Chapter 12 RG
- 1. ©Pearson Education, Inc., publishing as Pearson Prentice Hall. All rights reserved. 172 READING CHECK In 1928,how did Americans show their approval for the way Republicans handled the economy? VOCABULARY STRATEGY What does the word converge mean in the underlined sen- tence? What context clues can you find in the surrounding words or phrases? Circle any words or phrases in the para- graph that help you figure out what converge means. READING SKILL Recognize Causes Look over the concept web. Select a cause of the Great Depression. Explain how it contributed to the depression. The Roaring Twenties were a Republican decade. Beginning in 1920, Republican Presidents led the nation and took credit for the good economic times. In 1928, the country continued to support the Republicans by electing Herbert Hoover President. However, the nation’s prosperity was not as deep or as sturdy as it appeared. American farmers faced difficult times in the 1920s. They had borrowed money to buy land and machinery to increase the harvest yields during World War I. Although the demand for American crops fell after the war, farmers were still producing large harvests. Cheap food flooded the markets, lowering farmers’ profits and mak- ing debt repayment hard. Industrial workers, whose wages rose steadily, did better than farmers. The owners of companies did even better. They became very rich. In fact, in 1929, the wealthiest 0.1 percent of the population earned about the same amount of money as the bottom 42 percent. However, the people with great wealth could not buy enough goods to keep the economy strong. Still, many workers took advantage of easy credit to buy products. This disguised the problem and helped the economy to grow. By 1929, it became clear that too much money was being poured into stock speculation. Investors often borrowed money to buy stocks, then sold them to turn a quick profit. Frantic buying and sell- ing inflated the prices of stocks to unrealistic levels. Finally, all the problems began to converge. A sharp drop in stock prices led to pan- icked selling. Stock prices bottomed out on Black Tuesday, October 29, 1929, wiping out whole fortunes in hours. The stock market crash marked the beginning of the Great Depression, a period lasting from 1929 to 1941 in which the U.S. econ- omy faltered and unemployment soared. Thousands of banks closed and many businesses failed. The government tried to boost the sale of American goods by passing the Hawley-Smoot Tariff, which placed high taxes on foreign goods. Foreign governments responded by placing tariffs on American goods. The result was closed markets and unsold goods, which destroyed international trade. Economists still disagree on what was the most important factor leading to the Great Depression, which eventually affected the whole world. Review Questions 1. How did World War I affect farmers and help lead to the Great Depression? 2. Why was stock speculation a problem? Name Class Date CHAPTER 12 Section Summary Section 1 CAUSES OF THE GREAT DEPRESSION
- 3. ©Pearson Education, Inc., publishing as Pearson Prentice Hall. All rights reserved. 174 READING CHECK In what part of the country did the Dust Bowl occur? VOCABULARY STRATEGY What does drastic mean in the underlined sentence? Read the underlined sentence aloud, but leave out the word drastic. What word could you use in its place? Use this strategy to help you fig- ure out the meaning of drastic. READING SKILL Categorize Which of the follow- ing were present in both urban and rural America? Circle your answer. • Hoovervilles • Unemployment • Farm foreclosures The Great Depression deeply affected Americans. Some lost every- thing they had while others struggled simply to survive. In the cities, Americans faced rampant unemployment. Between 1921 and 1929, annual average unemployment rates never rose above 3.7 percent. By 1933, almost 25 percent of workers were without jobs. As unem- ployed families ran out of money, their hardship deepened. Drastic necessity forced them to sell their belongings. Sometimes a family’s only food came from a bread line, where people lined up for hand- outs from charities or public agencies. Many people were evicted from their homes. With no place else to go, they sometimes grouped together in Hoovervilles—makeshift shantytowns of tents and shacks built on public land or vacant lots. Conditions were bad in rural America, too. Before the depres- sion, farmers had already been struggling. During the depression, their problems worsened. Crop prices dropped lower. Between 1930 and 1934, nearly one million farmers lost their homes for failure to pay their mortgages. Some farmers stayed on the land as tenant farmers, working for bigger landowners rather than for themselves. A severe drought and overfarming on the Great Plains turned the soil to dust, making farming impossible and creating huge dust storms. High plains regions in Texas, Oklahoma, Kansas, New Mexico, and Colorado became known as the Dust Bowl. Many farm- ers left the area and moved to California to look for work. Because some of these people were from Oklahoma, Dust Bowl refugees became known as Okies. Minorities were hit the hardest by the depression. African American sharecroppers were thrown off the land they had farmed and migrated north. In 1932, unemployment among African Ameri- cans was nearly double the national rate. In the Southwest, many white Americans urged repatriation of Mexican Americans. Repatri- ation involved government efforts to send Mexican immigrants and their American children back to Mexico. For many Americans, the depression was a time of great hope- lessness and despair. Review Questions 1. What were some of the problems that farmers faced during the depression? 2. What was repatriation, and who was most affected by it? Name Class Date CHAPTER 12 Section Summary Section 2 AMERICANS FACE HARD TIMES
- 5. ©Pearson Education, Inc., publishing as Pearson Prentice Hall. All rights reserved. 176 READING CHECK Who led army troops against protesters in Washington, D.C., during the summer of 1932? VOCABULARY STRATEGY What does the word simultaneously mean in the underlined sentence? Look for clues in the surrounding words, phrases, and sentences. Circle the phrase below that has the same meaningas simultaneously. • done at the same time • done one after the other READING SKILL Identify SupportingDetails List the details that support the con- clusion that Hoover’s policy of volunteerism failed. From big cities to small towns, the Great Depression spread misery across America. As the crisis deepened, Herbert Hoover struggled to respond to the nation’s problems. At first, Hoover felt that government should not interfere with what he thought was the natural downswing of the business cycle. Soon, however, Hoover tried a different approach, called volun- teerism. Hoover asked business leaders not to cut prices and wages. He called for the government to simultaneously reduce taxes, lower interest rates, and create public-works programs. He also asked the wealthy to give to the poor through charities. Finally, Hoover called for a policy of localism. This policy asked state and local govern- ments to provide more jobs and relief measures. However, busi- nesses cut wages and laid off workers, towns and states did not have the resources to respond to the crisis, and charities ran low on money. The crisis demanded federal action. Next, the President decided to adopt a policy of trickle-down economics. The idea was that the government would provide loans to bankers so they in turn could lend money to businesses. Busi- nesses would then hire workers, leading to increased production and consumption, and the end of the depression. At Hoover’s urg- ing, Congress created the Reconstruction Finance Corporation (RFC) to provide loans to businesses. However, businesses that did receive loans did not always use them to hire workers. Hoover did have one success in the building of Hoover Dam. Construction of the dam on the Colorado River brought much-needed employment to the Southwest in the early 1930s. Americans became increasingly unhappy with Hoover’s han- dling of the depression. A group of almost twenty thousand unem- ployed World War I veterans known as the Bonus Army marched in protest and set up camps in Washington, D.C. They wanted early payment of a bonus promised them. Congress agreed, but Hoover vetoed the plan. When riots broke out in July 1932, Hoover called in the military. General Douglas MacArthur led army troops against the veterans. Many of the veterans were hurt, a situation that angered many Americans. Hoover had little hope of reelection. Review Questions 1. What was President Hoover’s first response to the depression? 2. What was the Bonus Army? Name Class Date CHAPTER 12 Section Summary Section 3 HOOVER’S RESPONSE FAILS