The Great Depression

The Economy Hoover Continued to grow from 1925 until 1929 Stock values grew from $27 billion in 1925 to $87 billion in October, 1929 Hoover Elected in 1928 to continue the Republican prosperity of the 1920’s Provided relief to businesses to help economic problems

Danger Signs Uneven Prosperity – The rich were getting richer Credit purchases increase (installment plans) Intense investment in the Stock Market (“Get rich quick” schemes) Too many goods, too little demand for them

Causes of Great Depression OVERSPECULATION Speculators (stock brokers) bid up stock prices Stock values based on borrowed amounts, not real value Stocks bought “On Margin”…investors only paid a fraction of the full stock price Industry over-expands Too many goods were being produced Wages not enough to pay for all the goods being produced Bankers made unsound loans International trade greatly reduced after WWI

The Stock Market Crash Black Thursday – The Dow Jones began to fall Black Tuesday – Investors raced to sell in order to get their money out of the Stock Market Investors hit first, but the Great Depression soon followed (1929-1941) Economic Cycle People Lose Jobs  Can’t Buy Goods  Profits Fall  Businesses Close

Results of Great Depression Millions lost their jobs Banks failed – People lost their life’s investments Businesses failed. Restaurants (as well as many other “service” industries) closed Bottom of the economic ladder hit the hardest Farmers devastated… The Dust Bowl worsened their situation Children suffered most Lack of education Malnutrition

Hoover and the Depression Hoovers efforts Asked businesses to freeze wages… later failed when workers’ pay was cut Passed the HAWLEY-SMOOT Tariff Raised the cost of foreign goods so people would buy American Backfired. Europe raised their tariffs and international trade slowed Hoover would not give aid directly to the people Instead, Hoover insisted on providing relief to businesses hoping it will create jobs.

Hoover’s Unpopularity Grew The Bonus Army 20,000 World War I Veterans marched on Washington They wanted immediate payment of a pension that was promised to them for 1945 D. Hoover lost the 1932 Election Hoover’s Unpopularity Grew People lived in shantytowns they called “Hoovervilles” People slept under newspapers they called “Hoover Blankets” People turned their pockets inside-out and called them “Hoover Flags”