Week Nine Lecture

Weak Manufacturing EconomyWeak Manufacturing Economy

1.1. Over-productionOver-production

2.2. Under-consumptionUnder-consumption

Weak Financial InstitutionsWeak Financial Institutions

1.1. Speculation & Unregulated Securities MarketSpeculation & Unregulated Securities Market

2.2. European Banking CollapseEuropean Banking Collapse

Weak Agricultural EconomyWeak Agricultural Economy

1.1. Weak Wholesale PricesWeak Wholesale Prices

2.2. ForeclosuresForeclosures

3.3. Dust BowlDust Bowl

October 29, 1929October 29, 1929 Investors lose billions. Investors lose billions. Unemployment skyrockets : ½ to 4 million Unemployment skyrockets : ½ to 4 million Economy falters:Economy falters: Stock fall again in 1931.Stock fall again in 1931. Real wages drop by 16% by 1931.Real wages drop by 16% by 1931. By 1933:By 1933:

1) 15 million unemployed1) 15 million unemployed2) GNP down by 29% 2) GNP down by 29% 3) Construction down by 78%3) Construction down by 78%4) Manufacturing down by 54%4) Manufacturing down by 54%5) Investments down by 98%5) Investments down by 98%

Hoover maintained that the economy was on a “sound and Hoover maintained that the economy was on a “sound and prosperous basis.” prosperous basis.”

Hoover’s attempt to fight the depression:Hoover’s attempt to fight the depression:

1)1)Restore Business ConfidenceRestore Business Confidence

2)2)Fight calls for government interventionFight calls for government intervention

3)3)VoluntarismVoluntarism

4)4)LocalismLocalism

Ineffectual due to:Ineffectual due to:

1)1)Government Blunders (raised interest rate & tariff)Government Blunders (raised interest rate & tariff)

2)2)Federal aid offset by cuts in state spendingFederal aid offset by cuts in state spending

3)3)Persistence of depression undermined local charityPersistence of depression undermined local charity

1.1. Unemployed CouncilsUnemployed Councils2.2. Rent PartiesRent Parties3.3. Farmer’s HolidayFarmer’s Holiday4.4. Sharecropper’s UnionsSharecropper’s Unions5.5. Southern Tenant Southern Tenant

Farmer’s UnionFarmer’s Union6.6. Ford Hunger MarchFord Hunger March7.7. Bonus ArmyBonus Army