Great Depression The period between in which the economy plummeted and unemployment skyrocketed

Republican: Herbert Hoover vs. Democrat: Alfred E. Smith  Herbert Hoover Mining engineer from Iowa Never ran for public office Quiet and reserved Had the 20’s prosperity to run off of  Hoover won an overwhelming victory “Americans were happy with the Republican leadership”

Stock Market Vocabulary  Dow Jones Industrial Average: Most widely used barometer of stock market’s health. Measure based on the stock prices of 30 representative large firms trading on the NY stock exchange  Speculation: buying stocks and bonds on the chance of a quick profit (ignoring the risks)  Buying on margin: paying a small percentage of the stock’s price as a down payment and borrowing the rest  Inflation: prices for goods/services rises & purchasing power is falls(people can’t afford the goods).  Deflation: decline in prices, often caused by a reduction in the supply of money or credit.

1. Tariffs(taxes) and war debt policies cut down the foreign market for American goods 2. A crisis in the farm sector 3. The availability of easy income 4. Unequal distribution of income

 Key industries barely made profit Example: railroads, textile mills, steel Mining & lumber no longer in high demand  Foreign companies couldn’t afford U.S. products  European economy on the downward with the war debt  Germany unable to pay back debt

 Suffered the most  After WWI crop prices dropped 40%  Farmers overproduced  lowered prices Went into debt, lost farms when banks foreclosed  Government tried helping Price supports: government buy surplus at guaranteed price then sell internationally  Coolidge VETOED aid  “Farmers have never made money. I don’t believe we can do much about it”

 Credit: arrangement in which consumers agreed to buy now and pay later for purchases Piled up LARGE amounts of debt  Americans living way beyond their means Americans slowed their spending, thus causes overproduction

 Richer got richer – poorer got poorer  70% of American families earned less than $2500 per year  Most Americans could not afford the flood of goods factories produced

Sept: Stock prices peaked then fell  confidence in market wavered - investors quickly sold their stock  October 29, 1929 – Black Tuesday Bottom fell out of the market # of shares dumped was record 16.4 million (no buyers) If you bought stocks on credit you were left with HUGE debt Investors lost $30 billion by November

 Banks and business fail People panicked and withdrew their money from banks  Banks didn’t have the money on hand  had invested it banks closed ,000 of nation’s 25,000 banks failed  MILLIONS LOST SAVINGS ACCOUNTS  GNP  cut in half $104 mil to $59 mil  Unemployment 1929  3% to 25%

 Depression spread throughout the world  1930 Hawley-Smoot Tariff: established the highest protective tariff in the U.S. history Reduce flow of goods into U.S. also prevented other countries from earning American currency

Depression brought hardship, homelessness and hunger to millions

 Most farmers could grow own food  Falling prices and rising debt—lost farms : 400,000 farms lost  Mortgage holder takes farm Farmers turn to sharecropping – barely scrape by

 Drought began in early 30s  Farmers had exhausted the land through overproduction of crops Grasslands = unsuitable for farming Surviving the Dust Bowl

 Loss of jobs = homelessness Slept in parks, sewers Shantytowns: little towns consisting of shacks  Sprang up everywhere “Here were all these people living in shacks made of orange crates. One family with a whole lot of kids were living in a piano box….People were living in what they could junk together”

 Soup kitchens: offering free or low-cost food  Bread lines: lines of people waiting to receive food provided by charitable organizations

Family Children Social Psychological “Family stood as a source of strength for most Americans”

 Difficult to deal with depression  used to providing for family  Everyday = spent walking around looking for jobs  During Great Depression about 300,000 “hoboes” wandered country, hitching rides on railroad boxcars and sleeping under bridges

 Canned foods  Sewed clothes  Carefully managed household budgets  Tried to work outside household, but became targets of resentment because many people believed married women had no place in the workplace Especially when there was such a large amount of men unemployed

 Poor diets and lack of money for health care led to serious health problems in malnutrition and diet-related diseases  Low budgets lead to shorten school year and school closings 1933 – 2,600 schools had shut down  Thousands of children went to work  Hundreds of thousands of boys and girls hopped on trains and went across country “Wild Boys”

 Suicide rate rose more than 30% 3x as many people were admitted to mental hospitals  Problems forced compromise No dream of college Put off getting married No dentist or doctor visits “Ever since I was twelve years old there was one major goal in my life...one thing...and that was never to be poor again”