1928-1932 The great depression

Causes of the depression 2a, 2c, 5a, 6b Causes of the depression

Key terms and people Herbert Hoover Speculation Black Tuesday Business Cycle Great Depression Hawley-Smoot Tariff

Prosperity hides trouble The Roaring Twenties was a REPUBLICAN decade Harding and Coolidge advocated big business Laissez-faire 1928 Election Herbert Hoover will run for the Republicans Easily wins the election

Problems in the agricultural sector Farmers faced difficult times in the 1920s They had increased production during WWI to meet war demands More land, more machines, etc After the war, demand dropped sharply However, production remained high Farmers couldn’t sell their crops=prices plummeted Couldn’t pay their hefty debts The result was a rural depression

Uneven distribution of wealth Wealth disparity The wealthy were getting richer, but the poorer continued to get poorer The wealthy couldn’t make up for what they poor couldn’t afford to buy Easy Credit The ability to purchase goods on credit hid the problem for a while Americans were accumulating more and more debt

The stock market crashes Speculation Too much money being poured into stock market People hoping to get rich overnight Buying on the margin meant that people owed A LOT of money October 29, 1929 Black Tuesday People rushed to sell their stocks and the market crashed Millions lost their life savings in a matter of hours

The great depression begins Lasted from 1929-1941 ***** The Banks Collapsed Crisis in confidence People “ran” to the banks to withdraw their money “Bank runs” caused banks to fail and close their doors Some people lost any money that they had deposited in the banks The “feds” had limited money supply prior to crash to discourage lending. Not enough money in circulation to help rebound the stock market crash

Businesses close and unemployment rises Stocks falling Businesses closed plants and laying off workers Snowball effect: production cuts continued to grow Tariffs Add to the Problems Hoover tried to fix the problem Protect American business from foreign competition Issued the Hawley-Smoot Tariff (highest ever) Backfiredstopped all international trade and worsened the worldwide depression

Primary causes of the depression Unsold agricultural surplus Increasing farm debt Hardships in Europe Uneven wealth distribution Rampant stock market speculation

Americans face hard times 2b, 5a, 5c Americans face hard times

Key Terms and people Bread line Hooverville Tenant farmer Dust Bowl Okies Repatriation

American cities Massive unemployment Led to widespread poverty and homelessness Breadlines: where people lined up for handouts from charities or public agencies Hoovervilles: makeshift shantytowns of tents and shacks built on public land or vacant lots Name showed that the American people blamed Hoover for the Depression

Rural america Crop prices fell even further Many farmers left their farms to find work Farmers that couldn’t pay their bills lost their farms and became tenant farmers Working for bigger landowners rather than themselves The Dust Bowl Affected the Great Plains Resulted from drought, loss of topsoil, and high winds Many people migrated from the area Okies

Women, children, and minorities Shared in the anxiety and stress Had to take on work to supplement family’s income Children Some ran away from home Some quit school Minorities Had to endure racism Magnified their communities’ economic hardships

Hoover’s response fails 1b, 2c, 6a Hoover’s response fails

Key terms and people Localism Reconstruction Finance Corporation Trickle-Down Economics Hoover Dam Bonus Army Douglas MacArthur

Volunteerism At first, Hoover followed a “hands-off” policy Social Darwinism Soon realized this was not going to work Hoover called on business leaders to maintain employment, wages, and prices Essentially it was a policy of doing NOTHING Called on wealthier individuals to give more many to charities

Cautious RESPONSE FAILS Hoover had faith in localism Problems could best be solved at local and state levels Believed businesses and individuals would find better and faster solutions if they were allowed to work them out themselves Government legislation imposed on them would not benefit them

Hoover adopts more activist policies Hoover was being blamed for the Depression Associated his name with suffering Hoover decides to use federal resources Believed the country suffered from a lack of credit Reconstruction Finance Corporation Government loans to railroads and businesses Loaned money to banks so they could lend to businesses Trickle-down economics Hoover Dam Brought much needed employment

Bonus army World War I veterans had been promised a bonus to be paid in 1945 The “Bonus Army” marched on Washington demanding early payment to help alleviate the Depression Hoover vetoed the bill and a riot broke out Hoover called on General Douglas MacArthur to get the Bonus Army out of Washington Used excessive force Photographs showed up in the newspapers and Hoover, once again, received the blame This was the “nail in his presidential coffin”