Ch. 2 Great Depression Flashcards
Broker
A person who buys and sells stocks and shares
Ticker
Ticker tape on which stocks and shares transactions were recorded. Could not keep pace when Wall Street crashed.
Bankrupt
When firms or people have insufficient funds to pay their debts. Relatively few brokers went bankrupt after Wall Street Crashed.
Wall Street Journal
A daily financial newspaper
Dow Jones Industrial Average
An index showing how shares in the top 30 largest companies are trading on Wall Street.
Assimilate
The idea that Native Americans should adopt American lifestyle and values; their traditional way of life should disappear. Dawes Severalty Act.
Allotment
Each Native American family was given an allotment of 160 acres of land to farm, which went against the traditional idea of common land ownership. Dawes Severalty Act.
Per capita income
Income per head of the population, highest in NE and far West.
Short term wages
Where hours of work are reduced. This happened when employment was unstable.
Lynchings
Illegal hangings, often used by the KKK as a means of terror. Lynchings became less common in the 1920s.
Census
Survey taken every 10 years to enumerate everyone in the country. 1920 Census showed that the US had become an urban nation.
Farm lobby
Politicians and interest groups who put forward the farmers’ case to the government. Had very powerful government influence but felt threatened by urbanization
Prohibition
Banning the sale, transportation, and manufacture of alcohol for consumption, negatively impacting grain prices and therefore farmers.
Yellow dog clauses
Where employees had to agree not to join a labor union.
The “Fed”
Federal Reserve Board, a group of banks
Reparations
Under post-war settlements, Germany had to pay $33 billion for war damage
Dawes Plan 1924
Offered scaled down reparations for Germany and gave it $250 million loan to help it pay its debt
Young Plan
Offered further scaled down reparation to 37 billion marks w/ annual payments for 59 years
Consumer durables
Goods that last a long time like motor cars and appliances. Much of 1920s prosperity was based on these, but they were not often repurchased.
Credit squeeze
When it is difficult to obtain credit. There was a credit squeeze after Wall St fell.
Bull pools
When brokers buy and sell among each other to keep prices up.
Blue Chips
Most reliable, safe bet companies to invest in.
What events contributed to the Crash?
Stampede to sell, lost confidence in stocks, no one was willing to take a risk. Economy crashed because of cycle of international debt, economic slowdown, uneven wealth distribution, rural poverty, get-rich-quick schemes, and banking system problems.
How prosperous was the economy in the 1920s?
Prosperous on paper but with underlying problems that contributed to the crash. Much debate.
Choose two historians at the end of the chapter– who are they and what do they say about the Crash?
Paul Johnson=British historian who believed that the 1920s economy was sound and prosperity was real because wealth was distributed more evenly than before, and that Wall Street Crash would have righted itself.
Liaquat Ahamed argued that the Crash was the result of too much reliance on the Gold Standard because there simply was not enough gold to finance international trade. Argued that the Great Depression was the result of economic mismanagement.
