The Great Depression The Great Depression by xiangpeng

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									The Great Depression
    October 29th, 1929
        Causes of the Depression
1.   Superficial prosperity
     Railroads, textiles, steel – barley made a profit.
2.   Crisis in the Farm Sector
     overprotection
3.   Easy Credit - living on credit
4.   Uneven distribution of wealth
5.   Poor decisions made by the government
                Get Rich Quick plan
►    Bull Market – long period of rising stock prices =
     people invest
►    Margin – people are buying stocks on credit also – 10%
     down and stockbrokers loaned rest
►    Example:
    1. Person has $1000 but wants $10,000 work of stock
    2. The stockbroker loans $9,000
    3. When the stock prices rise, investor sell, make a profit and pay
       back stockbroker
►    Speculation – betting that the market would
     continue to rise.
 Everything that goes up, must come
                down
►   Problems!!
 * Stock prices started to fall
  * everyone began to sell stocks to
    repay loans
  * Prices drop further when money
    is pulled out
► Monday, October 21st,
  1929 = Margin Call
► Tuesday, October 29th,
  1929 – Black Tuesday!!
 stock market falls to lowest
  prices ever
             Things get worse
► Hawley-Smoot
 Tariff Act - raises
 tariffs to the highest in
 history
 “If you won’t buy our
 stuff, we aren’t buying
 yours” =
 other countries
 stopped buying
 American goods
            Hoover’s Beliefs
► “Any  lack of confidence in the economic
  future… is foolish,”
► “Rugged individualism” – people should
  succeed through their own efforts.
► Help should come from individuals,
  charities, and local organizations
► Everyone should work together to get
  through
Herbert Hoover: A Lifetime of
        Acheivements
                Hoover’s Response
                      Boulder Dam – jump start the
                      Economy and add jobs


                                                  Federal Farm Board –
Reconstruction Finance
                                   Trickle        raise crop prices by
Corporation - Gov.
                                   Down           keeping some off the
provides money for banks,
                                                  market
insurance co. and large
business.

                            Federal Home Loan
                            Banking Act –
                            Lowered mortgage
                            rates so homeowners
                            and farmers can
                            refinance
The Great Depression in America
                  Bonus Army
► 10,000 – 20,000 WWI
  veterans arrive in D.C.
► Want a bonus promised to
  Bonus Army them for
  wartime service
► At first, Hoover provides
  food and supplies to
  veterans
► July 28th, 1932 Hoover
  decides that veterans
  should leave
► General MacArthur and
  Major Eisenhower force
  veterans to leave.
Hoover vs. World War I Veterans
             “The Dust Bowl”
► Causes:
  1.  overproduction
  2.  drought
  3.  wind
  4.  no grass, crops, or
      trees
► One Solution – move
  west to California =
  Okies = migrants
Farmers and their lost dreams –
    The Dust Bowl Years
    Hoover’s approval rating goes




Defeated easily in 1932 by Democratic
 candidate Franklin Delano Roosevelt

								
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