GREAT DEPRESSION

Election of 1928 Herbert Hoover Republican candidate Alfred Smith Democratic First Catholic to run for President

GREAT DEPRESSION Herbert Hoover Republican

GREAT DEPRESSION Alfred E Smith Democrat

GREAT DEPRESSION Hoover’s Campaign promise “Chicken in every pot and a car in every garage”

GREAT DEPRESSION Hoover wins in a landslide

GREAT DEPRESSION U. S. Still in prosperity but cracks are showing

GREAT DEPRESSION Easy Credit Over production of inventory

GREAT DEPRESSION Economy was strong based on World War I Installment buying Dollar down dollar a week

GREAT DEPRESSION Made it easy for all to buy Repossessed if payments were missed Stock Market opened to all Americans Some were novice

GREAT DEPRESSION Speculation Margin Buyer puts 10% down on a stock Broker provides rest as a loan or margin

GREAT DEPRESSION Buyer gambles that stock is going to increase

GREAT DEPRESSION If price fell broker called in margin demanded immediate payment Usually investor or buyer lost everything

GREAT DEPRESSION BUBBLE BURSTS October 29, 1929 “Black Tuesday” Stock prices plummeted

GREAT DEPRESSION 29 th and 30 th 16 million shares were sold By two weeks time index price fell by 50% 30 billion dollars were lost in the next weeks

GREAT DEPRESSION Unsound banking practices led to: Speculation risky loans fake investment schemes

CAUSES OF GREAT DEPRESSION Credit Too much People and banks suffered People could not pay Banks lost money

GREAT DEPRESSION Not all lost some gained tremendously Joseph Kennedy Sr. allegedly Got inside information and sold before the market crashed

GREAT DEPRESSION Agriculture Depressed for years Overproduction caused low prices Agriculture Marketing Act

GREAT DEPRESSION Established loans to farmers Federal Farm Board Purchased surplus crops Could not limit production Depression in Europe closed a market for surplus food

GREAT DEPRESSION Depression was world wide Smoot-Hawley Tariff High tariffs on imported goods to protect U S goods

GREAT DEPRESSION Foreign countries flooded market Prices continued to fall Farmers continued to grow crops Prices plummeted depression worsened especially for farmers

GREAT DEPRESSION Banking and Finance Federal Reserve Board was urged to regulate credit and speculation They did nothing

GREAT DEPRESSION Deposits shrank Massive withdrawals Holidays were declared in Nevada, Louisiana Michigan Emergency credit pool for relief

GREAT DEPRESSION Bankers formed National Credit Corporation Failed to help situation Fearful that loans would jeopardize their banks

CAUSES OF GREAT DEPRESSION Few basic industries No diversification –2 major industries Construction automobile

CAUSES OF GREAT DEPRESSION Uneven distribution of wealth More than one half of Americans lived on edge of poverty

CAUSES OF GREAT DEPRESSION International debt Europe could not pay back loans to United States from World War I

High Tariffs on American goods Europe responded with the same high tariffs on American goods

GREAT DEPRESSION

All failed Reconstruction Finance Corporation (RFC) Jan 1932 Provided loans to banks

GREAT DEPRESSION Railroads Life insurance Farm Mortgage assistance It did ease the banking crisis January banks failed April 46 failed

GREAT DEPRESSION Unemployment Relief Organization Stimulate private charities 3 other major measures were passed by Congress

GREAT DEPRESSION 300 million dollars were allocated to help liquidate banks loans for public works Loans to states to help in public projects

GREAT DEPRESSION 30 million allocated Too cautious (RFC) to help None for Public Works

GREAT DEPRESSION Hoover would not direct aid to unemployed Private Charities Opposition to direct relief

GREAT DEPRESSION Cemented his reputation as doing nothing to ease depression Shack villages were called Hooversvilles

Herbert Hoover Newspapers wrapped around people were called Hoover Blankets Broken down cars were called Hoover wagons Pockets turned inside out were called Hoover Flags

GREAT DEPRESSION BONUS MARCH 1932 Hunger Marches and unemployed rioted Bonus Expeditionary Force (BEF) World War I veterans were able to borrow against life insurance in 1945

GREAT DEPRESSION Technically it was not a bonus Veterans wanted the money now Needed the money for necessities

GREAT DEPRESSION Congress could not afford payments Yet they appropriated $100,000 for the marches return home ½ took offer

GREAT DEPRESSION Others occupied buildings to be knocked down for public work projects July 28, 1932 police tried to evict squatters 2 veterans killed stalemate continued

GREAT DEPRESSION General Douglas McArthur had orders to move vets He took it upon himself to drive them farther than President Hoover ordered

GREAT DEPRESSION McArthur along with junior officers Patton and Eisenhower Used tanks guns and tear gas to remove veterans

GREAT DEPRESSION McArthur disobeyed orders to stop Hoover while upset did nothing to stop McArthur Reinforced Hoover’s image as a do nothing President

GREAT DEPRESSION ELECTION OF 1932 FDR Franklin D. Roosevelt Elected President New outlook for United States