Economic Crisis, Stock Market Crash & Early Depression Flashcards

Flashcards about the Economic Crisis, Stock Market Crash & Early Depression

Herbert Hoover

President of the US from 1929-1933, elected in 1928, mining engineer, oil tycoon, multimillionaire, former Secretary of Commerce.

Rugged Individualism

Hoover's belief that service for the common good is superior to individualism and that business leaders would voluntarily work together to promote better economy, greater efficiency.

Farming Sector Crisis

The weakest sector in the US economy throughout the 1920s, which was especially bad in the South.

Great Bull Market

A period when stock prices since 1924 were high and continuing to increase.

Buying Stocks on Margin

Purchasing stocks through a broker by making a down payment, usually about 30% but as low as 10% of the face value of the stock; broker loans the rest of the cost.

Speculative Bubble Bursts

September 1929, when stock prices in the US began to decline.

Black Tuesday Crash

October 29, 1929, when stock prices fell drastically as investors tried to sell stocks madly.

Causes of the Stock Market Crash

Excessive use of credit, false expectations, agricultural recession, overproduction, weaknesses in the banking system, and unequal distribution of wealth and income.

Economic Crisis, 1929-1932

Businesses began to fail, banks began to fail, unemployment rose, foreclosures on farms and homes occurred, Federal Reserve Board shrank money supply, and foreign trade dropped off.

Reasons for the Economy Tanking

Overproduction/under-consumption, low wages, easy credit, disparity of wealth, farm sector crisis, unstable financial system, high tariffs and Federal Reserve Bank policies.

Laissez-faire Republicanism

Hoover's belief that the economy should fix itself without government intervention and that responsibility for fixing the economy should be in the hands of private industry and banking

Hoover Dam

An example of economic conservatism advocated by President Hoover; funding came from the federal government, but privately-owned companies were contracted to carry out construction.

Hoovervilles

Areas that sprang up in fields, parks and other open areas during the Depression.

Reconstruction Finance Corporation (RFC)

Provided aid to state and local governments to keep their programs of relief funded and made loans to banks, insurance companies, mortgage companies, railroads, and other industries.

Franklin Roosevelt

The Democrat nominee who promised a 'new deal for all Americans' in the Election of 1932.

War Adjusted Compensation Act (1924)

Authorized a bonus to be paid to veterans in 1945, but many veterans demanded immediate cash payment in 1932.

Bonus Army

WWI veterans who gathered in Washington, demanding cash payment of the bonus.

Lame Duck Period

Under the US Constitution the period of time between the election of a new President and the inauguration

Brain Trust

A group of experts gathered by Franklin Roosevelt to propose solutions for the economy.