Great Depression 1-3 Flashcards
Introduction facts
-Economic depression
-Stock market lost 80% value
- worst economic disaster
- 25%-30% lost their jobs
- lasted ten years(1929-1940)
-1/3 of goods weren’t produced
- affected everyone
-11,000 banks failed
-businesses, farming, banks and stock market
-Started in U.S, then spread worldwide
-involved all regions
-2nd most serious crisis
-25% had their hours reduced
Recession
Slowdown in economic activity for 2 or more consecutive quarters(6 months), people become nervous and cautious
Depression
Severe decline in economic activity with widespread unemployment; lasts longer than a recession and has a longer decline in business activity (lasting 3 or more years), people react with fear and panic
Factors of Recession/Depression
- Employment
- Industrial production
- Income
- Sales
Healthy Stock Market
Prosperity in 1920s
- High GNP(Gross National Product)
- Explosive growth in American manufacturing
- Low Unemployment (3%)
- Stock prices rises
Business was good
Stock
A share of ownership in a company
Invest
Buy a stock
Bull Market
Period of time of increased stock prices, investor confidence
Bear Market
Period of time of decreased stock prices, lack of investor confidence
Visible symbol of American economy
Stock Market
DOW Jones Industrial Average
The barometer of the stocks worth. How the top 30 largest companies are doing.
Election of 1928
Republican Herbert Hoover
Democrat Alfred E. Smith
Hoover Campaign
- U.S had prosperous under republican administration
- Hoover favored prohibition
- Hoover was protestants’
Speculation
Wild buying of risky stocks betting the market would continue to climb hoping for a quick profit
Causes of the Great Depression
- Availability of easy credit- Excessive lending by banks
- Buying on margin- Getting loan for a stock
- Speculation- wild buying
- Overproduction of farm crops- war years over, crops didn’t need to be produced
- Mistakes by the federal reserve- raising interest rate, took 1/3 of the money
- 1929 stock market crashed- Black Tuesday
- bank failures/hoarding money-panicking, bank runs, 11,000 banks collapsed
- Overproduction in industry- consumers stopped spending, businesses struggles so they cut workers
- Hawley-Smoot Tariff- Largest tariff in history, trade war started, world trade fell 40
October 29, 1929
Stock market completely crashed, The stock market kept going up and down, 16.4 million shares were sold
The dust bowl causes
- A severe drought (1931)
- Overproduction of crops- stripped soil
- Harsh winds that created dust storms
- Top soil blew away
- No crop rotation
The dust bowl effects
- Loss of crops/food; loss of livelihood
- Worsened great depression
- “Okies” migrated to other regions
- Farmers couldn’t pay debts and lost farms to foreclosure
Dust Bowl States
Kansas, Oklahoma, Texas, New Mexico, Colorado
Route 66
Main route of the “Okies” heading west
Chicago, Illinois-Los Angeles California
John Steinbeck
Writer
“Mice and Men”
Grapes of Wrath
won the Pulitzer prize and Nobel prize
made into a movie
Woodrow Wilson “Woodie” Guthrie
Singer/songwriter
Was an “Okie”
“This land is your Land”
Nickname- Dust Bowl Troubadour
Movie about autobiography
GNP Dropped
Between 1928-1932, the US Gross National Product fell nearly 50% from $104 billion to $59 billion. GNP-the total output off a nations goods and services
Unemployment soared
Unemployment leapt from 3% in 1929 to 25% in 1933; some economists say the unemployment rate went up as high as 50%. The unemployment rate today is about 4%
Businesses went bankrupt
Lack of consumer spending, many businesses lost their ability to make a profit and therefore closed their doors and declared bankruptcy
Farm Foreclosure
Occurs when a lender takes over property from an owner who has failed to make loan payments
Many farmers went bankrupt
Loss of savings and Loss of Homes
Many families went through savings first. Then they would cash out their policies. Borrow money from friends and family, stop paying rent and mortgage, move in with relatives, crowded living conditions, 17,000 families were put out on the street per month
Bread Lines/soup kitchens
Offered free or low cost food, resembles a human snake, formed as early as 4:00am, wait up to 2-3 hours, men felt ashamed and humiliated when they couldn’t provide for their family, 1.5 million women had been abandoned by their husbands
Hoboes riding the rails
Hobo was created in the 1930s, poor drifters who hitched rides on trains and slept under bridges. Mostly men, some women. many teenagers
Hooverville’s
makeshift shakes were made out of scrap materials. Mock reference to president Hoover. No running water, electricity, but near rivers and fire plugs. Jackrabbits and gophers were usually eaten. “Hoover flags” are men’s pants turned inside out to represent the lack of money they have
Street Vendors
Street corners in cities were filled with people trying to earn money. Apples were the most common sold item. Nearly 6,000 unemployed people worked in the street, selling apples for 5 cents.
Poor Conditions for Minorities
African Americans experienced unemployment and poverty at double and triple the rates. Last hired and first fired. Increased violence and lynchings.
Poor conditions for children
Brunt of poverty, roam docks in search of spoiled vegetables, begged at neighbors door, dropped out of school, 200,000 moved about the country as beggars
Suicide rate/alcoholism/mental illness and depression
Shame, failure, despair, and anger became part of the American spirit. Suicide rate went over 30%. Alcoholism rose sharply, 3 times as many people were admitted to state mental hospitals
Charity/Kindness/Thriftiness
Many people showed kindness and charity, Organizations were not ready for the problems.
Changing role of government and the development of the welfare state
The government had never been involved in private lives of citizens economically. There was no social security or welfare money. The government would grow larger and the “welfare state” was born.
Rise of dictators in Europe
Emergence of dictators in Europe, promised jobs and better economics.
Hoovers response to the Great Depression
Reassure citizens, normal part of the business cycle
Hoovers Philosophy
The depression was a normal part of the business cycle and that the economy would rebound
His belief in rugged individualism
Born into poverty, became great
Americans can overcome all hardships
Laissez-faire
When the government plays a small role in the affairs of business and there is minimal interference by the government
Rugged Individualism
Americans should succeed through their own efforts and should not rely on the government handouts, unnecessary government intervention threatens prosperity and it dims the spirit of the American people
Hoovers Actions
Encouraged companies to hold wages steady and not lay-off workers. Refrain from striking. He cut taxes to put more money in peoples pockets.
federal Farm Board
Help farmers stabilize prices and promote sales by holding surplus grain in storage
Federal Home Loan Bank Act
Lowered mortgage rates for home owners and allowed farmers to refinance farm loans to avoid foreclosure
Reconstruction Finance Corporation
Provided emergency loans to struggling businesses, banks, and railroads
Hoover Dam
Hoover Dam
The bonus Army
15,000 world war 1 veterans and their families marched to Washington D.C. in support of a proposed bill (Patman Bill), A bonus to WW1 vets early, Senate voted down. They camped outside the building, so the police went down and they fired into the crowd killing 2 veterans. Americans were outraged and once again, Hoovers image suffered
The Hoover Dam
$700 million dollar project, 726 ft. Frank Crowe oversaw the project, from Canada, Was built along the Colorado river
