1. Goal 9 Part 4 The Nation’s Sick Economy Stock Market Crash - 1929 Great Depression – 1930s

2. Economic troubles Causes of problems (1) “SUPERFICIAL PROSPERITY” of the 1920s (easy credit / installment plan) (2) Farming : “OVERPRODUCTION” (3) Major Businesses / Railroads lost profit to new forms of technology

3. Farmers need a “LIFT” The ONE business that suffered the most – AGRICULTURE / FARMING During WWI – demand for crops = high! After WWI – demand for crops = low! Problem - overproduction! Congressional reaction: McNary – Haugen Bill - “PRICE SUPPORTS” – the federal government would buy the “surplus / overproduction” at a guaranteed price!

4. Herbert Hoover (1928-1932) America = “remain optimistic” Believed in “RUGGED INDIVIDUALISM”  People should rely on themselves and NOT the government! (no bailouts)  Bailouts would weaken the self- respect of people and businesses *Hoover’s Rugged Ind. helped him act cautiously *America BLAMED Hoover for the Depression (too little too late) Ex. Hoovervilles

6. Dreams of riches in the Stock Market Economists sent warnings! Dow Jones Industrial Average – barometer for the Stock Market 2 REASONS / CAUSES for the Stock Market Crash in 1929 (1) ****** SPECULATION ****** - buying stocks in order to “MAKE QUICK MONEY” while “IGNORING THE RISKS!” (leads to) (2) ****** BUYING ON MARGIN ****** - paying a small percentage of a stock’s price and “Borrowing” the rest from the bank (easy money) PROBLEM:______________

7. Stock Market Crash (1929) Stocks PEAKED…. then FELL People freaked out, some investors quickly sold their shares (Y2K) Black Tuesday – October 29, 1929 VERY IMPORTANT: What signaled the beginning of the Great Depression? THE STOCK MARKET CRASH 1929

8. The Great Depression 1929 -1940 600 banks closed 11,000 banks failed Federal government never protected people’s money…so…1,000s of people lost all of their savings! Worldwide shockwaves: The Depression affected Europe as well (postwar –inflation at an all time high!)  ****Leads to the rise of Dictators Racism during the Depression: African Americans were fired before any other culture Notable Result: American confidence in Economy went DOWN!!!!

10. Hawley-Smoot Tariff (1930) How are we going to fix it??????? Hawley-Smoot Tariff (1930) - established a very high “protective tariff” to boost American economy / designed to protect from foreign competition Major Problem: cutting the flow of foreign goods to America made it WORSE! Then, foreign countries raised their own protective tariffs Same result as the Embargo Act of 1807

11. Hardships and Suffering During the Depression Relief DOES NOT come from the government –  Relief comes from charitable organizations Depression in Cities: (1) Shantytowns (HOOVERVILLES)– little towns consisting of shacks (2) Soup Kitchens – offered free to low-cost food (3) Bread Lines – waiting in lines for food provided by charitable organizations (4) Hoover Soup Depression in Rural Areas: Main Advantage: Farmers can grow their food! ***** Minorities experience an increase in discrimination because of “job competition”

13. THE DUST BOWL Problem: Drought and dust storms struck the GREAT PLAINS (Caused by poor farming techniques (no crop rotation) OKIES: farmers that moved from the Dust Bowl to CALIFORNIA

16. John Steinbeck: The Grapes of Wrath Explains the difficulties of Okies during the Depression and their move to California

17. Effects on American families Men: difficulty with coping with unemployment HOBOES – wondered the country looking for jobs Women: canned foods and sewed clothing to make money (to help family) Targets of enormous resentment: unfortunately, 30’s culture = why should women have a job over a man? Children: poor diets, malnutrition, child-welfare programs were closed, quit school = jobs! “Wild Boys” and “Hoover Tourists”

18. DIRECT RELIEF During the early years of the Depression, NO federal relief for American people and business Direct Relief: cash payments or food provided by the federal government Ex. New York City: $2.39 / family / week

19. Hoover’s 2 Intervention Programs/ Recovery Measures (1) Federal Home Loan Bank Act: (direct) lowered mortgage rates for homeowners and allowed farmers to refinance their farms (PEOPLE) (2) Reconstruction Finance Corporation: (indirect) $2 billion of “emergency money” for banks, businesses, railroads (BUSINESSES)  Ex: TRICKLE DOWN ECONOMICS Go through business and THEN into people’s pockets (Too little …too late) MORE GOVERNMENT

20. The Bonus Army Bonus Expeditionary Force Story: WWI vets support the “Patman Bill” – would grant $500 to each soldier Problem: $ comes in 1945, not now! WWI vets want MONEY NOW! Hoover’s Reaction: WWI vets were “communists” *Hoover “disbanded” the Bonus Army by “gassing” the soldiers Result: Hoover’s image suffered MAIN EFFECT: Tarnished the relationship between the Federal government the American Citizens (credibility is shot)

21. The Great Depression (1929-1940) Causes : Superficial prosperity Easy credit / installment plan Overproduction (*farming sector) ***** Stock Market Crash (1929) ***** Effects : Shantytowns / Hoovervilles / Breadlines / soup kitchens (charitable help) Unemployment *Worldwide economy suffers Banks fail / Businesses collapse

23. Which of Hoover’s recovery measures provided DIRECT help to the American people? A. The Federal Home Loan Bank Act B. The National Credit Corporation C. The Reconstruction Finance Corporation D. The Patman Bill

24. Cinderella Man Eulogy Assignment Assignment: You have been given the proud task of delivering Jim Braddock’s eulogy. Take the position of his sons, Jay or Howard or his daughter, Rosie. Format of Eulogy: 1.The hard times your father lived through 2.The nature and personality of the man. 3.The obstacles in life he overcame and his outstanding achievements 4.How and why he should be remembered Length: 2-3 pages – Due tomorrow or the Monday after Thanksgiving