the great depression hopelessness, hoboes, and hoover
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TRANSCRIPT
The Great DepressionHopelessness, Hoboes, and Hoover
Life Before the G.D.
• Roaring Twenties• Fun• Youthful Excitement
• Post-War Prosperity• During/After WWI, American Economy Grows
• Industry & Trade• Consumer Products• Farmers not doing well – why?
• No End In Sight for Economic “Boom”
• Stock Market Increases Steadily throughout ’20s
The Illusion of Wealth
• During ’20s, an Illusion of Wealth exists• WHY?
• 3 Reasons• War Debts
• Loaned $ to get paid $
• Uneven Distribution of Wealth• 2% of pop. controlled 70% of Wealth• What does this mean for economy?
• Buying on Margin/Credit• Stock Market Value is not accurate
A Crash is Coming
• 1920-1929: Stock Market quadruples• 1920: 318 million shares
traded• 1929: 1 Billion shares
traded
• More people begin to Invest• Buy On Margin
• Federal Reserve attempts to limit margin buying – but it is too late
Black Tuesday
• Sept 3, 1929: Market at Highest Point• Sales of manufactured goods decreased
• Rumors: Big investors are about to leave market
• Thurs, Oct 24, 1929: Rumors lead people to sell stocks…Prices drop….more sell…panic begins• Bankers step in to buy up stock, crisis avoided
• Tues, Oct 29, 1929: PANIC – 16 million shares of stock are dumped• Market drops $16 Billion (Today’s $ = $180
Billion)
CAUSES OF GREAT
DEPRESSION
Buying On Margin
Stock Market Crash of 1929
Bank Panics Farm FailuresHawley-Smoot
Tariff
The Depression Begins
• Because of Margin Buying, many people lose their savings
• Bank Panics• Banks Close, people lose
everything
• As Depression starts, economy cycles downward
• Nearly 3 million Americans lose their jobs• Unemployment rises to
25%
People Lose Jobs
People can’t Afford
to buy things
Businesses Fail
Hard Times Ahead
• No Jobs = No Money = No Home
• “Hoovervilles” spring up • Horrible Conditions
• Hoboes• Travel around
country looking for work
• Breadlines• Charities & Soup
Kitchens
The Dust Bowl
• Farmers already struggling during ’20s
• 1931: Severe Drought in Great Plains
• Poor agricultural practices • Dust Bowl
• Dirt blown as far as New York
• Many Farmers Leave • 2.5 Million • Migrant Workers go to
California• Called “Okies”
Who is Herbert Hoover?
• 1928: Hoover very popular
• Hoover = brilliant economist • Shared Views of Harding
& Coolidge• BIG BUSINESS, SMALL
GOVERNMENT• “Rugged Individualism”
• Helping poor is insulting to them
• Not the Government’s Role
• Associative State• Businesses & Gov’t will
voluntarily cooperate• Hoover Dam
Hoover to the Rescue?
• Hoover’s $ Background is his downfall• “G.D. is a natural cycle & will fix itself”
• Urges “Voluntary Cooperation”• NO DIRECT AID TO POOR• 1932: $2 Billion in direct loans to
businesses• Reconstruction Finance Corp. (RFC)• Expansion of Federal Government’s role
Down with Hoover!
• Hawley-Smoot Tariff• Disaster• Incredibly high tariff, = Europe passes high tariff
= no trade • By 1934: Trade down 2/3 from 1929
• Bonus March• WWI Vets want Bonuses• Set up Hooverville in Washington DC• Hoover orders US Army to break it up• Burns Hooverville to ground & uses tear gas• Looks terrible for Hoover
• Election of 1932: FDR wins in a landslide