Crash & Depression Chapter 22

Review: Stock Market Boom Stock Market “Boom” Stock speculation inflates prices Margin buying leads to greater demand – higher prices: notes payable on demand Government fails to monitor or regulate the market

Summary: Stock Market Bust Stock Market “Bust” Overproduction leads to falling wages and profits Experienced buyers quietly sell, leading to less demand and lower prices “Snowball” Effect leads to the Great Depression

Black Thursday October 24, 1929 o The Dow Jones Industrial Average peaked at $ in September o By October 24th, stock prices began to fall o Example - GE went from $400 to $

Black Thursday - October 24, 1929 Black Thursday - October 24, 1929  Pres. Hoover - business “is on a sound and prosperous basis”  Group of bankers bought shares to stabilize prices  Not enough to stop the panic

Monday October 28, 1929 b Investors continued to sell b Prices continued to drop

Black Tuesday – October 29, 1929 Black Tuesday – October 29, 1929 Tried to sell stocks at any price Bankers called in their Losses totaled $ billion dollars

The Ripple Effect of the Crash b Less people able to buy goods (decline of GNP) b Leads to b Severe contraction = b This contraction was so severe, it is known as the

The Great Depression - Stock Market Crash to WWII b Approximately b Approximately of US banks failed b Unemployment b Unemployment reached b GNP b GNP went from $103 billion to $ billion

The Worldwide Impact b Countries depended on the USA for capital, markets, and goods b Contractions began in Europe b Result - they could not buy American products b (Germany was particularly hard hit)

Underlying Causes of the Depression b All of the warning signs that were ignored from the 1920’s. b Lack of government oversight b Lack of government response Note: Natural disasters did not cause the Great Depression but effected severity of it

Social Effects of the Depression Section 2

Social Effects of the Depression b Hoovervilles b Hobos - approx. 1 million b Farm distress low prices due to low demandlow prices due to low demand evictions and foreclosuresevictions and foreclosures

The Dust Bowl ( ) b Drought and poor environmental practices b Effected Great Plains and the Midwest b Hardest hit were Oklahoma, Kansas, and Nebraska b Top soil blew into the Atlantic Ocean b Created a desert in the center of the USA b Displaced millions of farmers

Poverty Increased Social Problems b increased b Health and nutrition decreased b Hoover claimed that no one starved but historians estimate as many as _____________ people died from the effects of the Depression

Poverty Increases Social Problems b Divorce, marriage, and birth rates declined b Homeless people moved in with relatives b “Last hired, first fired” b Lynchings increased b Japanese & Mexicans were deported were deported

Scottsboro Boys b March, African Americans were accused of raping two white women b They were convicted and sentenced to die without even seeing a defense attorney b They were later exonerated but not until four of them had spent many years in jail

Surviving the Great Depression Section 3

Survival b People b People helped one another b States b States provided relief b ______________ b ______________ assisted millions b Those b Those that survived never completely forgot what it was like to live through the Great Depression

Surviving the Great Depression b People helped each other b Farmers assisted each other ________________________________________ Violence prevented some ________________________Violence prevented some ________________________

Surviving the Great Depression b Estimated 1,000,000 hobos rode the rails b Approx. 250,000 of them teenagers

Surviving the Great Depression b Political movements like the Socialist and Communist Parties gained membership b Entertainment like this new like this new board game board game provided a provided a pleasant diversion pleasant diversion

Signs of Change Prohibition was repealed in 1933 The Chrysler building was overshadowed by the Empire State Building in 1931 The Chrysler building was overshadowed by the Empire State Building in 1931

Signs of Change b By 1935 Calvin Coolidge diedCalvin Coolidge died _____________ was convicted of tax fraud_____________ was convicted of tax fraud Babe Ruth retiredBabe Ruth retired Lindbergh baby was kidnapped and found deadLindbergh baby was kidnapped and found dead b America’s heroes were changing

The Election of 1932 Section 4

President Hoover: b Assured the American people the economy was improving b Insisted it was a b Thought direct relief should come from b Asked business leaders to maintain wages voluntarily

President Hoover’s Response b Agricultural Marketing Act of was supposed to buy excess crops from farmers to increase demand b Hawley - Smoot Tariff - largest tariff in history (1930)

President Hoover’s Response b Reconstruction Finance Corp. - (1932) b Trickle down economics

President Hoover’s Response b Public works projects like new buildings, bridges, and roads

b “ “ b No (federal) government handouts b Gave little direct relief until 1932 President Hoover’s Response

b 1932 signed the Home Loan Bank Act to lower interest rates on mortgages b 1932 allowed the federal government to give money to the states for relief programs President Hoover’s Response

Peoples’ Responses to Hoover b “Too little, too late” b People blamed him for the Depression b Called him heartless and cold

The Bonus Army b World War I veterans promised a bonus but not until 1945 b ,000 went to Washington to demand immediate payment b Stayed in Washington in Hoovervilles to embarrass the President

b March to the White House led to a confrontation with the army b ________________________________ was called in to quell the uprising b He used tanks, gas, and 4 Calvary units against unarmed marchers The Bonus Army b US Army burned the shantytown and caused a riot

Election of 1932 “This campaign is more than a contest between two men….It is a contest between two philosophies of government.” Herbert Hoover, October 1932

Election of 1932 b Herbert Hoover b Franklin D. Roosevelt

Election of 1932 b Franklin D. Roosevelt won by 7,000,000 votes b Herbert Hoover only won 6 states b FDR would start the New Deal upon his inauguration in March, 1933 » The End