2. 1920s saw increase in consumerism, stock market Farmers compiled huge debts Industrial workers’ wages increased, but not as much as their production Corporations saw most of the profit People owed a lot of credit Begin to see some causes of the Great Depression *** 1) Uneven distribution of wealth ***2) Overproduction in farming ***3) Excess of credit

3. Lots of stocks bought on speculation: high-risk with hopes of high profits in the future Many stocks purchased on credit October 29, 1929: confidence in stock market was lost Investors sold their stocks Stock market crashed Many investors and businesses lost everything Helps mark the beginning of the Great Depression

4. Banks among the first to feel effects People tried to withdraw their money 1929: Federal Reserve limited money supply to discourage lending ***5) Too little money in circulation Businesses tried producing less, laying off workers Businesses produce less -> fire workers -> people have less money -> don’t buy as many goods -> businesses produce even less -> fire even more workers, etc.

5. Hawley-Smoot Tariff: Congress raises prices on imports Keeps foreign products out of American market Foreign markets retaliate by placing their own tariffs Europe already had financial issues from WWI America no longer able to provide financial assistance Europe experiences similar financial collapse as a result

6. Unemployment changed from 3.7% to 24.9% People who kept jobs often experienced paycuts or reduced hours Families struggle to sustain themselves Breadline: people line up for handouts from charities or public agencies Hoovervilles: makeshift collection of tents/shacks in cities for homeless families Betrayal of “American dream”

7. Farmers had been suffering before the Great Depression Many lost their properties, some became tenant farmers Dust Bowl: huge drought in the Great Plains Bad farming practices made it worse Towering dust storms common Storms killed animals, covered houses, dirtied rivers Many families had no choice but to migrate Okies: nickname for Dust Bowl refugees

8. Saw upswings and downswings of business cycles as normal Hoover believed in rugged individualism: all individuals can succeed without gov’t help Volunteerism: donate $$$ and goods to charity Most Americans instead thought of themselves Hoover called for lower taxes, lower interest rates, more public works programs Encourage more production and consumption with the R.F.C. Tried trickle down economics: money from the top of the pyramid will trickle down to the base Protests escalated with the Bonus Army March Hoover re-election doomed