The Great Depression 1929 - 1932

#31 President Herbert Hoover Elected 1928 Republican from Iowa Promised a continuation of Republican politics that made the “Roaring 20s” good in the US Few could have forecasted the coming of disaster on the horizon Was later blamed for the Great Depression because of his policies

The Crisis Begins In response to high demand for food during WWI, farmers borrowed money (credit) to afford more capital (land, machinery, labor). After the war, the high demand for food fell drastically; farmers soon found themselves unable to repay their loans.

The Crisis Begins Due to an increased demand for goods many industries saw a dramatic increase in profit Unlike farmers, industrial workers experienced huge raises in salary (remember the “Roaring Twenties”) Many Americans now had disposable incomes With this extra income Americans bought cars, radios, and other luxuries. Many bought into the stock market, buying on margin, in hopes of becoming wealthy. “Buying on margin” – putting up a little bit of money to buy a lot of stock (similar to buying on credit)

The Crisis Begins In the 1920’s, economic and income disparity grew More and more products were being produced, but after a time, too many people could not afford to buy them. This led to a problem of over-production and under-consumption Overproduction – too much being made Underconsumption – too little being bought

The Stock Market Crashes Stock – investment in a company with a partial claim on that company’s profit Stock Market – the sale or trade of investments in a company Speculation – process of taking high risks investments in hopes of quick profits Black Tuesday – October 29, 1929 – Stock Market crashes Investors pull out millions of dollars in hopes of salvaging what money they had left Marked the “beginning” of the Great Depression

The Stock Market Crashes Banks fail, businesses close, unemployment reaches 25% Families lose their homes and farms; lines for soup kitchens become common sights Hoovervilles – makeshift shantytowns of tents and shacks built on public or vacant lots Named after President Hoover; who many blamed his policies for causing the Market to crash.

The Dust Bowl Dust Bowl – term used for the Great Plains during the 1930s when the region suffered from drought and dust storms. Three major causes: Over-production of crops (loss of topsoil) Drought Severe wind storms

IMAGES FROM THE DUST BOWL

THE DUST BOWL Families devastated by the Dust Bowl relocated to the West Coast or large cities in hopes of finding work. Okies – nickname given to Oklahoma resident moving to West Coast Steinbeck's The Grapes of Wrath; The fictional story of the Joad family driven out by the Dust Bowl and moving to California

ELECTION OF 1932 Democrat (blue): Franklin D. Roosevelt Republican (red): Herbert Hoover

The US Rallies Behind FDR Franklin Delano Roosevelt (FDR) Democrat from New York Distant nephew of Teddy Roosevelt Elected President in 1932 after he defeated Hoover Many blamed Hoover for making the Great Depression worse. Roosevelt would consolidate executive power and use it to lessen the pinch of the Depression This process was known as the New Deal