Download The Great Depression

 Hoover
• Elected in 1928 to
continue the
Republican
prosperity of the
1920’s
• Provided relief to
businesses to help
economic problems
 The
Economy
• Continued to grow
from 1925 until 1929
• Stock values grew
from $27 billion in
1925 to $87 billion in
October, 1929
Uneven Prosperity –
The rich were getting
richer
 Credit purchases
increase (installment
plans)
 Intense investment in
the Stock Market (“Get
rich quick” schemes)
 Too many goods, too
little demand for
them

 OVERSPECULATION
• Speculators (stock
brokers) bid up stock
prices
• Stock values based on
borrowed amounts, not
real value
• Stocks bought “On
Margin”…investors
only paid a fraction of
the full stock price
 Industry
expands
over-
• Too many goods were
being produced
• Wages not enough to
pay for all the goods
being produced
• Bankers made
unsound loans
• International trade
greatly reduced after
WWI
Black Thursday – The
Dow Jones began to fall
 Black Tuesday –
Investors raced to sell
in order to get their
money out of the Stock
Market
 Investors hit first, but
the Great Depression
soon followed (19291941)


Economic Cycle
• People Lose Jobs 
Can’t Buy Goods 
Profits Fall  Businesses
Close
 Millions lost their jobs
 Banks failed – People lost
their life’s
investments
 Businesses failed. Restaurants (as well as
many other “service” industries) closed
 Bottom of the economic ladder hit the
hardest
 Farmers devastated… The Dust Bowl
worsened their situation
 Children suffered most
 Lack of education
 Malnutrition
 Hoovers efforts
• Asked businesses to freeze wages… later failed
when workers’ pay was cut
• Passed the HAWLEY-SMOOT TARIFF
 Raised the cost of foreign goods so people would buy
American
• Backfired. Europe raised their tariffs and
international trade slowed
• Hoover would not give aid directly to the people
• Instead, Hoover insisted on providing relief to
businesses hoping it will create jobs.

The Bonus Army
• 20,000 World War I

Hoover’s Unpopularity
Grew
• People lived in
shantytowns they called
“Hoovervilles”
• People slept under
newspapers they called
“Hoover Blankets”
• People turned their
pockets inside-out and
called them “Hoover
Flags”
Veterans marched on
Washington
• They wanted immediate
payment of a pension
that was promised to
them for 1945
• D. Hoover lost the 1932
Election