AP US History AMSCO Guided Notes
7.9: The Great Depression
AMSCO Guided Notes
AP US History Guided Notes
AMSCO 7.9 - The Great Depression
Learning Objectives
- Explain the causes of the Great Depression and its effects on the economy.
I. Causes of the 1929 Crash
1. How did the Great Depression differ from previous depressions in American history?
A. Wall Street Crash
1. What role did rising stock prices play in the prosperity of the 1920s?
2. How much did the Dow Jones Industrial Average rise between March 1928 and September 1929?
B. Black Thursday and Black Tuesday
1. What happened on Black Thursday and Black Tuesday, and why did the bankers' intervention fail?
2. How far did stock prices fall from their September 1929 peak to their lowest point three years later?
II. Underlying Causes of the Great Depression
1. Why was the stock market crash alone insufficient to explain the Great Depression?
A. Uneven Distribution of Income
1. How did the unequal distribution of income contribute to the economic collapse?
B. Stock Market Speculation
1. What is buying on margin and how did it increase the risk for investors?
C. Excessive Use of Credit
1. What factors led to increased borrowing and installment buying during the 1920s?
D. Overproduction of Consumer Goods
1. How did increased productivity and credit create a mismatch between production and consumption?
E. Weak Farm Economy
1. Why did farmers fail to share in the prosperity of the 1920s, and what additional challenges did they face?
F. Government Policies
1. How did high tariffs and the Federal Reserve's tight money policies contribute to the depression?
2. Why did the Federal Reserve's focus on preserving the gold standard worsen bank failures?
G. Global Economic Problems
1. How did U.S. policies toward Europe contribute to a worldwide depression?
III. Effects of the Great Depression
1. What do the statistics on GNP, income, bank closures, and unemployment reveal about the severity of the Great Depression?
A. Social Effects
1. How did the Great Depression affect different social classes and groups differently?
2. What were Hoovervilles and what did they symbolize about the depression's impact?
IV. President Hoover's Policies
1. What was Hoover's initial approach to the depression and why did he hesitate to seek federal action?
2. How did Hoover's views on government's role in relief change between 1929 and 1931?
V. Responding to a Worldwide Depression
A. Hawley-Smoot Tariff (1930)
1. What were the provisions of the Hawley-Smoot Tariff and what were its unintended consequences?
B. Debt Moratorium
1. Why did Hoover propose a moratorium on international debt payments and what was the outcome?
VI. Domestic Programs: Too Little, Too Late
A. Federal Farm Board
1. What was the purpose of the Federal Farm Board and why was it insufficient to address the farm crisis?
B. Reconstruction Finance Corporation (RFC)
1. What was the RFC and how did Hoover believe it would help the economy recover?
2. Why did Democrats criticize the RFC as helping only the rich?
VII. Despair and Protest
A. Unrest on the Farms
1. What actions did farmers take to combat foreclosures and falling prices?
B. Bonus March
1. What did World War I veterans demand in the Bonus March and how did the government respond?
2. How did the government's handling of the Bonus March affect public opinion of President Hoover?
VIII. Changing Directions
1. When did the economic decline reach bottom and what event finally brought full recovery?
2. How did the Great Depression change American attitudes toward government and lead to political change?
Key Terms
Black Tuesday
Dow Jones index
buying on margin
uneven distribution of income
excessive use of credit
overproduction
high tariffs
Federal Reserve
stock market crash
business failures
unemployment
gross national product
poverty and homelessness
Herbert Hoover
self-reliance
Hawley-Smoot Tariff (1930)
debt moratorium
Farm Board
Reconstruction Finance Corporation
bonus march (1932)