The Nation’s Sick Economy: Cause and Effect
Directions: Read through section 1 on page 642 to find the causes and effects of the following. Write
them in the chart.
Cause
1. Superficial prosperity of the 1920’s
2. Textile mills faced competition from Japan,
India, China
3. Coal mining declined.
Effect
1. Weaknesses that led to Great Depression
2.
3.
4. Applications for new building permits declined.
5. (List at least 2 causes)
5. Agriculture suffered.
6.
6. McNary-Haugen Bill
7. (List 2 reasons).
7. Americans bought less.
8. Businesses encouraged Americans to buy on
credit.
9.
8.
10.
10.
11. Hoover has an advantage over Alfred Smith.
11.
12.
13.
12. Americans were unaware of nation’s
problems.
13. speculation
14. Unrestrained buying and selling
14.
15. Buying on margin and stocks declining.
15.
16.
17.
16. People frantically tried to sell their stocks
before prices fell even lower.
17. Investors lost $30 billion.
18. (List 4)
18. Great Depression occurs.
19. These factors in return lead to…
19.
20.
20. Many banks closed.
21. Federal government did not insure banks.
21.
9. Consumers spent less.
22. Unemployment rose to 25% in 1929.
23.
23. European countries faced high debt payments.
24.
24. highest protective tariff in US history
25. Reduced the flow of goods into the US
25.
26. World trade fell more than 40%
26.
27.
27. European countries faced heavy debts
28. Britain and other European countries went off
the gold standard.
28.
Look at “Now and Then” on pages 646-647.
List below the companies involved with the first Dow Jones Industrial Average.