1. The Great Depression Begins
Chapter 14.1 “The Nation’s Sick Economy”

2. Election of 1928 Republican- Herbert Hoover
*Secretary of Commerce under Harding & Coolidge
*Quiet & reserved
*Advantage- 1920’s prosperity under Republican
control.
Democrat- Alfred E. Smith
*4 term Governor of New York
*Personable & liked the limelight
Hoover wins in a landslide (Americans pleased with the way things were going under Republican leadership.)

3. Missed Economic Indicators
Basic industries- railroads, textiles & steel barely made profits. (RR’s lost business to new transportation-trucks, buses, private cars)
Mining & Lumbering- were no longer in high demand. (Coal mining suffered b/c of new forms of energy.)
Decline in housing starts- which will lead to loss of jobs in related industries.
Demand for Agriculture- falls off dramatically after WWI. Banks fail in rural areas b/c loans to farmers can’t be repaid.

4. Wealth & The Stock Market
Uneven distribution of wealth- Income of the wealthiest 1% rose 75% (avg. as a whole was 9%). 70% of the nation’s families earned less than $2500 (min. amount for a decent standard of living).
Dow Jones Industrial Average- is a measure of health taken on the stock market from 30 of the largest firms being traded (ex. 1920’s = GE & GM/ ex = Disney & Verizon)
Speculation- buying stocks on the chance of a quick profit.
Buying on Margin- paying a small percentage of the stocks price as a down payment and borrowing the rest.

5. October 29, 1929 Now known as “Black Tuesday.”
Sept. ‘29, stock prices peaked and then fell. Confidence in the market is shaken.
Oct. 24, 1929, the market took a plunge. Many investors panicked and unloaded their shares.
On Black Tuesday, investors were still unloading stock trying sell before prices plunged. (16.4 million shares sold. Millions more couldn’t find buyers.)
Many people were unable to get there money from banks b/c it was either loaned or invested in the stock market.
The Hawley Smoot Tariff Act will stagnate trade with Europe throwing Europe into a worse depression than the U.S.

6. Hardship & suffering
Chapter 14.2

7. Rural & Urban Situations
Foreclosures- process by which mortgage holders take back property if payment has not been made.
Overproduction- process by which 1 crop is continually planted stripping the soil of its nutrients.
Dust Bowl- area in the midwest that was ravaged by drought, high winds & overproduction (TX, OK, KS)
Urban
Unemployment- out of work
Shantytowns- towns popping up of little shacks (Hooverville was built in Central Park in NYC.)
Soup Kitchens/Bread Lines- offered free or low cost food.
Hobos- transients that roamed the country sometimes looking for jobs or trading work for food.

8. Emotional Impact on the Family
Men- difficulty coping with unemployment, many searched daily for jobs, some became so discouraged they abandoned their families.
Women- worked hard earning pennies (sewing, canning food, washing/ironing) Many were too ashamed to reveal the hardships their family was going through.
Children- poor diets & lack of money for healthcare led to serious medical problems. School years were often shortened or schools were simply closed.

9. Hoover struggles
Chapter 14.3

10. Hoover’s Philosophy
“Rugged Individualism”- people should succeed through their own efforts. Should not look for a government handout. Hoover was against welfare and the idea of direct relief to the needy. He believed it would hurt the “moral fiber” of a person.
Hoover Dam- once called Boulder Dam. This dam would harness the power of the Colorado R. for electricity. It is now also used to supply drinking water to Los Angeles & Las Vegas.

11. Last Thoughts on Hoover
Federal Home Loan Bank Act- lowered mortgage rates for homeowners & allowed farmers to refinance their farms.
Reconstruction Finance Corporation- authorized up to $2 billion for emergency financing for banks and other businesses.
Hoover will get blamed for Americans problems b/c they didn’t think he did enough to help them.
Bonus Army- WWI veterans that marched on D.C. wanting compensation for their service during the war. Hoover will get rid of them by calling in the 12th infantry led by Gen. MacArthur & Maj. Eisenhower to chase them away by various methods.