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World History V > Great Depression 1930s > Flashcards

Great Depression 1930s Flashcards

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1
Q

What is a stock?

A

Shares of a company bought and sold

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2
Q

What causes stock market prices to increase/decrease? /2

A

Increase: demand is high

Decrease: demand is low or non-existent

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3
Q

What was the lifestyle of the wealthy in the 1930s? /4

A

Huge housings (multiple rooms and floors)

Having their own railway cars

In-house service (maids, servants)

Parties

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4
Q

What is consumer credit? /2

A

Borrowing money for purchasing power

“Buy now, pay later”

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5
Q

What is “buying on margin”?

A

Means to borrow money to buy stocks

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6
Q

What were the two economic problems that existed in 1929? /4

A

Many people have accumulated debt

Car sales drop

Steal production declines

Majority of the population is poor and getting poorer

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7
Q

What was the crash of 1929? /2(4)

A

October 29th, 1929 (Black Tuesday)

Everyone tries to sell their stocks all at once,
|-> causes demand to decrease substantially
|-> due to prices being so high—can’t be paid back

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8
Q

How often does a stock market crash happen? /2

A

Every 20 to 30 years (a generation or so)

People start losing faith in the economy

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9
Q

Why do people start losing faith in the economy? /2

A

Decrease in production

Stock market decreasing to a crash makes it worst

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10
Q

Did the Great Depression start immediately after the stock market crash?

A

No.

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11
Q

What is a speculator?

A

Someone who does something very risky, but that could yield profits

Ex. Buying on margin

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12
Q

What is the Bread line?

A

Lining up to get free bread

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13
Q

Why were there so many men in suits (middle class) occupying the Bread line? /2

A

Consequence of the stock market crashing

Those men lost all their money and savings in buying stocks

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14
Q

What is economic free-fall? /2

A

US economy was slowing down

Stock market crash accelerated the downturn in the economy

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15
Q

What is recession? /2

A

Gross Domestic Product falls for 2/4 of six months only

Common

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16
Q

What is Gross Domestic Product? /2(3)

A

The total value of all goods and services produced in a country in 1 year

Increase GDP:

  • People are employed
  • Production/economy is stable/flourishing
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17
Q

What is a depression? /3

A

A sustained, long-term downturn in an economy

Prolonged recession

Falls for over 2 years straight (rare)

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18
Q

What are the consequences of the American depression? /5

A

High unemployment: 25% unemployment rate in the 1930s

Lack available credit

Low production

Bankruptcies

Reduced trade

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19
Q

What is lack of credit in the 1930s? /3

A

Banks can not give loans

Due to not having enough of a revenue (money) to meet everyone’s request to borrow

Why:
Banks can only have a certain amount of money in their reserve

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20
Q

What is overproduction in the late 1920s to early 1930s? /3

A

One of the major causes of the Great Depression

Farmers experience this cause first

Companies are producing at a rate where they BELIEVE demand has/will increase

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21
Q

What is the cause of overproduction in the 1930s? /4

A

Companies banked on the fact that demand was high in the 1920s,

Companies expand and increase their production, BELIEVING it would continue in the 1930s’

Eventually more goods are produced than can realistically be sold

The gap between production and demand is too big

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22
Q

What is the consequence of overproduction in the 1930s? /3

A

Companies try to rid of their goods by lowering the prices

Companies slow down production by 1930

Massive lay-off of workers (eventually firing them)

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23
Q

What does lay-off mean? /2

A

Workers start to work less, resulting finally in unemployment

Full-time 
⬇️
Part-time (payed half of their usual salary)
⬇️
Fired/unemployed
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24
Q

What are bank failures in the late 1920s to early 1930s? /3

A

One of the major causes of the Great Depression

Borrowers can not pay back their loans to banks

Money disappears LITERALLY

25
Q

What is the cause of bank failures in the 1930s? /2

A

Banks also played in the stock market (BAD IDEA), using the money from their reserves

Banks play in the stock market
⬇️
Market crashes
⬇️
Banks lose money 
⬇️
Banks can not give loans/unable to open people’s savings account
⬇️
Money disappears
⬇️
Banks close
26
Q

What are the consequences of bank failures in the 1930s? /7

A

Americans owe banks approx. $45 Billion due to the inability to pay them back on the 1930s

Money disappears LITERALLY

Fewer banks to get a loan from

Savings account disappear

Lack of credit available

People lose their money with no hope of borrowing more

American money supply reduced by almost 1/3

27
Q

Why are banks cautious of who they loan money to after the stock market crash?

A

If they were to loan to anyone, they too will become bankrupt

28
Q

What was the worst year of depression for banks?

A

1933

4004 banks closed

29
Q

What did it mean that you’re money would disappear LITERALLY in the Great Depression?

A

You must get your savings money out of the bank before it goes bankrupt and ultimately disappear

30
Q

What is the distribution of wealth in the 1930s? /5

A

One of the major causes of the Great Depression

Unequal distribution of wealth

5% of Americans owned 33% of the nation’s wealth

70% of population at or below a decent wage

Disposable income of rest of population changed little

31
Q

What is the cause of distribution of wealth in the 1930s?

