CNs: Chapter 14, Section 1
The Americans
The Nation’s Sick Economy
Pages 464-471
1. Describe two economic
troubles that threatened
America’s prosperity during
the 1920s.
1a. Key industries like railroads, textiles and
steel were barely making a profit. Mining and
lumber were no longer in high demand.
1b. Demand for drops such as corn and wheat
fell after WWI. Farmers had excess crops
and were in debt, many lost their farms.
2. How did Hoover “take the
nation?”
2. Hoover was a Republican and he could point
to years of prosperity under Republican
administrations. He declared that America
was nearer to a triumph over poverty than
ever before.
3. How did speculation and
margin buying cause stock
prices to rise?
3. Both speculation and margin buying
encouraged buying stocks for a quick profit.
Credit was easily available so investors bought
and sold stocks, ignoring the risks. This
unchecked buying and selling caused stock
prices to rise.
4. In early September 1929, stock prices
4. Describe the stock market
crash.
peaked. Confidence in the stock market began
to drop and some investors sold their stocks
anda pulled out of the market. On October
24, the price of stocks took a huge drop and
even more investors sold their stocks. On Oct
29, prices fell further and investors continued
to try to sell their stocks, however there
were not enough buyers. People who had
bought stocks on credit were left with huge
debts and stocks that were worth little.
Many people lost their life savings.
5. What happened to ordinary
workers during the Great
Depression?
5. Millions of people lost their jobs and
6. How did the Depression
affect the world economy?
6. Europe also suffered through the Great
unemployment rose to 25%. Those who still
had jobs faced pay cuts and reduced hours.
Depression. European countries had high
debts from WWI. Germany had to pay the
Allies for damages they caused during the
war. America’s depression meant that the
demand for European goods fell, further
hurting the European economies.
7. List the four main causes of
the Great Depression.
7. Four causes of the Great Depression:
a. Tariffs and war debt policies cut down the
foreign market for American goods.
b. Crisis in the farm sector
c. The availability of easy credit
d. An unequal distribution of income