: Causes & Early Effects of the Great Depression

1. What happened on "Black Tuesday"?
On "Black Tuesday," stock holders frantically tried to sell their shares before prices fell even lower, and on that day 16.4 million shares were dumped.

2. How did the economic trends of the 1920s in industry, agriculture, and with consumers help cause the Great Depression? (Make sure you include significant details about each area in your answer. It should be at least a paragraph)


3. According to your reading, what are the major causes of the Great Depression?
The stock market crash was a cause of the Great Depression. Also, banks that had money invested in the stock market lost money and went out of business, so many people lost the money in their accounts that was held at those banks. Other businesses failed as well; about 90,000 businesses went bankrupt. As a result, many people lost their jobs, and the unemployment rate went up to 25 percent. Some of the main reasons, according to teh reading, were tariffs hindering American trade, unequal distribution of income, availability of easy credit, and a crisis in the farm sector.

4. What was Hoover’s philosophy of government?
Hoover believed that one of the main functions of government was to maintatin cooperation between competing groups and interests in society. He believed that, if htere were an issue, the government would step in and bring the two sides to cooperate voluntarily. He did not believe goverment should force cooperation, just encourage and facilitate it.

5. What was Hoover’s initial reaction to the stock market crash of 1929?
Hoover's initial reaction to the stock market crash of 1929 was to be cautious and call together professionals to cooperate and help find a solution. He also requested that companies and laborers do not do anything to make the impact worse, like cutting wages, or going on strike for higher wages. He also created an organization to raise donations for poor people.

6. What was the nation’s economic situation in 1930?
The nation's economic situation in 1930 was disastrous. Farmers refused to work their fields and sell their crops for such a low price, and people blocked food shipments in attempt to raise food prices and profits. Everyone blamed Hoover and began to hate him. The victims of poverty gave the things they used to survive without a home nicknames after Hoover.

7. How did voters in 1930 respond to this situation?
Voters in 1930 responded by blaming Hoover for the situation, and democrats took advantage of the people's anger towards Hoover by campaigning with anti-Hoover ideas. The democrats won many congressional elections, and the republicans lost their superior numbers in Congress.

8. What did Hoover do about the economic situation?
Hoover tried to help the economy by making negotiations between organizations to make them cooperate and try to raise prices and profits. He also persuaded large banks to create the National Credit Corporation, which gave loans to smaller banks to help them avoid bankruptcy. When this failed, Hoover passed the Federal Home Loan Bank Act, which lowered mortgage rates for home owners and allowed farmers to refinance their farm loans to avoid foreclosure. His most ambitious measure, though, was the Reconstruction Finance Corporation. It authorized up to $2 billion to be loaned to large corporations to help them pay workers and employ more workers. It was still not enough to save the economy.

9. How did the economy respond to his efforts?
His efforts were ineffective to save the economy. His attempts to make companies and organizations cooperate did little to help, and the acts and organizations he passed and created did not have much of a helpful effect. The only thing that came from his attempts was skepticism and anger from the people that disagreed with and blamed him.