Download Section 2. Stock Market Crash and Great Depression Powerpoint File

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Herbert Hoover was admired for the
way he impacted the food relief during
and after World War I
He was also effective in the Secretary
of Commerce for both president
Harding and Coolidge
In 1928 when Herbert Hoover was
elected president, people expected
that “the good times would get better
with Hoover in office.”
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In 1928, the stock
market value rose from
27 billion to 38.4 billion
and by October 1929,
the stock value was
nearly 87 billion.
Though some people
lost jobs due to
machinery in the
assembly line, the
unemployment rate
was only below 4%
By this time, wages
increased 40% since
1914
Unemployment Rate from 1890 to 1940
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“the rich got richer and the poor got
poorer.”
New technologies came about and even
though people could not afford them,
citizens would buy new radios, vacuums, etc
which got them into more debt
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Speculation “The higher the risk, the
higher the gain”
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To attract less wealthy investors,
stockbrokers encouraged…
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“buying on margin”  which means that
they only have to pay between 10% to 50%
of each stock and borrow the rest.
When you have to pay back your debt, you
were charged high interest and the only way
you really made money is when your stock is
worth more than the value
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During WWI, the demand for cotton
and wheat was at high which made
farmers rich but as the war ended, the
prices and demand increased.
Farmers could not repay the debt from
purchasing new land and supplies so
they had to sell their land
Workers were still working long hours
for low wages and in addition, the
factories were not in healthy
conditions
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Dow Jones Industrial Average is
the average of stock prices of
major industries.
On Wednesday Oct 23rd, investors
who were worried for the market
prices falling, sold their stock for
almost twice as less as they bought
it. Ex: a $400 share sold for $283 a
share
The fallowing Tuesday, over 16
million shares were sold for less
then the price that was bought
Great Crash the collapse of the
stock market where over $30
billion was lost
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Great Depression was a severe
economic decline that not only
affected America but had affects on
parts of the world as well
Restaurants and local businesses
closed and the cost of food
produced in America price
decreased from $103 billion to $56
billion
Banks lived off the interest paid by
homes and farms and when citizens
canceled accounts, banks closed
and over 9 million accounts were
canceled
The United States insisted on the
allies from WWI to repay debt and
import taxes were high, making the
European trades harder to sell to the
Unites States
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Overspeculation People bought
stocks on borrowed money and if a
stock was sold for less than what
you bought, you lost money which
made is harder to pay interest
The Federal Reserve system
regulates the flow of money so
when they limited the money
supply, their wasn’t enough money
to increase the economy
Those who had the most money
where people who would rather
spend on goods then save and
invest. Banks were not trusted so
people wouldn’t put the money in
banks.
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Hoovervilles meaning
shelters of the homeless,
were also called
“shantytowns”…mockin
g president Hoover for
the blame of this
depression
Shantytowns were made
of cardboard, trash, trash
bags, paper, etc.
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Dust Bowl Droughts and Dust
storms took over the mid west
causing farmers to loose their crops
and homes
The “Dust storms” were caused by
top soil and when the wind picked
up the soil, it carried it to the east,
picking up speed and traveling for
hundreds of miles, causing the
“Black Blizzard”
These storms reached all the way to
New York City, blackening the skies,
stained the snow in the New England
states, and even reached ships along
the Atlantic Sure line
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Hoover tried to win America by
saying that he will create new jobs
by building new business, dams,
etc.
Newspapers made him look bad,
showing pictures of him feeding his
family or playing with his dog
while others were starving and
praying for change
The lowest point for Hoover was in
1932 20,000 WWI vets wanted the
pension payment that has been
promised latter on but the senate
said no. Hoover called in the army,
causing many injuries
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When Franklin Roosevelt took office, he
promised a New Deal this program will
help with relief, recovery and reform to fix
the causes of the depression
In the first one hundred days, things were
already changing. Eleanor Roosevelt
greeted the WWI marchers, and within an
hour, they were on her side
Franklin first closed banks, causing the
Emergency Banking Act where
government checked banks to make sure
they were financially stable and most banks
re-opened, gaining the faith to start saving
again.
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FERA (federal emergency relief
administration) gave money to public
works programs to help create jobs
Programs such as the CCC and the CWA
helped the homeless who had no jobs. New
schools, hospitals, dams, etc were to be built
CCC civilian conservation corps were for
un married young men and soon one was
created for women to help fix local roads
and businesses. Free food and shelter were
provided for the workers
CWA Civil works administration gave over
4 million jobs to the homeless, improving
parks, roads and airports.
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NRA (National Recovery
Administration) set codes and created
minimum wages which aloud workers
bargaining rights
HOLC (Home Owners Loan
Corporation) refinanced the
mortgages, making payments more
affordable
TVA (Tennessee Valley Authority
helped farmers and created jobs on the
farm
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After the land slide victory over Alfred
Landon, FDR created a better “New Deal”
This new round included: stricter controls
over business, and higher taxes on the
rich
Banned child labor
Social Security System a form of
payment to people who couldn’t support
themselves
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Min. wage was at .25 cents and women
would get horrible treatment
Most jobs went to the “head of the
family”
African Americans were only aloud to
work at low waged jobs, they were
against FDR in 1932 but in 1936, they
joined his ideas, hoping the second new
deal changed rights, however, they had
no help from the federal government so
they boycotted businesses
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The Wagner Act was suppose to keep
industrial peace but they had a
disagreement with the union so
workers would strike
Sit Down Strikes workers would stop
working but refused to leave the work
campus
Scabs would be called in to work but
could not enter due to the strikes in
progress
Most of these were set at GM but
executives would fight back by turning
off the heat and blocking them from
getting food but women would latter
take food to their husbands
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Because of the criticism, the new
deal had to soon come to an end
Due to the governments massive
spending, the economy did
improve, and a big thanks goes
to the S.S. Tax
National Debt The amount of
the money the government
borrowed and didn’t pay back.
By the end of the 1940’s, the debt
was over 21 billion
Debt clock
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Grapes of wrath Based on the Dust Bowl
victims
Soap Operas 15 min. shows were meant to
appeal women
Wizard of Oz Humor for children to help
them think happy and forget about the hard
times
Comedy's For men to get away from all the
hard work
Federal Art Gave 10,000 artist work to paint
over 2000 murals, 100,000 paintings and over
17,000 sculptures
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Public Works Many hospitals, dams,
bridges are still standing today
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Social Security though the wages are low,
the S.S. are for the elderly to help pay bills
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Both Roosevelt and his wife received letters
everyday with improvements on how the
economy is doing, but several years would
pass before full recovery would form, thanks,
in part, to the second world war