Great Depression

							GREAT DEPRESSION
   GREAT DEPRESSION
• Election of 1928
• Herbert Hoover Republican
  candidate
• Alfred Smith Democratic
• First Catholic to run for
  President
   GREAT DEPRESSION
• Herbert Hoover Republican
   GREAT DEPRESSION
• Alfred E Smith Democrat
   GREAT DEPRESSION
• Hoover’s Campaign promise
• “Chicken in every pot and a
  car in every garage”
    GREAT DEPRESSION

• Hoover wins in a landslide
     GREAT DEPRESSION

U. S. Still in prosperity but
 cracks are showing
   GREAT DEPRESSION

•Easy Credit
•Over production of
 inventory
    GREAT DEPRESSION

• Economy was strong based on
  World War I
• Installment buying
• Dollar down
• dollar a week
    GREAT DEPRESSION

• Made it easy for all to buy
• Repossessed if payments
  were missed
• Stock Market opened to all
  Americans
• Some were novice
    GREAT DEPRESSION
• Speculation
• Margin
• Buyer puts 10% down on a
  stock
• Broker provides rest as a loan
  or margin
    GREAT DEPRESSION

• Buyer gambles that stock is
  going to increase
    GREAT DEPRESSION

• If price fell broker called in
  margin demanded immediate
  payment
• Usually investor or buyer lost
  everything
    GREAT DEPRESSION

• BUBBLE BURSTS
• October 29, 1929
• “Black Tuesday”
• Stock prices plummeted
        GREAT DEPRESSION

•   29 th
        and 30 th16 million shares
  were sold
• By two weeks time index price
  fell by 50%
• 30 billion dollars were lost in
  the next weeks
    GREAT DEPRESSION

• Unsound banking practices led
  to:
  Speculation
  risky loans
  fake investment schemes
      CAUSES OF GREAT
        DEPRESSION
• Credit
• Too much
• People and banks suffered
• People could not pay
• Banks lost money
    GREAT DEPRESSION

• Not all lost some gained
  tremendously
• Joseph Kennedy Sr. allegedly
• Got inside information and
  sold before the market
  crashed
    GREAT DEPRESSION

• Agriculture
• Depressed for years
• Overproduction caused low
  prices
• Agriculture Marketing Act
    GREAT DEPRESSION
• Established loans to farmers
• Federal Farm Board
• Purchased surplus crops
• Could not limit production
• Depression in Europe closed a
  market for surplus food
    GREAT DEPRESSION

• Depression was world wide
• Smoot-Hawley Tariff
• High tariffs on imported goods
  to protect U S goods
       GREAT DEPRESSION
•   Foreign countries flooded market
•   Prices continued to fall
•   Farmers continued to grow crops
•   Prices plummeted depression
    worsened especially for farmers
    GREAT DEPRESSION

• Banking and Finance
• Federal Reserve Board was
  urged to regulate credit and
  speculation
• They did nothing
    GREAT DEPRESSION

• Deposits shrank
• Massive withdrawals
• Holidays were declared in
  Nevada, Louisiana Michigan
• Emergency credit pool for
  relief
    GREAT DEPRESSION

• Bankers formed National
  Credit Corporation
• Failed to help situation
• Fearful that loans would
  jeopardize their banks
      CAUSES OF GREAT
        DEPRESSION
• Few basic industries
• No diversification
 –2 major industries
   • Construction
   • automobile
      CAUSES OF GREAT
        DEPRESSION
• Uneven distribution of wealth
• More than one half of
  Americans lived on edge of
  poverty
      CAUSES OF GREAT
        DEPRESSION
• International debt
• Europe could not pay back
  loans to United States from
  World War I
• High Tariffs on American
  goods
• Europe responded with the
  same high tariffs on American
  goods
GREAT DEPRESSION
    GREAT DEPRESSION

• All failed
• Reconstruction Finance
  Corporation (RFC)
• Jan 1932
• Provided loans to banks
    GREAT DEPRESSION
• Railroads
• Life insurance
• Farm Mortgage assistance
• It did ease the banking crisis
• January 1932 346 banks failed
• April 46 failed
    GREAT DEPRESSION

• Unemployment Relief
  Organization
• Stimulate private charities
• 3 other major measures were
  passed by Congress
    GREAT DEPRESSION

• 300 million dollars were
  allocated to help liquidate
  banks loans for public works
Loans to states to help in public
  projects
    GREAT DEPRESSION

• 30 million allocated
• Too cautious (RFC) to help
• None for Public Works
    GREAT DEPRESSION

• Hoover would not direct aid to
  unemployed
• Private Charities
• Opposition to direct relief
    GREAT DEPRESSION

• Cemented his reputation as
  doing nothing to ease
  depression
• Shack villages were called
  Hooversvilles
         Herbert Hoover
• Newspapers wrapped around
  people were called Hoover
  Blankets
• Broken down cars were called
  Hoover wagons
• Pockets turned inside out were
  called Hoover Flags
     GREAT DEPRESSION
• BONUS MARCH 1932
• Hunger Marches and unemployed
  rioted
• Bonus Expeditionary Force (BEF)
• World War I veterans were able to
  borrow against life insurance in
  1945
    GREAT DEPRESSION

• Technically it was not a bonus
• Veterans wanted the money
  now
• Needed the money for
  necessities
    GREAT DEPRESSION

• Congress could not afford
  payments
• Yet they appropriated
  $100,000 for the marches
  return home
• ½ took offer
     GREAT DEPRESSION
• Others occupied buildings to be
  knocked down for public work
  projects
• July 28, 1932 police tried to evict
  squatters
• 2 veterans killed stalemate
  continued
    GREAT DEPRESSION

• General Douglas McArthur
  had orders to move vets
• He took it upon himself to drive
  them farther than President
  Hoover ordered
    GREAT DEPRESSION

• McArthur along with junior
  officers Patton and
  Eisenhower
• Used tanks guns and tear gas
  to remove veterans
    GREAT DEPRESSION

• McArthur disobeyed orders to
  stop
• Hoover while upset did nothing
  to stop McArthur
• Reinforced Hoover’s image as
  a do nothing President
    GREAT DEPRESSION

• ELECTION OF 1932
• FDR Franklin D. Roosevelt
• Elected President
• New outlook for United
  States