Great Depression

1. Great Depression

2. Europe • Fordney-McCumber Tariff (1922) put in place by Harding. • Britain and France cannot pay back their debt. • Turn to Germany who was unable to pay. • France sends troops to Germany. • Charles Dawes suggests the Dawes Plan. • U.S. loans Germany 2.5 billion to pay back France and Britain who pay U.S. • Paid with our own money!

3. Economy of the 1920's • Economic growth: • Consumer spending increases – buying goods on credit. • The Gross National Product rose. • Auto industry #1 • Electricity quadrupled • Laissez-faire government policies. • Stock Market Growth: • Speculation- making risky stock investments for quick turnaround profits. • Buying on the Margin- paying a small percentage of a stock’s price as a down payment and then barrowing the rest.

4. Danger signs • Huge corporations still dominated • Personal debt • Speculation and Buying on the Margin led to stock debt and risky investments • Overproduction led to a rising unemployment • Wages remained stagnant even when profits rose

6. Herbert Hoover 1928 • Republican • Mining engineer from Iowa • Secretary of Commerce under both Harding and Coolidge. • Quiet Reserved • Won election because of the years of prosperity under Republican leadership (roaring 20s). • “We in America are nearer to the final triumph over poverty than ever before.” • Defeated much more experienced Alfred E. Smith • Four terms as Governor of New York.

7. The Stock Market Crashes • September of 1929 – stock prices peaked and then fell. • October 29, 1929 – known as Black Tuesday • The bottom fell out of the stock market • 16.4 million shares sold (NEW RECORD!!!) and $33 billion in assets were lost. • Dow Jones average fell from 381 to 198!

8. How the Crash affects everyone • 1. Businesses were unable to pay off bank loans and defaulted. • 2. Consumers also began to default on their loans • 3. People tried to withdraw their money from banks (bank runs). In turn, banks had to call in loans, but couldn’t get much money back. • 4. Unpaid loans and Bank Runs forced 5,500 banks out of business • 5. 9 million saving accounts were lost • 6. Businesses cut production because people were not spending money • 7.Production cut, unemployment rises (12million people lose jobs) • 8. The Gross National Product dropped from $103 billion to $56 billion.

9. http://www.youtube.com/watch?v=H8aUW8AF_qw Hardships • To protect the American economy, Congress passed the Hawley-Smoot Tariff Act (1930). • Highest tariff to date – not the desired effect • Rise of “Shantytowns” (AKA Hoovervilles). • Little towns (mostly shacks) sprang up in cities • Soup Kitchens and Bread Lines • Poorer conditions for African Americans and Hispanics. • Higher unemployment and less pay. • Deportation of Hispanics

10. http://www.youtube.com/watch?v=lNXTKVxOmfk Hardship • Women return to work for lower pay, but face resentment. • Children starving, serious health problems • Schools close • Returning to work • Became “Hoover Tourists” - travelling the country by rails (for free) • Men – hopelessly trying to find work. • Many abandoned their families • As many as 300,000 transients would travel the country looking for work.

11. Rural Problems • 1929-1932 – 400,000 farms were closed to foreclosure • Return to tenant farming • Over-production exhausted the land and led to the “Dust Bowl”. • Drought • Top soil would be pulled free in dust storms. • Land couldn’t be farmed. • Families packed up, left their land behind and became migrant workers. • Came to be known as “Okies” • Moved West to California and the Pacific Coast.

12. Hoover's actions • Hoover moved cautiously. • Americans believed in “rugged individualism” • Families take care of themselves and their own • Hoover opposed federal welfare (AKA direct relief). • The needy needed to turn to charities and local organizations. • Federal Government was to direct relief methods. • Bureaucracy would be too expensive and stifle individual liberties.

13. Hoovers Actions • Just after crash he called together leaders to help fix the situation – ineffective. • Boulder Dam (Hoover Dam) – public service project. • Provides flood control and electricity to the area. • Paid for by the profits it would generate. • Regular water supply t cities in the area. • SUCCESS!

14. Change • Anti-Hoover Sentiment won the Democrats Congress in 1930. • Hoover wanted cooperation. • Set up groups such as: National Credit Corporation and others to remedy specific troubles areas. • Federal Home Loan Act (1932) – lowered mortgage rates for homeowners and allowed farmers to refinance. • Reconstruction Finance Corporation (1932) – was to aid large business , like banks and railroad companies, in hope the profits would “Trickle down.” • Was not enough.

15. Hoover's Death Nell • 10,000 – 20,000 WW1 vets. And their families (AKA the Bonus Army) travelled to D.C. • Supported the Patman Bill – which was to pay veterans who had not been properly compensated for their war time efforts. • Hoover did not support them or the bill (but allowed them to protest peacefully). • June 17th, Bill was voted down – 2,000 veterans remained after ordered to leave. • Soldiers were sent out on July 28th. • Poor treatment of veterans by Hoover’s soldiers. • Franklin Delano Roosevelt was handed the Presidency.