1. The Great Depression

2. The Economy Hoover Continued to grow from 1925 until 1929
Stock values grew from $27 billion in to $87 billion in October, 1929
Hoover
Elected in 1928 to continue the Republican prosperity of the 1920’s
Provided relief to businesses to help economic problems

3. Danger Signs Uneven Prosperity – The rich were getting richer
Credit purchases increase (installment plans)
Intense investment in the Stock Market (“Get rich quick” schemes)
Too many goods, too little demand for them

4. Causes of Great Depression
OVERSPECULATION
Speculators (stock brokers) bid up stock prices
Stock values based on borrowed amounts, not real value
Stocks bought “On Margin”…investors only paid a fraction of the full stock price
Industry over-expands
Too many goods were being produced
Wages not enough to pay for all the goods being produced
Bankers made unsound loans
International trade greatly reduced after WWI

5. The Stock Market Crash Black Thursday – The Dow Jones began to fall
Black Tuesday – Investors raced to sell in order to get their money out of the Stock Market
Investors hit first, but the Great Depression soon followed ( )
Economic Cycle
People Lose Jobs  Can’t Buy Goods  Profits Fall  Businesses Close

6. Results of Great Depression
Millions lost their jobs
Banks failed – People lost their life’s investments
Businesses failed. Restaurants (as well as many other “service” industries) closed
Bottom of the economic ladder hit the hardest
Farmers devastated… The Dust Bowl worsened their situation
Children suffered most
Lack of education
Malnutrition

7. Hoover and the Depression
Hoovers efforts
Asked businesses to freeze wages… later failed when workers’ pay was cut
Passed the HAWLEY-SMOOT Tariff
Raised the cost of foreign goods so people would buy American
Backfired. Europe raised their tariffs and international trade slowed
Hoover would not give aid directly to the people
Instead, Hoover insisted on providing relief to businesses hoping it will create jobs.

8. Hoover’s Unpopularity Grew
The Bonus Army
20,000 World War I Veterans marched on Washington
They wanted immediate payment of a pension that was promised to them for 1945
D. Hoover lost the Election
Hoover’s Unpopularity Grew
People lived in shantytowns they called “Hoovervilles”
People slept under newspapers they called “Hoover Blankets”
People turned their pockets inside-out and called them “Hoover Flags”