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The Great Depression


									The Great Depression

Chapter 14
                I.) The Election of 1928
A.   Republican candidate =
     Herbert Hoover

B.   Democrat candidate =
     Alfred E. Smith

C.   Outcome:
     Hoover wins and public
     opinion is in favor of the
     II.) Causes of the Great Depression

A.   availability of “Credit” (living beyond means)
B.   unequal distribution of wealth (rich get richer, poor get poorer)
C.   farming crisis (falling prices, loss of farms, surplus crops)
D.   tariffs & war debt (loss of foreign markets for goods)
III.) The Events that lead to Depression
                      Late 1920’s = Industry in trouble
           (railroad, textile, steel, mining, lumber, automobile, construction)

                       During WWI = Farms Prosper
                       During 1920’s = Farms Suffer
(demand falls, crop price falls, income falls, farmers default on loans, rural banks fail)

              Late 1920’s = Consumers have less Money
 (rising prices, stagnant wages, uneven distribution of wealth, overbuying on “credit”)

              In 1920’s = Stock Market is a “Bull Market”
              (Speculation- rush to buy stocks in hopes to strike it rich)

                  By 1929 = People “Buying on Margin”
                 (unrestrained buying & selling fuels market upwards)
IV.) The Great Depression Begins
                       September 1929
              Stock prices peak then begin to fall

                     October 24, 1929
           Stocks plunge investors unload shares

                     October 29, 1929
           “Black Tuesday” Stock Market Crashes
 (16.4 million shares dumped, stock prices plummet, people left with debt)
                     V.) Financial Collapse
A.   Rush to with draw money leads to “failure
     of banks”
     1. 1929 = 600 banks close
     2. 1933 = 11,000 banks fail
     Result: millions of Americans loose their savings

B.   Gross National Product is cut in half
     1. from $104 billion to $59 billion
     Result: business's go bankrupt

C.   Workers loose their jobs
     1. 1929 = 3% unemployment
     2. 1933 = 25% unemployment
     Result: 1 out of 4 cannot find work
          VI.) Hardships and Suffering
A.   People loose homes
     1. Shantytowns called
        “Hoovervilles” created
B.   People cannot find food
     1. “Soup kitchens” & “Bread
C.   African Americans & Latinos
     face highest level of
     1. racial violence
D.   Farmers can grow their own
     1. tenant farming
E.   Dust Bowl results in farmers fleeing
     land or evicted

F.   Traditional family values emphasized

G.   Men turn to the streets (“Hobos”)

H.   Women struggle in workplace and
     become a target of resentment

I.   Children receive poor diets,
     healthcare, work in sweatshops, don’t
     go to school

J.   Suicide rate increases & social
            VII.) Hoover’s Policies Fail
A.   President Hoover believed that the govt. should only play a
     limited role in solving economic problems
     1. govt. role was to encourage cooperation between
        business groups in society not to control it
     2. Hoover opposed federal welfare or direct relief to the needy
B.   Hoover’s Attempt to Help
     1. Hawley-Smoot Tariff- established highest protective tariff on
                                 imported goods in U.S. history
     2. Boulder Dam- provides flood control, electricity, water supply, and
                         construction jobs
     3. Federal Farm Board- organization of farm cooperatives aimed at
                                 raising crop prices
     4. National Credit Corporation- loaned money to smaller banks to
                                         help prevent bankruptcy
     5. Federal Home Loan Bank Act- lowered mortgage rates to home-
                                             owners & refinances to farmers
     6. Reconstruction Finance Corporation- $2 billion emergency funds
                                       to large businesses (trickle down theory

C. Outcome:     too little, too late!
          VIII.) Hoover’s Image Suffers
A.   The Bonus Army- 1932 incident in which WWI veterans
     march on Washington D.C. to support Patman Bill to pay
     wartime bonus now rather than 1945
     1. created a “shantytown” in D.C.
     2. June 17, 1932 bill fails and veterans told to leave & refuse
     3. Gen. MacArthur and Major Eisenhower lead troops to
        disband Bonus Army
     4. American public stunned by treatment of veterans

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