The Great Depression

Causes of the Depression Speculation Buying on the Margin Decrease in buying power of Americans Growing gap between rich and average citizen Inept monetary policy of US; not enough money in circulation US served as a lender for foreign nations; their economies and could not buy our products High tariffs – blocked international trade causing underconsumption Causes of the Depression

Hoover’s Response Worked to promise a rapid recovery Asked businesses not to cut wages or production, which they did for about 2 yrs Suggested that city/states stimulate their economies with building projects for jobs Gave aid to farmers but only as a cooperative group; thousands lost their home b/c they were not part of the co- op Unemployment rose to 25% by 1932 Refused to support federal aid programs Did create the RFC to provide aid to banks, ins. Companies, railroads hoping for a trickle down effect, didn’t happen Bonus Army – marched to Washington asking for their military bonuses early - removed with force by order of Pres. Fed up people elected FDR in 1932 Hoover’s Response

Way of life during the Depression On top of the depression, farmers also had to deal with extreme drought and dust storms in the 1930s. Could not pay their mortgages b/c of low crop prices Caused thousands of foreclosures Penny auctions – neighbors would come to the bank auction and buy equipment for pennies and then return it to the owner once the auction was over. Way of life during the Depression

Many were forced to move westward and leave their possessions and farm Migration of the Okies Tenant farmers in the South were also hit hard. Farmers left tenant lands fallow to allow crop prices to increase Tenants lost their jobs due to machines or loss of land. Con’t

Mexican Americans were discriminated against Many were deported even though they were US citizens Many sought repatriation in the Mexico Joblessness was just as bad in cities – some as bad as 80% unemployed With no factories working cities became quiet ghost towns Many were evicted and forced to live with other family members or to “Hoovervilles”

Hooverville in Seattle, WA

Men – were depressed and looking for work, often resorting to drinking, or even leaving their family behind to find work Women – kept the family together, living off meager food and sewing their own clothes and often held got money for laundry or sewing for others to help with rent. Many also worked outside the home. The depression was as much psychological as it was economic. Gender Roles

Discuss why the stock market eventually crashed in 1929. Name 2 reasons. What did Hoover recommend in order to deal with the depression? How did farmers attempt to keep their homes from being auctioned by the bank? What does this statement mean? - “The depression was as much psychological as it was economic.” Quiz