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The Great Depression: Causes, Impact, and Hoover's Failures

Explore the underlying causes of the Great Depression, the devastating impact on American lives, and Herbert Hoover's ineffective response to the crisis.

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The Great Depression: Causes, Impact, and Hoover's Failures

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  1. Unit 5 Section 11 The Great Depression

  2. Causes of the Depression Economic prosperity of the 20’s had underlying cracks: • Overproduction of goods post war • Mining and Lumbering demand falls post war • Railroads have trouble competing • Overproduction by farms / falling prices • Renewed Tariff • Uneven distribution of income • No banking regulations

  3. Hoover’s Election • 1928, Herbert Hoover becomes President • Promises “two cars in every garage; two chickens in every pot…” • Laissez Faire Republican; steps into seemingly prosperous economy • Predicts “end of poverty”

  4. Stock Market Crash • Seemed like economy would grow forever • Stock prices were over inflated (companies overvalued) • Lack of oversight • Speculation in the market – buying stocks on chance of quick profit; ignoring risks • Buying on margin – buying stock on credit

  5. Stock Market Crash • September of ‘29, market finally turns down, panicked selling begins • October 29th, 1929 – massive stock sell off. Stock market crashes. “Black Tuesday” • Mid November, stocks had lost $30 Billion in value 1

  6. The Depression Begins • Panicked Americans make run on banks to withdraw funds… some can’t, as $ was invested in market • By 1933, 11,000 banks fail. Unemployment hits 25%. • Rural areas hit hardest – foreclosure of farms, environmental disaster of Dust Bowlhits at same time

  7. Lives Devastated • Shantytowns emerge as people lose homes – nicknamed “Hoovervilles” • Soup kitchens and breadlines provide little relief • Women and children, minorities, suffer even more • Men search for work, great movement around nation. (Okies and others to California – portrayed in Of Mice and Men) • Tremendous psychological effects – suicide, desperation, value of saving and hard work

  8. Iconic Images A California “Okie” family in 1936 Dorothea Lange’s “Migrant Mother” A Chicago soup kitchen, opened by Al Capone

  9. Hoover’s Failures • Hoover’s solution was rugged individualism – no direct relief to the people • Established RFC – Reconstruction Finance Corp. to loan $ to businesses as ‘trickle down’ theory • “Two families in every garage”, Hoovervilles

  10. The Bonus Army • 1932, Thousands of World War veterans march on Washington demanding payment for wartime services - Known as “Bonus Army” • Because of economic hardship, want payment immediately instead of 1945, agreed upon date • Hoover sends in military to break up camp of protestors, violence ensues • Bonus Army is gassed, children killed and injured • Hoover, already struggling, is ruined politically

  11. Election of 1932 Democrats are almost guaranteed victory • Franklin Delano Roosevelt, NY Governor, easily wins • Pledges New Dealfor American people • Democrats take control of Congress (1930) 2

  12. Election of 1932 • Hoover remains as lame duck until March – people suffer • 20th Amendment passed as result – changes inauguration date • FDR must address banking issue quickly 3

  13. 1. from http://www.ushistory.org • 2. from http://www.britannica.com • 3. from http://www.mapsmaniac.com

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