10 – The Great Depression
Essential Content: U.S. History (2nd draft, 11/03/08)
Because of hidden weaknesses in the American economy, the fabulous rise in wealth of the middle 1920’s collapsed into the
Great Depression. President Hoover’s response is frequently summarize as “too little, too late.”
Textbook Chapter 14, pages 462 to 485. California State Standard 11.6. Test Thursday, December 4.
Learning Targets – Basic, essential information
Additional Basic
Proficient
Exemplary
1. The booming economy of the 1920’s hid numerous weaknesses. By the late
1920’s, the American economy suffered from over-production/under
consumption of durable goods. (p. 464)
Consumer debt (p. 466)
Weak agricultural economy
Tariff barriers (p. 465, 471)
European war debts
German war reparations
(p. 469)
Florida Land Bubble
2. A stock market bull-market bubble in 1928-1929 was fueled by speculation
and buying on margin. (p. 467)
Buying on margin (467)
Speculation (p. 467)
unequal wealth distribution
Dow Jones Industrial
Average (p. 467)
3. Herbert Hoover was elected in 1928 and inaugurated in March 1929. Hoover,
more progressive than conservative, ran on a platform of continuing
Republican prosperity. (p. 466)
Alfred E. Smith
urban, Catholic vote
4. The anticipation of higher tariffs – the Hawley-Smoot Tariff of 1930 – broke the
speculative Stock Market bubble in October, 1929. (p. 467)
Hawley-Smoot Tariff
(p. 470)
Thursday, October 24, 1929
Black Tuesday, Oct. 29
Margin calls
5. The Federal Reserve (with Hoover’s guidance) tightened the money supply,
in order to “punish” speculation. Strict monetary policy caused a contraction
of money and approximately 8% deflation each year from 1930 to 1933.
deflation
GNP contracts
Bank failures (p. 469)
Mortgage foreclosures
Federal Reserve policy
6. High American tariffs, and reciprocal tariff wars, caused a contraction of
international trade and international markets for American-made goods.
German default on loans
7. The contracting economy created wide-scale unemployment, with 13 million
unemployed and 20 million more underemployed by 1932. Families,
neighbors, church groups, and some local governments provided relief.
Shantytowns
Hoovervilles (p. 479)
8. The Great Depression was a challenge to the American character of selfsufficiency. (p. 477)
stigma of poverty
thrift
9. American agriculture suffered from over production and falling prices
throughout the 1920’s. Rural Americans did not consume durable goods.
Hoover Moratorium
Bread lines (p. 473)
Soup kitchens
Hobos, transients (p. 475)
Railroad tramps (p. 476)
The Dust Bowl (p. 474)
Farm foreclosures (p. 473)
drought
10. Hoover’s 1st response to the contracting economy was to express caution and
project optimism. He viewed the recession as a normal part of the business
cycle. (p. 478) Hoover opposed government relief. (p. 475, 479)
Rugged individualism (479)
Voluntary cooperation
Bolder Dam (p. 480)
Agricultural Marketing Act
1929
11. Hoover’s 2nd response to the contracting economy was to expand voluntary
cooperation, but his “small government” principles are frequently called “Too
little, too late.” (p. 481)
Reconstruction Finance
Corporation (p. 481)
Income taxes rise - 12% to
61% - to balance budget
Golden Gate Bridge
Federal Farm Board (p. 481)
Federal Home Loan
Bank Act (p. 481)
Federal Reserve tightens
credit
12. “Rock bottom” was reached after the market correction of 1929 became the
recession of 1930 and finally the Great Depression of 1932.
The Bonus Expeditionary
Force, 1932. (p. 482)