations in economic activity consisting of recession and recovery and growth and decline

“rugged individualism”
the idea that people should succeed through their own efforts. They should take care of themselves and their families, rather than depend on the government to bail them out

federal bureaucracy
the collective agencies and employees of the executive branch. During the time after the Great Depression, Hoover said that getting them involved would “be too expensive and would stifle individual liberties”

Boulder Dam/ Hoover Dam
A dam on the Colorado river that would “save the economy” because of the energy, and jobs it would produce. One of Hoover’s projects proposed that did make a difference

“Hoovervilles”
name for shantytowns in American cities. The name was a direct slap at the president’s policies

“Hoover blankets”
nickname for the newspapers that homeless people wrapped themselves in, during the time of Hoover’s presidency

“Hoover flags”
nickname for empty pockets turned inside out, during the time of Hoover’s presidency

Federal Farm Board
an organization of farm cooperative backed by Hoover. The organization was intended to raise crop prices by helping members to buy crops and keep them off the market temporarily until prices rose

National Credit Corporation
organization backed by Hoover, that loaned money to smaller banks, which helped them stave of bankruptcy

Federal Home Loan Bank Act
act signed by Hoover that lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure

Glass-Steagall Banking Act
act passed by congress after Hoover left office, which separated investment from commercial banking and was hoped to prevent another crash

Reconstruction Finance Corporation (RFC)
approved by Congress in January 1932. It authorized up to $2 billion for emergency financing for banks, life insurance companies, railroads, and other large businesses

refinance
to provide new financing; to discharge a mortgage with a new mortgage obtained at a lower interest rate

“trickle down”
terms of political rhetoric that refer to the policy of providing tax cuts or other benefits to businesses and rich individuals, in the belief that this will indirectly benefit the broad population

Bonus Expeditionary Force/ Bonus Army
a group of WWI veterans and their families who marched on Washington, D.C., in 1932 to demand the immediate payment of a bonus they had been promised for military service

Walter Waters
lead the Bonus Army on their march to Washington D.C. demanding payment of service bonuses not due until 1945

Patman Bill
A bill that authorized the government to pay a bonus to World War I veterans who had not been compensated adequately for their wartime service. This bonus, approved in 1924, was supposed to be paid out in 1945 in the form of cash and life insurance policy, but Congressman Wright Patman and the Bonus Army believed the money should be paid immediately

Wright Patman
congressman who believe the $500 bonus, from the Patman bill should be paid immediately

Douglas MacArthur and Dwight D. Eisenhower
two men sent by Hoover to clear the Bonus from the federal buildings

shantytown
a neighborhood in which people live in makeshift shacks

soup kitchen
a place where free or low cost food is served to the needy

bread line
a line of people waiting for free food

foreclosure
the process by which a mortgage holder takes back property if an occupant has not made payments

Dust Bowl
the region, including Texas, Oklahoma, Kansas, Colorado, and New Mexico, that was made worthless for farming by drought and dust storms during the 1930s

“Black Blizzards”
most severe storms that were said to have darkened the sky in New York City and Washington, D.C.

Okies
migrants who moved from the Dust Bowl. This term was originally referred to Oklahomans, but came to be used negatively for all migrants

monopoly
board game invented in 1933 that families commonly played during the depression when money was tight to entertain themselves

transients/”hoboes”
men during the Great Depression who wandered the country, hitching rides on railroad boxcars and sleeping under bridges. These people occasionally turned up at homeless shelters in big cities

direct relief
the giving of money or food by the government directly to needy people

rickets
childhood disease caused by deficiency of vitamin D and sunlight associated with impaired metabolism of calcium and phosphorus. Many children during the Great Depression suffered from this health problem do to the lack of available food and the rise of malnutrition

“wild boys”
teenage boys who hopped aboard America’s freight trains to zigzag the country in search of work, adventure, and an escape from poverty

“Hoover tourists”
Teenagers who abandoned their families, got on freight trains, and toured the nation to escape poverty

