The Great Depression Chapter 12 Vocab 15 words

The Great Depression Chapter 12 Vocab – 15 words

Great Depression – A period from 1929 -1941 in which the economy faltered and unemployment soared.

Causes of the Great Depression – Agricultural Overproduction and Debt – Unequal distribution of wealth – Easy Credit

Black Tuesday/ Stock Market Crash – October 29, 1929 – The stock market lost $10 -$15 billion dollars. – By November, stock prices had dropped by over 1/3.

Causes of the Stock Market Crash – Speculation – Buying on the Margin – No government regulation

Speculation – Practice of making high risk investments in hopes of obtaining large profits. – She speculated that the price of gold would increase, so she bought a pound of gold in hopes of becoming wealthy overnight.

Buying on the Margin – Buying stocks by paying a small (10%) down payment, then borrowing the rest from a stockbroker. – If stocks rose, the buyer could easily pay the stockbroker and still make a profit. – If stocks fell, the broker would issue a margin call, and the buyer would have to pay the loan immediately.

Bank Failures – As people lost confidence in the economy, they made “runs” on the banks to retrieve their money. – The Federal Reserve limited the money supply to discourage lending. – As a result, few banks had enough currency, and were forced to close.

Hawley Smoot Tariff – Raised prices on foreign imports to such a level that they could not compete in the American market. – Effect: caused European countries to enact their own tariffs…disastrous to the global economy.

“Hoovervilles” – Makeshift shantytowns of tents and shacks built on public land or vacant lots. – The nickname “hooverville” was a jab at President Hoover, who many blamed for the hard times.

Tenant Farmers – Farmers that lived on land they did not own, working for the landowners rather than themselves.

Dust Bowl – Farmers in the Great Plains had used poor farming methods which deprived the soil of moisture. – Combined with a severe drought, the soil turned to dust. – Winds blew the dust for hundreds of miles, blanketing farms and blackening the skys.

Okies – Dust bowl migrants who went to the West Coast to escape the problems of the dust bowl.

Reconstruction Finance Corporation (RFC) – Federal agency set up by Congress in 1932 to provide emergency government credit to banks, railroads and other large businesses. – Example of trickle down economic.

Hoover Dam – Dam on the Colorado River built during the Great Depression (1932) to create jobs.

Bonus Army – A group of World War I veterans who traveled to Washington DC to demand an early payment of the bonus that Congress had promised them.