2. 71% of the population earned less than $2,500 a year Increasing personal debts due to “credit” Overproduction in factories and farms causing prices to drop Risky investment choices (playing the stock market) Post WWI Economics…

3. Increasing unemployment in large industries (railroads, textiles, coal) Unequal distribution of wealth Weak banking structure Weak international economy (high tariffs & high foreign debt) Lack of government regulation on various industries

4. Investing in stocks became popular in the 1920s (stock = part ownership in a company) Many people could not afford to pay cash – so “Bought on margin” – investors pay part of selling price and borrow the rest from the broker In 1929 six billion loans and 600,000 investors “Black Tuesday” – Stock Market Crash on October 29 th, 1929 (16.4 million shares were sold)

5. An estimated $30 billion dollars were lost on the stock market by November. lost money causes many people & businesses to go bankrupt leads to widespread bank failures

6. Banks called in loans Public could not pay back money From 1929 to 1932 five thousand banks failed

7. Farms were overproducing causing prices to drop Dust Bowl ruined crops in the mid 1930s 1/3 of Americans were farmers One million families lost their farms

8. 25% of the population was unemployed by 1932 People standing in bread lines for food

9. Republican President from 1928 – 1932 He opposed direct government intervention and direct relief to get out of the depression Only private charities should help Reconstruction Finance Corporation (RFC) – program to give loans to businesses Hoovervilles: homeless shanty towns that were blamed on Hoover Defeated in 1932 election due to his failure to address depression.