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TheGreat Depression
Roots• Hoover promised continued prosperity• False Prosperity of the 1920’s
– Buying things on credit– Credit, not savings, allowed people
to buy a lot of stuff– Toward end of the 1920’s, consumers
spent $$ on paying off credit whichled to decline in sales
• Led to layoffs, consumers stopped purchasing
Roots• Overproduction
– Created a cycle of economic downturn
• Investments in the Stock Market– Buy stocks on margin
• Buy stocks on credit—small down payment, pay for stocks with earnings
– Bull Market• A long period of rising stock prices• Caused people to invest more and more
– Stock Market Crash• October, 1929—Investors believed the BOOM was over…
started selling
Stock Market Crash
• Lasted 1 week
• $30 billion lost– = $396 billion in
today’s $
• Equaled all the $
Made in 1929 to
that point
Immediate Impacts
• Banks had invested deposited money into the stock market– Millions lost their
savings– Created “Bank Runs”
• People pulled out what was left of their $$
• Banks closed
Great Depression
• Massive unemployment (25% in 1933)
• Foreclosures and homelessness
• Families moved into “Hoovervilles”– Shanty towns built by homeless families near
soup kitchens– Crime– Named after Hoover
• blamed for crash
Hooverville in Seattle
Hoover Cart
Hoover Leather
Hoover Flag
Hoover Blankets
Great Depression
• Hoover believed in “Rugged Individualism”– People should take care of themselves– No Government interference
• Social Darwinism??
• Public Works– Increase employment in the private sector
• Hoover Dam – startedIn 1931
Hoover Dam
Dust Bowl
• Massive Drought in late 1920’s– Led to bare fields that
turned to dust
– Winds blew—caused dust storms from Texas to North Dakota
– 50 dust storms a year in the 1930’s
• Created massive migration of “Okies” westward
Approaching Dust Storm
Devastation
Relief
• Did not work—Hoover unwilling to spend $$ on projects– Raised taxes to pay for public works projects
• Only expands the problem
• NCC National Credit Corporation– Created a pool of money to give to banks– Give $$ to struggling banks—Didn’t work
Too little, Too Late
• Emergency Relief Construction Act– $1.5 Billion to public works– $300 million in emergency loans
• Could not fix the damage that had been done
Salt on the Wound
• The Bonus Marchers– 100’s of WWI vets from Oregon marched to
Washington DC• They wanted legislation to be passed that would
get their $1000 pensions from the war earlier than 1945
• Camped in Hooverville in DC—15,000 vets had joined the cause
– Removed by force by the US military• Further harmed Hoover’s reputation
FDR to the Rescue
• Republican Party blamed for Great depression
• Election of 1932– Hoover vs Franklin D. Roosevelt
• FDR won 89% of the Electoral Vote
– Promised American’s a
“New Deal”
Dust Bowl
FDR
• Governor of New York– Popular because he offered economic relief to
those in need– Had Polio
• Barely ever seen standing• Eleanor Roosevelt had a huge
impact on FDR’s popularity
First 100 days in Office
• People feared that the Gold Standard would end, reducing the value of the dollar– Gold Standard—1 ounce of gold = certain $
$– Millions of people emptied bank accounts
to convert to gold before price went down• Thousands of banks closed• “Bank Holidays” enacted
– Protect banks from bank runs
First 100 days in Office
• Sent Bill after Bill to Congress– Passed 15 major acts to fight the depression
• SEC—Securities and Exchange Commission– Regulate stock market to prevent fraud
• FDIC—Federal deposit Insurance Corporation– Provides governmental insurance to banks
• Debt Relief programs– Restructured loans, lower rates, longer pay periods
• Relief Programs– Work programs to the unemployed
Book Time Yeah!!
Go to pages 445 – 452Find the following acronyms, write out what they
stand for and 1 sentence describing what their purpose was:
FDIC SEC FCA AAA NIRA NRA
CCC FERA PWA CWA WPA
Wagner Act Social Security Act
New Deal Legacy
• Did not end the depression, but gave Americans sense of stability and security
• Created a “Broker State”– Government acts as mediator among
competing interest groups
• Created a “Safety Net”– Safeguards against
another economic disaster