Great Depression History Test

What pledge did FDR make to the American people in 1932?

"a new deal for the American people"

Unequal distribution of wealth:

1% of the people in America controlled all of the money where 90% of Americans were too poor and would struggle to participate in the business market

By how many votes did FDR defeat Hoover?

7 million

How many people migrated because of the dust bowl

800,000 people.

what is an Okie?

A Dust Bowl refugee.

What is a Hooverville? Hoover blanket? Hoover Flag?

A Hoovervilles were makeshift shantytowns of tents and shacks built on public land or vacant lots. Hoover blankets were newspapers and Hoover Flag is a sign of poverty when they turned their pockets inside out looking for a job.

What is a Bank holiday?

A day when a Bank is closed so it can get its accounts in order before reopening for business.

What is a tenant farmer?

A farmer that worked for landowners rather than for himself.

What is the "Brain Trust"?

A group of professionals and academics that helped FDR plan the New Deal.

What is a commodity?

A raw material or primary agricultural product that can be bought and sold, such as copper or coffee.

What does a "run on the banks" mean?

A run on the bank was when a number of people went to the bank demanding their money back and closing their accounts.

What is a protectionary tariff?

A tariff set in place to protect their own countries goods from foreign competition. What effect did the Hawley Smoot Tariff have on European Countries?: It raised prices on foreign imports to an extent that the European countries could not compete in the American Market. It also inspired the Europeans to enact protective tariffs of their own.

define Recession

A time of temporary economic unemployment.

What areas of the US were impacted by dust bowl

All the southern Great Plains (Texas, Oklahoma, Kansas, New Mexico and Colorado).

What impact did the photos from the march have on Hoover

Americans were disappointed and frustrated with the federal response and treatment of war veterans. FDR easily won the 1932 election

What is trickle-down economics?

An economic concept believed by Republicans during the 1920s and early Great Depression where the wealthy and businesses would pass down money to workers and the poor with money saved by lower taxes.

Describe the "snowball" effect on the business cycle?

As more companies closed plants leaving more workers unemployed, to save money, incomes shrank leading consumers to spend less money. This caused businesses to cut even more and to save money.

how the snowball effect impact the labor market?

As more people were laid off the population lost more which resulted in consumers spending less money

Easy credit

Became the mindset of Americans. Americans borrowed money to buy goods and then struggled to pay back these loans. Banking system collapses: - As the Federal Reserves Board raises interest rates people are less motivated to buy but as they lower rates people are more motivated to buy. During the 1920s interest rates were extremely low. The FRB decided to raise rates to ensure that they are going to get their money back; people begin to not trust the banks anymore and rushed to take their money our of banks.

Why is it called the "dust bowl"

Because in a Bowl you normally stir what it is inside, and here the wind was stirring or removing the ground from everywhere.

Why were minorities likely to be hurt more by the depression?

Because of discrimination, minorities were the last to be hired and the first to be fired.

Why did many farmers lose their land?

Because of falling commodity prices and accumulating debt.

Why did volunteerism fail?

Because people acted in their own interest, not in the country's; in individual, not cooperative courses.

Why were people pulling money from the bank?

Because they were afraid of the bank losing the money.

Why did birth rates decrease during the depression?

Because women had to work and there was no money to raise children.

What happened on Black Tuesday?

Black Tuesday was the day the Stock Market's "bottom fell out". More than 16 million shares were sold as the stock market crashed. Billions of dollars were lost and whole fortunes were lost within hours.

What impact did the "Fed's" policy have on the economy?:

By 1929, the "Fed", worried about over speculation, limited the money supply to discourage leading. As a result, there was too little money in circulation to help the economy after the stock market crashed.

What were the results of Republican policies?

Deregulation, Consumption, the gross national product, and the stock market went up.

Why were droughts a constant problem on the plains?

Droughts were a constant problem because there was very little rain each year, typically less than what was needed for farming. New farming techniques also caused a lack of water, creating frequent droughts.

Why do farmers live on credit?

Farmers sometimes borrow money to plant seed / buy livestock for the growing season in the future. After the food is harvested and taken to market, can farmers repay the loan. If they lose the growing season due to bad decision or poor luck, they can't repay the loan.

Farm and Industry Crisis

Farmers were not making enough money to pay off their debts from WW1. As the demand for industry goods lowered more people got laid off resulting in a snowball effect.

What happened in many European countries due to the GD

Fascist Leaders take power

Who is Eleanor?

Franklin D. Roosevelt's distant cousin and wife.

What was Friedman's opinion?

