great depression test Flashcards
(28 cards)
when was the great depression
started officially on oct 29, 1929; didn’t really end until 1940 as US’s role in WW1 increased
causes of the great depression?
high tariffs (hawley-smoot tariff)
dust bowl
overextension of credit
uneven distribution of wealth
stock market crash
banking crisis
speculation definition
when one buys something with the intent of selling it at a higher price
what is buying on the market
many people bought stocks with borrowed money (caused 30 billion dollars to be lost)
what happened on black tuesday (oct 29, 1929)?
many panic and try to sell all their stocks before prices drop even more. many people need to sell them in order to pay back their loans. the market becomes flooded with sellers
what is the banking crisis?
many people tried ot take back money, but
banks were not insured/regulated by government, so they used many people’s savings for loans and investments into stock market
banks couldn’t give people back their savings, so many failed
by 1933, 25,000 banks failed
what caused the farming crisis
overproduced lands
strong winds
drought
caused 400k farms to be lost due to foreclosure
government’s response?
president hoover- nation feels he does nothing, tells americans to allow economy to recover on its own
he doesn’t believe in/offer direct relief
hoover’s response
asks laborers not to strike
business owners not to layoff workers
private companies to help with relief efforts
federal home loan bank act
reconstruction finance corporation
sets aside money for public works
what does federal home loan bank act do
lower mortgages rates for homeowners
what does reconstruction finance corporation do
authorizes 2 billion dollars for emergency financing for banks and large businesses
what were smoot-hawley tariffs (tariff act of 1930)
law that implemented protectionist trade policies, signed by president hoover, increased US tariffs on over 20k imported goods
prompted retaliatory tariffs by many other countries, were major factors of reduction of US exports and imports by 67% during great depression
what was the bonus army 1932, how did hoover react to them
WW1 veterans struggling for money camped in washington DC asking government for “bonus check” (supposed to get later for fighting in war)
hoover sends in troops to get rid of them with tear gas
what is the new deal
series of projects and agencies started to help americans get jobs
president created more government jobs (works progress administration)
employed 8 million americans
deficit spending
what did the new deal do
relief for needy
economic recovery
financial reform
what was glass-steagall banking act
1933 law, established federal deposit insurance corporation to protect individuals’ bank accounts, response to bank failure and currently insures individual bank deposits up to 250k dollars
securities and exchange commission 1934
(sec) as result of stock market crash, creates laws to regulate stock market and enforces regulations involving sale of stocks and bonds
civilian conservation corps
provided outdoor jobs for young men
tennessee valley authority
constructed dams, powerplants along river, provided many jobs, brought electrical power
central valley project
plan to irrigate san joaquin valley
agricutural adjustment act
limited number of staple crops farmers grew, paid farmers who voluntarily stopped growing crops
national industrial recovery act
created public works administration, national recovery administration
public works administration
provided jobs for unemployed, created new orders for multiple industries, helped individual contractors hire and pay workers
national recovery administration
established codes of fair business practices for individual industries
