Wall Street Crash and Hoover's Response

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Questions and Answers

What was the primary cause of the panic on Wall Street, known as "Black Thursday"?

A sudden increase in interest rates by banks, making loans more expensive.

A surge in share prices leading to overvaluation.

Government intervention in the stock market causing a surge in prices.

Investors selling their shares rapidly due to fears of business failures. (correct)

The Wall Street Crash of 1929 led to an immediate and drastic increase in share prices.

False (B)

What was the main economic policy President Hoover advocated for during the early stages of the Great Depression?

Laissez-faire

President Hoover emphasized the importance of "______ individualism" during the Great Depression, encouraging individuals to rely on themselves for support.

rugged Signup and view all the answers

Match the following events to their respective effects on the Great Depression:

Wall Street Crash = Triggered a panic on Wall Street, causing a rapid decline in share prices Smoot-Hawley Tariff = Led to retaliatory tariffs by other countries, harming American exports Emergency Relief and Construction Act = Provided loans to businesses for infrastructure projects, creating jobs Overproduction in farming = Led to falling prices for agricultural products, hindering businesses and leading to job losses Signup and view all the answers

What was the primary reason for the creation of Hoovervilles?

Lack of income and housing (D) Signup and view all the answers

The Bonus Army consisted primarily of World War II veterans.

False (B) Signup and view all the answers

What significant event occurred between 1930 and 1933 that impacted banks?

Nine thousand banks closed. Signup and view all the answers

The widespread unemployment by 1933 resulted in __________ of the American workforce being unemployed.

a quarter Signup and view all the answers

Match the following terms with their descriptions:

Hoovervilles = Makeshift shantytowns for the unemployed Bonus Army = WWI veterans demanding a bonus Dust Bowl = Severe drought affecting farming income Unemployment rate = Percentage of the workforce without jobs Signup and view all the answers

What was the outcome of the Bonus Army's march to Washington D.C.?

The U.S. Army was authorized to disperse them (D) Signup and view all the answers

Industrial wages rose significantly during the Great Depression.

False (B) Signup and view all the answers

What was the amount of savings lost for individuals due to the bank closures?

$2.5 billion Signup and view all the answers

The birth rate declined as families faced __________ hardships.

financial Signup and view all the answers

Who was primarily blamed for the lack of response to the economic crisis and the rise of Hoovervilles?

Herbert Hoover (A) Signup and view all the answers

Study Notes

Wall Street Crash

Share prices plummeted rapidly in 1929, with a total of $64 billion worth of shares traded on the Wall Street Stock Market.
Investors panicked and quickly sold their shares, fearing business collapse and consequent share devaluation.
This triggered a sharp drop in share prices, escalating into a Wall Street panic, known as "Black Thursday."
On Black Thursday, shares lost $26 billion in value.
Banks were forced to recall loans, lacking funds to cover share sales, impacting businesses significantly.
Deflation reduced credit and caused numerous business failures.
Overproduction in agriculture depressed prices, further harming businesses and causing job losses.

Intervention and Volunteerism

President Hoover favored volunteerism and a laissez-faire economic approach, promoting minimal government intervention.
He believed markets would self-correct, and businesses would overcome the crisis independently.
Hoover championed "rugged individualism," encouraging self-reliance rather than government assistance.
Despite his initial stance, the Depression's severity compelled some government intervention.
The 1930 Smoot-Hawley Tariff increased import taxes by 40% to protect American businesses.
This tariff, however, backfired, provoking retaliatory tariffs from other countries, harming American exports and exacerbating the Depression.
The 1932 Emergency Relief and Construction Act provided loans to businesses for infrastructure projects (e.g., the Hoover Dam) to create jobs and boost the economy.
These measures aimed to alleviate the crisis, but they proved insufficient in addressing the depression's severity.

Unemployment, Homelessness, and Hoovervilles

The Wall Street Crash triggered business struggles, resulting in job losses and decreased savings.
Between 1930 and 1933, nine thousand banks collapsed, leading to $2.5 billion in lost savings.
Farming income plummeted to $2 billion in 1932, a third of its 1929 value, due to the Dust Bowl and poor weather.
Industrial wages declined by 50% in 1933, forcing layoffs at companies like Ford.
Widespread unemployment and financial hardship soared homelessness.
By 1933, unemployment reached a quarter of the American workforce.
Lack of income and housing forced many to construct makeshift shantytowns, called "Hoovervilles," in major cities, named after President Hoover due to perceived inaction.
Hoovervilles offered shelter to the unemployed and homeless through rudimentary structures and community support.
The birth rate declined due to financial hardship and housing shortages.
Immigrants and Black Americans disproportionately suffered from unemployment and poverty, facing discrimination.

Bonus Army Marches

The Bonus Army comprised World War I veterans demanding immediate payment of a promised $625 bonus, originally due in 1945.
In 1932, they marched to Washington D.C. to demand payment, facing economic hardship.
Congress rejected their plea, yet the veterans refused to leave, camping outside the White House to pressure the government.
President Hoover ordered the U.S. Army to disperse the veterans, resulting in tear gas, injuries, and deaths. This shocked the public.
This incident severely damaged Hoover's reputation, highlighting his perceived insensitivity to veterans' struggles.

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Description

This quiz covers the events surrounding the Wall Street Crash of 1929 and President Hoover's approach to the economic crisis. Explore the causes of the stock market decline, the panic that ensued, and Hoover's belief in minimal government intervention. Test your knowledge on this pivotal moment in American history.