1. The Road to the Depression
How to mess up a good economy with greed!!!

2. Causes of the Depression
Remember: DUMBASS Debt from war Unemployment Margin buying Black Tuesday and Thursday Adding on tariffs Shaky banking Super production by farmers and manufactures

3. The Down Turn Begins Stock market gambling included
Americans borrowed heavily to bet on stocks
businesses put their cash into margins loans rather than into new machines and factories
the connection between the real value of companies and their stock prices was reduced

4. The Economy is in Trouble
Signs that the economy might be weakening or be in trouble in the 1920s
rural bank failures
wealth was unevenly distributed
United States imports declined by the end of the decade

5. More Troubles Brewing Stock prices grossly inflated
Buying on margin
Too much borrowing from banks
Do not have real value
Buying stocks on margin contributed to the Great Crash
as prices fell, stockholders either had to sell their stocks or pay more cash

6. Stock Market Crashes The Stock Market “crash” refers to
the huge drop in the value of stocks
Basic Cause of the Depression
overproduction of consumer goods

7. Effects of the Great Crash
Investors and business lose millions
Thousands of banks fail
Savings are wiped out
Business production cut
Lay off thousands of workers
Unemployment rises
Consumer spending further drops
The Great Depression sets in

8. Video—bank runs

9. Can it happen again?

10. Can it happen again?

11. Why didn’t we have another Depression
????????

12. Presidential Lack of Action
President Hoover opposed direct government relief for individuals
the character of the American people would be damaged
Hoover’s way of dealing with the depression
tax cuts
higher tariffs
a limited program of public works
In the 1930s duties were boosted on a thousand items by the
Hawley-Smoot Tariff Act

13. Hoover Tries Reconstruction Finance Corporation helped Did not help
large corporations
banks
insurance companies
Did not help
Farmers
People in need
Poor homeless people built shantytowns called Hoovervilles

15. 1932 The Bonus Army Presidential election
a march on Washington was made by a group of unemployed WWI veterans
Broken up violently by the government
Presidential election
Republican platform
letting the nation’s problems be solved by natural forces
Democratic platform
the repeal of Prohibition and fairer distribution of the wealth

16. 1932 ELECTION
1 out of 4 was unemployed…
nat'l income was 50% of what it had been in 1929
Repubs. nominated Hoover  no hope
winner by a landslide = FRANKLIN DELANO ROOSEVELT (Dem - N.Y. governor)

17. FDR Wins 1932 election People did not like Hoover
Wanted to do whatever possible to try to end the Depression
Had a political history of establishing a relief program