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US History II Honors- Dr. Kenney > The Great Depression: Boom and Bust > Flashcards

The Great Depression: Boom and Bust Flashcards

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1
Q

Who was Warren G. Harding?

A
  • President 1921-1923
  • unable to see corruption among his staff
    -Was Ohio senator
  • Motto: “a return to normalcy” which means steady way of doing things.
  • known to be soft and didn’t like to say no
    Republican
  • Didn’t know much about the government.
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2
Q

Who was Albert Fall?

A
  • Harding appointed him secretary of the interior

- became involved in Teapot Scandal

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3
Q

Who was Calvin Coolidge?

A
  • President after Harding
  • continued harding’s policies and had an isolationist view (did not want to trade with other nations)
  • DAWES Plan during his presidency- set up a payment schedule to lend money to Germany so they can pay back Europe and then Europe can pay us back
  • Gave boring speeches and was extremely shy
  • VP candidate to harding
  • was governor of Massachusetts
  • did not change anything in business.
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4
Q

Who did Al Smith run against?

A

Hoover

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5
Q

Who was Herbert Hoover?

A
  • republican chose Hoover when Coolidge didn’t run again for presidency.
  • Supported isolationism, individualism, free enterprise, and small government
  • Good leader, good integrity, humanitarianism, passion for assembling facts
  • won by a landslide when he ran for presidency in 1928
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6
Q

Who was Alfred E. Smith?

A
  • Roman Catholic
  • Ran against Hoover
  • Radio was widely used in campaign elections and helped hoover run a dirty campaign
  • Smith was unable to win in the south because he was Catholic, opposition to prohibition, liberal ideas
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7
Q

Adkins v. Children’s Hospital?

A
  • Supreme Court overturned their claim that women needed a protective status for their minimum wage
  • It denied women a minimum wage with the argument that because they want to be equal to men then they shouldn’t have a minimum wage because men don’t have one.
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8
Q

Teapot Dome Scandal?

A
  • The secretary of the interior, Albert B. Fall convinced the secretary of the navy to transfer valuable oil-laden land to the interior department.
  • Fall was bribed with $100,000 to lease the lands to oilmen Harry F Sinclair and Edward L. Doheny
  • Attorney General Daughtery was accused of illegal pardons and liquor permits
  • Harding died in San Francisco on August 2 in 1923 with reputation intact.
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9
Q

What is the Hawley-Smoot Tariff

A
  • Intended to be a mild tariff; congress taxed on several amendments, turning it into a bill that raised the tariff to 60%
  • nation highest protective tariff during the peacetime
  • tariff deepened the depression that had already begun in America and other nations and increased the international financial crisis.
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10
Q

What is the DAWES plan?

A
  • Addressed the debt repayment issue; it set up German reparations and allowed Americans to make private loans to Germany
  • a downturn in the global economy disrupted the flow of money and because of this the US never fully received the money back
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11
Q

What is Black Tuesday?

A
  • The crash started on Thursday when everyone started selling their stocks. The the group of bankers met and put $250 million dollars back it. This caused the market to rise.
  • everything was good over the weekend
  • But Tuesday is when everything crashed again, but this time there was nothing that could help it.
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12
Q

What were Hoovervilles?

A

Little towns that poor people built to protect themselves. The houses were made out of cardboard. They called it this because they were blaming Hoover for ignoring the problems and for putting the country in that situation.

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13
Q

What was the Reconstruction Finance Corporation (RFC)?

A
  • 1932
  • it was a government lending institution
  • it was established under hoover
  • It agreed to assist big businesses like railroads, banks, credit corporations
  • failed to encourage economic growth (trickle-down economics, didn’t work)
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14
Q

What was the Stimson Doctrine?

A
  • 1932
  • it stated the the US would not recognize any territory that has been taken by force
  • this was specifically addressing Japan taking China’s land
  • this was an underlying factor to WWII
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15
Q

What was the Bonus Army?

A
  • 1932, the capital was surrounded by unemployed veterans from WWI
  • The government was holding their assets
  • when the depression hit they asked for their money back because they couldn’t support their families.
  • they demanded their promised bonus money for their service in the army.
  • the govt sent in troops to get them
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16
Q

What is the Kellogg-Brand Act?

A
  • 1928
  • ratified by 62 nations
  • made it illegal to declare war
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17
Q

Who was FDR?

A
  • Got into office in a landslide

- when he first got into office, he closed all the banks and declared it a bank holiday.

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18
Q

What day did the stock market crash?

A
  • On October 24, 1929
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19
Q

What was everyone’s view of life after WWI?

A
  • everyone was optimistic and happy.
20
Q

When did consumer credit start and what is it?

A
  • it started after WWI

- “Buy now, pay later” mentality

21
Q

How did Liberty Bonds create investment culture?

A
  • Americans were already used to in vesting in the government to pay for the war and they would get interest from the bonds.
22
Q

Who was Charles Mitchell?

A
  • Got Americans to invest in companies instead of bonds
  • first time Americans were able to make investments of this nature
  • Stocks kept rising, celebrities would endorse companies and products
23
Q

How was Joseph Kennedy involved in the Great Depression?

