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Honors US The Great Depression and New Deal Part One

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Honors US The Great Depression and New Deal Part One Powered By Docstoc
					   Stock trading captured the imagination of the American public in
    the 1920s. Buying stocks on the chance of a quick profit without
    considering risks is speculation.
   Stock prices rose twice as fast as industrial production. Paper value
    far outran real value.
   Many were lured into the market through easy credit, known as
    Margin accounts. Buying a stock “on margin” allowed people to
    purchase stocks with only a small down payment (as low as 10%)
   The boom of the 1920s
    relied on continually rising
    prices. When they stopped,
    the boom was over.
   On October 29, 1929 Black
    Tuesday the bottom
    dropped out. Panic took
    hold. As prices dropped,
    people were forced to sell,
    driving prices further
    down.
   Half the value of the stock
    market was wiped out in
    ten weeks.
   The Great Depression was
    the worldwide economic
    collapse following the stock
    market crash in 1929, in
    which unemployment
    remained high for an
    extended period and many
    businesses failed.
   The Stock Market Crash,
    alone, did not cause the
    Great Depression. There
    were other underlying
    factors:
       The availability of easy credit
       Tariffs on foreign goods
       A crisis in the farm sector
   Loss of a job could mean
    economic catastrophe for
    workers and their families,
    many of whom became
    homeless and lived in
    shantytowns known as
    Hoovervilles.
   By 1933, 12.6 million
    workers, more than one
    quarter of the labor force,
    were without jobs.
   Many men and boys
    became hoboes who “rode
    the rails” as they searched
    for work.
   President Hoover failed to face the facts of the
    Depression. He resisted calls for a greater federal role in
    relief efforts or public works projects. Hoover’s plan for
    recovery centered on restoring business confidence and
    asking businesses not to lay off employees.
   In the Spring of 1932, the Bonus Army, made up of
    World War I veterans and their families, marched on
    Washington, D.C. They demanded immediate payment
    of a bonus promised for 1945. The veterans and their
    families were forcibly removed from their camp by U.S.
    Army troops under General Douglas MacArthur.




                                             Douglas MacArthur
   In 1932, the Democrats
    nominated Franklin
    Delano Roosevelt to run
    against Herbert Hoover.
    Roosevelt promised a
    “new deal” for the
    American people.
   Roosevelt won in a
    landslide
   One of the New Deal’s
    primary goals was to
    regulate the Stock
    Market.
   In the first days of his
    administration, Roosevelt
    conveyed a sense of
    optimism and activism
    that helped restore the
    confidence of the nation.
   He spoke directly to the
    people using fireside
    chats, radio broadcasts
    that proved enormously
    successful.                 “ The only thing we have
                                  to fear is fear itself.”
   Roosevelt’s first major
    action as president was
    to close all of the
    nation’s bank and
    inspect them (National
    Bank Holiday).
   Healthy banks were
    only allowed to reopen
    under licenses from the
    Treasury Department.
   By March, half of the
    nation’s banks, holding
    90% of the nation
    deposits, were open.

				
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posted:10/27/2011
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