Freidman's opinion stated that the depression resulted from a contraction in the money supply, the twin events in the stock market crash, and the run of bank failures in 1930 left too little money in circulation for the nation's economic needs.

Who did Hoover order to clear out the campers?

General Douglas MacArthur

What was the one success of government projects under Hoover?

He asked to build a dam on the Colorado River, which offered a lot of working opportunities.

Why did Hoover not like the idea of federal public assistance?

He believed it was unconstitutional. - he was a Conservative

Describe FDRs political resume

He belonged to the Democratic Party. NY governor secretary of the Navy

How did FDR get polio

He fell from a boat into the cold water of the North Atlantic - leaving him paralyzed for life.

Why did Hoover ask people to donate to charities?

He wanted Americans to voluntarily join forces to combat the depression.

Why did HH have no chance of winning in 1932?

He was deeply unpopular at the time. The great depression hurt reputation

How did Hoover help during WW1

He was first as a brilliant coordinator of the Belgium relief program and then as the head of the Food Administration. He saved Europe from starvation.

How is Hoover an example of a self-made American

He was orphaned as a child but persevered through this tragedy and graduated from Stanford University and collected a mass fortune by becoming a mining engineer. By 1914 he retired and devoted himself to public services

How did FDR differ from Hoover in the role of the federal government?

Hoover believed that Depression relief should come from state and local governments and private agencies, while FDR believed that the depression required strong action and and leadership by the federal government

What does the slogan "Chicken in every pot" mean?

Hoover promised a "Chicken in every pot" for the average American household. Critics accused him of being heartless and shortsighted - think Marie Antoinette's claim of "let them eat cake"

Why does hard work does not always yield positive results?

Hoover tried hard but he was not able to discover the right formula to cease the Great Depression.

Where did the word Depression come from?

Hoover used this word to describe the state of affairs because he thought it sounded less severe than other terms.

Give an example of falling crop prices?

In 1919, a bushel of wheat sold for $2.16; while in 1932, it sold for 38 cents.

What farming techniques made the drought worse?

Intensive farming and plowing under natural grasses.

What did the FDIC do

It helped to restore the confidence in the economy: runs on banks ended and the stock markets stabilized.

Why is it difficult to pinpoint one specific cause of GD

It is hard to pinpoint one specific cause because there were so many mistakes that occurred within American economics at the time. Some theories suggest that a contraction in the money supply, the twin events in the stock market crash, the run of bank failures, or the lack of government interference in the economy were thecauses of the depression.

What was Keynes's opinion

Keynes believed that the depression was caused by the lack of government interference in the economy. He argued that uneven distributions of wealth, stock speculation, consumer spending, productivity, and unemployment could have all been avoided it the government had been involved.

Why did Okies go to California?

Lured by the promise of jobs, but were crushed when that promise too often proved empty. 23. Who was most likely to survive the dust bowl? farmers who had lots of land and a variety of corps

Why could many families buy the Model T?:

Many families could afford the Model T because of its low price and installment loan credit.

What impact did the depression have on families?

Men could not longer bring money home, and some of them labored tirelessly to find a job, others sank into shame and despair and some others deserted their families. Divorce rates drop during this time

Give specific examples as to why this uneven distribution of wealth creates problems

More than 60% of all American families earned yearly incomes of less than $2,000 per year, while twenty-four thousand of the countries riches families enjoyed annual incomes of over $100,000. With the large amounts of wealth, the rich could buy 50 times the amount the working class could, but the rich did not buy enough to keep the economy booming. Too many Americans did not have enough money to buy what they wanted or needed.

Did the RFC work?

NO Because the money remained in the top of the pyramid. It lent money to the government and to the banks. Hoover believed businesses did not have access to credit - and credit is the grease that keeps the business cycle moving.

What was the unemployment rate in 1933

Nearly 25% of all American workers had lost their jobs.

Domino effect:

One thing happens to someone it triggers others to think that it will happen to them. One person gets laid off and their neighbor gets nervous and starts saving. This leads them to stop spending their money on other things and other stores start to lay off other people because no one is buying from their store.

What are the causes of the Stock Market Crash

Overvaluation Over speculation Margin Buying Fed Interest Rates Stock Pools / Lack of Rules Mob Mentality

Why was the AAA controversial?

People believed it was immoral to kill livestock or destroy crops while people went hungry.

What is the significance of the line "...I build the railroads....I fought the wars....what happened to all the wealth I created..."?

People who had worked to improve the country now were as poor as anyone else.

What did RFC do

Provided financial support to state and local governments, as well as providing loans to banks, railroads, and other businesses after the Great Depression.

What does RFC stand for?

