Great Depression & New Deal Flashcards
What event on October 29, 1929, marked the onset of the Great Depression?
Black Tuesday
Describe what happened on Black Tuesday during the Great Depression.
On October 29, 1929, the stock market lost 12% of its value, signaling the start of the Great Depression.
Why is Black Tuesday significant in the context of the Great Depression?
It symbolizes the dramatic failure of the stock market, precipitating widespread economic turmoil.
Why was buying on margin risky during the Great Depression?
It involved using borrowed funds to purchase stocks, magnifying losses during the market crash when the Dow fell by nearly 90%.
How did uneven distribution of income contribute to the Great Depression?
The richest 1% of Americans owned nearly 33% of the assets, exacerbating economic imbalances that led to the depression.
How did excessive use of credit exacerbate the Great Depression?
Consumer debt more than doubled from 1920 to 1930, from $3 billion to $7 billion, leading to unsustainable financial bubbles.
How did overproduction contribute to the Great Depression?
Factories and farms produced more goods than could be sold, leading to a surplus that drove down prices and profits.
Why were high tariffs detrimental during the Great Depression?
The Smoot-Hawley Tariff of 1930 raised U.S. tariffs on over 20,000 imported goods to record levels, severely reducing international trade.
Critique the Federal Reserve’s policies during the early Great Depression.
The Fed’s failure to expand the money supply contributed to a deepening of the economic crisis, with the money supply contracting by 30% from 1929 to 1933.
Describe the significance of the stock market crash in 1929 during the Great Depression.
The crash led to a loss of over $30 billion in market value, equivalent to about $430 billion today (2024), devastating the economy.
Describe the extent of business failures during the Great Depression.
Over 85,000 businesses failed between 1929 and 1933, reflecting the severe impact of the economic downturn.
Describe the unemployment rate during the Great Depression.
Unemployment soared to 25% by 1933, up from just 3% in 1929, leaving approximately one in four workers jobless.
How widespread were bank failures during the Great Depression?
Nearly 9,000 banks failed throughout the 1930s, wiping out millions of people’s savings due to lack of federal insurance.
ow did the Great Depression affect the Gross National Product (GNP) of the United States?
The GNP of the U.S. fell by almost 50% from $104 billion in 1929 to $56 billion in 1933, highlighting the economic devastation.
Describe the impact of the Great Depression on poverty and homelessness.
Poverty rates skyrocketed, and homelessness became widespread, with over 2 million people roaming the country by 1932.
Who was the U.S. President at the start of the Great Depression?
Herbert Hoover
Describe Herbert Hoover’s approach to the Great Depression.
Herbert Hoover promoted policies based on self-reliance and limited government intervention in the economy.
How did Herbert Hoover’s belief in self-reliance influence his response to the Great Depression?
Hoover believed that voluntary measures and individual initiative would be sufficient to recover from the economic crisis, avoiding direct government relief to the unemployed.
How did the Hawley-Smoot Tariff affect the U.S. economy during the Great Depression?
Enacted in 1930, it raised U.S. tariffs to historically high levels, worsening the Depression by stifling international trade.
Describe the purpose and impact of Hoover’s debt moratorium.
In 1931, Hoover proposed a one-year moratorium on international debt repayments to help stabilize the global economy, but it had limited success.
How did the Farm Board attempt to address the agricultural crisis during the Great Depression?
Created in 1929, the Farm Board aimed to stabilize prices by buying surplus grains and cotton, but it struggled to curb the agricultural economic decline.
What was the impact of the Reconstruction Finance Corporation during the Great Depression?
Established in 1932, it provided federal loans to banks, railroads, and other large businesses, but it was criticized for not doing enough for ordinary Americans.
Describe the events and outcome of the Bonus March.
In 1932, World War I veterans marched to Washington, D.C., to demand early payment of a promised bonus, but were violently dispersed by the Army, damaging Hoover’s public image.
Describe the phenomenon of “Hoovervilles” during the Great Depression.
Makeshift shantytowns named “Hoovervilles” sprung up across the U.S., symbolizing public discontent with Hoover’s handling of the economic crisis.