7.9 APUSH AMSCO

Black Tuesday

On October 29th, the bank fell out as millions of panicky investors ordered their brokers to sell - but not buyers could be found.

Dow Jones index

Prices on Wall street decreased steadily. The Dow Jones index had fallen from its September high of 381 to 198. Three years later, stock prices would hit the bottom at 41, less than one ninth of their peak value

buying on margin

the practice of allowing investors to purchase a stock for only a fraction of its price (CREDIT) and borrow the rest at high interest rates. When Stock Market begins to crash banks call in loans. To pay back banks investors sold stocks for less than they purchased. Loose money and go into debt.

uneven distribution of income

the top 5% of the richest Americans received over 33% of all income (once demand for their products declined, businesses laid off workers causing a downward spiral in demand and layoffs) Stock Market Speculation. + many people believed they could get rich quick by "playing the market"

excessive use of credit

low interest rates and the economic boom led to increased borrowing and installment buying. (over indebtedness resulted in defaults on loans and bank failures)

overproduction

Farmers overproduced goods, which lead to a decrease in prices and less profit

high tariffs

A high tariff enacted in 1930 during the Great Depression. By taxing imported goods, Congress hoped to stimulate American manufacturing, but the tariff triggered retaliatory tariffs in other countries, which further hindered global trade and led to greater economic contraction.

Federal Reserve

This act created a central banking system, consisting of twelve regional banks governed by the Federal Reserve Board. It was an attempt to provide the United States with a sound yet flexible currency. The Board it created still plays a vital role in the American economy today.

stock market crash

The steep fall in the prices of stocks due to widespread financial panic. It was caused by stock brokers who called in the loans they had made to stock investors.

business failures and unemployment

This depression of the 1930s was even worse than the preceding ones. It lasted far longer, caused more________________ , and affected more people—both middle class and working class—than any preceding period of hard times.

Bank failures

Some economists have concentrated blame on the Federal reserve for its tight money policies, as hundreds of banks failed. Instead of trying to stabilize banks, the money supply, and prices, the Federal Reserve tried to preserve the gold standard. Without depositors’ insurance, people panicked and sought to get their money out of the banks, which caused more of these.

gross national product

The value of all the goods and services produced by the nation in one year

poverty and homelessness

This increased, as the stress on families as people searched for work also increased.

Herbert Hoover

Devoted his presidency to helping during the great depression

self reliance

Hoover hesitated to ask Congress for action on the economy, afraid that government assistance to individuals would destroy this

Hawley Smoot Tariff

A high tariff enacted in 1930 during the Great Depression. By taxing imported goods, Congress hoped to stimulate American manufacturing, but the tariff triggered retaliatory tariffs in other countries, which further hindered global trade and led to greater economic contraction.

debt moratorium

A suspension on the payment of international debts.

Farm board

Created in 1929 before the crash, but powers were later enlarged to meet economic crisis. Authorized to help farmers stabilize prices by temporarily holding surplus grain and cotton in storage.

Reconstruction finance corporation

Federally funded corporation set as a measure for propping up faltering railroads, banks, and insurance companies.

bonus march (1932)

Unemployed veterans marched on the capitol and many were harmed. People lost faith in Hoover.