Chapter 9- the Great Depression

Who were the republican and decomcratic candiadatates running in the election of 1928?
Herbert hoover (R)
Alfred E Smith (D); smiths religion became a campaign issue. Hoover won

What is a bull market?
A long period of rising stock prices which convinced many people to invest in stocks

Act of buying stocks at great risk with the anticipation that the prices will rise; by late 1920s buyers engaged in speculation

Investors bought stocks on margin, making only small cash down payments (as low as 10% of price) and borrowed the rest

Margin call
Demand by a broker that investors repay loans made for stocks at once

What happened during the month of September 1929?
The market peaked, then prices began an uneven downward slide. Investors thought it was nothing and sold more stock causing prices to decline even further

How did Black Thursday and Black Tuesday get their names?
On October 24 (Black Thursday) the market plummeted further.
On October 29 (Black Tuesday) prices took the steepest dive yet

By mid November of 1929, the market price of stocks had dropped about __.

In what 2 ways were banks weakened which caused them to eventually close?
1. By 1929, banks had lent billions to stock speculators
2. Many banks had invested depositors money in the stock market

Why did bank runs occur?
News of bank failures worried Americans, so depositors made runs on banks, withdrawing their money out of fear that the bank would collapse and they would loose their savings

With less credit available, the economy went into a ___.

What was the leading factor to the onset of the Great Depression?

What caused the economy to collapse?
Low interest rates
Uneven distribution of wealth (farmers went bankrupt)
High tariffs
Falling demand (Americans stopped buying b/c they had to pay off debts, so manufacturers cut production and laid off workers)
Stock market speculation

Many Americans in the 1920/ bought high cost items on the ____ plan
Installment; but Americans stopped buying because they couldn’t cover the cost, so people bought less. This resulted in manufacturers producing less and laying off their workers

Hawley-Smoot Tariff
It was meant to protect American businesses, but caused fewer American goods to be sold overseas hurting businesses; raised tariffs significantly

What mistakes were made by the federal reserve?
-failed to raise interest rates
– encouraged member banks to make risky loans
– low interest rates led business leaders to think the economy was still expanding
-tightened credit

How did unemployed people get free food ?
They stood in breadlines of lined up outside soup kitchens

Homeless, built shanty towns called Hoovervilles, unemployed Americans who wandered around the country ; they got around by sneaking on to trains or by hitchhiking

What happened to immigrants during the depression?
Immigrants returned to their native countries (repatriation), others were deported if they had broken the law (Mexicans were deported)

What was the dust bowl?
Drought in the Great Plains that extended from the Dakotas to Texas; When crop prices dropped in the 1920s, farmers tried to make up the difference by planting wheat, but a drought left the Great Plains bare and the soil dried to dust.

Why did the Great Plains farmers, nicknamed the “Okies”, head west to California?
In search for a better life

Why did movies become increasingly popular?
To escape their worries during the hard times of the 1930s, Americans went to the movies each week

Soap operas
A serial drama on television or radio using dramatic situations

Explain how photography was influenced during the 1930s
TIME magazines introduced LIFE, a photojournalism magazine
Photojournalist- Margaret Bourke captured in pictures how the Great Depression affected many Americans

How did Americans cope with hunger and homelessness during the Great Depression?
By keeping themselves entertained in arts, movies, radio stations, literature, photography, etc

How did president Hoover promote economic recovery?
Public works and urging businesses not to reduce wages

Why did Hoover believe the government should not step in to help individuals?
Hoover believed that American “rugged individualism” would keep the economy moving. He felt that the system of individualism was the best social, political, spiritual and economic system

What did Hoover think contributed to Europe’s slow recovery?
After world war 1, European countries implemented a form of socialism, which did not recover their economy

How did public works slightly benefit the economy? What was negative about it?
It resulted in construction jobs for unemployed Americans; if the government raised taxes, consumers would have less money to spend, hurting business. If the government kept taxes low and ran a budget deficit (spending more money than it collected) it would have to borrow money, making less available for loans

How did Hoover hope to rescue banks?
-His goal was to increase money supply and help banks make loans to corporations
-he set up 2 corporations that both failed in helping the economy
1. National credit Corp
2. Reconstruction finance Corp

What was the national credit corporation?
the NCC created a pool of money that allowed troubled banks to continue lending money in their communities
– failed to meet the nations needs

What was the reconstruction finance corporation?
-Made loans to businesses
– by 1932, the RFC had lent about $238 million to industries
– failed to increase lending sufficiently

Why did congress pass the emergency relief and construction act?
By the spring of 1932, state and local governments were running out of money and private charities lacked the resources to provide relief, so congress stepped in. The act called for $1.5 billion for public works and $300 million in emergency loans to the states for direct relief
(Federal gov was supplying direct relief funds); however it was too late to reverse damage of depression

Who organized hunger marches in 1931?
The American communist party

Why did farmers burn their crops?
In attempts to raise prices by reducing their supply. They burned corn to hear their home and dumped milk into ditches

What did the bonus army want? What did they do to get it.
$1,000 bonus for each veteran that congress promised. Over 15,000 veterans marched on the government and petitioned, but they did not receive it and Hoover refused to meet with them
– a couple months after veterans were cleared from buildings near Capitol, 2 veterans were killed, and general MacArthur sent 700 soldiers to clear camps

How was president Hoovers image tarnished?
Through the uprising of the bonus army marchers and the lingering depression

What was the public mood concerning the economy at the beginning of the 1930s?
Discontent and angry

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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 …

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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1929 What year was there a major stock market crash? There is a lot of economic uncertainty. Credit works well until what? WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY $13.90/PAGE Write my …

Laissez faire Idea that government should not interfere in the economy Hoovervilles Popular name for shanty towns built by homeless people during the great depression WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY …

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