The Crash Quest

Question 1

List the challenges facing American farmers after WWI.

Answer 1

1. Farmers struggled with dry land caused by overfarming during WWI.
2. Prices for crops decreased as demand declined after the war.
3. Low profits forced many farmers into debt- causing many to face foreclosure.
4. The government did not intervene to help struggling farmers.

Question 2

Define foreclosure.

Answer 2

When a bank takes away your home or farm because you cannot maintain mortgage payments.

*Impacted many farmers before the Great Depression; and impacted all Americans during the Great Depression

Question 3

Describe the role the US government take in the American economy during the 1920s.

Answer 3

The government demonstrated a Laissez-faire approach to the economy, even when problematic signs emerged.

Question 4

Define: Laissez-faire.

Answer 4

When the government demonstrates a very limited role in the economy; putting in place very few regulations.

This approach was prominent in the 1920s.

Question 5

Identify the consumer and bank practices that caused instability within the US stock market.

Answer 5

1. Many Americans participated in stock speculation, creating instability in the stock market.
2. Banks allowed people to buy on margin, adding to risks in the stock market.

Question 6

Define: stock speculation.

Answer 6

Stock speculation involves excessively buying stocks with the hope of making a profit from future price increases– even if you can’t afford to lose that money.

Question 7

Define ‘buying on margin’.

Answer 7

Using bank loans to purchase stocks; considered a very risky practice.

Question 8

Identify the factors that led to the collapse of the American economy in 1929.

Answer 8

1. Risky behaviors in the stock market (like stock speculation and buying on margin) led to instabiiity, eventually resulting in the worst stock market crash in US history in October 1929.
2. The crash led to a wave of bank and business collapses.

Question 9

Describe how the Great Depression compares to other economic challenges in American history.

Answer 9

The Great Depression was more severe and prolonged than previous economic downturns.

Question 10

Describe the challenges facing Americans during the Great Depression in:

1. Cities
2. Rural areas

Answer 10

1. People lost all their money in the stock market collapse and wave of bank failures, record high unemployment (25%), record high eviction rates and homelessness, without money for food people relief on charities that were overwhelmed with demand.
2. Already struggling farmers faced decreased crop prices and profits which led to waves of foreclosure (record high farm foreclosures), as well as the Dust Bowl which devastated farms and caused severe health issues forcing many to leave the Great Plains for California.

Question 11

Define: Hooverville.

Answer 11

Communities of makeshift shacks/shanties build by the homeless in parks and along rivers during the Great Depression; nicknamed after President Hoover who they believed wasn’t doing enough to help them.

Question 12

Identify the factors that caused the Dust Bowl during the Great Depression.

Answer 12

1. Overfarming during WWI led to extremely dry land/loss of topsoil.
2. Extended drought stripped soil of remaining moisture
3. High winds captured the dusty soil and provoked static electricity– forming massive dust storms.

Question 13

Describe President Hoover’s perspective about the president’s role in the economy during the Great Depression.

Answer 13

Hoover believed in limited government intervention in the economy and instead favored:
* Rugged Individualism: encouraging people to overcome their own challenges without outside help.
* Volunteerism: Encouraging those who hadn’t lost everything to give to charity and volunteer to help.

Question 14

Identify examples of President Hoover’s efforts to respond to the Great Depression.

Answer 14

Despite initially doing very little to respond to the Great Depression, Hoover did eventually:
1. Signed the Smoot-Hawley Tariff- which actually made the economy even worse.
2. Approved construction of the Boulder (Hoover) Dam- which employed 42,000 people, provided affordable electriticty, and helped with irrigation.
3. Developed the Reconstruction Finance Corporation (RFC) to try and support struggling banks– unfortunately so many had already closed or were beyond saving.

Question 15

Define: Bonus Army

Answer 15

The Bonus Army was a group of World War I veterans who marched/protested in Washington D.C. to demand early bonus payments in 1932.

Question 16

Describe the controversy surrounding the Bonus Army March in 1932.

Answer 16

After the government refused to pay early bonuses to protesting veterans, they refused to leave prompting Hoover to call on the military to remove their encampment. Soldiers and tanks arrived, violently clearing the encampment, resulting in 2 deaths and extreme public outrage.

Question 17

Identify the factors that influenced the outcome of the 1932 Election.

Answer 17

1. Record high unemployment, bank failures, homelessness.
2. American outrage at Hoover for failing to effectively address these issues.
3. Public reaction to the violent actions taken toward the Bonus Army protesters.
4. Roosevelt’s popularity and belief that he was willing to actually address the Great Depression.

Question 18

Define: Franklin D. Roosevelt.

Answer 18

Popular candidate in the 1932 election, who went on to win the presidency over President Herbert Hoover; Distant cousin of the beloved President Teddy Roosevelt.