Ch. 18 Reading Quiz

stock market

• a system for buying and selling stock in corporations

bull market

• a long period of rising stock prices

margin

• buying a stock by paying only a fraction of the stock price and borrowing the rest

margin call

• demand by a broker that investors pay back loans made from stocks purchased on margin

Speculation

• the act of buying stocks at a great risk with the anticipation that the prices will rise

  • Since lots of buyers engaged in this, the stock prices had to rise to meet the demand of buyers

installment

• a monthly plan made to pay off the cost of an item when buying it on credit

Black Tuesday

• (October 24, 1929) stock market crash

  • Customers put stocks up for sale immediately

  • Value of the industrial index (measure of the value of leading industrial companies) dropped by 10%

  • Not a major cause of the Great Depression, but it undermined the economy’s ability to overcome other weaknesses

  • Greatest financial struggle for Americans → biggest gap between the annual high and low for stock

Hawley-Smoot Tariff

• (1929) President Hoover wanted to encourage overseas trade by lowering tariffs → Congress decided to protect American industry from foreign competition by raising tariffs

  • Raised the average tariff rate to the highest level in American history

• Result: failed the help American businesses

  • Foreign countries responded by raising their own tariffs → fewer American products were sold overseas

  • Decrease in exports hurt both American companies and farmers

HTSQ: How did the stock market crash affect Americans, even those who had not invested in the stock market?

• ~$30 billion lost

• Banks began closing

  • Banks lost money on their investments

  • Speculators defaulted on their loans

  • Banks cut back drastically 0on loans → no ability to borrow money for consumers or businesses → economy was sent into a recession

  • Government did not insure bank deposits → bank customers (event hose that did not invest in the stock market) lost their savings

  • Bank run: persistent and heavy demands by a bank’s depositors, creditors, or customers to withdraw money

HTSQ: What role did religion play in the election of 1928?

• Democrat: Alfred E Smith (governor of NY) → first Roman Catholic to win a major party’s presidential nomination

  • Religious beliefs caused conflict in his campaign

    • Some Protestants claimed the Catholic Church financier the campaign and would have inappropriate influence on American politics

HTSQ: How did the Industrial Revolution in the United States, which created wealth, jobs, and a strong economy, play a role leading to the Great Depression?

• Industrial Revolution → growing urban population → increased involvement in the American stock market

  • More buyers made the stock market more competitive → stock prices had to be raised to meet demands

  • Great Depression was caused by the plummeting stock prices on Black Tuesday and the closing of banks

bread lines

• jobless and hungry stood in lines for free food

soup kitchens

• jobless and hungry lined up outside soup kitchens set up by private groups for food

shantytowns

• a town of shacks on unused or public lands where homeless people lived

Hoovervilles

• Shantytowns that were named after the president that homeless blamed for the circumstance

hoboes

• a homeless and usually penniless wanderer

Dust Bowl

• terrible drought of the Great Plains → left the fields bare and the soil dried to dust

  • Spanned from the Dakota’s to Texas

  • Blackened sky

  • Dust buried crops and livestock

  • Humans and animals outdoors sometimes died of suffocation as the dust filled their lungs

• Result: Great Plains farmers who could not hold onto their land which was mortgaged would have to return their property to the banks

  • Nearly penniless → many families headed west nad hoped for a better life in CA

  • Many Oklahoman migrants were called “Okies”

soap operas

• a serial drama on television or radio using melodramatic situations

Grant Wood

• painter of the 1930s → regionalist school style

  • Works emphasized traditional American values esp. rural Midwest and South

  • American Gothic - best-known painting that pays tribute to no-nonsense Midwesterners and gently makes fun of their severity

John Steinbeck

• one of the Okies (Oklahoma migrants who went to CA b/c of the Dust Bowl)

  • Conditions: 1 room shacks ~10×12ft

  • No rug, no water, no bed

  • Little iron wood stove

  • Water must be carried from the faucet at the end fo the street

William Faulkner

• writer of The Sound and the Fury

  • Consciousness technique: showed what characters are thinking and feeling before they speak → exposed hidden attitudes of the residents of a fictional Mississippi county

public works

• projects such as highways, parks, and libraries built with public funds for public use

relief

• aid for the needy → welfare

foreclosure

• to take possession of a property from a mortgagor b/c of defaults on payments

hunger marches

• organized by the American Communist Party → crowds of hungry poor people

  • “Feed the hungry, tax the rich”

Reconstruction Finance Corporation

• created by Hoover - made loans to businesses (banks, railroads, and building-and-loan associations)

  • First federal agency created to stimulate the economy during peacetime

Bonus Army

• Marches who lobbied to pass legislation that would give $1,00 bonus for each veteran that would be distilled in 1945 → ~15,000 people

  • Wore ragged military informs

  • Trudged along the highways or rode the rails

  • Sang old war songs

HTSQ: Why did the farmers think their actions would drive up prices?

• “Farmers protest low dairy prices by destroying supply”

  • Less supply → high prices (supply and demand)

  • Destroyed supply by pouring out dairy products like milk on the grounds

HTSQ: Hoover is considered by some historians to be the eighth worst president. Why might they rank Hoover so poorly?

• Hoover believed that American “rugged individualism” would keep the economy moving and the government should not step in to help individuals → he failed to resolve the economic crisis of the Great Depression

  • Led to mass numbers of homeless, hungry, and poor people → shantytowns and Hoovervilles

    • Hunger marches and protests

HTSQ: Poverty in the US was nothing new. How did this Depression made the situation so much worse?

• Depression caused mass unemployment → jobless often went hungry → were evicted → went hungry and stood in bread lines or lined up outside soup kitchens

  • Had to live in shacks on unused or public lands → created shantytowns, also called Hoovervilles

  • Hoboes: a homeless and usually penniless wanderer

  • Immigrants returned to their native countries

    • Less available jobs and overall appeal for employment in America

    • Federal government launched repatriation drives to send them back to their home countries

    • Efforts deported immigrants who violated the law → Southwest federal officials forcibly deported Mexican immigrants back to Mexico without regarding their citizenship status

HTSQ: What chain of events turned the once-fertile Great Plains into the Dust Bowl?

• crop prices dropped in the 1920s → farmers tried to make up the difference by planting more weight

  • Terrible drought left he Great Plains bare

  • Soil dried to dust

• Dust Bowl stretched from the Dakotas to Texas

  • Blackened sky for hundreds of miles

  • Dust buried crops and livestock

  • Humans and animals outdoors sometimes died of suffocation when the dust filled their lungs