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
`
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.