Chapter+24+Brian,+Jin+Soo,+Ilwon,+Jeffrey,+Erica+Tuesday+Dec+9

== = = =**//__Objective/Key Questions __//**= = = ===1) Analyze the causes and consequences of the stock market crash of 1929. === Causes and Consequences of the stock market Crash
 * //__OUTLINE __//**


 * Margin buying: the practice of purchasing stocks with borrowed money
 * Credits: Because of Credits, which made the consumers buy the product even though they had no money, made the economy weak because they had no way to pay the bank back. (Credit has the same idea as credit card)
 * When the banking crisis occurred, many citizens were afraid that if the Bank closed down, they might not be able to get their money. Therefore, they have withdrawed their savings WHICH created even MORE bank failures.
 * The Banking Crisis changed the willingness of pay of the consumers, which worsened the economic crisis.
 * Large number of investors suddenly sold all their shares
 * Created a chain reaction of other people selling all their shares
 * Many people lost lots of money (selling shares at a low price)

 **2) Evaluate the causes of the Great Depression. Causes of the Great Depression**

GLOBAL >
 * Stock Market Crash of 1929 made many people very poor
 * Trouble in Europe reached America
 * US participation in WW1.
 * War debts by European countries piled up
 * World trade declined during late 1920s and early 1930s
 * Foreign countries could not buy American goods and vice versa
 * Placed unreasonably high tariffs on foreign goods
 * Income gap played a big role on Great Depression. To bridge the income gap, many people used CREDITS.

However, the Great Depression wasn't viewed as that much of a big deal since many economists viewed depression as an inevitable part of business cycle. Therefore, the economy is just going through recession, and it will eventually come back up. HOWEVER, Great Depression lasted long.  BANKS > > <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;"> BUSINESS > <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Banks could not repay loans (Therefore banks were closed)
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Customers withdrawed money from bank because they were afraid that they might not get their savings.
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">1930-1932
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">5000 banks failed
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Customers were unable to buy goods (Willingness to pay declined)
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Many companies had to lay off workers (HIGH unemployment rate which gave the citizens a hard time)
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">Unemployment: 3.2% to 23.6% (page 718)
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">US gross national product: the total value of all goods and services produced in a given year
 * <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">$103 billion to $56 billion


 * 3) Explain the global context of the depression and the reasons for the worldwide economic collapse.**

For this question, there is a perfect MAP that describes Global depression in 718. To explain it in more details, World Wide economic collapse, also known as the Great Depression was caused by the great money used during World War 1 when USA participated in WW1. Participation of WW1 led to economic crisis in US. Stock market crush, banking crisis, and business failures alone DIDN'T cause the Great Depression. GLOBAL economy had suffered a lot because of economic troubles in USA. Many Europeans countries had enormous debts built up because of war, which eventually decreased the world trade rate during 1920s and 1930s. This affected USA because since foreign countries are also in an economic crisis, American goods weren't exported. American industries which relied on sales to consumers in foreign countries were left with NO money, but LOTS of surpluses. Therefore, to protect the producers in USA, congress passed the Smoot-Hawley Tariff of 1930, which was the highest tariff in US history. This protected American industries from inexpensive imports and encouraged consumers to buy more domestic product instead of imported product. HOWEVER, it accelerated the global depression by eliminating the American market for foreign manufacturers and industries.

- farmers: n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> shrinking demand for farm products caused prices to drop n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Production exceeds demand n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Many farmers failed to keep up their mortgage n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Bank foreclosed on farms l<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> A farm with an $800 mortgage was sold for $1.90 n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Several farm states, beginning with Iowa in1933, passed laws that temporarily banned foreclosure sales. n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Conditions were bad for southern tenant farmers n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Cotton prices fell from 16 cents per pound in 1929 to less than 6 cents in 1931 n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Farmers in the Midwest faced an overabundance of food n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Southern cotton farmers faced poverty and devastating harvests. n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Government officials and many Americans wanted to remove illegal aliens and Mexican n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> The government forced the farmers to go back to their own native land n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Americans believed that this would ease the strain of the depression n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> In1930s, about 500,000 Mexican descents were pressured to leave the country. n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Josefina Fierro de Bright, the daughter of migrants who had fled from revolution in Mexico to settle in California, organized against discrimination in the Southwest u<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> She led boycotts of companies that did business in Mexican American communities but did not hire Mexican American workers n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Mexican American group called El Congreso organized Hispanic migrants to resist oppressive conditions - workers: n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> They were hit by depression n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Since many employers could hire women more cheaper than men, women workforce actually increased in the 1930s n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Competition in domestic and agricultural work increased n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Some unemployed workers went self-reliant, selling apples on the street n<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> More than 6,000 unemployed workers sold apples in New York City - the American family Life in U.S. cities during the Great Depression was difficult. Many city-dwellers faced unemployment and poverty. Many people fought for scraps of food like animals such as fighting over barrels of garbage outside of restaurants. During the early 1930s the federal government did little to assist struggling city-dwellers or their local communities. City governments, religious groups such as the Salvation Army, and charitable organizations, including the Red Cross tried to provide direct relief to the needy. Neighbors also helped on other. Mexican American communities formed mutual aid societies known as mutualistas to help each other. Some Chinese American communities set out open barrels of rice so that people could draw from them privately, without having to ask for handouts. Harlem residents organized “rent parties.” These large social gatherings charged a small admission fee to help pay a neighbor’s monthly rent. Across the country, people engaged in a daily struggle to feed themselves and their children. Poverty-stricken men and women waited in breadlines for bowls of soup and pieces of bread given out by charitable organizations. Homelessness was also a serious issue. People lost their homes and gathered in shantytowns. - minorities: u<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> African American had particularly difficult times, as economic troubles worsen the problem of racial discrimination u<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> White Americans believed that African Americans should not be hired as long as white Americans were not hired u<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> African American women lost their jobs u<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> Percentage of employed African American women fell
 * 4) Analyze the impact of the Great Depression on various groups**

