Causes & Early Effects of the Great Depression

1. What happened on "Black Tuesday"?

The bottom fell out of the market and the nation's confidence. Shareholders frantically tried to sell before prices plunged even lower.

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)

The important industries struggled, farmers grew more crops and raised more livestock than they could sell, and both consumers and farmers were steadily going into debt. In industry railroads and textiles barley made a profit and mining and lumbering were no longer in high demand. Also housing declined and when housing declines so do jobs.

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

Tariffs and war debt policies that cut down the foreign market for American goods, a crisis in the farm sector, the availablity of easy credit, and an unequal distribution of income

4. What was Hoover’s philosophy of government?

To provide security from poverty and want, a nation built of home owners and farm owners, to have the people of America with their savings protected, steady jobs and all to be secured.

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

It was that it wasn't a big deal and tried to reasure them that the nation's economy was on a sound footing.

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

It became worse however the Democrats took advantage of anti-Hoover sentiments to win over the seats in the Congress.

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

They became more frustrated with the Depression and so they expressed their anger with strikes in a number of ways.

8. What did Hoover do about the economic situation?

He took a more Activist approach by signing into the law the Federal Home Loan Bank Act and the Reconstruction Finance Corporation.

9. How did the economy respond to his efforts?

The RCF loaned more than $805 million to large corporations however businesses still failed.