Great Depression: Stock Market Crash, Dust Bowl, and Hoover’s Response

What percentage of agricultural activity was prevalent in most nations prior to the 1800s?

80 to 90%.

How is a recession defined by economists?

More than two quarters (six months) of economic decline in gross domestic product.

What constitutes a depression in economic terms?

Multiple years of economic decline.

What significant economic event did Americans recognize in 1921?

The onset of a severe economic downturn that was different from previous recessions.

What was the impact of the Great Depression on world trade?

It affected world trade significantly, not just in the U.S. but in countries like England, Germany, and France.

What was the approximate GDP decline from 1929 to the bottom of the Great Depression?

Nearly 40%.

What major global event contributed to the economic recovery after the Great Depression?

World War II production.

How did consumer spending behavior change in the 1920s?

Consumers were buying a lot of goods on installment plans.

What happened to farmers' debts during the 1920s?

Farmers were deeper in debt by the end of the 1920s due to purchasing on credit.

What environmental disaster was caused by overproduction in the Midwest?

The Dust Bowl.

What was the impact of the Dust Bowl on farmers in the Great Plains?

About 2.5 million people left the Great Plains states during the 1930s.

What caused the Dust Bowl according to historians?

Attempting to grow crops on unsuitable soil and a series of droughts.

What was the initial reaction of people during dust storms in the 1930s?

They were terrified and felt it might be the end times.

What did farmers in the Great Plains try to do to modernize their farming practices?

They bought tractors and fertilizers on credit.

What was the consequence of plowing more frequently in the Great Plains?

It exhausted the soil that was not very fertile to begin with.

What was the effect of the interconnectedness of the economy during the Great Depression?

Even local economies were affected by national and international economic conditions.

What was the common misconception about the land in the Great Plains?

That it was suitable for farming, despite being unsuitable.

What did people experience during dust storms in terms of visibility?

They could see dirt falling from the sky, mistaking it for snow.

What did the Dust Bowl lead to in terms of agricultural practices?

A shift towards more irrigation and fertilizer use.

What was the fate of many farms during the Great Depression?

Many were foreclosed on and abandoned.

What was the stock market's performance on the day it dropped by 32 billion dollars?

It marked a significant decline during the onset of the Great Depression.

What was one of the major causes of the Dust Bowl according to environmental historians?

The attempt to grow crops that were not suited for the local ecosystem.

What did the Great Depression reveal about the U.S. economy's relationship with the world economy?

Americans became inseparable from the global economy.

How did the Great Depression affect employment in the U.S.?

It caused widespread unemployment and business failures.

What was the significance of the year 1936 in relation to the Great Depression?

It was the year when the GDP returned to pre-Depression levels of 1929.

What were some of the goods that consumers were buying on credit in the 1920s?

Radios, cars, and refrigerators.

What was the psychological impact of dust storms on families during the Dust Bowl?

They felt helpless and trapped in their homes.

What was the long-term agricultural shift in the Great Plains post-Dust Bowl?

Increased reliance on irrigation and government subsidies for crops.

What event marked the beginning of the Great Depression?

The stock market crash, where the market dropped by 32 billion dollars.

What does the term 'buying on margin' mean?

It means purchasing stocks by paying only a percentage of the stock's price upfront, with the hope that the stock will appreciate in value.

What was the consequence of buying on margin when stock prices fell?

Investors were required to pay back the borrowed amount, leading to financial ruin for many.

How did the stock market crash affect banks?

Many banks had invested in the stock market and closed when they could not meet withdrawal demands, resulting in 5,500 bank closures.

What happened to personal savings during the Great Depression?

140 billion dollars in personal savings evaporated as banks closed and could not return deposits.

What was the unemployment rate during the Great Depression?

Unemployment reached 14% nationally, with some areas experiencing much higher rates.

How did consumer behavior change after the stock market crash?

People became hesitant to deposit money in banks, often choosing to hide cash instead.

What was the impact of layoffs during the Great Depression?

Companies laid off workers due to decreased demand for products, leading to high unemployment rates.

What did the term 'overvalued stock' refer to?

Stocks that were priced higher than their actual worth based on company assets and market conditions.

How did the Great Depression affect labor relations?

There was a decline in trust between employees and employers, with favoritism and unethical practices during layoffs.

What was one reason for the stock market's rapid rise in the 1920s?

More people were investing in the stock market without sufficient knowledge about it.

What analogy was used to explain the loss of stock value?

The analogy of a new car losing value immediately after purchase was used to illustrate how stock value can drop.