<span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';">There were several reasons that caused the Great Depressions. One was the excessive spending on credit (get the stuff now, pay later) that started in the boom days after World War I. Everybody was confident that the economy will continue to grow and the stock market will continue to rise, so nobody worried whether they will be able to pay their bills later. They all thought they would make money in the stock market, resulting in some people even borrowing money to buy stocks (margin buying). Company made a lot of money thanks to this extravagant spending, which in turn strengthened the people’s confidence in the stock market (because they continued to see good numbers in company income statements). <span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';"> <span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';">However, the bubble could not continue forever. When the market crashed on Black Thursday, people panicked and their confidence was shattered. They rushed to sell their stock shares and that caused the stock prices to drop even more and faster. After Black Tuesday, everybody – individuals, companies, banks – had suffered greatly. A huge amount of wealth simply disappeared. Because people lost so much money in the stock market, they could not pay back their loans from credit and margin buying. This caused more than 500 banks to fail. People also stopped buying goods, and businesses consequently failed too. Without a properly functioning banking system, they could not find liquidity that possibly could have helped them to weather the storm. When business failures created huge unemployment, further reducing people’s consumption, the Great Depression was already in full swing. <span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';"> There were some other reasons as well. First, the U.S. was not the only country hit by depression. The whole world was in depression, and so other countries did not buy American goods. The U.S. just made everything worse buy applying very high tariffs on goods. This led other countries to retaliate with high tariffs of their own on American goods. This hurt international trade even more, contributing to the Great Depression. Another reason was the large income gap in the years before the Great Depression. A small percentage of U.S. people were really rich and the rest were borrowing money to sustain their life and did not have the buying power to further boost the economy. If farmers and average businessmen were paid more, then the Great Depression could have been less severe or stopped. Lastly, the government failed to apply appropriate fiscal or monetary policies in the years before the Great Depression. There were clear signs that the economy was on a bubble, but the government did little to curb the bubble. In other words, the government filed to manage the ups and downs of a business cycle. The Great Depression could have been a mere down time (recession) but the negligence of the government probably contributed to magnify its severity..
 * 5) Explore the reasons for the deepening crisis of the Great Depression and evaluate the Hoover administration’s responses.**

The basic idea of the Hoover administration’s responses was “rugged individualism.” Hoover opposed the idea of providing direct relief to the people because it would create a large bureaucracy, inflate the federal budget, and reduce the self-respect of the people. Instead, he believed that people should rely on their strength and work hard to fight the crisis. Private charities and local communities could help, but the government should not be the one giving direct relief. However, he didn’t do nothing. Although he refused to provide food, clothing, and shelters, he tried to stimulate the economy by having the government to take an active role – only in indirect ways. The Reconstruction Finance Corporation, the Federal Farm Board, and other SOC projects (Hoover Dam) tried to create jobs and pump money into the economy by helping large companies and letting the effects trickle down the economy. What he didn’t do was to give direct assistance to individuals and small businesses. <span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';"> <span style="font-family: 'Times New Roman',Times,serif;"><span style="color: rgb(68, 68, 68); font-family: 'Segoe UI','sans-serif';">As the history show, this approach was ineffective. The people of that time also blamed Hoover. Although Hoover’s policies marked a big change in the role of government, that was not the economy needed. The people could not stand up to fight the crisis when they did not have a basic foundation to work on. Also, politics is not economics. He could have done a much better job with uniting the people and encouraging them to fight if he were open to giving some direct assistance. Overall, his policies were right in direction and in theory, but insufficient in scale and took too much to show effects (to trickle down the economy). In times of a dramatic crisis, a dramatic policy is needed, and Hoover did not follow this way.

