The Great Depression The Great Depression BeginsBegins

Election of 1928Election of 1928

Republican Herbert Hoover vs Democrat Alfred E. SmithRepublican Herbert Hoover vs Democrat Alfred E. Smith

Republican Republican HooverHoover wins the election wins the election

STOCK MARKET COMES ALIVESTOCK MARKET COMES ALIVE1920’s- stock prices rose 1920’s- stock prices rose steadily and over 4 million steadily and over 4 million Americans owned stock (3%)Americans owned stock (3%)SpeculationSpeculation- buying stocks - buying stocks and bonds on the chance of a and bonds on the chance of a quick profitquick profitBuying on MarginBuying on Margin- paying a - paying a small percentage of a stock’s small percentage of a stock’s price as a down payment and price as a down payment and barrowing the restbarrowing the restDow Jones Industrial Dow Jones Industrial AverageAverage- most widely used - most widely used barometer of the stock barometer of the stock market’s health. It is a market’s health. It is a measure based on the stock measure based on the stock prices of 30 representative prices of 30 representative large firms trading on the NY large firms trading on the NY Stock Exchange.Stock Exchange.

STOCK MARKET CRASHESSTOCK MARKET CRASHES

Stock Market Stock Market Crashed on October Crashed on October 29th 1929- known as 29th 1929- known as Black TuesdayBlack Tuesday the the bottom fell out of the bottom fell out of the market and the market and the nations confidence. nations confidence. People lost most of People lost most of their savings and their savings and went into debt.went into debt.

The stock market crash signaled the beginning of The stock market crash signaled the beginning of the Great Depression (1929-1940) when the economy the Great Depression (1929-1940) when the economy plummeted and unemployment rose.plummeted and unemployment rose.

Farmers StrugglingFarmers Struggling

Farmers/agriculture Farmers/agriculture suffered, demand fell suffered, demand fell 40% after WWI. 40% after WWI. Price-supportsPrice-supports--government bought in government bought in surplus crops and surplus crops and guaranteed prices and guaranteed prices and sell them on the world sell them on the world market.market.Farms Overproduced and Farms Overproduced and people Underconsumedpeople Underconsumed

Bank and Business failuresBank and Business failures

1929- The stock market 1929- The stock market crash scared Americans and crash scared Americans and people attempted to people attempted to withdraw all their money from withdraw all their money from banks banks 600 banks closed in 1929. 600 banks closed in 1929. By 1933 over 11,000 of the By 1933 over 11,000 of the nations 25,000 banks closed.nations 25,000 banks closed.Gross National Product Gross National Product (GNP)- total output of goods (GNP)- total output of goods and services was cut in halfand services was cut in halfUnemployment rose and Unemployment rose and 1out of ever 4 workers was 1out of ever 4 workers was out of a jobout of a job

World Trade DownWorld Trade Down

Much of Europe suffering facing high war debts Much of Europe suffering facing high war debts which limited America’s ability to import which limited America’s ability to import European goodsEuropean goodsHawley –Smoot Tariff-Hawley –Smoot Tariff- Hoover Hoover passed this tax passed this tax in 1930 and was the highest protective tariff in in 1930 and was the highest protective tariff in US history. He attempted to protect American US history. He attempted to protect American farmers and manufactures from foreign farmers and manufactures from foreign competition. This actually hurt the US because competition. This actually hurt the US because the Tariff prevented European countries from the Tariff prevented European countries from earning American currency and buying earning American currency and buying American goods. American goods. World Trade was down 40%World Trade was down 40%

CAUSES OF THE GREAT CAUSES OF THE GREAT DEPRESSIONDEPRESSION

Speculation in the Stock MarketSpeculation in the Stock Market

A crisis in the farmer sector: A crisis in the farmer sector: Overproduction and underconsumptionOverproduction and underconsumption

Bank failuresBank failures

Tariff and war debt policiesTariff and war debt policies

The availability of easy creditThe availability of easy credit

An unequal distribution of incomeAn unequal distribution of income

Depression hits USDepression hits US

The depression hit the The depression hit the cities when people lost cities when people lost their jobs and were their jobs and were evicted from their homesevicted from their homesShantytownsShantytowns (little towns (little towns consisting of shacks) consisting of shacks) built out of scrap built out of scrap materials materials Soup Kitchens and Soup Kitchens and BreadlinesBreadlines- offering free - offering free of low-cost food and of low-cost food and people waiting in lines to people waiting in lines to receive food provided by receive food provided by charitable organizations charitable organizations

The DUST BOWLThe DUST BOWL

Rural area depression was hard, but most farmers could grow their Rural area depression was hard, but most farmers could grow their own food for their familiesown food for their families1929-1932 over 400,000 farms were lost through foreclosure and 1929-1932 over 400,000 farms were lost through foreclosure and farmers turned to tenant farming and barley had a livingfarmers turned to tenant farming and barley had a livingTHE DUST BOWLTHE DUST BOWL- Drought in the Great Plains created huge Dust - Drought in the Great Plains created huge Dust storms that sometimes carried dust to East Coast Cities. These storms that sometimes carried dust to East Coast Cities. These states became known as the bowl states; Kansas, Oklahoma, Texas, states became known as the bowl states; Kansas, Oklahoma, Texas, New Mexico, and Colorado. Thousands of farmers packed up their New Mexico, and Colorado. Thousands of farmers packed up their families and headed west following rt. 66 to California families and headed west following rt. 66 to California

