Ch. 3 Great Depression Flashcards
President Hoover
President during the Great Depression who is largely blamed for its effects
American Dream
The belief that everyone can succeed through hard work and effort; Hoover encapsulated the American Dream.
Self reliance
Hoover’s belief in the equality of opportunity. Everyone could be rich and successful like him with hard work, which he detailed in his book, American Individualism.
Laissez-faire
The policy in which the government should not regulate the economy at all, which Hoover did not strictly support
Depression proof industries
For example cigarette manufacturing, industries that did not immediately feel effects of the Great Depression
Depositors
those who placed their money in the bank. They lost confidence in the bank and withdrew, leading to runs on the bank
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Liquid assets
assets that are easily liquidated, or converted into cash. When banks had to evict farmers, they often lost liquid assets in the form of mortgage payments in exchange for run down farms.
Run on the bank
When everyone tries to take their money out of the bank
Work ethic
The feeling that people should work hard and the unemployed should go out and find a job. It derived from the notion that how well one worked was a sign of one’s worth, both personally and socially. Part of the reason there was no welfare, and also contributed to low self-esteem for unemployed people and bad psychological effects
Hoboes
People who wandered around the USA in search of work. Many of the unemployed became hoboes and lived in shantytowns, and hoboes were not looked upon nicely because people did not want to encourage transients wandering into their areas.
Chain gangs
Groups of convicts chained together while working outside the prison, for example, in digging roadside drainage ditches. Hoboes in Atlanta Georgia were arrested and put into chain gangs.
Monetarists
Economic theory that governments can control the economy through regulation of the money supply. They argued that the decline of circulation of money comes before a depression and that more circulation is required for economic growth.
Rediscount rate
the interest rate at which banks borrow money from the federal reserve banks. In 1931, rise in rediscount rate led to a decrease in industrial production
Voluntarism
The notion that businesses and state government should resolve the depression through their own voluntary acts.
Hawley-Smoot Tariff
Highest tariff in US history at 40% on industrial and agricultural products, causing European nations to abandon free trade and decreasing American exports. Did nothing to help farmers.
Agricultural Marketing Act
established a nine-person Federal Farm Board to buy, store, and dispose of surplus agricultural products, but they could not stop overproduction, and it encouraged sale of crops at higher prices than normal which was unsustainable and failed to take into account that agricultural was a foreign and domestic affair, so the high tariffs were actually hurting American farmers.
Grain Stabilization Corp
a company that bought grain for 80 cents per bushel instead of the worldwide price of 60 cents, thereby encouraging farmers to produce more, leading to overproduction
Repudiation of war debts
Where countries ceased repaying their war debts. Hawley-Smoot and crash in international trade led to European countries repudiating their war debts.
Moratorium
Term given to Hoover’s offer to postpone debt repayment for 18 months. Hoover said that if other countries would stop collecting debts for 18 months, the US would do the same to release monies for investment, but it was too little too late to have much effect.
Lame duck presidency
The period between one president coming to the end of his term and his successor taking over. This was the same time when the moratorium went up for renewal.
Federal Home Loan Bank Act
An act passed under Hoover intended to save mortgages by making credit easier, and a series of federal home loan banks were established to help loan associations provide mortgages. It was one of Hoover’s unemployment relief programs but it did not do enough to address the problem, since the max loan was 50% of the property value.
Reconstruction Finance Corporation
Hoover’s most radical measure for combatting GD and a forerunner of the New Deal. It leant money to big businesses to restore confidence in the financial institutions, but many criticised it for favoring large corporations instead of individuals.
Bonus Army
army of veterans who gathered at DC in a nonviolent protest and asked for their bonuses early, but the Senate voted no, so Hoover removed them from DC, outraging Americans.
Douglas MacArthur
the man in charge of the real army when the bonus army was removed from DC. Used tanks and infantry and overstepped his authority
Fascist
European-based movements associated with policies of extreme nationalism and racism which were spreading to the Americas. They were associated with the extreme right side of politics, aka the Silver Shirts, and the KKK was interested in this political group.
Communists
People who believed that the planning and organization of the economy should be controlled by the state so people are rewarded according to the value of their contribution. American communists took orders from the Soviets and wanted revolution, but mostly just sniped at the socialists.
Socialists
Did not associate with the communists. Worked with the American Federation of Labor but did not gather much support because most felt that it was more important to defeat Hoover than vote for socialism, so they supported Roosevelt.
AFL
American Federation of Labor, an organization representing workers’ unions, that was racist and conservative
Extreme right
the facists/silver shirts, but they were relatively insignificant
Extreme left
communists and socialists. Also had little effect on the nation.
How did the Depression affect African Americans and women?
Blacks faced incredibly high unemployment, and their jobs were offered to whites. Women who were still working were blamed for taking men’s jobs, and they were more likely to be laid off than men.
What reasons are given for the longevity of the Depression?
The international economic crisis, the federal government intervention was inadequate, the Depression eventually reached all parts of the country, US businesses, including banks, lacked the infrastructure to reform, the USA needed to trade but foreign countries could not afford to buy American goods, so unemployment stayed high.
What did Hoover do to react to the Great Depression?
He tried to support agriculture through the Agricultural Marketing Act, he imposed the moratorium and delayed debt collection from foreign countries for 18 months, he promoted voluntarism, and provided indirect unemployment relief from the Federal Home Loan Bank Act and the Reconstruction Finance Corporation.
What are some examples that the US under Hoover could not help its poor?
Hoover believed in the American Dream, in work ethic and rugged individualism, and in self-reliance. Therefore he philosophically could not provide Americans with direct relief because it would violate his policies. Therefore he advocated for indirect relief, but this did not really help the Depression soften. He also had the Bonus Army forcibly removed from DC.