A

The wealthy stopped spending/investing because they don’t need to

32
Q

What are the consequences of the unequal distribution of wealth in the 1930s? /4

A

Consumer spending drops, when spending could have stimulated the economy

Disparity between the rich and the poor

Economy is at a still

Wages do not increase regardless of high employment

33
Q

What ends the Great Depression?

A

WWII

34
Q

What did the lower class do as employment in the late 1920s early 1930s? /3

A

Road workers

Have small wages

Cultivate other people’s land

35
Q

What prolonged the Great Depression? /4

A

Little government attention (for 2 years)

Laissez-faire economics

Hawley-Smoot Tariffs

Drought/ Dust bowl

36
Q

Why was there little government intervention during the Great Depression? /2

A

The government did not identify it as a depression yet

Saw it as a normal downturn in the economy

37
Q

Who is the US president during the Great Depression?

A

Republican Herbert Hoover

38
Q

What did president Herbert Hoover do for the Great Depression?

A

Introduced laissez-faire economics

39
Q

What is laissez-faire economics? /2

A

The idea of the market fixing itself

Not something the American government should intervene/meddle with and wait for an outcome

40
Q

What are the Hawley-Smoot Tariffs? /4

A

Designed to increase production in the US

Putting tax on imported goods = more expensive goods

People will want to buy domesticated goods

FAILS

41
Q

Why does the Hawley-Smoot Tariffs fail? /2

A

Trading countries get mad

Put barriers in trading networks with the US

42
Q

What is the SMILETTE poster? /4

A

Created by the Democratic government

Used as commentary on the republican “laissez-faire economy”/government

Stating the Republican government is not good for the nation

(Also) Election poster for future president: Franklin Delano Roosevelt

43
Q

What is the drought of the 1930s?

A

Dust storms ravage the region until the late 1930s

44
Q

What is the cause of the drought of the 1930s? /2

A

Overgrazing/excessive ploughing of the American plains in the 1920s rendered the soil fragile

Rains stop in 1930

45
Q

What are the consequences of the 1930 drought? /4

A

Tracker introduced: good for speed and bad for ploughing

High infant/elderly death rate: pneumonia/suffocation on dust

Plagues of grasshoppers

The Great Depression is also called the Dirty Thirties

46
Q

How does the depression spread worldwide? /5

A 
US banks call in loans from foreign countries
⬇️
Foreign countries’ exports decrease
|-> can no longer pay back their loans 
⬇️
US banks fails
⬇️
With no exports to the US, foreign economics fail
⬇️
Britain, France, Japan are affected
47
Q

What is the process (causes) that leads to the Great Depression? /6

A 
High production
⬇️
Low demand
⬇️
Prices fall
⬇️
Lay-offs (potential firing)
⬇️
Demand decreases further
↗️
Production decreases further/prices fall again
48
Q

What is unemployment like in the 1930s? /8

A

Over 1/2 of all households are impacted by the Depression

Companies closed

Reduced demand

Lay-offs became common

Large companies made all jobs part-time

Car industry laid-off almost half their employees

25% of Americans are unemployed

People use CV boards

49
Q

How did the working class cope with unemployment? /10

A

Hover flag

Don’t go to doctors : buy sketchy medicine

Turn down heat/ wear lots of clothes= decrease living costs

Move to smaller apartments = decrease living costs

Do not buy meat or dairy: most expensive foods

Buy potato, onion and cheap food

Used all their savings

Bandit buggy: tie a horse to a car
|-> people can’t afford gas

People live with other families

Do chores for money

50
Q

What is the Hover flag? /2

A

Empty pockets

Make front of Hover who did little changes

51
Q

How did the middle and upper class affected by the Great Depression? /2

A

Lost a lot in the stock market, were ruined

Other lost their jobs, unemployed

52
Q

How come some in the middle and upper classes were not impacted by the Great Depression? /3

A

Some investors profited from low stock market prices

Other industries, like advertising companies, exploded thanks to companies trying to increase demand

Sit on money, are patient

53
Q

What consequence did the drought have on Canada? /5

A

Rural families leave for the cities

Single men find work

Many depend on soup kitchens

Kindness of strangers to survive

ALOT of immigration

54
Q

What are hobos? /5

A

Leave their homes

Ride on rail and go around the country to find jobs

Illegal

Not a lot of jobs in cities either

Uses signs to help each other

55
Q

What consequence did the Great Depression have on American migration? /4

A

Families leave the plains

Called “Okies” or “exodusters”

Many Americans leave for California

Find work as seasonal farm labourers or remained unemployed
|-> ex. Picking berries

56
Q

Why do many Americans move to califomis Ain the 1930s? /3

A

Since California holds a lot of berries for farming

Good food resource

57
Q

What is the FDR? /2

A

The Franklin Delano Roosevelt political party

Introduced programs to improve the economy

58
Q

Why does the FDR take over?

A

1932 voters are dissatisfied with President Hoover and want to change

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