2.  Farmers in trouble  Industries in trouble- RR, steel, textiles  Credit- People buying in credit and installment plans  Buying on the Margin  Lead to stock market crash  Laissez-faire  Govt does very little to help

3.  Overproduction  Farmers produce more which leads to price of crops going down  Debt  Increase debt and foreclosures on farmers loans  Hurt banks because farmers can’t make payments and foreclose

4.  Auto industry was booming  Other industries failing  Steel, coal mining, railroads, textiles, lumbering, other mining  Lead to workers losing jobs and debt

5.  1928- Elected as Republican  “Rugged Individualism”  Belief that individuals should help themselves and government should not get involved to help people

6.  “Buying on the Margin”  Way to buy stocks where you pay part of the money up front and banks finance the rest  Example- you buy a $100 stock but only pay $20 because bank finances other $80  When stocks doing good- fine  When stocks drop- people lose $20 and can’t pay back the other $80  Leads to panic and people selling stocks for whatever they can get

7.  October 29, 1929  “Black Tuesday”  People sell stocks in record numbers and stock market drops dramatically  People lose entire savings and investments  Bank Failures  Following collapse, people rush to banks to withdraw money  Many banks couldn’t pay because they lose in stock market crash  Leads to bank closings and people losing investments in banks

8.  High Unemployment as businesses fail  3% n 1929 to 25% in 1933  Worldwide Effects  Many European investors lost money in US stock market crash  European economies effected  Hard to sell American farm goods overseas

10.  Cautious  “Rugged Individualism”  1929- Boulder Dam (Hoover Dam)  Provide electricity and control floods in Nevada and California (today provides water to Las Vegas and Los Angeles)  Finally- 1931 Hoover acts  Federal Home Loan Bank Act- reduce mortgage rates for homeowners  Reconstruction Finance Corporation- $2 billion in emergency funds for banks and other businesses

11.  Hoovervilles  Named after President Hoover  Settlements of poor and unemployed  Built homes from boxes, scrap metal, whatever they could find  Dust Bowl  Caused by drought and overproduction  Extreme drought conditions  Huge storms of dust and wind- drive many farmers to leave (for California)  Dust storms- could not see, spread disease, winds causes destruction  Will be referred to as Oakies  From 1933-1936

12.  Bonus Army (1932)  WWI veterans wanting bonus (Govt. had promised to pay this in 1945)  Wanted it earlier- due to depression  Hoover refused  Most left Washington DC- about 2,000 stayed  US Army forced to act- gassed about 1,000 people (some died, including 11month old baby)  Hoover’s image and reputation will suffer

13.  Franklin Roosevelt (FDR) wins  Promise to use government spending to help economy  First action in 1932 will be to close all bank and declare a banking holiday  Pass the Emergency Banking Relief Act  Sound banks can reopen  Those that needed help would get loans  Programs will become known as the New Deal  He will win re-election in 1936, 1940, and 1944