The term ‘depression’ describes the mood and state of mind of the Americans during the Great Depression. The economic crisis of the 1930s affected the mental health and attitudes of many Americans. Therefore, as the psychological strain of the Great Depression increased, many Americans looked to the popular culture and entertainment for escape. Many people took up inexpensive pastimes, such as reading and playing games at home. Movies and radio were particularly popular because they were inexpensive. For example, talking pictures and movie cartoons made by Walt Disney were popular because of the low-ticket price and double features. Radios experienced their golden age during the depression. They were free for everyone. During the 1930s the number of radio nationwide rose from about 12 million to 28 million. Popular programs allowed listeners to forget the hard times. Lastly, books were also popular because they reflected the public’s desire to escape the harsh reality of depression. Many of the ear’s most popular novels offered tales that took readers’ minds off their economic worries. Cheap comic books presented heroes such as Flash Gordon and Tarzan.
 * 6) How did popular culture offer an escape from the Great Depression?**

>>> Salvation Army media type="youtube" key="Rhqa739ZVxo" height="344" width="425"
 * 7) Contrast the background and leadership abilities of Franklin D. Roosevelt with those of Herbert Hoover.**
 * Herbert Hoover || Franklin D. Roosevelt ||
 * * Mining engineer and author
 * Did not give direct aid
 * Believed that direct aid caused reliance
 * Federal Emergency Relief Board (1931)
 * Give each state $375 million for helping unemployment
 * Failed because president refused to pass (Feb 1932)
 * Believed in individualism
 * Rugged individualism: success comes through individual effort and private enterprise
 * Encouraged charity
 * 1930: Hoover created the President’s Committee for Unemployment Relief (PCUR)
 * Assist state and local relief efforts
 * Community Chest
 * Red Cross
 * YMCA
 * Cabinet members proposed a laissez-faire
 * Let the crisis work out by itself
 * Hoover rejected
 * Congress funded public work programs
 * Wanted to ‘start a fire’
 * Put the economy back on its feet
 * Hoover Dam: one of the results of government intervention
 * 1929: Agricultural Marketing Act: established the Federal Farm Board with a budget of $500 million
 * FFB expected to help farming problems
 * Buy materials in bulk
 * Crops stored and sold when price was highest
 * Prices still fall
 * Proposed to buy a lot of products and sell it when the quantity fell
 * FAIL
 * Spent $180 million
 * Home Loan Bank Act: 1932
 * Home Loan Bank Board
 * Provided money for savings banks
 * Reconstruction Finance Corporation (RFC)
 * By Congress in Feb 1932
 * Basically let out loans
 * No direct aid
 * Did not work
 * Gave money to big businesses
 * Critics complained it did not help the real people in need: citizens
 * Hoover failed to stop the depression
 * Government became more active
 * Blames on Hoover
 * Communist Party and Socialist Party blamed capitalism
 * Bonus Army
 * Unemployed veterans
 * Protest: May 1932
 * More than 10000 WW1 Veterans
 * Grant veterans “early payment of the pension bonuses owed them for their service during the war”
 * Rejected bill
 * Many left, some stayed
 * Hoover ordered army to send them away
 * Few people died
 * People hate Hoover even more || * Born into wealthy family
 * Paralyzed waist down because of polio
 * Governor of NY in 1928
 * 1932: ran for president
 * Fairer distribution of wealth
 * Election of 1932
 * Attacked Hoover rather than presenting his own points
 * Wanted to help the people
 * “at the service of the people” ||

media type="youtube" key="oKwkT4Mh87M" height="344" width="425"

Questions 1,2, and 3: Erica Questions 4 and 6 Brian Ilwon Questions 5 and 7: Jeffery Jinsoo

OBJECTIVES THAT WE WILL FOCUS ON

Chapter 24.1: **<span style="color: rgb(210, 126, 231);"><span style="color: rgb(3, 2, 3); font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;">1) Analyze the causes and consequences of the stock market crash of 1929. ** Chapter 24.2: <span style="font-size: 110%; font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif;"> **4) Analyze the impact of the Great Depression on various groups** Chapter 24.3: **5) Explore the reasons for the deepening crisis of the Great Depression and evaluate the Hoover administration’s responses.

1st quiz 24.1 http://www.proprofs.com/quiz-school/quizview.php?title=241-prosperity-shattered 2nd quiz! 24.3 http://www.proprofs.com/quiz-school/quizview.php?title=hoovers-policies**