Herbert Hoover and the Crash

1. The Onset of the Great Depression in America – Homework Assessment Herbert Hoover and the Crash

2. 1. Which of the following industries WAS NOT STRUGGLING during the early 1920s, according to the textbook? D. Automobiles Agriculture was suffering from – of all things – bumper crops. The overproduction of corn, wheat, and other crops during this period on the Great Plains led to a drop in prices. Coal mining was in a slump due to competition from other fuels, railroads were steadily being replaced by trucks and other types of transportation, and clothing manufacturing – which had once employed thousands of piecemeal laborers, was growing increasingly mechanized. Workers were being replaced by machines, and only the large companies with the money to buy them could produce low price goods. Cars, however, kept selling until the Crash brought an end to everything!

3. 2. October 29th, 1929, the date when over 16 Million shares of stocks were sold at rapidly declining prices is known as - C. Black Tuesday D-Day refers to the invasion of Normandy during World War II, people. C’mon. The Great Comeuppance is just some crazy thing I made up, and Black Friday, as you all should know by now, is the day after Thanksgiving when every woman and man in the United States ventures out to the shopping malls to buy things for Christmas. Black Friday, actually has a happy connotation. The companies who see a sales increase during the Christmas season are actually getting out of the “red” – or debt, and into the “black” or profits! Black Tuesday: completely different kind.

4. 3. Which of the following WAS NOT a cause of the Great Depression? A. Government Spending The Stock Market crash, despite the efforts of your textbook to rewrite history, was in fact a major cause of the Great Depression – because it caused the banks to fail. The overproduction of goods in the economy, a longstanding problem, was also a major problem in the economy. And a poor housing market – not unlike the poor housing market we have experienced for the past six or seven years – was also a major factor in the Depression. Government spending, however, did not contribute to the problem: Harding, Coolidge, and Hoover all agreed that government spending should be kept to a minimum. Laissez-Faire.

5. 4. Because of reckless investments by stockbrokers using borrowed money, between 1930 and 1933 there were about 5000 - C. Bank Failures By the time Franklin Delano Roosevelt called a “Bank Holiday” in 1933 and redefined the rules of banking with the Federal Deposit Insurance Corporation, the damage was already done. And for those of you who selected answers A or B, there were actually hundreds of thousands of business bankruptcies and home foreclosures, not just 5000. And there are no debtors prisons in America! If there were, half the country would be in jail. The 5000 banks that had closed by 1933 would grow to closer to 10,000 by the end of the first term of FDR, but then security would return to banking.

6. A. Buying on the Margin • Buying on the margin allowed stockbrokers to purchase ten times the shares they might have been able to otherwise. If they invested wisely, they made more in profits. But if they made a poor choice, all of their money – and the money in people’s savings accounts - was gone. 5. Stockbrokers who purchased shares of companies with borrowed money were engaged in a practice known as -

7. B. Default • The failure to repay bank loans is called – B. Default

8. D. Unemployment at 25% _____7. By the year 1933, unemployment in the United States of America was close to – A. 6% B. 7.8% C. 17% D. 25%

9. C. Hoovervilles _____8. Makeshift shantytowns built with scrap wood and waste materials, where people lived in unsanitary conditions without running water or heat were called – Harding Huts Coolidge Cottages Hoovervilles Bush Bungalows Ralph Retreats

10. Absolutely Nothing! _____9. Because they were committed to laissez-faire economic principles, what did Herbert Hoover’s financial advisors recommend that he do with government money? A. Spend money to create jobs. B. Not to do anything. C. Hand out food to the poor. D. Invest in housing companies.

11. B. Reconstruction Finance Corporation _____10. In order to help business like railroads, insurance companies, and big businesses to stay afloat and banks to stay solvent, what program did Herbert Hoover create in 1932? A. Federal Deposit Insurance Corp. B. Reconstruction Finance Corp. C. Tennessee Valley Authority D. National Recovery Admin.

12. _____11. The group of World War I veterans which came to Washington, D.C. seeking relief but were sent away empty-handed and burnt out of their shantytown were – C. The Bonus Army In 1932, the Bonus Army came to Washington, D.C. to ask for a $1000 bonus check – promised to them by the government for their service in World War I – about thirteen years early. They claimed that without relief, they might not live until 1945. Unfortunately, the men were not given an audience with the President. The Congress listened to their complaints, but would not give in to their demands. When the men decided to camp out near the White House in a “Hooverville” shanty, the administration became fearful of a revolt. He ordered the shanty burned down, and chased the men out of town, and – if it was possible – became even more despised!