Chapter 22 hardship and hope the great depression of

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Business Law and the Legal Environment, Standard Edition
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CHAPTER 22
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Chapter 40 / Exercise 5
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Hardship and Hope: The Great Depression of the 1930s Chapter Outline: I. The Great Depression The Great Depression defined the decade of the 1930s and molded an entire generation of Americans. A. Causes of the Crisis Historians and economists agree on most of the following as causes of the Depression: 1) overproduction of goods and food; 2) overexpansion of credit, especially buying of stocks on margin; 3) excessive profits and unequal distribution of wealth; 4) decline in farm prices in the 1920s industry was lagging technologically; 5) the collapse of the banking system as a result of Federal Reserve System policies; and, 6) occurred within the context of a global depression. Europe never recovered from WWI and remained indebted to the United States. The lack of any safety net for workers and their families also contributed to the suffering. B. Surviving Hard Times In 1930, six million Americans were unemployed, and by 1933, 13 million Americans were unemployed. In 1932, the national output was nearly 50% of what it had been three years before, below the 1913 level. C. Enduring Discrimination The black community always had to contend with poverty, and the Great Depression only worsened their plight. Even among the “hobos” the racial and sexual hierarchy prevailed. The case of the “Scottsboro Boys” hi ghlighted the African-American travails. After being accused of rape by white women who were “riding the rails” with them, the young black men were put on trial three times. The U.S. Supreme Court reversed the second conviction, citing the exclusion of blacks from the jury. The case ignited civil rights activists, liberals, and radicals during the 30s.
Mexican-American families struggled to survive on the low wages paid to laborers, and many were deported. Thousands of farmers lost their farms. In 1933, over 5% of the nation’s farms were foreclosed on because they could not pay the taxes on their property. In 1931, Midwestern farmers organized the Farmers’ Holiday Association to try to force prices up. They withheld grain and livestock from the market, and dairy farmers dumped thousands of gallons of milk in Iowa and Wisconsin to protest the price that had dropped to two cents a quart. D. The Dust Bowl Farmers across Oklahoma, Texas, Kansas, Colorado, and New Mexico suffered as an extended drought and “d ust storms” caused the topsoil in the region to blow away. Thousands of “Okies” packed their meager belongings and left for greener pastures in California. Their tale was told by John Steinbeck in The Grapes of Wrath, while Dorothea Lange and Woody Guthrie captured their plight in photographs and music. II. Presidential Responses to the Depression Herbert Hoover seemed unable to respond to the Depression. He kept saying, “ prosperity is just around the corner.” But soup lines stretched around the corner. He believed that offering welfare to the suffering would destroy their “rugged individualism.” Because of the deepening