1. The Great Depression Hopelessness, Hoboes, and Hoover

2. Life Before the G.D. Roaring Twenties Fun Youthful Excitement Post-War Prosperity During/After WWI, American Economy Grows Industry & Trade Consumer Products Farmers not doing well – why? No End In Sight for Economic “Boom” Stock Market Increases Steadily throughout ’20s

3. The Illusion of Wealth During ’20s, an Illusion of Wealth exists WHY? 3 Reasons War Debts Loaned $ to get paid $ Uneven Distribution of Wealth 2% of pop. controlled 70% of Wealth What does this mean for economy? Buying on Margin/Credit Stock Market Value is not accurate

4. A Crash is Coming 1920-1929: Stock Market quadruples 1920: 318 million shares traded 1929: 1 Billion shares traded More people begin to Invest Buy On Margin Federal Reserve attempts to limit margin buying – but it is too late

5. Black Tuesday Sept 3, 1929: Market at Highest Point Sales of manufactured goods decreased Rumors: Big investors are about to leave market Thurs, Oct 24, 1929: Rumors lead people to sell stocks…Prices drop….more sell…panic begins Bankers step in to buy up stock, crisis avoided Tues, Oct 29, 1929: PANIC – 16 million shares of stock are dumped Market drops $16 Billion (Today’s $ = $180 Billion)

6. CAUSES OF GREAT DEPRESSION Buying On Margin Stock Market Crash of 1929 Bank PanicsFarm Failures Hawley-Smoot Tariff

7. The Depression Begins Because of Margin Buying, many people lose their savings Bank Panics Banks Close, people lose everything As Depression starts, economy cycles downward Nearly 3 million Americans lose their jobs Unemployment rises to 25%

8. People Lose Jobs People can’t Afford to buy things Businesses Fail

9. Hard Times Ahead No Jobs = No Money = No Home “Hoovervilles” spring up Horrible Conditions Hoboes Travel around country looking for work Breadlines Charities & Soup Kitchens

10. The Dust Bowl Farmers already struggling during ’20s 1931: Severe Drought in Great Plains Poor agricultural practices Dust Bowl Dirt blown as far as New York Many Farmers Leave 2.5 Million Migrant Workers go to California Called “Okies”

11. Who is Herbert Hoover? 1928: Hoover very popular Hoover = brilliant economist Shared Views of Harding & Coolidge BIG BUSINESS, SMALL GOVERNMENT “Rugged Individualism” Helping poor is insulting to them Not the Government’s Role Associative State Businesses & Gov’t will voluntarily cooperate Hoover Dam

12. Hoover to the Rescue? Hoover’s $ Background is his downfall “G.D. is a natural cycle & will fix itself” Urges “Voluntary Cooperation” NO DIRECT AID TO POOR 1932: $2 Billion in direct loans to businesses Reconstruction Finance Corp. (RFC) Expansion of Federal Government’s role

13. Down with Hoover! Hawley-Smoot Tariff Disaster Incredibly high tariff, = Europe passes high tariff = no trade By 1934: Trade down 2/3 from 1929 Bonus March WWI Vets want Bonuses Set up Hooverville in Washington DC Hoover orders US Army to break it up Burns Hooverville to ground & uses tear gas Looks terrible for Hoover Election of 1932: FDR wins in a landslide