AH Ch 12 - Great Depression

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Herbert Hoover
-Republican President from 1929-1933
-elected 1928;
-Government should not interfere with business;
-Labor and management will keep things running smoothly
-President when the Stock Market crashed
Speculation
-People gambling on stock prices rising and buying stocks with borrowed money
-a risky stock purchase intended to turn quick profits,
-made by investors hoping for high returns
Black Tuesday
-October 24, 1929;
-People sold all their stock and the market fell;
-In one day market lost 50% of its value;
-Banks fail
-the time at which the stock market collapsed in the Great Crash,
-investors sold more than 16 million shares of stock
Business cycle
Growth and contraction of the economy
Great Depression
1929-1941;
-Economy faltered and unemployment soared;
-Began with the stock market crash
Hawley-Smoot Tariff
-Raised the tariffs on imported goods to protect American goods;
-Makes things worse as other countries did the same thing to us;
-US stops investing in Germany, so Germany fails
-a tax passed in 1930 on foreign products brought into the US,
-Europe reacted by passing high protective tarriffs
The Welfare State
Result of the Depression; Government must step in and help people
Farmers
Farmers go into debt to upgrade and keep up with demand; Prices fall; Farmers can't pay loans; Rural banks fail
Wealth
-Became to concentrated;
-Corporate profit rose 65%, Wages only 8%;
-Wealthy did not spend enough money;
-Easy credit;
-Over speculation on the stock market
Bread line
People lined up for free food from charities or public agencies
Hooverville
During the Great Depression many homeless people built makeshift shanty towns (shacks and tents) grouped together on public lands
Tenant Farmer
-Farmers who remained on their land after big landowners bought their farms;
-These farmers worked for others instead of themselves
Dust Bowl
-In the middle of the US the land dried up and would not grow crops
-caused hundreds of thousands of people to migrate from the Great Plains
Okies
Dust Bowl refuges who moved west when their farms dried up
Repatriation
Government encouraged Mexicans to go back to Mexico
Localism
-President Hoover thought jobs and relief should be provided at local and state levels
-a policy committed to solving problems at local and state levels
Reconstruction Finance Corporation
-RFC,
-instituted by Congress,
-made government loans,
-to stimulate economic recovery
-1932 President Hoover's plan to reverse the course of the depression;
-Gave more than 1 billion dollars in loans to railroad and big business;
-Lent money to banks so they could give more business loans
Trickle-down economics
-the theory that money invested in banks and businesses will work its way through the system to laborers
-Theory that gives money to the top of the pyramid and it will trickle down to the base
Hoover Dam
-a large public works project that brought much-needed employment to the Southwest in the early 1930's
-1930
-originally Boulder Dam
Bonus Army
-WW1 soldiers who wanted the bonus that Congress had promised them;
-Congress passed Adjusted Compensation Act which gave soldiers a lump sum;
-Hoover vetoed the bill to pay them early
-marched on Washington DC
Douglas MacArthur
-General called in to use federal troops to clear out the protesters
-ordered tear gas to be fired at the Bonus Army's march on Washington DC
Factor that helped hide economic problems in 1920's
Americans purchased many consumer goods on credit
Banks failed at the onset of the Great Depression because...
too many depositors tried to withdraw their money all at once.
European countries reacted to the Hawley-Smoot Tariff by...
taxing American imports.
John Maynard Keynes believed this economic condition caused the Great Depression
lack of government intervention
Urban unemployment, at the onset of the Great Depression...
increased dramatically.
Taxpayers Protection League
members resisted evictions by staging nonviolent protests
Farmers contributed to the problems that led to the Dust Bowl by...
using intensive farming practices that removed protective grasses.
Unemployment rate of African Americans
nearly double the national rate
President Hoover responded cautiously to the depression because...
he thought that the business cycle would correct itself.
President Hoover urged Congress to institute the RFC because he believed that the economy suffered from...
a lack of credit.
Some Americans blamed the Great Depression on ...
capitalism.
Many Americans wanted new leadership in 1932 because...
President Hoover's economic policies had failed.
Group faced the greatest financial difficulty
farmers
Expansion
US economy phase of the business cycle during the 1920's
Stock market crashed because...
investors lost confidence in the market and started to sell their shares.
Factor that contributed to the spread of the Great Depression overseas
-a decline in investments from the US.
-the US reduced investments in Europe
African Americans and Mexican Americans had an especially difficult time during the Great Depression because...
they faced discrimination when competing for a limited number of jobs.
Volunteerism failed because...
businesses and citizens acted in their individual best interests.
Unequal distribution of the nation's wealth led to the depression by:
-farmers had huge surpluses of crops, but demand for them decreased drastically so they went into debt,
-acquiring a line of credit was easy, but it caused more debt for people who could not make payments,
-wealthy people grew wealthier and had money to spend on consumer products, but this spending was not enough to keep the economy booming.
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