1. Warm up
Take a few minutes to finish your Causes worksheet from yesterday. We will review as a class to begin today

2. Causes of the Great Depression
Industry
Key industries barely made a profit (railroad, mining, etc.)
Some industries lost business to foreign competition, new American technologies
Some industries suffered from declining demand after WWI
Agriculture
After WWI, demand for farm products fell drastically (prices too)
Many farmers could not pay debts, ost their farms
Congress passed price supports, but President Coolidge vetoed (laissez-faire)

3. Causes of the Great Depression
Consumer Spending
Credit was easily available, businesses encouraged Americans to pile up debt
Faced with rising prices, stagnant wages and high debt, consumers decreased their buying

4. Causes of the Great Depression
Distribution of Wealth
Nearly half of American families earned less than the minimum amount necessary; rich got richer
Most consumers had too little money to buy the goods produced by American factories

5. Causes of the Great Depression
Stock Market
Many investors and banks engaged in speculation (buy and sell quickly) and buying on margin (buy part of a stock and pay the rest later)
Wealth was only on paper so when the market crashed people lost their life savings

6. Herbert Hoover and the Depression

7. Herbert Hoover Republican
Hoover took office at a time of unparalleled economic prosperity and optimism
BUT at the end of his presidency- the US was at the bottom of the deepest economic depression in history

8. Rugged Individualism or Direct Relief?
Americans had long believed in the idea of “rugged individualism”- that it was up to the individual to take care of himself when hard times came
When economy collapsed people began to support idea of “Direct Relief”- the gov’t should act to help those who could no longer help themselves

9. Initial Response
Hoover stepped up propaganda campaign aimed at boosting consumer confidence, believing that if Americans would just start buying stuff again then the economy would bounce back
Privately, he knew that the economy was extremely unstable
Held multiple meetings with major business leaders trying to get them to keep all of their factories open, but to no avail

10. Hoover’s failed response
The National Credit Corporation
Reconstruction Finance Corporation
Get the largest banks in the country to provide lending services that would be able to give money to the banks that are on the brink of foreclosure.
NCC never had enough cash to meet the demand for credit.
The RFC was created to make direct loans to banks and railroad companies
Even the RFC could not meet the demands for loans

11. Emergency Relief and Construction Act
Hoover approved spending on public works projects and an additional spending to provide “direct relief”—money provided directly to families in need
Still, the efforts of the government were too small to stimulate economic growth

12. Consequences of Hoover’s Failed Policies

13. Hunger Marches
Crowds of the unemployed and the hungry began to hold large scale demonstrations across the US, demanding gov’t relief.

14. Farmers
Desperate farmers began to destroy their own crops and produce in an effort to increase prices
Some even resorted to burning their crops for heat in their home
Anger continued to grow as more and more farmers had their land foreclosed

15. Breadlines, Soup Kitchens Appear
People began to rely heavily on soup kitchens and breadlines run by churches, charitable organizations, and even city governments in order to survive
Demand was too high, however, to be met by charity alone

16. “Hoovervilles”
In large cities, as people could no longer afford to pay rent, they were forced into homelessness
Many began to live in homemade shacks that they built in any open space available, usually public parks like NYC Central Park
Whole villages began to appear referred to as “Hoovervilles”

17. Hobos
Hundreds of thousands of homeless, jobless men began to live nomadic lifestyles, moving from place to place
Often lived in temporary Hoovervilles called Hobo Jungles, near any major railroad junction

18. The Bonus Army
In 1924, Congress had promised to pay every American WWI Vet a $1000 service bonus in 1945
In May 1932, over 150,000 WWI vets arrived in DC to lobby Congress to give the bonus earlier
Many of the Bonus army stayed in DC living in Hoovervilles
Hoover sent the actual Army to clear the Bonus Army out and then burned their camp
Re-election campaign damaged