Ch. 21 Sections 1, 2, and 3

Hoover Dam

A huge public works project on the Colorado River that provided jobs, water for irrigation, and power -One policy that did succeed was the construction of Boulder Dam, (later renamed Hoover Dam) across the Colorado River. Started in 1930, the huge dam provided power for more than a million people and irrigation for farm land, and brought needed jobs to the Southwest.

Banking Crisis (what would have caused one? Where do people go when they suddenly need money?)

A stock market crash can cause a banking crisis as when the stock market crashes, people try to sell their bonds for any price to try to pay back their loans. When this happens, people fear that their money in the banks will be lost so they go the banks to try to withdraw their funds. However, the banks dont have enough of their money on hand in cash, causing banks to start to fail, leading to business' to start to close and/or lay off their workers, therefore lowering the demand for goods

Borrowed money to buy stock, assuming prices would continue to increase

Because the stock market continued to rise, what did many people continue to do?

-Hardships in Europe and rural America -uneven distribution of wealth -speculation in the stock market -increased personal debt

Causes of the Great Depression

Production fell, workers were laid off/unemployment rose, the economy fell into a period of dramatic decline, family life was hurt, African Americans had even a harder time of getting a job (Many were thrown off southern farms where they were sharecroppers), as Okies moved out of the Plaines, Mexicans and Mexican Americans faced fierce competition for jobs as well as the US government encouraged them to go back to Mexico

Effects of the Great Depression

Okies

Great Plains farmers forced off their land by the Dust Bowl -Farmers who had lost their land, called Okies regardless of where they were from, were forced to leave. -In old trucks, farmers moved west or to northern cities. Before the pace slowed, 800,000 Okies left Texas, Oklahoma, Missouri, and Arkansas alone. Rural states lost population during the 1930s. Those who could afford it bought distressed neighbors' farms at low prices to build expanded commercial farms.

The Dust Bowl

Millions of acres in the Great Plains that were destroyed when dust storms blew away the soil -causes: a severe drought plagued the plaines, farmers had dug up thick praire grasses to plant wheat, so there was nothing to hold the soil in places, and Winds traveling as fast as 100 mile-per-hour winds blew dust clouds 8,000 feet tall in Oklahoma, Texas, New Mexico, and Colorado. -effects: wildlife and farm animals choked and suffocated, farmers lost their farmlands

Black Tuesday

October 29th, 1929, the day the stock market crashed

Dwight Eisenhower

One of the WWII generals who was involved with forcing the Bonus Army out of DC

Business Cycle

Periodic expansion and contraction of the economy

Repatriation

Policy whereby local, state, and federal governments encouraged or coerced Mexican immigrants (some of them US citizens) to return to Mexico

Localism

Policy whereby problems are best solved at the local and state levels and not by the federal government

Tenant farmer

Rural farmers who lost their land but stayed on to work for larger landowners -Between 1930 and 1934, nearly a million farmers lost their farms, homes, and farm equipment because they could not pay their mortgages. -Bankers sold the land and equipment at auction. Some farmers became tenant farmers, working for bigger landowners. Others decided to leave in search of work elsewhere in the United States.

Douglas MacArthur

Supervised the forced removal of the Bonus Army, which angered many Americans

Great Depression

The collapse of the United States and world economies beginning in 1929

Spend more than they earned, leading to Americans racking up more than $6 billion total in personal debts

What did easy credit and installment buying lead people to do?

Uneven distributions of wealth (while factory workers' wages rose 8%, factory output rose 32%, resulting in worker wages rising modestly while rich investors incomes skyrocketed)

What did rising wages mask in the work force?

Their wages and hours were cut

What happened to those during the Great Depression who managed to keep their jobs?

Speculation

When investors gamble that stock prices will rise

Reconstruction Finance Corporation

created in 1932 to lend cash to investors to stimulate the economy -In 1932, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). The RFC employed a policy known as trickle-down economics. -The RFC gave billions of dollars to banks and large businesses. The idea was that they would lend to, and invest in, struggling businesses who would hire workers and thus end the depression. The RFC failed when businesses did not hire more workers.

Trickle Down Economics

economic theory that holds that money lent to banks and corporations would in turn be invested in small businesses which would hire more workers

Herbert Hoover

former Secretary of Commerce and Republican candidate for President in 1928 -he believed in voluntary cooperation between business and labor -he and the rest of the republican party had strong confidence/took credit for the strong economy -despite his confidence, others saw signs of weakness, especially in the agriculture sector (rural farmers produced huge surpluses of food that led to a decrease in prices so farmers couldn't pay for their own good or repay their loans) -As the Great Depression spread misery across America, Herbert Hoover struggled unsuccessfully to respond to the nation's problems. As a result of Hoover's failed response, in 1932 Americans would turn to a new leader and increased government intervention to stop the depression. -he tried a number of different approaches, but in the end he failed to discover the right formula for stopping the crisis. -At the start of the economic downturn, Hoover took a hands-off approach. -he believed that up and down swings in the economy were a natural part of the business cycle (It was thought that strong businesses would weather storms without the support of the government) -when he saw he needed to do something, he Asked businesses to keep wages, employment, and prices at current levels. Called for tax cuts, lower interest rates, and public works. Asked wealthy to donate more money to charity. But volunteerism FAILED -He put his faith in localism, but Towns and states didn't have the necessary resources to deal with the depression -Hoover did not support direct federal aid to individuals.

Bonus Army

group of WWI veterans who marched to Washington DC in 1932 to demand early payment of a bonus promised to them by Congressed -In the summer of 1932, almost 20,000 veterans set up camps and occupied vacant buildings. In July, police tried to evict them and riots erupted.

Hawley-Smoot Tariff

high protective tariff passed in June 1930 that contributed to a worldwide depression -congress passed this to protect American manufacturers from foregin competition -the led to other nations retaliating and raising their tariffs as well -this resulted in a drop in world trade, making the abundant amount of american factory and farm products harder to sell during the depression, causing more americans to go into debt

Hooverville

term used to describe makeshift shantytowns set up by homeless people during the Great Depression -the homeless lived in empty railroad cars, in cardboard boxes, or in shacks built on public land or in empty boxes

Bread line

where charities or local agencies gave food to the poor -people were so poor and hungry that they sold their property to buy food