What did seasoned investors advise regarding stock purchases?

They advised to carefully evaluate a company's assets and market before buying stock to avoid overvalued investments.

What was the effect of the stock market crash on the economy?

It led to widespread bankruptcies, loss of savings, and a significant economic downturn.

What did people do with their savings after the crash?

Many chose to keep their savings at home instead of depositing them in banks.

What was the unemployment rate in Toledo, Ohio during the Great Depression?

Toledo experienced an unemployment rate of 80% at one point.

How did companies respond to decreased demand for products?

Companies began to close temporarily and issued layoff notices to employees.

What was the sentiment towards employers during the Great Depression?

There was widespread anger and distrust towards employers due to broken promises and layoffs.

What was the impact of the stock market crash on banks' operations?

Banks that had invested in the stock market faced insolvency and could not meet withdrawal demands.

How did the stock market crash affect new investors?

New investors, lacking experience, were particularly hard hit as they faced significant losses.

What did the term 'correction' refer to in the context of the stock market?

A correction refers to a decline in stock prices after a period of rapid increase.

What was the public's reaction to the stock market crash?

Many people were shocked and confused, leading to a loss of confidence in financial institutions.

What role did the foreman play during layoffs?

Foremen had significant power and could influence who was laid off, sometimes demanding bribes to keep jobs.

What was the general attitude towards investing in stocks during the 1920s?

There was a sense of optimism and a belief that stock prices would continue to rise indefinitely.

What did Groucho Marx's quote illustrate about stock investing?

It illustrated the speculative and often reckless behavior of investors during the stock market boom.

What were fraternal organizations during the Great Depression?

Groups formed around religion or ethnicity that provided mutual aid, insurance, and loans to members.

What was the peak membership of the Slovene National Benefit Society?

64,000 members.

What significant financial challenges did the Slovene National Benefit Society face by 1933?

Declining membership and unpaid loans, leading to reduced benefits.

What social issue became common during the Great Depression?

Bread lines became a common sight in cities.

What was a concern regarding the distribution of bread in soup kitchens?

People might sell the bread after receiving it, leading to questions about who was 'deserving' of assistance.

What humiliating experience did some individuals face when seeking food assistance?

They had to prove their destitution and answer intrusive questions about their circumstances.

What was the stance of President Herbert Hoover regarding government welfare?

He opposed government handouts, believing they would create dependency.

What was the purpose of the Reconstruction Finance Corporation (RFC)?

To provide loans to banks and corporations to stimulate employment and economic recovery.

How much was the initial budget of the RFC?

$1.5 billion.

What metaphor did Hoover use to describe the economic recovery process?

He compared it to priming a pump to get water flowing.

What was a notable public works project initiated during Hoover's administration?

The Hoover Dam.

What term was used to describe homeless encampments during the Great Depression?

Hoovervilles.

What were the Bonus Marchers demanding in 1932?

They demanded early payment of bonuses promised to World War I veterans.

What was the government's response to the Bonus Marchers?

Hoover ordered the US Army to evict them and destroy their encampment.

What was the public perception of Hoover's actions towards the Bonus Marchers?

They were viewed negatively, reflecting desperation for government action.

What was the impact of the stock market crash on fraternal organizations?

Many organizations lost treasury funds, further limiting their ability to assist members.

What was the effect of declining membership on fraternal organizations during the Great Depression?

They struggled to meet insurance obligations and provide aid.

What was the societal impact of people being unable to rely on fraternal organizations?

It led many to turn to government assistance as a last resort.

How did the Great Depression affect the perception of private charities?

They were increasingly seen as insufficient to meet the crisis needs.

What was the attitude towards government welfare programs before the Great Depression?

They were minimal, based on the belief that individuals should rise or fall on their own merit.

What was a common reason for individuals being denied support from charities?

Living with an employed parent or not having dependents.

What was the significance of the term 'dole' during the Great Depression?

It referred to government welfare, which many believed would create dependency.

What was the societal response to the increasing number of homeless during the Great Depression?

Homeless encampments, or Hoovervilles, became widespread.

What did the term 'Hoovervilles' symbolize during the Great Depression?

They symbolized the failure of Hoover's policies to address homelessness and unemployment.

What was the impact of the Great Depression on community institutions?

Many community institutions, like fraternal organizations, failed to provide necessary support.

What led to the humiliation of individuals seeking assistance during the Great Depression?

The need to prove their destitution and answer probing questions.

What was the long-term effect of the Great Depression on individuals' trust in institutions?

It led to a shift towards seeking government support as private institutions failed.