A
  • He was a Wall Street Speculator that became a celebrity

- celebrities were considered smart and creative innovators that were trying to help America get wealthy.

24
Q

How were Americans buying stock?

A
  • they bought stock with borrowed money and there were no rules as to how much money you would have to pay upfront or borrow.
  • this became a large part of the economy
  • 40 cents out of every dollar was loaned for stocks
  • they were buying stocks on margin (buy now pay later)
25
Q

How did women start to gain independence?

A
  • by going to college
  • they invested in the stock market
  • they were starting to manage their own finances.
26
Q

What was Calvin Coolidge’s motto?

A
  • “The business of America is business”

- he had connections to Wall Street’s inner circle, small but very wealthy and powerful firms.

27
Q

Why did Wall Street’s power grow unchecked?

A
  • the stock market had a big influence on the government and because powerful firms had close relationships with the government, it prevented the govt from checking the market.
  • Because of this, insider trading occurred all the time.
28
Q

Describe Hoover’s election in 1929.

A
  • He had a dirt smear campaign
  • he saw how spectators would pump and dump stock but turned his head the other way and did nothing about it.
  • He had no political courage
  • thought the market would take care of itself
29
Q

Who was Paul Warburg?

A
  • American investor, born in Germany
  • He issued a warning that stated that if things continued the way they were that there would be a “general depression” that would affect the whole country
  • he saved his bank before things got bad
30
Q

What happened in May 1929?

A
  • 60 new companies appeared on the stock market

- People like Groucho Marx questioned his broker.

31
Q

What happened in September 1929?

A
  • the stock market became volatile
  • hoover did nothing.
    He asked for info from his banker friend, Thomas LaMontt but he said the market would correct itself.
  • five days later the market crashed
32
Q

Why was there a sudden loss of confidence in the market?

A
  • More specifically, automobile stock fell sharply on Wednesday, October 23
  • this was the start of the crash, which is noted as Tuesday, Oct 29
33
Q

What happened on Thursday, October 24th?

A

Prices of the stock dropped drastically

  • masses of people were gathering in the street. They were all shocked.
  • 400 mounted policemen were called in Wall Street to stop the mobs
34
Q

What happened to Winston Churchill during the crash?

A
  • he lost a fortune
35
Q

After the first crash, what did the elite investment group decide to do?

A
  • they decided to gather up a sum of $250 million dollars and put it back into the market in hopes that it would help it.
  • They all held more than $6 billion in assets
  • Charles E. Mitchel went to J.P Morgan with the $250 mil to invest
  • Mitchel bought stocks at a higher price than they were. This was symbolic and was meant to restore confidence.
  • it worked!
36
Q

Describe the stock market on Monday, October 28.

A
  • the ticker tape couldn’t keep up with the stocks
  • people were exhausted and some even fainted.
    Bankers demanded collateral in the form of cash because they were afraid they weren’t going to be paid back the money people had borrowed.
  • they told people to bring cash or their stocks would be sold.
37
Q

What percentage did the stock prices plummet?

A
  • 22% in one day
38
Q

What happened on Tuesday, October 29?

A
  • the stock market crashed, but this time no one could fix it.
  • $25 million in personal wealth disappeared
  • over 2,000 banks failed and then another 3,000 failed over the next couple of years.
39
Q

Was there any infrastructure in place?

A
  • No
  • there was no FDIC (no way to back up the banks)
  • the entire financial system was worthless
  • people stopped putting their money in banks
40
Q

How did the domino effect work?

A
  1. Banks, brokerages, and lending companies were loaning money to people to buy stocks
  2. When prices of stock fell there was a mass bankruptcy and liquidity (drastic change in an assets price) crisis
  3. Businesses laid people off
  4. Unemployed people were unable to support their families
  5. as demand fell more businesses closed which meant more people were out of work
  6. the cycle continues
41
Q

Who was Franklin Delano Roosevelt?

A
  • democrat
  • took office in a landslide victory
  • seen as savior of America and promised a new deal for American public
42
Q

What was FDR’s plan?

A
  • he would regulate the financial system. He guaranteed bank deposits, and instituted and enforced laws that forced banks to adhere to strict govt regulations
43
Q

What happened when investigations into the crash were launched?

A
  • Banks and brokerages were found guilty of having manipulated the system
  • FDR formed a securities and exchange commission and put his buddy Joseph Kennedy in charge
44
Q

Presidents in order.

A
  1. Harding
  2. Coolidge
  3. Hoover
  4. FDR
45
Q

What is the Fordney-McCumber Tariff?

A
  • increases tariff.
46
Q

What is “Silent Cal”?

A
  • A nickname for Coolidge
47
Q

What happened to farmers and unions during the 20s?

A
  • Union membership declined
  • Companies favored open shops (Jobs open to non union workers)
  • Farmers experienced economic difficulty
  • there was a less demand for crops from domestic and international markets after WWI

US History II Honors- Dr. Kenney (1 decks)

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