US Chp 22 The Great Depression Hoover….Dam!!! The Best Laid Plans of Stocks And Bonds Often Go Awry, Leaving US Naught But Grapes of Wrath

Causes of the Great Depression Unequal Distribution of Wealth High Tariffs and War Debt Overproduction: industry and agriculture Federal Reserve Monetary Policy Stock Market Crash and Financial Panic Unequal Distribution of Wealth High Tariffs and War Debt Overproduction: industry and agriculture Federal Reserve Monetary Policy Stock Market Crash and Financial Panic

1920s was prosperous - though not for everyone. installment buying - using credit and paying back in small amounts was introduced. People began to buy cars, radios, etc. on the installment plan Farmers were not doing well 1920s was prosperous - though not for everyone. installment buying - using credit and paying back in small amounts was introduced. People began to buy cars, radios, etc. on the installment plan Farmers were not doing well

Farmers Not Doing Well Rural Poverty “We don’t need price supports. Farmers have never made money. I don’t believe we can do much about it.”

Table shows the sharp decline in the prices of various products from American farms 30% of Americans still live on farms

Some Industries in Trouble Very little profit for key industries RR, steel, textiles Mining and lumbering hurting coal mining unprofitable *housing starts going down Very little profit for key industries RR, steel, textiles Mining and lumbering hurting coal mining unprofitable *housing starts going down New forms of competition

Overproduction in Factories Factories making lots of products but wages weren’t rising enough for people to buy the products The surplus products couldn’t be sold overseas due to high tariffs and lack of money in Europe

Unequal Distribution of Wealth Nation’s wealth grew by billions but not everyone benefited evenly. The top 1% received 75% increase to their disposable income while the other 99% of people only saw an average 9% increase in their disposable income 80% of Americans had no savings at all Nation’s wealth grew by billions but not everyone benefited evenly. The top 1% received 75% increase to their disposable income while the other 99% of people only saw an average 9% increase in their disposable income 80% of Americans had no savings at all Disposable income is money remaining after necessities have been paid for

The chart shows that 99% of the population received a 9% increase in their income, while the top 1% saw their income rise by 75%.

The economy grew by billions throughout the 1920s. Total realized income rose from $74.3 billion in 1923 to $89 billion in 1929

Chart showing wages of unskilled workers. Notice how little the wages changed during the supposed prosperity of the 1920’s.

Election of 1928

In the 1928 presidential contest, Democratic New York Governor Al Smith ran against Republican Secretary of Commerce Herbert Hoover. Many were suspicious of Smith who was Catholic, while Hoover was popular for feeding starving Europeans after WWI. Al Smith Herbert Hoover

President Hoover’s belief in self-reliance would later affect his ideas about how to best solve the upcoming depression

MCNARY-HAUGEN BILL FEDERAL FARM BOARD, SUPPLIED WITH $500,000,000 TO ADVANCE TO FARM CO- OPERATIVES FOR MARKETING PURPOSES, TO STABILIZATION CORPORATIONS FOR BUYING AND HOLDING SURPLUS CROPS.

Millions of average Americans began speculating in the stock market in the 1920s. Speculating is buying risky stocks out of a desire to get rich quick, rather than investing because of a sound investment. Stocks were overpriced due to speculation - meaning they were not worth their sale price Massive fraud and illegal activity occurred due to lack of regulation and rules Margin buying or buying using credit lack of strong Federal Reserve Policy

Federal Reserve Policy Federal Reserve System created in 1913 was to help stabalize the economy. it created a central banking system for theUS One of its major goals was to deal with bank panics At the beginning of the Grt Deprs. the Fed did not address the failing banks, and many historians believe that idleness worsened the Grt Depres. Federal Reserve System created in 1913 was to help stabalize the economy. it created a central banking system for theUS One of its major goals was to deal with bank panics At the beginning of the Grt Deprs. the Fed did not address the failing banks, and many historians believe that idleness worsened the Grt Depres.

What Does Hoover Do? Tries to help farmers through legistlative acts that encourage producers’ cooperatives. Tries to stabalize Grain and Cotton prices too little too late Tries to help farmers through legistlative acts that encourage producers’ cooperatives. Tries to stabalize Grain and Cotton prices too little too late Hoover fears handouts from federal gov’t will only weaken the national fiber; we might become socialists or communists...

What Does Hoover Do? Passes the Hawley-Smoot Tariff of % rise in tariffs

What Does Hoover Do? His “make work program” - Hoover Dam.

What Does Hoover Do? He assists the RR, banks, and rural credit corporations hoping it would trickle down to the people * criticism with hindsight vision but the truth is Hoover’s plans were quite radical for the day and paved the way for FDR’s success in getting similar measures passed

There must be other reasons than the failure of the system: “We in America today (winter 1931) are nearer to the final triumph over poverty than ever before in the history of any land.” Henry Ford said (March 1931) the crisis was here because, “the average man won’t really do a day’s work unless he is caught and cannot get out of it. There is plenty of work to do if people would do it.” A few weeks later he laid off 75,000 workers.

What Does Hoover Do? Bonus Army 1932

What Does Hoover Do? Hoover began a significant shift in American history - before him Americans just “sweated it out” and the gov’t did nothing to tweak/assist in economic recovery. With Hoover that all changed. This is the beginning of a major shift (one FDR will carry much further) in the belief the Federal Gov’t does have the responsibility to take care of its citizens’ welfare.