The Great Depression Begins Chapter 23: Section four

President Herbert Hoover

Alfred Smith

Election of 1928

Stock Market Crash

Oct. 29, 1929

  What led to the Stock Market Crash?

  Overspeculation (heavy demand made prices go up)

  Buying on margin (10% down and borrow the rest from a broker)

  Panic set in and people began to frantically sell stock (16 million shares sold in one day)

  No buyers; prices declined to nothing

Great Depression

Causes for the Great Depression   Is the Stock Market Crash a cause for the depression?

  Crisis in the farm sector

  Easy credit/low interest rates

  Big income gap (50% population below poverty line)

  Overproduction of goods (supply bigger than demand)

  High tariff (world trade fell 40%)

  Global economic crisis (bound to effect Am.)

  No government regulation over banks, stock market, etc.

Banks affected by Crash

Shanty (Hooverville)

Mortgage Foreclosures

  Banks took over property due to failure to make payments

  400,000 farm foreclosures between 1929-32

  25% unemployment for white Americans by 1932

  50% unemployment for African Americans 1932

Migrant Mother Photo

Migrant Mother

To make matters worse

What caused Dust Bowl?

  Drought and winds

  Overproduction of crops

  Little grass; few trees to hold down soil

  Dust for hundreds of miles

  Texas to North Dakota. Southern Plains (Kansas, Oklahoma, Texas)

  2 million migrant men. Where did they go?

Route 66

Dust Bowl Image

Dust Bowl Image

Social/Psychological Effects

  Suicide rates up 30%

  Adults stopped going to doctor, dentist (poor health)

  Young people stopped going to college; put off weddings

  Stigma of poverty; shame and embarrassment

  Kindness to strangers

What is the best course of action for the economy?

  Do nothing; let if fix itself (typical response)

  Rely on charities and local organizations

  “rugged individualism” (no gov’t bailouts)

  Offer “direct relief” (welfare)

  Create public works jobs (jobs created by government)

Hoover Dam

How do we fix the economy?

  Big differences between Republicans and Democrats

  Election of 1932 (Herbert Hoover vs. Franklin D. Roosevelt)

  People vote for FDR. Why?

  What solutions did Hoover offer?

  What solutions did Roosevelt offer?