1. The Great Depression 1928-1941 (this chapter: 1928-1932)

2. Impending Disaster
As the fun of the Roaring 20’s was going on, the economy started to go through some changes.
RR – b/c of trucks, buses; textiles and steel not making much of a profit.
Coal wasn’t in as big of a demand b/c of new energy, new houses (Housing Starts) weren’t being built as much, which affects lumber and lots of other related industries.

3. Farmer’s Struggle
During war, farms were prospering...after war, demand went down.
Farmers took out loans to buy more equipment to produce more
Farms couldn’t pay loans back so banks foreclosed
Some banks closed b/c they weren’t getting payments from farms.
Farmers also bought on credit to try to get appliances

4. Unequal Wealth Distribution
-Lots of stuff being produced - families buying it on credit – price’s rising – lot’s of debt – production increasing more than wages – rich getting richer.
-70% of families – earn less than $2,500, (considered minimum for standard of living)

6. Herbert Hoover
In the election of 1928, people voted based on republican prosperity of the 1920’s and Hoover was easily elected over Democratic candidate Alfred Smith.

7. Stock Market 1929 – 4 million Americans owned stock
Speculation – people began buying stocks and bonds on the chance of a quick profit
Buying on the Margin – Paying a small % of a stock’s price as a down payment and borrowing the rest.
Laissez-faire

8. The Crash 9/3/1929 – stock market peaked and fell
10/24/29 – market went down; Black Thursday
10/29/29 – Black Tuesday – The market crashed, people tried to sell but many were stuck w/huge debts…people lost all their savings
3-4 wks later, investors had lost $30 billion.
Hoover tried to calm the public but by Nov 13, 1929 stock went from 381 to 198.7

10. The Great Depression
The Great Depression – the period from 1929 –1941 w/big unemployment and bad economy.
Banks closing – 11k/25k, 90k business went bankrupt, 25% of workforce unemployed (Ford laid off 75k at one factory), GDP was cut in ½ billion to 59 billion
The FED limited $ supply to discourage lending and so there was to little $ in circulation when the stocks crashed

12. Hawley Smoot Tariff
Highest tariff in U.S. history, supposed to protect farmers & manufactures from foreign comp, instead Europeans couldn’t sell and therefore couldn’t buy U.S. stuff
Europe raised their tariffs
This caused a ripple effect where no one was making $

13. The “Snowball Effect”

14. Hoover Gets the Blame
Hoovervilles/Shanty-towns – People were evicted from their homes...these little towns consisting of made up shacks sprang up.

15. Charities Lend a Hand
Soup Kitchens + Breadlines – People went to these to get food which were run by charities.
African Americans and Latinos had it worse off…had lower pay and Latinos were told to get out...”last hired, first fired”

16. The Dust Bowl
Dust bowl – b/c many farms overused their land and drought in the mid-west, it was void of trees and became a dust center.
Farmers moved West to escape the dust storms and b/c they were evicted from their farms….800k moved…they were called “Okies”
Some farmers resorted to tenant farming

19. Traveling the Rails...Looking for Work
Lots of men became hobos (as young as 15-20)
There was no federal system of direct relief – helping out the poor w/food and $
Some cities offered relief but not much.

20. The Plight of Families
There was resentment against women b/c people thought they shouldn’t work if men couldn’t + they weren’t seen in breadlines
Children ran away on trains around the country, 300,000 kids were out of school b/c schools closed and families couldn’t afford them

21. Hoover’s Plan
Hoover wanted the country to remain up- beat…no worries that all of your $ just went down the drain and you’ll never get out of debt…it will be all good.
Voluntarism
Gov’t’s role was to facilitate cooperation between competing groups and interests in society

22. Volunteerism and Rugged Individualism
Rugged Individualism – People should succeed through their own efforts and federal handouts would be disrespectful
He told business’s to work together, not layoff people, demand higher wages...doesn’t work...contradicts human self-interest

23. Too Little...Too Late
Federal Home Loan Bank Act – lowered mortgages and allowed farmers to refinance
Reconstruction Finance Corporation – $2 billion to banks, RR, life insurance…trickle down economics – if the gov’t gives out loans to banks, they’ll loan to business’s and then they’ll make money, give raises, and hire jobs
He did have the Hoover Dam built and cut taxes

24. Hoover Fails at Press Relations
Bonus Army – Veterans wanted $ now instead of 1945 that they had been promised w/ the Adjusted Compensation Act.
Congress voted to give them their $ in 1931 but Hoover vetoed it...everybody is hurting
They marched on DC
Hoover had the Bonus Army removed from Washington (forcefully/violently) and it hurt his image