The American Family- The American Family- money was tight so money was tight so families stayed at home families stayed at home to entertain themselves to entertain themselves playing Monopoly (1933) playing Monopoly (1933) and listening to the radio. and listening to the radio. Some families broke Some families broke apart during the strain!apart during the strain!Men were in the streets Men were in the streets because they had because they had difficulty coping with difficulty coping with unemployment and unemployment and everyday they would go everyday they would go in the streets and look for in the streets and look for jobsjobs““Hobos”Hobos” wandered the wandered the streets and slept under streets and slept under the bridgethe bridge

WOMEN and CHILDRENWOMEN and CHILDREN

Women Struggle to Women Struggle to survive- canning food, survive- canning food, sewing clothes and sewing clothes and managing household managing household budgets. Women were budgets. Women were also starving to death in also starving to death in cold atticscold atticsChildren also suffered Children also suffered through poor diets and through poor diets and went to work in sweat went to work in sweat shops. Teenage boys shops. Teenage boys roamed the country and roamed the country and were called “Hoover were called “Hoover tourists”tourists”

people lost their will to survive people lost their will to survive and suicide rate rose 30 and suicide rate rose 30

percent between 1929-1932percent between 1929-1932Giving up Dreams of going to Giving up Dreams of going to college, getting married, and college, getting married, and

having childrenhaving children

Social and Psychological EffectsSocial and Psychological Effects

Hoover Struggles with Hoover Struggles with DepressionDepression

President Herbert Hoover tried to reassure the President Herbert Hoover tried to reassure the nation that the economy was fine and Hoover nation that the economy was fine and Hoover felt the government could play a felt the government could play a limited role limited role in in helping solve the nation’s problemshelping solve the nation’s problems

Hoover takes cautious steps by asking Hoover takes cautious steps by asking employers not to cut wages or lay off workers employers not to cut wages or lay off workers and asked labor leaders to avoid strikes. He and asked labor leaders to avoid strikes. He also helped create organizations to generate also helped create organizations to generate contribute to the poor.contribute to the poor.

HOOVER DAMHOOVER DAM

Boulder Dam (later called Boulder Dam (later called Hoover Dam)- project Hoover Dam)- project Hoover approved of a Hoover approved of a dam on the Colorado dam on the Colorado river. This dam would river. This dam would generate electric among generate electric among seven states Arizona, seven states Arizona, California, Colorado, California, Colorado, Nevada, New Mexico, Nevada, New Mexico, Utah, and Wyoming.726 Utah, and Wyoming.726 ft high 1,244 ft long the ft high 1,244 ft long the worlds tallest dam and worlds tallest dam and second largest.second largest.

Political TurnPolitical Turn

Democrats won the 1930 Congressional Democrats won the 1930 Congressional Election by taking more seats in the Election by taking more seats in the Congress. Congress.

Republicans lost control of the House and Republicans lost control of the House and saw their majority in the Senate dwindle to saw their majority in the Senate dwindle to one voteone vote

Problems at a RiseProblems at a Rise

Farmers declared a “farm Farmers declared a “farm holiday” and refused to work holiday” and refused to work on their field because of on their field because of loosing crops and marketsloosing crops and markets

Shantytowns soon became Shantytowns soon became called “Hoovervilles” called “Hoovervilles”

People called the People called the newspapers they wrapped newspapers they wrapped themselves in “Hoover themselves in “Hoover blankets.” blankets.”

Empty pockets turned inside Empty pockets turned inside out were called “Hoover out were called “Hoover flags”flags”

Hoover Takes ActionHoover Takes ActionHoover backed the Federal Farm Board (to raise Hoover backed the Federal Farm Board (to raise crop prices)crop prices)Establishment of a National Credit CorporationEstablishment of a National Credit CorporationFederal Home Loan Bank ActFederal Home Loan Bank Act- 1932 lowered - 1932 lowered mortgage rates for homeowners and allowed mortgage rates for homeowners and allowed farmers to refinance their farm loans to avoid farmers to refinance their farm loans to avoid foreclosureforeclosureReconstruction Finance CorporationReconstruction Finance Corporation (RFC)-2 billion (RFC)-2 billion dollars for emergency loans to banks, railroads, and dollars for emergency loans to banks, railroads, and other big businessother big businessTrickle-Down Theory- Trickle-Down Theory- Hoover argued RFC loans Hoover argued RFC loans would stimulate the economy and companies would would stimulate the economy and companies would start hiring again, but the poor could not wait for the start hiring again, but the poor could not wait for the money or jobs.money or jobs.

Bonus ArmyBonus ArmyBonus Army-Bonus Army-WWI WWI veterans arriving to the veterans arriving to the country in 1932, marched country in 1932, marched on Washington….on Washington….Patman Bill-Patman Bill- Bonus army Bonus army asked for compensation asked for compensation from their time spent in from their time spent in WWI and Hoover opposed WWI and Hoover opposed the bill and Senate turned the bill and Senate turned it downit downAttempt to Disband Bonus Attempt to Disband Bonus Army-Army- ended up gassing ended up gassing the army of 1000 people, the army of 1000 people, which hurt Hoover’s image which hurt Hoover’s image at president and in the at president and in the next electionnext election

Election of 1932Election of 1932

Franklin Delano Franklin Delano RooseveltRoosevelt

DemocratDemocrat

New Deal for American New Deal for American People, lots of People, lots of government interventiongovernment intervention

RooseveltRoosevelt Wins with a Wins with a landslidelandslide

Herbert HooverHerbert Hoover

RepublicanRepublican

Government needs to Government needs to stay out of the stay out of the economy to protect economy to protect free enterprisefree enterprise

NEW DEALNEW DEAL

Roosevelts First Roosevelts First Hundred Days he Hundred Days he took actions to help took actions to help the economy and the economy and created programs to created programs to give people jobs and give people jobs and food. food.