The Great Depression
Begins
Election of 1928
Republican Herbert Hoover vs Democrat Alfred E. Smith
Republican Hoover wins the election
STOCK MARKET COMES ALIVE
1920’s- stock prices rose
steadily and over 4 million
Americans owned stock (3%)
Speculation- buying stocks
and bonds on the chance of a
quick profit
Buying on Margin- paying a
small percentage of a stock’s
price as a down payment and
barrowing the rest
Dow Jones Industrial
Average- most widely used
barometer of the stock
market’s health. It is a
measure based on the stock
prices of 30 representative
large firms trading on the NY
Stock Exchange.
STOCK MARKET CRASHES
Stock Market
Crashed on October
29th 1929- known as
Black Tuesday the
bottom fell out of the
market and the
nations confidence.
People lost most of
their savings and
went into debt.
The stock market crash signaled the beginning of
the Great Depression (1929-1940) when the
economy plummeted and unemployment rose.
Farmers Struggling
Farmers/agriculture
suffered, demand fell
40% after WWI.
Price-supportsgovernment bought in
surplus crops and
guaranteed prices and
sell them on the world
market.
Farms Overproduced and
people Underconsumed
Bank and Business failures
1929- The stock market
crash scared Americans and
people attempted to
withdraw all their money from
banks
600 banks closed in 1929.
By 1933 over 11,000 of the
nations 25,000 banks closed.
Gross National Product
(GNP)- total output of goods
and services was cut in half
Unemployment rose and
1out of ever 4 workers was
out of a job
World Trade Down
Much of Europe suffering facing high war debts
which limited America’s ability to import
European goods
Hawley –Smoot Tariff- Hoover passed this tax
in 1930 and was the highest protective tariff in
US history. He attempted to protect American
farmers and manufactures from foreign
competition. This actually hurt the US because
the Tariff prevented European countries from
earning American currency and buying
American goods.
World Trade was down 40%
CAUSES OF THE GREAT
DEPRESSION
Speculation in the Stock Market
A crisis in the farmer sector:
Overproduction and
underconsumption
Bank failures
Tariff and war debt policies
The availability of easy credit
An unequal distribution of income
Depression hits US
The depression hit the
cities when people lost
their jobs and were
evicted from their homes
Shantytowns (little towns
consisting of shacks)
built out of scrap
materials
Soup Kitchens and
Breadlines- offering free
of low-cost food and
people waiting in lines to
receive food provided by
charitable organizations
The DUST BOWL
Rural area depression was hard, but most farmers could grow their
own food for their families
1929-1932 over 400,000 farms were lost through foreclosure and
farmers turned to tenant farming and barley had a living
THE DUST BOWL- Drought in the Great Plains created huge Dust
storms that sometimes carried dust to East Coast Cities. These
states became known as the bowl states; Kansas, Oklahoma, Texas,
New Mexico, and Colorado. Thousands of farmers packed up their
families and headed west following rt. 66 to California
The American Familymoney was tight so
families stayed at home
to entertain themselves
playing Monopoly (1933)
and listening to the radio.
Some families broke
apart during the strain!
Men were in the streets
because they had
difficulty coping with
unemployment and
everyday they would go
in the streets and look for
jobs
“Hobos” wandered the
streets and slept under
the bridge
WOMEN and CHILDREN
Women Struggle to
survive- canning food,
sewing clothes and
managing household
budgets. Women were
also starving to death in
cold attics
Children also suffered
through poor diets and
went to work in sweat
shops. Teenage boys
roamed the country and
were called “Hoover
tourists”
Social and Psychological Effects
people lost their will to
survive and suicide rate rose
30 percent between 19291932
Giving up Dreams of going to
college, getting married, and
having children
Hoover Struggles with
Depression
President Herbert Hoover tried to reassure the
nation that the economy was fine and Hoover
felt the government could play a limited role in
helping solve the nation’s problems
Hoover takes cautious steps by asking
employers not to cut wages or lay off workers
and asked labor leaders to avoid strikes. He
also helped create organizations to generate
contribute to the poor.
HOOVER DAM
Boulder Dam (later called
Hoover Dam)- project
Hoover approved of a
dam on the Colorado
river. This dam would
generate electric among
seven states Arizona,
California, Colorado,
Nevada, New Mexico,
Utah, and Wyoming.726
ft high 1,244 ft long the
worlds tallest dam and
second largest.
Political Turn
Democrats won the 1930 Congressional
Election by taking more seats in the
Congress.
Republicans lost control of the House and
saw their majority in the Senate dwindle to
one vote
Problems at a Rise
Farmers declared a “farm
holiday” and refused to work
on their field because of
loosing crops and markets
Shantytowns soon became
called “Hoovervilles”
People called the
newspapers they wrapped
themselves in “Hoover
blankets.”
Empty pockets turned inside
out were called “Hoover
flags”
Hoover Takes Action
Hoover backed the Federal Farm Board (to raise
crop prices)
Establishment of a National Credit Corporation
Federal Home Loan Bank Act- 1932 lowered
mortgage rates for homeowners and allowed
farmers to refinance their farm loans to avoid
foreclosure
Reconstruction Finance Corporation (RFC)-2 billion
dollars for emergency loans to banks, railroads, and
other big business
Trickle-Down Theory- Hoover argued RFC loans
would stimulate the economy and companies would
start hiring again, but the poor could not wait for the
money or jobs.
Bonus Army
Bonus Army-WWI
veterans arriving to the
country in 1932, marched
on Washington….
Patman Bill- Bonus army
asked for compensation
from their time spent in
WWI and Hoover opposed
the bill and Senate turned
it down
Attempt to Disband Bonus
Army- ended up gassing
the army of 1000 people,
which hurt Hoover’s image
at president and in the
next election
Election of 1932
Franklin Delano
Roosevelt
Democrat
New Deal for American
People, lots of
government intervention
Roosevelt Wins with a
landslide
Herbert Hoover
Republican
Government needs to
stay out of the
economy to protect
free enterprise
NEW DEAL
Roosevelts First
Hundred Days he
took actions to help
the economy and
created programs to
give people jobs and
food.