“bulls”
nickname for armed freight yard patrolmen

stigma of poverty
this mindset during the Great Depression never disappeared completely; achieving financial security became the primary focus in life

housing starts
the number of new dwellings being built; this number fell, as did jobs in many related industries in the US (furniture manufacturers and lumbering)

foreclosed
the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default; many banks did this to farmers and took their farms because they could not pay their mortgages

default
loss resulting from failure of a debt to be paid; farmers did this because they could not pay their loans, which led to rural banks failing

McNary-Haugen bill
called for federal price-supports for key products such as wheat, corn, cotton, and tobacco; government would buy surplus crops at guaranteed prices and sell them

price-supports
subsidies provided by the federal government, primarily to agriculture, whereby surpluses of products are purchased and kept off the market; this action reduces supply and keeps prices at a level required by the producer; used in the McNary-Haugen bill

credit
an arrangement in which consumers agreed to buy now and pay later for purchases; in the form of an installment plan; easily available to Americans

installment plan
a payment plan that allows customers to make payments at set intervals over a period of time until the total debt is paid; usually in monthly payments; included interest charges

interest charges
where extra money would have to be paid for the amount of extra time it took to pay the loan/debt off; added to installment plan payments

Herbert Hoover
Republican candidate in the 1928 Presidential election; soft spoken man, but could point to the years of prosperity and Republican administrations since 1920; won election; “We in America are nearer to the final triumph over poverty than ever before.” (wrong)

Alfred E. Smith
Democratic candidate in the 1928 Presidential election; 4 term governor of New York; personable and enjoyed being in the limelight; lost to Herbert Hoover

Dow Jones Industrial Average
the most widely used barometer of the stock market’s health; measure was based on the stock prices of 30 representative firms trading in the New York Stock Exchange

New York Stock Exchange
the largest stock exchange, located in New York City; most of the companies on this exchange are larger companies with higher-priced stock; used as a barometer in the Dow Jones Industrial Average

“bull market”
name for a period of rising stock prices; why investors continues to have faith in the nation’s economy despite the concerns of economists

speculation
name for when people bought stocks and bonds on the chance of a quick profit, ignoring the risks

buying on margin
name for paying a small percentage of a stock’s price as a down payment and borrowing the rest

Black Tuesday
October 29, 1929; the bottom fell out of the stock market and the nation’s confidence; shareholders tried to sell before prices plunged lower; people who bought on credit were stuck in huge debts, while others lost all of their savings

limit order
tells the broker to buy or sell only if the stock matches a certain price

market order
tells the broker to execute a transaction immediately, no matter what the price is

Great Depression
period from 1929-1940 where the economy plummeted and unemployment skyrocketed; included a collapse of the American economy

Gross National Product (GNP)
nation’s total output of goods and services; cut in half because of the Great Depression

Hawley-Smoot Tariff Act
Congress passed this in 1930; established the highest tariff in US history to protect American manufacturers and farmers from foreign competition; prevented other countries from earning US currency to buy US goods; made unemployment worse; countries raised their tariffs also

What industrial weakness signaled a declining economy in the1920s? The older industries such as textiles, steel, and railroads, which were basic to the fundamental well-being of the economy, were barely profitable. How did diminished demand affect farmers in the 1920s? …

Price-supports Maintenance of a price at a certain level through government intervention. Credit arrangement in which consumers agreed to but now and pay later for purchases. WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR …

Price Supports Attempt to help ease farmers’ financial problems by the government buying surplus or extra crops and selling them in Europe or abroad. Great Depression The period from 1929 to 1940 in which the nation suffered from a continuous …

margin call Demand by a broker that investors pay back loans made for stocks purchased on margin. bull market A period of increased stock trading and rising stock prices. WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY …

stock market a system for buying and selling stocks in corporations buying on margin buying a stock by paying only a fraction of the stock price and borrowing the rest WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC …

Which group experienced an early depression in the 1920’s? Farmers During the 1920’s, the United States economy moved through which phase of the business cycle? Expansion WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR …

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