1. THE STOCK MARKET CRASH & THE GREAT DEPRESSION

2. CONSUMER ECONOMY BOOM Consumers began to buy everything on credit
Installment plans were the new fad
By 1929, 60% of all cars and 80% of all appliances were bought on credit
Advertising brought in $1.5 billion in 1927
First Fast Food Chain emerged, A&W
The number of millionaires doubled during the 20s

3. COOLIDGE PROSPERITY Calvin Coolidge had won the presidency in 1924
He declared America’s economy was based on “laissez-faire”, which meant “the business of America is business”
Huge profits of the 1920s were being made through three groups: Wall Street, Land Speculators, & Bootleggers

4. THREE CAUSE OF THE STOCK MARKET CRASH
Speculation
Making high-risk investments in hopes of a high gain
Buying on Margin
Allowed investors to buy stocks for only a fraction of its price and borrow the rest of the money
Investors would put 10% down on the stock and borrow the rest
Overproduction of Goods
Industrial growth and buying on credit caused for an increase in supply and demand

5. A NEW LOOK
In 1928, Herbert Hoover won the presidential race as Coolidge decided to not run
Slogan, “We in America are nearer to the final triumph over poverty than ever before in the history of any land
He was brought into a pressure cooker job; he had to continue American prosperity

6. THE PROGNOSTICATION A crash was looming, but no one listened
In August 1929, Roger Babson advised wise investors to pay up their loans and quit buying on margin because the market was going to crash
On October 24, 1929, a large number of investors suddenly began to sell their shares
This led to prices plunging

7. THE CRASH
Known as “Black Tuesday”, worried investors quickly sold 16 million shares of stock on October 29, 1929
This led to the crash of the stock market
Unable to raise the funds, thousands of people were forced to sell their stock at huge losses
Stockholders, in the end, lost over $30 billion

8. BANKING PROBLEMS “Black Tuesday” also caused banks to fail was well
No money paid back on loans = No banks
Many people tried to pull all their life savings out of the banks, which also caused some to fail
Also, many people were not able to even receive money they had stored in the banks

9. DEPRESSION
The Gross Domestic Product, GDP, is defined as the total value of all goods and services produced during a given year
Staggering statistics:
GDP fell 29%
Consumer buying dropped 18%
Construction dropped 77%
Investment dropped 98%
Unemployment rate rose to 25%

10. LAY THE BLAME Hoover took the brunt of the blame for the crash
People began to mock Hoover:
Hoovervilles --- shantytowns the homeless lived
Hoover Flags --- empty pockets turned inside out
Hoover Blankets --- Newspapers used as covers

11. HOOVER’S PROBLEMS Salvation Army Revenue Act of 1932
Set up to aide people in NOT going hungry
Revenue Act of 1932
Raised top taxes from 25% to 63%; taxed was passed on to the consumers

12. FDR Franklin Delano Roosevelt was elected president in 1932
Roosevelt’s plan for action was known as “The New Deal”
The Three R’s of Roosevelt’s plan was Reform, Recovery, and Relief
FDR won the popular vote 28 million votes to 15 million votes
Won the Electoral College 472 to 50
During his inauguration speech, he stated, “The only thing we have to fear is fear itself”

13. WHO WAS THIS MAN?
FDR was the cousin of former president Teddy Roosevelt
Married to Eleanor Roosevelt who played a vital role in his presidency
Stricken with polio in 1921 and did not have usage of his legs
Roosevelt conducted “fireside chats” to connect with the American people on a personal basis
These were broadcasted over the radio

14. ROOSEVELT’S PRESIDENCY
On the day FDR took his oath of office, there were about 15 million people standing in bread lines and in soup kitchens
FDR assembled a “Brain Trust” to help make a change in society
FDR coined his recovery acts of legislation the NEW DEAL

15. THE FIRST NEW DEAL Civilian Conservation Corps
Federal Emergency Relief Act
Tennessee Valley Authority
National Industrial Recovery Act
Civil Works Administration
Public Works Administration
Banking Acts
Federal Deposit Insurance Corporation
Securities and Exchange Commission

16. THE SECOND NEW DEAL Works Progress Administration Social Security Act
Rural Electrification Administration
National Labor Relations Act
National Youth Administration
United States Housing Authority
United Auto Workers

17. KEYNESIAN THEORY
Roosevelt drew much of his inspiration for the New Deal from the writings of British economist John Maynard Keynes
He believed that a government’s deficit spending could prime the economic pump and jump-start the economy