superficial prosperity of the late 1020s hid troubling weaknesses that led to this
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Terms in this set (43)
1)World War 1 - international demand for crops such as wheat and corn rose
2) farmers planted more crops and took out loans for new land and equipment
3)War ends - crop prices fall
4) farmers boosted production to earn more money - depressed prices more
5)farmers couldn't pay loans - defaulted
6)because of defaults, banks failed
7)Congress proposes McNary-Haugen Bill
price supportsthe support of certain price levels at or above market values by the governmentcreditan arrangement in which consumers agreed to buy now and pay later for purchases, often on an installment plan (usually monthly) that included interest chargesamount of income needed for a decent standard of living in the 1920s$1500average man or woman in 1920sbought outfit once a yearbetween 1920 and 1929the income of the wealthiest 1 percent of the population rose by 75%1928 presidential electionHerbert Hoover (Republican) versus Alfred E. Smith (Democrat)bull marketperiod of rising stock pricesspeculationbuying stocks and bonds on the chance that they might make a large profit, ignoring the risksbuying on marginpaying a small percentage of a stock's price as a down payment and borrowing the rest - BIG PROBLEM if stocks went downOctober 29Black Tuesday - day that the bottom fell out of the stock marketstock market crash signaled the beginning of this ( not the cause of the depression but it hastened the economy's collapse)Great Depressiondates of the Great Depression1929-1941Great Depressioneconomy in severe decline and millions out of workcauses of the Great Depression1)OLD and decaying industrial base- outmoded EQUIPMENTt made some INDUSTRIES less competitive 2)a crisis in the farm sector - FARMERS PRODUCED MORE THAN THEY COULD SELL 3)the availability of EASY CREDIT - many people went into debt therefore cut their spending 4)an UNEQUAL DISTRIBUTION OF INCOME - too little money in the hands of the working peopleDow Jones Industrial Averagemost widely used barometer of the stock market's health -- based on the stock prices of 30 large firms trading on the New YOrk Stock Exchangeafter the crashAmericans panicked and withdrew their money from banks, causing banks to closeother countries that suffered during the Great Depression (WORLDWIDE PHENOMENOM)much of Europe, particularly Germany, who then couldn't import American goodsshantytownslittle towns consisting of shacks, usually on the outskirts of citiessoup kitchensplaces where food is offered free to the needybread lineslines of people waiting to receive food provided by charitable organizations or public agenciesimpact of Great Depressionharder on African Americans and Latinos who had high unemployment rates; also, an increase in racial violenceLatinosMexicans and Mexican-Americans living in the SouthwestDust Bowldrought in the Great Plains (Texas to North Dakota) and overuse of land due to overproduction of crops made grasslands unsuitable for farming: DUST TRAVELED HUNDREDS OF MILES, EVEN TO THE EAST COASTeffects of the Great Depression on the American Family1) MEN lost their jobs ; took to the streets and on railroads to search for new jobs; became depressed because they were used to supporting their families; even abandoned families 2)WOMEN canned food, sewed clothes, carefully managed households; many worked outside the home - became target of resentment because it was believed they were taking jobs from men 3) CHILDREN became malnourished leading to serious health problems 4) SOCIAL AND PSYCHOLOGICAL EFFECTS - Depression, suicide rate rose, illness, put off getting married and having childrenHooverpresident when stock market collapsed who believed government should help but not take over; he did not want government to get too much powerAndrew Mellonsecretary of the Treasure under Hoover who believed in a "do- nothing" approach for the governmentrugged individualismbelief that Hoover had that people should succeed due to their own efforts1930 congressional electionswon by the Democrats - problem since Hoover was a Republicandirect reliefcash payments of food provided by the government to the poorBoulder Damgiant dam on the Colorado River between Arizona and Nevada ; one of first public works projects initiated by Hoover; now called the Hoover DamFederal HOme Loan Bank Actlowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosureReconstruction Finance Corporation (RFC)emergency financing to banks, life insurance companies and other large businesses intended to pump new life into the economyBonus Army (Bonus Expeditionary Force)World War 1 Vets and their families who marched on Washington in 1932 to support a bill that authorized the government to pay a bonus to WWI vets who had not been compensated properly during wartimes; BILL DEFEATED; people asked to leave; government gassed those who wouldn't; CAUSED HOOVER TO LOSE SUPPORT OF THE PEOPLE