Podcast
Questions and Answers
What caused farmers to be unable to pay off their loans after World War I?
What caused farmers to be unable to pay off their loans after World War I?
What does 'buying on margin' refer to?
What does 'buying on margin' refer to?
What was the primary purpose of the Hawley-Smoot Tariff Act?
What was the primary purpose of the Hawley-Smoot Tariff Act?
Which of the following best describes Black Tuesday?
Which of the following best describes Black Tuesday?
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During the Great Depression, what was the effect on unemployment from 1929 to 1933?
During the Great Depression, what was the effect on unemployment from 1929 to 1933?
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Which of the following options was NOT a major cause of the Great Depression?
Which of the following options was NOT a major cause of the Great Depression?
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What term describes the towns consisting of shacks that emerged during the Great Depression?
What term describes the towns consisting of shacks that emerged during the Great Depression?
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What was a major contributing factor to the Dust Bowl in the 1930s?
What was a major contributing factor to the Dust Bowl in the 1930s?
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What was the primary belief of Hoover's administration regarding the economy during the Depression?
What was the primary belief of Hoover's administration regarding the economy during the Depression?
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Which program was established to help put Americans back to work during the Depression?
Which program was established to help put Americans back to work during the Depression?
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What was the main purpose of the Reconstruction Finance Corporation?
What was the main purpose of the Reconstruction Finance Corporation?
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What was the main goal of the Federal Home Loan Bank Act?
What was the main goal of the Federal Home Loan Bank Act?
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What was the Bonus Army advocating for?
What was the Bonus Army advocating for?
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What was the purpose of the Social Security Act?
What was the purpose of the Social Security Act?
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Which act requires companies to provide complete transparency in their stock information?
Which act requires companies to provide complete transparency in their stock information?
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What were FDR's fireside chats primarily aimed at achieving?
What were FDR's fireside chats primarily aimed at achieving?
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Which two programs were the largest components of the Second New Deal?
Which two programs were the largest components of the Second New Deal?
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What is deficit spending?
What is deficit spending?
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Study Notes
Crop Prices and Farm Loans
- Crop prices rose during WWI due to high international demand.
- Farmers increased planting and borrowed for land/equipment.
- Post-war demand fell, and crop prices plummeted by 40%.
- This made it difficult for farmers to repay their loans.
Buying on Credit
- Buying on credit allowed consumers to purchase items immediately, paying later.
American Business Encouragement
- Businesses encouraged high consumer debt by making credit easily accessible.
Presidency During the Crash
- President Hoover was president during the stock market crash.
Dow Jones Industrial Average
- The Dow Jones is a stock market index representing 30 large companies.
Speculation and Buying on Margin
- Speculation is risky investment based on quick profit potential, ignoring risks.
- Buying on margin involves a small down payment on stock, borrowing the rest.
Black Tuesday
- On October 29, 1929, the stock market crashed.
The Great Depression
- The Great Depression was the period from 1929-1940, marked by economic decline and high unemployment.
- By 1933: 11,000 banks failed, 90,000 businesses went bankrupt, and the gross national product halved. Unemployment increased from 3% in 1929 to 25% in 1933.
Hawley-Smoot Tariff Act
- This act imposed the highest protective tariff in US history, aiming to protect farmers and manufacturers.
Four Major Causes of the Great Depression
- Tariffs and war debt policies reduced foreign markets.
- Farm sector crisis.
- Easy credit.
- Unequal income distribution.
Shantytowns
- Little towns of shacks built by the poor and homeless during the Depression were known as shantytowns.
Ways the Poor and Homeless Were Fed
- Soup kitchens and bread lines provided food to those in need.
Difficulties for Minorities
- African Americans and Latinos experienced higher unemployment and lower wages.
- Increased racial violence occurred with unemployed white workers competing for jobs.
The Dust Bowl
- Reduced rainfall in the 1930s affected the Great Plains.
- Overproduction of crops and overgrazing made the grasslands unsuitable for farming.
States Affected Most by the Dust Bowl
- Kansas, Oklahoma, Texas, New Mexico, and Colorado were significantly affected.
Direct Relief
- Government payments or food provided to the poor.
- New York provided a weekly payment of $2.93 per family.
Government Response to the Depression — Hoover's Approach
- The Hoover administration believed the economy would self-correct without government intervention.
Major Program to Create Jobs
- Federal Emergency Relief Administration (FERA)
Federal Home Loan Bank Act
- This act aimed to help Americans keep their homes through home loan refinancing.
Reconstruction Finance Corporation (RFC)
- The RFC provided $2 billion in emergency funding for banks, insurance companies, railroads and large businesses.
- Its intended benefit was to stimulate economic recovery “trickling down” to ordinary citizens.
The Bonus Army
- 10,000 to 20,000 WWI veterans marched on Washington to support the Patman bill.
Patman Bill
- Provided bonus payments to WWI veterans.
Hoover's Response to the Bonus Army
- Hoover initially asked the veterans to leave and then deployed the army to disperse those who had not.
1932 Presidential Election Winner
- Franklin D. Roosevelt won the presidential election.
Roosevelt's New Deal Program
- Roosevelt's program aimed at relief, economic recovery, and financial reform.
Fireside Chats
- Roosevelt's radio addresses aimed to inform and reassure the public about New Deal initiatives.
Federal Deposit Insurance Corporation (FDIC)
- The FDIC insured bank accounts up to $5,000.
Federal Securities Act
- This act required detailed information on stock offerings.
Civilian Conservation Corps (CCC)
- This act aimed to control crop production for price stabilization.
Work Relief Programs
- Public Works Administration, National Industrial Recovery Act (NIRA).
Deficit Spending
- Deficit spending is when government spending exceeds revenue.
Reasons for a Second New Deal
- Economic gains from the first New Deal were insufficient, with persistently high unemployment and low production.
Eleanor Roosevelt
- FDR's wife who was a social reformer, advocating for the less fortunate.
Work Progress Administration (WPA) and National Youth Administration (NYA)
- WPA focused on creating jobs quickly. NYA provided jobs, education, counseling and recreation for young people.
Social Security Act
- The Social Security Act included old-age insurance, unemployment compensation, and aid to families with dependent children/disabled.
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Description
This quiz covers key events leading to The Great Depression, including crop prices, buying on credit, and market speculation. Understand the economic factors during the 1920s and the significant impact of Black Tuesday. Test your knowledge on crucial elements that shaped American economic history.
