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49 Cards in this Set
- Front
- Back
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Many farmers and industries were
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going into debt
*Railroads, textiles, and steel barely made profits *Mining and lumbering declined *Automobile, construction and consumer goods also weakened **A sign of this is less housing being built *Crops declined significantly *Farmers couldn’t pay debts and as a result, rural banks began to fail |
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McNary Haugen bill
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called for price supports
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Price supports
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govt would buy surplus crops at set rates and sell them on the world market
*Wheat, corn, cotton, and tobacco *Vetoed twice by coolidge |
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Americans bought less due to
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higher prices, stagnant wages, unbalanced distribution of income, and overbuying credit
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Production increased much faster than
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wages
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Americans often bought on credit with
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installment plans
*Encouraged consumer debt; led to customers cutting on spending |
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Poverty in the Great Depression
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Many families could not afford what was needed for a decent standard of living
*The rich became wealthier *Many could not afford the new economic advances or buy from the flood of goods. |
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Alfred E Smith
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Democrat who fought against Herbert Hoover in the 1928 election
*Hoover won because many were happy under Republican leadership |
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Some economists saw
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weakness in the economy, but most had confidence in the nation's economic health
*The stock market, which many people invested into, was a visible symbol of the prosperous American economy |
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Dow Jones Industrial Average
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barometer of stock market's health
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Stock rose in the 1920s causing people to
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invest in stocks
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Speculation
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bought stocks and bonds on the chance of a quick profit while ignoring risks
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Buying on margin
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paying a small percentage of a stock's price as a down payment and borrowing the rest
*Govt did not try to regulate stock market *Would significantly hurt investors if prices fell |
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Oct 24, 1929
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stock market fell; market plunges; shares unloaded
*Black Thursday |
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Black Tuesday
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the bottom fell out of the market
*Shareholders frantically tried to sell before prices plunged more *People were stuck in debt or lost most of their savings *Oct 29, 1929 *Began Great Depression |
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Great Depression
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1929 to 1940 where the economy plummeted and unemployment skyrocketed
*Not caused by crash alone but the crash hastened it and made it more severe |
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People tried to withdraw their money from the bank but
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some couldn't because the banks had invested in stock
*More than 600 banks closed *11000 failed *People lost their savings |
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Great depression halved
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GDP (gross domestic product)(nation's total output of goods and services)
*Automobile and railroad companies were hit *Millions lost their jobs; those with jobs faces pay cuts and reduced hours *A few like Joseph P Kennedy sold stock beforehand and made money |
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The great Depression made it difficult to |
sell American farm products and manufactured goods abroad and import European goods
*European countries faced war debts like Germany |
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Hawley Smoot Tariff Act (1930)
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congress established the highest protective tariff in US history
*Protect American farmers and manufacturers from foreign competition *Prevented other countries from earning US dollars to buy American goods *Unemployment was worse because industries could not export to Europe *Many countries retaliated by raising their own tariffs, harming world trade by 40% |
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Cause of Great Depression
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*Tariffs and war debts that cut down the foreign market for American goods *Crisis in the farm sector *Availability of easy credit *Unequal distribution of income *These factors led to falling demands for consumer goods *Govt contributed to crisis by keeping interest rates low, allowing companies to borrow easily and build debt |
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Bull and Bear market-
*Bull= stock market is going well *Bear |
empty, "bare" market
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Many people
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lost their jobs and became homeless
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Shantytowns
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little towns consisting of shacks
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Soup kitchens
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offered free or low cost food
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Bread lines
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lines of people waiting to receive food provided by charitable organizations
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African Americans and Latinos faced
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lower wages, higher unemployment rates, and increasing racial violence
*Many Latinos either left to Mexico or were deported there by the govt |
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While the depression hit rural areas, farmers had the advantage of
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growing their own foods
*But many lost their land due to debt and barely scraped by with tenant farming |
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Drought began in early 1930s and affected the
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Great Plains
*Farmers exhausted land due to overproduction of crops *Without many plants to hold up soil, winds scattered topsoil and spread dust around |
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Dust Bowl
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Kansas, Oklahoma, Texas, New Mexico, and Colorado
*Many families left and headed towards California to be farmhands |
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Okies
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became a negative term for migrants
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Family stood as a symbol of
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strength; the importance of the family unit was emphasized but some families broke apart due to strain of daily struggles
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Men and People During Great Depression
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*Many men wandered around in search of jobs; became hoboes *Suicide rates and admission to mental hospitals rose *People gave up doctors, dentist, college, marriage, and having children *People were nicer to others down on their luck; increase in thriftiness |
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Direct relief
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cash payments or food provided by govt to the poor
*There was no direct relief in the beginning |
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Women during Great Depression
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Women canned food or sewed clothes and managed the household budget
*Many women worked outside the home but for less money *Became targets for resentment; people believed that women, especially married, had no right to work when there were unemployed men |
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Children During Great Depression
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Children suffered from poor diets and lack of health care
*Schools were shortened or closed *Many children went to work *Teenagers hopped on freight trains for work and adventure "hoover tourist" *The roads were dangerous |
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WW1
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farmers took out loans 4 expensive farming equip
˅ Over production of crops ˅ Price and demand go up of food-farms cans sell crops ˅ Dust storms and high prices of food-farmers cant pay loans/mortgage ˅ Farms lose homes and forced to move west/east |
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During Great Depression, Herbert Hoover encouraged
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optimism and to remain about their business
*Hoover wanted cooperation between competing groups and interests in society (but be voluntary) |
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Americans believed in
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"rugged individualism" which is why Hoover opposed any form of federal welfare or direct relief to the needy
*Afraid that he would weaken people's self-respect and moral fiber *Felt that individuals, charities, and local organizations should pitch in *federal govt should direct relief measures *Frustrated Americans |
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Hoover had a
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cautious approach to govt
*Urged key leaders to work together for the solution *Year later, economy still shrunk |
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Boulder Dam
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built by Hoover on Colorado River
*World's tallest dam & second largest overall *Electricity, flood control, and water |
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Democrats began
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taking power
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Some farmers
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burnt crops or refused to work as retaliation for Depression
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Hoover began taking action with the Federal Farm Board
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which would help raise crop prices by buying crops and keeping them off market until prices rose
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National Credit Corporation helped
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stave off bankruptcy
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Federal Home Loan Bank Act
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lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure.
*After Hoover, Congress passed the Glass-Steagall Banking Act which separated investment from commercial banking and would hopefully prevent another crash |
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Hoover's most ambitious economic measure was the
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Reconstruction Finance Corporation
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Reconstruction Finance Corporation (RFC)
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authorized up to $2 billion for emergency financing for banks, life insurance companies, railroads, and other large businesses
*Hoover hoped money would trickle down to the poor through job growth and higher wages *Businesses still failed |
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Bonus Army
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WWI vets and their families that gathered at DC
*Bonus Army Came to support Patman Bill which would authorize govt to pay a bonus to WWI vets who had not been compensated adequately for their wartime service *Hoover did not like the Marchers and opposed legislation but respected their peaceful assembly and provided supplies so they could erect their own shantytown *Senate vetoed down bill and Hoover asked Marchers to leave *Hoover sent troops to those who remained in fear that they would become violent *People were gassed and a few were killed which caused an outrage *Hoover would later had to face Democrat Franklin D Roosevelt |
