1. Unit 5 Section 11
The Great Depression

2. Causes of the Depression
Economic prosperity of the 20’s had underlying cracks:
Overproduction of goods post war
Mining and Lumbering demand falls post war
Railroads have trouble competing
Overproduction by farms / falling prices
Renewed Tariff
Uneven distribution of income
No banking regulations

3. Hoover’s Election 1928, Herbert Hoover becomes President
Promises “two cars in every garage; two chickens in every pot…”
Laissez Faire Republican; steps into seemingly prosperous economy
Predicts “end of poverty”

4. Stock Market Crash Seemed like economy would grow forever
Stock prices were over inflated (companies overvalued)
Lack of oversight
Speculation in the market – buying stocks on chance of quick profit; ignoring risks
Buying on margin – buying stock on credit

5. Stock Market Crash
September of ‘29, market finally turns down, panicked selling begins
October 29th, 1929 – massive stock sell off. Stock market crashes. “Black Tuesday”
Mid November, stocks had lost $30 Billion in value 1

6. The Depression Begins
Panicked Americans make run on banks to withdraw funds… some can’t, as $ was invested in market
By 1933, 11,000 banks fail. Unemployment hits 25%.
Rural areas hit hardest – foreclosure of farms, environmental disaster of Dust Bowl hits at same time

7. Lives Devastated
Shantytowns emerge as people lose homes – nicknamed “Hoovervilles”
Soup kitchens and breadlines provide little relief
Women and children, minorities, suffer even more
Men search for work, great movement around nation. (Okies and others to California – portrayed in Of Mice and Men)
Tremendous psychological effects – suicide, desperation, value of saving and hard work

8. Iconic Images A California “Okie” family in 1936
Dorothea Lange’s “Migrant Mother”
A Chicago soup kitchen, opened by Al Capone

9. Hoover’s Failures
Hoover’s solution was rugged individualism – no direct relief to the people
Established RFC – Reconstruction Finance Corp. to loan $ to businesses as ‘trickle down’ theory
“Two families in every garage”, Hoovervilles

10. The Bonus Army
1932, Thousands of World War veterans march on Washington demanding payment for wartime services - Known as “Bonus Army”
Because of economic hardship, want payment immediately instead of 1945, agreed upon date
Hoover sends in military to break up camp of protestors, violence ensues
Bonus Army is gassed, children killed and injured
Hoover, already struggling, is ruined politically

12. Election of 1932 Democrats are almost guaranteed victory
Franklin Delano Roosevelt, NY Governor, easily wins
Pledges New Deal for American people
Democrats take control of Congress (1930) 2

13. Election of 1932
Hoover remains as lame duck until March – people suffer
20th Amendment passed as result – changes inauguration date
FDR must address banking issue quickly 3

14. 1. from http://www.ushistory.org