Reconstruction Finance Corporation

What are the three Rs?

Relief, recovery and reform.

What economic problems existed in Europe during great depression

Reparation payments, war debt payments, and international imbalance of trade. How did the reparations from WW1 contribute to Europe's problems?: Germany ceased their reparation payments, and the U.S. agreed to suspend France and Britain's war debt payments.

What strategies did families use to keep the family afloat?

Sell furniture, paw jewelry, and move to cheaper lodgings.

What role did Eleanor serve?

She served as FDR's eyes and ears .

Why did Hoover want a reduction in taxes?

So people had more money and the economy could start to move again.

How did the AAA help farmers?

The Agricultural Adjustment Act provided financial aid, paying farmers subsidies not to plant part of their land and to kill off excessive livestock.

What is the FDIC

The Federal Deposit Insurance Corporation, which insured the bank deposits up to $5,000. -today the number is $250,000

How did raising interest rates on loans cut the money supply?

The Federal Reserve cut interest rates to stimulate economic growth.

How was the Great Depression ubiquitous?

The Great Depression touched everyone because every American either experienced it or knew someone who was experiencing it.

What did the TVA accomplish

The Tennessee Valley Authority built series of dams in Tennessee River valley to control floods and to generate electric power. It also replanted forests, built fertilizer plants, created jobs, and attracted industry with the promise of cheap power.

What is a foreclosure?

The action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments.

Why did farmers have to mechanize during WW1

The demand for crops during WW1 spiked, to keep up with the demands farmers were forced to buy costly tractors and other mechanized equipment.

Why did the demand for food decrease after WW1?

The demand for food decreased because the demand for it overseas decreased. Farmers no longer needed to send food to Europe for our troops and members of the Allies.

What is the "American Dream"?

The ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative.

What does "hands-off policy" mean?

The policy of doing nothing- popular among conservative republicans and free market economics.

What happened to the workering classes wages during the 1920s

The workers' wages only rose eight percent.

What impact did these high tariffs have on global trade?

These policies made matters worse for America. The international move toward high productive tariffs closed markets all over.

Why are plain grasses so important?

They prevented the topsoil from blowing away during periods of drought.

What were the bonus army asking for?

They were seeking for the early payment bonus the Congress had promised them. Senate Vetoed

Why would farmers dump milk?

To demand to local store owners higher profits for their milk.

What is repatriation?

To encourage Mexican immigrants and their families to return to Mexico

Why High Tariffs during GD

US Govt wanted to keep American companies in business so they tariffed imported goods from Asia and Europe - causing other countries to retaliate and tariff American goods. This cut global trade.

What was the Bonus Army?

WWI veterans who marched in DC to demand early payment of the bonus money promised them for their military service.

How did buying expensive items on credit hide the economic problems?:

When people buy goods on credit they only pay for a percentage of it at a time; pay a small percentage down and the rest over a period of months or years. Doing this postponed the realization of debt to many Americans and caused many to go into debt.

What is the result when supply is high and demand is low?

When supply is high and demand is low prices go down. During the 1920s farmers in America were not in a position where they could lower prices than they already were, this lead to many having to find new jobs and their farming land.

What is a bread line? Soup Kitchen?

Where people lined up for handouts from charities or public agencies.

How did business leaders try to cope with slower consumer spending

While their stocks were still falling, they began to close plants and forcing workers onto the endless list of unemployed.

how did General Douglas MacArthur clear out the bonus army

With gas and bayonets.

Why did the rich become even richer in the 1920s?:

Worker productivity increased. Output per person-hour jumped 32 percent, and corporate profits from worker output increased 65 percent. All these figures pointed to the fact that during the 1920s, the rich became much much richer, while industrial workers simply became "less poor."

Most workers were able to keep their jobs, but what happened to the pay and hours worked for these jobs?

Workers had wages or hours cut.. sometimes wages decreased and hours increased

Define Depression

a time of significant unemployment.

What impact did the crash have on the business cycle?:

consumers spent less money and businesses slowed production of goods - thus creating an increase in unemployment claims.

Why was communism and socialism appealing to the people in the 1930s

ecause they said capitalism created economic inequalities and because they saw communist policies as offering stability to the US. economy

How did FDR use the radio to communicate his plan

fireside chats - it brought a sense of confidence and reassurance to Americans. It was effective because he convinced citizens that the banks were a safe place to keep their money.

Did the stock market crash cause the great depression

no

The Grapes of Wrath

this Steinbeck book describes life for the "Okie" farmer struggling during the Dust Bowl. Many families could afford the Model T because of its low price and installment loan credit.