Causes& Effects of the great Depression

1.What happened on "Black Tuesday"?

On "Black Tuesday", the stock market crashed lower than it ever had before. Investors rushed to get rid of their stock; 16.4 million stocks were dumped that day. Many lost nearly all of their savings.

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)

In the 1920s, many industries began to fail. Other means of transportation, such as busses, replaced railroads in popularity, and new means of getting energy made the demand for coal mining or lumbering drop significatntly. Nearly every big industry needed to cut back significantly on jobs just to stay afloat. Another "sector" that was hit hard was agriculture - farmers had a surplus of goods, and no one to buy them. They tried to remedy this problem by upping production, but this only exacerbated the problem and put them into death. With banks foreclosing on their property and debts not getting paid off, its no wonder the economy started to head into a downhill spiral. Economic trends within the realm of consumerism echo this clearly - people were buying less and less products. Although companies were raising prices, only the very upper crust actually had enough money to buy luxury items. The rest of the population could barely keep a roof over their heads. People were quick to buy things on credit, and to invest in the stock market without thinking. This inflamed already occurring issues within the economy.

3. According to your reading, what are the major causes of the Great Depression?

The four major causes of the Great Depression are tariffs and war debt policies that effected foreign trade with America; a crisis in the farming industry; easy credit being too available; and an uneven distribution of income.

4. What was Hoover’s philosophy of government?

Hoover believed strongly in ended conflicts between different groups within the country. However, he was very against government handouts to the poor - he believed that it did not allow people to grow and fend for themselves, and preferred to encourage individuals and charities to help out the less fortunate without the aid of government funds.

5. What was Hoover’s initial reaction to the stock market crash of 1929?

Hoover's initial reaction to the crash of 1929 was that things were not as bad as they seemed; every boom is naturally followed by a depression, and worrying was not necessary because things would most certainly pick right back up soon enough.

6. What was the nation’s economic situation in 1930?

In 1930, nothing had improved - in fact, things had gotten worse. Soup kitchens became more and more common as the unemployment rates continued to climb ever higher, and the stock market continued to spiral out of control.

7. How did voters in 1930 respond to this situation?

The populace put much of the blame on Hoover; do to his unpopularity, they voted many Democrats into Congress.

8. What did Hoover do about the economic situation?
Hoover began to take several steps to right the economic situation. He began to back several individual groups, and convinced the nation's large banks to set up an organization that loaned money to smaller banks who were on the verge of bankruptcy. Hoover then passed the Federal Home Loan Bank Act, which let homeowners refinance their own homes, and helped farmers to stave off foreclosure. Finally, Hoover created the Reconstruction Finance Corporation. The RFC gave $2 million to refinance many major businesses, industries, and organizations.

9. How did the economy respond to his efforts?
Though Hoover's efforts seemed like they would work well, ultimately, it was too late to do anything - the situation had already grown so out of control that Hoover's plans and adjustments had little effect on the economy.