Chapter 22: The Great Depression Begins

-buying stocks or bonds on the chance of quick profit while ignoring the risks

margin buying
buying stocks with borrowed money
-if value of stocks declined, there was no way to pay off the loans

Stock Market crash
-Black Tuesday: bottom fell out of the stock market, it was worth nothing
-confidence in stock market fell
-banks lost money to people who borrowed money to buy stocks

Dow Jones Industrial Average
-most widely used barometer of the stock market’s health
-measure based on the stock prices of 30 representative large firms trading on the New York Stock Exchange
-rose 300 points in 5 years (1920s)

direct relief
-cash payments or food provided by the government to the poor

Great Depression
-the period from 1929 to 1940 in which the economy plummeted and unemployment skyrocketed

Hawley-Smoot Tariff
-high tariffs on imported goods
-designed to protect American farmers and manufacturers from foreign competition
-highest protected tariff in American history
-Europe retaliated with high tariffs on their imports
*no countries buying internationally

Herbert Hoover
-pointed out to American that the Republican party had led the country to prosperity in the past
-won election of 1928
-president during the Great Depression
-didn’t do much the country approved of to help get out of the Depression
“A chicken in every pot and a car in every garage.”

Hoover’s approach to the Great Depression
-rugged individualism
-Boulder/Hoover Dam
-Federal Farm Board
-National Credit Corporation
-Federal Home Loan Bank Act
-Reconstruction Finance Corporation

Boulder Dam
-flood control
-more jobs
-regulate water supply: enabled growth of California’s massive agricultural economy

300,000 transients wandered the country, hitching rides on railroad boxcars and sleeping under bridges

shantytowns in American cities

Causes of Dust Bowl
-great drought in early 1930s
-overproduction of land (left grassless/treeless acres of dirt and dust

Bonus Army
-made up of WWI veterans and their families
-arrived in Washington D.C. in 1932 for the March on Washington
-came to support the Patman Bill
-Hoover considered them “communists and persons with criminal records”

Major Causes of Great Depression
1. Industries in trouble
2. Agriculture suffers
3. Consumers spend less
4. Living on Credit
5. Uneven Distribution of Wealth

Industries in Trouble
-railroads, textiles, and steel industries barely made profit
-coal mining competed with electricity, oil, and natural gas
-auto, construction, consumer goods weakened

Agriculture Suffers
-prices fell by 40% after war crop demand dropped

Consumers Spend Less
-rising prices
-stagnant wages
-overbuying on credit

Living on Credit
-installment plans allowed people to live beyond their means
-no one considered interest

Uneven Distribution of Wealth
-rich got richer, poor got poorer
-income of richest 1% rose by 75% compared with 9% increase of Americans as whole

voluntary cooperation
-Hoover believed that one of government’s chief functions was to foster cooperation between competing groups and interests in society
-must be voluntary, not forced
-governments role was to encourage and facilitate cooperation, not to control it

Presidential Candidates 1932
Herbert Hoover (second term) – R
Franklin D. Roosevelt- D

Long range effects of the Depression
-people learned the dangers of buying on credit and investing in the stock market
-Hoover Dam
-farmers have learned to not overwork the land

other causes of the Great Depression
-tariffs and war debt policies that cut down the foreign market for American goods
-a crisis in the farm sector
-the availability of easy credit
-an unequal distribution of income

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 …

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? …

“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 …

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 …

Herbert Hoover – Republican candidate who assumed the presidency in March 1929 promising the American people prosperity and attempted to first deal with the Depression by trying to restore public faith in the community Speculation One who buys property, goods, …

price support the maintenance of a price at a certain level through government intervention. credit an arrangement in which a buyer pays later for a purchase, often on an installment plan with interest charges. WE WILL WRITE A CUSTOM ESSAY …

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