 Depressed Farming:  The end of WWI led to a decline in demand for agricultural products 1. Too much food led to a 40% drop in crop prices  The Stock Market: 2. Overspeculation of stocks 3. Many people borrowed money to pay for stocks, called buying on margin 4. There was no regulation of the stock market 5. Overproduction of goods

Too much inventory…Not enough buyers

 The Stock Market:  On Tuesday, October 29, 1929, the stock market crashed.  People rushed to sell and investors lost $30 billion  Only 3 million of 121 million Americans were initially affected by the crash.  This is the beginning of the Great Depression

The U.S. stock market had only about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

 Many banks closed after crash due to loss of funds invested in the stock market.  Panic caused bank runs, closing 600 banks in 60 days.  Many people lost ALL their money when banks closed.  25,000 banks and 90,000 businesses failed by  Unemployment rose to 25%

 The effects of the depression were made worse by the Dust Bowl:  Heavy droughts & over- farming in the West destroyed the Plains  In the early 1930s, windstorms swept away loose soil- static electricity created “brown blizzards”  Farmers in the Plains left their farms & searched for work or better land in West coast states

 Initially, Hoover asked big businesses and the wealthy to help out.  As the depression worsened, Hoover called for more gov’t action  The gov’t issued relief checks to help the unemployed Reconstruction Finance Corps  The Reconstruction Finance Corps (RFC) loaned money to failing businesses

 Public works projects like Hoover Dam, were started to provide jobsHoover Dam  Hoover believed the states, not the federal government, should provide relief  These efforts did not end the depression & many citizens lost faith in President Hoover

 Horse-drawn automobiles were known as “Hoover Wagons”.

 Newspapers used to cover the homeless were called “Hoover Blankets”

 Hoover also decided to deport 2 million people of Mexican descent to be repatriated or sent back to Mexico.  1.3 million of those deported were actually American citizens.  Hoover created this legislation in response to American farmers who wanted their jobs, primarily in California

 As people lost their jobs, they began to move from place to place, looking for work.  They were known as Hobos and often used the trains as a way to travel  “Riding the rails”

 In 1933, FDR becomes president.  In order to restore confidence in U.S. banks, FDR’s first response is to declare “bank holidays” and shut down all banks to prevent more bank closures.  He only allowed financially stable banks to open.  He started “fireside chats”, addressing the nation by radio to give updates and reassurance.

 Hundred Days – In his first 100 days in office, FDR was able to have 15 major acts passed by Congress to resolve the economic crisis.  These acts created programs known as his New Deal.

 Those who opposed FDR’s New Deal included:  Left Wing: (Democrats)  Huey Long – Senator from Louisiana who believed in the redistribution of wealth  Father Charles Coughlin – did not believe the New Deal helped enough. He publicly criticized FDR on his radio show.

 Those who opposed FDR’s New Deal included:  Right Wing:(Republicans)  Big Businesses – New Deal regulation caused them to lose money.  Supreme Court – Believed New Deal was unconstitutional (FDR had gone too far)

 In order to have more support for his New Deal programs, FDR proposed the following:  Force all Supreme Court Justices to retire by 70 years old (not appointed for life)  Increase the number of justices from 9 to 15, allowing FDR to appoint 6 more justices who would support the New Deal.  **This plan harmed FDR’s reputation and actually took away any support left for New Deal proposals.