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Causes1. False Prosperity
2. Speculation
3. Stock Market Crash
4. Banking Crisis
5. Unemployment
6. Trade Collapse
7. Republican Policy
False Prosperity
Overdependence on mass production
Overproduction in textiles, farming, autos
60% population earned less than the $2000 poverty minimum
Top 5% earned 33% income - spending by the rich essential
Broker loans on call rose from $3.5b in 1927 to $8.5b in 1929
Only 1.5m of 120m population were investors
Charles Mitchell of National City Bank: "I know of nothing fundamentally wrong with the stock market." (Oct. 21, 1929)
Speculation
Stock Market Crash
Sep. 3 Dow high of 381
Oct. 23 - J.P. Morgan buys to stop price decline
Oct. 24 - panic selling began - 12.8m shares
Oct. 29 - "Black Tuesday" - 16.4m shares
Unemployment
Ripple effect as leading factories close
Rose to 25-35% of total labor force
− 80% in Toledo
Farm income declined 60%
− 1/3 lost their land
Trade Collapse
Foreign countries retaliate with high tariffs
Weimar Republic unable to pay reparations or U.S. banks loans
U.S. had been a creditor with $638m annual surplus
Republican Policy
"The Ordeal of Herbert Hoover"
Laissez-Faire
Balanced budget
Trickle down
Voluntarism
Hawley-Smoot tariff
Social Problems • Unemployment and poverty
• Breakdown of families
• Soaring high school dropout rates (2 to 4 million)
• Homelessness
• Organized protests
• Around the country, the homeless built settlements of cardboard and tar-paper shacks, called "Hoovervilles" in reference to President Hoover
• Farmers armed with guns and pitchforks marched on the local banks to prevent foreclosures
Laying the Blame
The American public found the "Three B's" responsible for the Crash and the
Depression:
1. Bankers
2. Brokers
3. Businessmen
Unable to withdraw
their money from the
banks, and not getting
enough unemployment to live off of, people
had no choice but to sell
their farms.
They traveled from place to place willing
to do any type of work. All they worried
about was how they
were going to get their next
meal.
The sand would pelt your face and sting your skin. It would often block
out the sun and make noontime
seem like midnight.
Farmers hurriedly
built fences to keep the sand
away from their farm
houses and to protect their
livestock.
The government
set land aside where people
could establish tent cities, small communities of homeless people living under tents.
In these tent cities, people were
unable to bath, there was poor sanitation, and everything was
dirty.
On special occasions, some families may have gotten some food. This is Christmas dinner in a “Hooverville”.
President Herbert Hoover
Rags to riches - American dream
Orphaned at an early age
Very bright
Worked his way through Stanford University
Made a fortune as a mining engineer and consultant
President Herbert Hoover
Head of the Food Administration during WWI
Conducted relief efforts in Europe during and after WWI
Earned a stellar reputation for efficiency and diplomacy
Very popular politician Believed in local solutions and private
initiatives to solve social problems
President Franklin Delano Roosevelt
Distant (5th cousin) relative of Teddy Roosevelt
Privileged Child: Family name was well known
Married Eleanor Roosevelt - TR's Niece
TR was basically a father to Eleanor
President Franklin Delano Roosevelt
Elected to the senate for NY in 1910 Ran for Vice-President in 1920 with James
Cox Struck down by polio in 1921 Paralyzed from the waist down Dropped out of public life for 7 years Left him with a strong empathy for suffering Got into politics in 1928 - elected governor
of NY Ran for President in 1933
Hoover-------------------------
-“Every time we
find solutions outside of the
government, we have not only strengthened our character, but we have
preserved our sense of real government.”
FDR--------------------------
“The test of our progress is not whether we
add more to the abundance of those who have
much, it is whether we provide enough for those who have little.”
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