How Do You Feel About the Future in Russia?

Areas	Improve	No Change	Worsen
National Economy Trade Relations Environmental Pollution Traffic in cities Family Finance Work or Profession Family Relationship Personal Health Home Living Standard

Vocabulary:

Look at the words and phrases below and circle the six that are the most difficult for you to understand. Then ask your classmates to explain these circled words.

Bankruptcy; collapse; fiscal year; hopelessness; plunge; inflation; exchange rate; stock market; prosperity; relief; pension; evolution; crippled; deposit; stagnation; economic boom; unconstitutional; merged companies; recovering of the economy; have dimes, devaluation.

Now, compose six sentences with these difficult words or phrases about the economic situation in the United States and the Russian Federation.

Exercise № 77. Read the text below. Insert required prepositions into blank spaces.

The year of 1929. Some years ….the United States witnessed expansion and inflation on a scale unknown …. any country …. the world. Inflation in wages, real-estate values, and stock prices seemed …. bring prosperity to everyone. While financial activity continued at an unprecedented rate through the summer of 1929, industrial activity was already slowing down. The collapse of the speculative mania …. the stock market was slowly followed by a realization that …. the United States as well as in other parts …. the world many grave economic and financial problems had not been faced. These were now to cause the most serious disarrangement …. economic structure that the world had yet known. Agricultural depression, the result …. falling prices for farm products and …. land, cost thousands of farmers their homes through foreclosure. Unemployment and bank failures were more common than ever ….. in American history. The domestic factors were complicated …. foreign affairs, such as war reparations and the questions of inter-Allied debts.

Out of Class Reading

Exercise № 78. Complete the text with words and expressions in the box. You can use a dictionary and make small changes.

Assess; savings; grim; equally; throughout; decrease; limited; important

The United States President Franklin D. Roosevelt, in his first inaugural address, made some attempt to … the enormous damage: withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the … of many years in thousands of families are gone. More …, a host of unemployed citizens face the grim problem of existence, and an … great number toil with little return.

He was speaking of the Great Depression of 1929 to 1940, which began and centered in the United States but spread quickly … the industrial world, but his words were inadequate. This economic catastrophe and its impact defied description.

On Oct. 24, 1929, the complete collapse of the stock market began; about 13 million shares of stock were sold. Tuesday, October 29 known ever since as Black Tuesday extended the damage; more than 16 million shares were sold. The value of most shares fell sharply, leaving financial ruin and panic in its wake.

There had been financial panics before, and there have been some since, but never did a collapse in the market have such a devastating and long-term effect. Like a snowball rolling downhill, it gathered momentum and swept away the whole economy before it. Businesses closed, putting millions out of work. Banks failed by the hundreds. Wages for those still fortunate enough to have work fell precipitously. The value of money … as the demand for goods declined.

Most of the agricultural segment of the economy had been in serious trouble for years. With the arrival of the depression it was nearly eliminated altogether, and the drought that created the 1930s Great Plains Dust Bowl compounded the damage.

Government itself was sorely pressed for income at all levels as tax revenues fell, and government at that time was much more … in its ability to respond to economic crises than it is today.

The international structure of world trade collapsed, and each nation sought to protect its own industrial base by imposing high tariffs on imported goods. This only made matters worse.

By the fall of 1931 the international gold standard had collapsed, further damaging any hope for the recovery of trade. This started a series of currency devaluation in several countries, because these nations realized that a devalued currency posed at least a temporary advantage in the struggle to find markets for their goods.

By 1932 United States industrial output had been cut in half. One fourth of the labor force about 15 million people was out of work, and there was no such thing as unemployment insurance. Hourly wages had dropped by about 50 percent. Hundreds of banks had failed. Prices for agricultural products dropped to their lowest level since the Civil War. More than 90,000 businesses failed completely.

Statistics, however, cannot tell the story of the extraordinary hardships the masses of people endured. For nearly every unemployed person, there were dependents who needed to be fed and housed. Such massive poverty and hunger had never been known in the United States before. Former millionaires stood on street corners trying to sell apples at 5 cents apiece. Hundreds of pitiful shantytowns called Hoovervilles in honor of the unfortunate Republican president who presided over the disaster sprang up all over the country to shelter the homeless. People slept under blanket-sold newspapers in the out-of-doors. People waited in bread lines in every city, hoping for something to eat. In 1931 alone, more than 20,000 Americans committed suicide.

For anyone with a few dimes, depression America was a shopper's paradise. A new home could be bought for less than $3,000. A man's suit cost about $10, a shirt less than 50 cents, and a pair of shoes about $4. Milk was 10 cents a quart, a pound of steak only 29 cents, and a loaf of bread a nickel. For a dime one could go to the movies, buy a nickel bag of popcorn, and even win prizes given away by the theater. That was for those who had dimes. Not many lucky enough to be working had much change to spend after paying rent and buying food. To turn to the government, at least during the Hoover years, was useless. There was no federally financed net of welfare programs to keep the working class from falling into poverty.

The depression of the 1930s shook capitalism to its foundations and shaped the public attitudes of people for generations. The shock was so great because it contradicted long-held beliefs in the unlimited possibilities of expansion. The depression made the Western world ripe for revolution as every political faction in society looked frantically for a cure. Finding a cure without determining the causes, however, was difficult. In fact, no economist has ever thoroughly explained why the disaster of 1929 to 1932 came about.

One of the most notable attempts to explain this disaster was made by John Kenneth Galbraith in his book 'The Great Crash, 1929', published in 1955. He pointed to five significant factors:

1. An extremely unequal distribution of incomes limited the consumer goods market. Most people were not making enough money to buy the goods they manufactured.

2. There was an enormous amount of fraud and corruption in big business and in the marketing of stocks and bonds. The prosperity of Wall Street consisted largely of paper that was not backed up by real wealth.

3. The banking structure, made up of too many banks, had acted foolishly in making loans. When bad times came, the loans could not be called in, and many people lost their savings as a result.

4. Foreign nations that had borrowed money from the United States could not repay their loans. This, coupled with high American trade barriers, damaged their economies because they could not send their exports to the United States at a profit.

5. The amount of information on the operation of the whole economy was much less adequate than it is today. People, even experts, were not as able to spot trends in industrial output, investment, consumer buying, and other factors that are now studied closely.

Exercise № 79. Make up groups of two or three students for discussion of the US government actions to block Great Depression. Preparing for discussion, make a set of five special questions to be put to your opponent group.

The Government Response (Reading Comprehension)

State governments were in no position to do much to aid depression victims, so hard-pressed were they for revenues. The response of the federal government was, at least in the beginning years, too little and too late. President Herbert Hoover and his aides were convinced that it was just around the corner to be over. Although the government had been heavily involved in helping large corporations for decades, the idea of direct aid to citizens in distress was regarded with disfavor by many in the Hoover administration.

Realistic measures to deal with the depression were undertaken with the installation of Franklin D. Roosevelt in the White House. But even the energy spent on devising new programs was insufficient to undo the depression damage. The economic crisis was not solved until World War II began and triggered huge needs for industrial and agricultural productivity. The Roosevelt New Deal, however, succeeded in putting in place new agencies and policies to try to assure that such a disaster would never happen again.

Exercise № 80. Organize your ideas and write 12 separated sentences about the Great American Depression. Then try to improve your sentences by using connectives and transitional phrases given below: