The Great Depression Begins Election of 1928

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 29 th 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 1 out 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 1929 -1932 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-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.