The Great Depression October 29th, 1929

Causes of the Depression Superficial prosperity Railroads, textiles, steel – barley made a profit. Crisis in the Farm Sector overprotection Easy Credit - living on credit Uneven distribution of wealth Poor decisions made by the government

Get Rich Quick plan Bull Market – long period of rising stock prices = people invest Margin – people are buying stocks on credit also – 10% down and stockbrokers loaned rest Example: 1. Person has $1000 but wants $10,000 work of stock 2. The stockbroker loans $9,000 3. When the stock prices rise, investor sell, make a profit and pay back stockbroker Speculation – betting that the market would continue to rise.

Everything that goes up, must come down Problems!! * Stock prices started to fall * everyone began to sell stocks to repay loans * Prices drop further when money is pulled out Monday, October 21st, 1929 = Margin Call Tuesday, October 29th, 1929 – Black Tuesday!! stock market falls to lowest prices ever

Things get worse Hawley-Smoot Tariff Act - raises tariffs to the highest in history “If you won’t buy our stuff, we aren’t buying yours” = other countries stopped buying American goods

Hoover’s Beliefs “Any lack of confidence in the economic future… is foolish,” “Rugged individualism” – people should succeed through their own efforts. Help should come from individuals, charities, and local organizations Everyone should work together to get through

Herbert Hoover: A Lifetime of Acheivements

Hoover’s Response Boulder Dam – jump start the Economy and add jobs Federal Farm Board – raise crop prices by keeping some off the market Reconstruction Finance Corporation - Gov. provides money for banks, insurance co. and large business. Trickle Down Federal Home Loan Banking Act – Lowered mortgage rates so homeowners and farmers can refinance

The Great Depression in America

Bonus Army 10,000 – 20,000 WWI veterans arrive in D.C. Want a bonus promised to Bonus Army them for wartime service At first, Hoover provides food and supplies to veterans July 28th, 1932 Hoover decides that veterans should leave General MacArthur and Major Eisenhower force veterans to leave.

Hoover vs. World War I Veterans

“The Dust Bowl” Causes: 1. overproduction 2. drought 3. wind 4. no grass, crops, or trees One Solution – move west to California = Okies = migrants

Farmers and their lost dreams – The Dust Bowl Years

Hoover’s approval rating goes Defeated easily in 1932 by Democratic candidate Franklin Delano Roosevelt