1. The Stock Market Crash and Great Depression
Chapter 21
The Stock Market Crash and Great Depression

2. What was right in the 1920s (or so we thought!)
Booming economy b/c of the “Republican Formula” (Harding, Coolidge, Hoover)
Strong business, little government, isolationist
Post-War optimism
New consumer goods bought up rapidly= more production and more jobs

3. Herbert Hoover Highly qualified public servant
Easy victory to Presidency
His opponent ,Al Smith (D-NY) was Catholic

4. The 2 sides of Hoover
Campaign (1928): “By adherence to the principles of a decentralized self-government, ordered liberty, equal opportunity, and freedom to the individual, our American experiment in human welfare has yielded a degree of well being unparalleled in all the world. It has come to the abolition of poverty…than humanity has ever reached before.”
During the G. D: "no one is actually starving The hobos, for example, are better fed than they have ever been.” or
“many persons left their jobs for the more profitable one of selling apples."

5. The Problems with the Economy
Agriculture: 25% of workforce
During war: high production and demand=need for more equipment=buy on credit (go into debt)
After war: low demand= low prices= little money
No way to pay off debt
No money means no purchasing power (can’t share in the prosperity)

6. Problems continued Wealth distributed unevenly
Good news: 1920s-Production up (32%), corporate profits way up (65%)
Bad news: workers’ wages up only 8%
Rich get richer, but can’t support a consumer-based economic system
200 largest companies controlled ½ of corporate wealth
Easy consumer credit leads to big issues later

7. Black Tuesday: Market Crash
What was driving up stock prices?
Speculation
Same reason homes prices rose 5 years ago
Stocks started to slide, then free fall on October 24, 1929
Part of the “business cycle”

9. Things Fall Apart Bank Failures
Less money=less spending. Leads to fewer jobs (high unemployment)
Hawley-Smoot Tariff
Europe soon follows into depression
Hit bottom in 1932