chapter 23 RUSH

What is “buying on margin?”
people borrowed on margin to buy stocks, all you had to do was put down a small amount of cash to buy each share of stock then you could borrow the rest of the purchase price on the value of the stock itself, when the stock went up you could make a great deal of money on a small investment but if the price went down you would lose all you had put in

What were “Hoovervilles?”
Hoovervilles were shantytowns during President Hoovers term also during The Great Depression, cartons and wood scraps on vacant lots,

What were characteristics of stock market gambling?
the more the stock mania grew, the less connection there was between the real value of a company and the price people were paying for that company and the price people were paying for that companys shares on the stock market. businesses found they could make more money with their cash by giving it to brokers to use for margin loans than by investing in new machines and factories

What were seen as causes of the Great Depression?
the business boom of the 1920’s made people overly confident, they invested their money in risky stocks and deals, banks made careless loans when people could not pay them back the banks failed, business produced more goods than they could sell, machines replaced human workers in many factory jobs, many people borrowed money they couldn’t repay, people had invested most of their money in stocks when stock prices crashed they lost all their savings

What were Hoover’s methods for dealing with the depression?
congress wanted it to fix itself but hoover did not sit still, he wanted it to fix themselves but he was also giving opportunity for employment

How did Hoover attempt to ease the suffering caused by the stock market crash?
called upon cities, states, and all private charities to help feed the hungry, brought business and labor leaders to the white house, where they promised to keep up wages and keep the factories going. cut his own salary by one-fifth, cut income taxes, “limited revision” upward of the tariff to help the textile factories and a few other depressed industries

How did the government respond to the “farmers’ plight?”
received from federal aid, during a special session of congress in the spring of 1929, an agricultural marketing bill passed by large majorities, this created a federal farm board with $500 million to lend to farm cooperatives to help them market their crops. the board was also told to use its funds to keep farm prices steady, federal farm board, no control over production, government lost $185 million, farmers lost their land went down same path as stock market

Why did Hoover oppose direct government relief for individuals?
hoover unfairly received the brunt of the blame for the great depression but he did pass measures that made the depression less severe than it could have been, critics noted that he could feed millions in belgium but not millions at home in america, he did not believe in government tampering of the economic machine and he felt that depressions like this were simply parts of natural economic process

How did buying stocks on margin contribute to the stock market crash?
makes stock unstable because the more stock that is purchased the less value it has

What did the 1932 Republican platform favor?
hoover, supported prohibition; no liquor, stood “pat” hoping that natural forces would solve the nations problems, argued real cause of the depression was world conditions that the US could not control, said Roosevelt’s change would destroy American free enterprise and the American system of government

What did the 1932 Democratic platform favor?
Franklin Roosevelt, change, republicans had encouraged reckless stock market speculation that had brought on the panic of the depression, promised the new deal rapid recovery for business and ag but there was no “blueprint”, appealed to the nation’s very group, called for appeal of prohibition everyone had a right to comfortable living, distribution of wealth, Roosevelt’s speeches were very general

What three main flaws in the American economy led to the events that began the Great Depression?
overproduction of farms and factories which caused a surplus of goods with too few consumers, over expansion of credit, crash of the stock market, lack of international trade due to high tariffs, unequal distribution of wealth, technological unemployment, circular economic problem

How did speculation and margin buying affect the stock market?
when buying on margin all you had to do was put down a small amount of cash to buy each share of stock, then you could borrow the rest of the purchase price on the value of the stock itself, when stock went up in price you could make money but if it went down you could lose all you put in

What underlying economic flaws did the Great Crash reveal?
margin loans, stock market gambling, prices began to fall and the rush to sell made prices fall even faster, the war many nations owed the united states money yet our tariff walls kept them from trading with us, the rise of “holding companies” had created some special problems that did not quickly meet the eye

What actions did Hoover take to deal with the economic crisis?
he used the agricultural marketing act to try to keep up the prices of tobacco, cotton, corn and wheat and help the farmers, he started a large program for the construction of public works, spend more than $2 billion on roads, buildings, and other public construction, to save large corporations, banks and insurance companies from bankruptcy he asked congress to create the reconstruction finance corporation. the bill to provide jobs by saving companies and to help start the country forward all along the line was enacted in 1932, congress also passed at hoovers request the federal home loan bank act to help people with mortgages from losing their homes

Compare and contrast the platforms of the Republican and Democratic parties in 1932.
The republicans felt they could not reject hoover or his policies. they nominated hoover and vice president curtis on the first ballot. it warned against the dangers to business if the democrats came to power. it supported prohibition. it stood “pat”-hoping that natural forces would solve the nation’s problems.
the democrats wanted governor franlin d. roosevelt of new york loved to try new things, the task of our party to break foolish traditions

Is it fair to blame Herbert Hoover for the depression?
no

what was the result of the depression and the people having to live in the hoovervilles?
within three years the number of marriages dropped by one quarter, college enrollment sank, and millions went hungry, 2/3 of children in new York city suffered from malnutrition, one in four workers were unemployed

Stock Market A system for buying and selling stocks in corporations Bull Market A long period of rising stock prices WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY $13.90/PAGE Write my sample Speculation …

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

The Stock Market Crash cause; The stock market crash that occurred on Black Tuesday, October 29, 1929 is NOT one and the same with the Great Depression. Over Speculation of Stocks cause; As the stock market soared, investors used their …

Hoover believed the best strategy for ending the Depression was encouraging voluntary controls in the business sector After Hoover took action in 1932, federal efforts and funds were too little and too late WE WILL WRITE A CUSTOM ESSAY SAMPLE …

A Collapsing Economy – Industries such as coal mining, railroads,and colthing were in a decline – prices for industrial stocks doubled between May 1928 and September 1929 – October 23 six million shares of stocks changed hands – falling prices …

overproduction During the 1920s, the wealthy grew wealthier due in large measure to government fiscal policies that both reduced business regulations and allowed the wealthy to keep more of their money. These reduced regulations and low corporate taxes increased the …

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