CHAPTER 14-”The Great Depression Begins” IDENTIFICATIONS

212. price support-to help farmers, US Congress tried to pass McNary- Haugen Bill...federal government would buy surplus farm crops at guaranteed prices and sell them (wheat, corn, cotton, tobacco) on the world market...Coolidge vetoed bill twice.

213. credit-arrangement in which consumers agreed to buy now and pay later for purchases Dow Jones Industrial Average-stock market had become most visible symbol of prosperous economy...DJIA-was the most widely used barometer of stock market...based on stock prices of 30 representative large firms trading on the New York Stock Exchange.

215. speculation-1920’s practice of buying stocks and bonds on the chance of a quick profit, while ignoring the risks buying on margin-paying a small percentage of a stock’s price as a down payment and borrowing the rest.

217. Black Tuesday- 29.October.1929, the bottom fell out of the Stock Market million shares were dumped...additional millions of shares couldn’t find a buyer...by mid-November, investors had lost $30B (amount spent in WWI).

218. Great Depression-period from 1929 to 1940 in which US economy plummeted and unemployment skyrocketed... beginning was signaled by stock market crash which hastened the collapse. RESULTS: 1. Bank Failures of banks closed. 2. GNP- cut from $104B to $59B 3. 90,000 businesses failed 4. Unemployment rose from 3% to 25%

ADD: CAUSES OF GREAT DEPRESSION: 1. tariffs/war debt policies that cut foreign market for US goods, 2. crisis in the farm sector, 3. availability of easy credit, 4. unequal distribution of income

219. Hawley-Smoot Tariff-1930, US Congress passed...highest protective tariff in US history...to protect farmers & manufacturers...opposite effect...within a few years-world trade had fallen more than 40%.

220. shantytowns-little towns, mostly made up of temporary shacks...new homes for those who lost jobs, homes, etc soup kitchen-offered free or low-cost food to poor/needy bread line-people waiting to receive food provided by charitable agencies or public agencies.

223. Dust Bowl-drought/wind began in Great Plains in early 1930’s, scattered topsoil across US...grasslands had been broken up to plant millions of acres of farmland>overproduction had exhausted land...Kansas, Oklahoma, Texas, New Mexico and Colorado affected...having lost farms, they traveled west on Route 66 to California hoping to find employment.

224. direct relief-cash payments or food provided by the government to the poor...example, NYC = $2.39 family/week *most generous of all cities!

225. Herbert Hoover-31 st president of US...after stock market crash-”Any lack of confidence in the economic future...is foolish”...be optimistic and go about business as usual...many people believed that growth in the economy was to be followed by a period of depression and it would fix itself...HH felt that government should play a limited role in solving problem.

226. Boulder Dam-world’s tallest and 2 nd largest dam...provided electricity, flood control, regular water supply (LA & LV)...today=Hoover Dam Federal Home Loan Bank Act- Hoover authorized Act which lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans to avoid foreclosure.

228. RFC-Hoover’s most ambitious economic measure...Jan authorized $2B for emergency financing for banks, life insurance, railroads and other large companies...”trickle down” to average citizens through job growth and higher wages...loaned $805M in first five months of operation>>>too little, too late

229. Bonus Army-in Spring, 1932, 10-20,000 WWI Doughboys and their families marched on Washington, DC to support Patman Bill (authorized government to pay bonus to vets for WWI service-Congress had approved bonus in 1924-scheduled to be paid in 1945)...With Patman Bill, bonus would be paid immediately...Senate voted down bill, vets told to leave, some refused...US Army troops broke up shantytown with tear gas...bad PR for Hoover!

230. Walter Waters-unemployed cannery worker from Oregon who led Bonus Army...represented them in meetings with Congressmen.