USH History Chapter Nine

The Great Depression. 1929-1941.

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Causes Of The Great Depression.

• Herbert Hoover elected president in 1928.

• He is the third Republican president in a row.

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Long Bull Market And A HUGE Bubble.

• Stock mania and buying on “Margin” caused the price of stocks sky high.

• What determines the price of a stock?

• Supply and Demand. Period!

• A sell off and Margin call caused the market to collapse.

• The “emperor has no clothes!”

CRASH! Oct. 29th-”Black Thursday.”

• Speculation v. investing.

• $30 billion lost. Equal to all the TOTAL wages Americans had earned in 1929.

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Investing Isn’t Saving

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Causes of The Great Depression.

• Overproduction.

• Low wages.

• High Tariffs.

• Farmers going broke.

• Uneven distribution of income.

• Mistakes by Federal Reserve.

• Stock Market bubble.

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Bank Failures.

• Why were banks hit so hard by the Stock Market Crash?

• They had invested their money in the stock market.

• They had loaned money to investors for the stock market.

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No F.D.I.C.• Bank runs were common.

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Depression Worsens.• 25 percent unemployment.

• G.D.P. cut by 50 percent!

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Makeshift Villages.

• Many families lost their homes.

• They lived in shacks or tents on the edge of town.

• These little communities were called “Shantytowns” or “Hoovervilles.”

• Thousands of “Hobo’s” stole rides on the trains looking for work.

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Environmental Disaster.

• Dust Bowl adds to depression woes.• Bad farming techniques and drought

cause much of the Midwestern and Great Plains states soil to blow away in the wind.

• Huge ecological disaster cause thousands to move. Many came west to CA.

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Escaping the Depression.

• Hollywood Fantasy Factory.

• Radio.

• Monopoly Game played for hours.

• Sports.

Hoover Finally Responds.

• Hoover felt, at first, that the market would correct itself in a short time.

• “Prosperity is just around the corner.”

• Things only got worse.

• Hoover did start some public works projects to create jobs.

• This didn’t help much.

Pumping Money Into The Economy.

• Reconstruction Finance Corp. was created to help banks loan out more money.

• Emergency Relief and Construction Act-1932.

• Too little and too late. The economy had crashed hard.

Mood of America BAD!

• Hunger Marches.

• Farmers revolt.

• Bonus Marchers-Army.

• Hoover called out the army on the Bonus marchers.

• Most Americans thought this was pretty ruthless and unfair!

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