the nation’s sick economy the great depression (the hoover years): 1929-1932
TRANSCRIPT
The Nation’s Sick Economy
The Great Depression (The Hoover Years): 1929-1932
Big Idea
• As the prosperity of the 1920’s ended, severe economic problems gripped the nation.
Major Topics
• Major industries in trouble• Farmers in trouble• Rising prices, stagnant wages• Living on Credit• Uneven Distribution of income• Hoover’s Failures• The Stock Market Comes Tumbling Down
Major Industries in Trouble
• Railroads, steel, and textiles barely made profits
• Mining and lumbering not in high demand
• Housing industry slowed throughout late 1920’s.
Farmers Need a Lift
• WWI helped out only temporarily
• Price continually dropped
• Massive debts due to overproduction
• McNary-Haugen bill was vetoed and died– Meant to provide price
supports for farmers
Living on Credit (Personal Responsibility)
• Rising Prices and Stagnant wages
• Many Americans living beyond their means
• Bought goods on credit– Buy now, pay later
• Americans piled up debts
Uneven Distribution of Income
• 1920’s: Rich got richer, poor got poorer
• 1929: Top 5% of the richest Americans owned 70% of the income
• 70% of Americans lived on minimum standards to survive (2,500 a year)
Election of 1928
Herbert Hoover• Able Republican
administrator• Hero of WWI• Promised a triumph over
poverty
Alfred E. Smith• 4-time New York governor• Lost Democratic South in
part to his Catholicism
Hoover vs. Smith
The Stock Market
• Stocks are units of ownership in a company
• Buying stock makes you a shareholder
• When the value of the company increases, so does your stock
• Companies sell stock to:– Research better ways to
make things– Create new products– Improve products– Hire more employees– Modernize buildings
Speculation
• The buying of risky investments in the hopes for a quick return
• Think about…..• Personal Responsibility• Governmental
Responsibility• Corporate
Responsibility
• Buying on margin– Paying a small % of a
stock’s price as a down payment and borrowing the rest
Black Tuesday
• October 29th: The stock market crashed
• Prices went spiraling down as people sold their investments
• 16 million stocks dumped in one day
• The stock market bubble had finally burst
• 30 billion dollars lost in the crash
Financial Collapse
• 1929: 600 banks closed• 1933: 11,000 banks had
failed• Millions lost everything• 90,000 businesses failed• GDP: 104 billion-59
billion
• 25% of workers unemployed
• 13 million people• Others faced pay cuts
and reduced hours
Hawley-Smoot Tariff
• 1930: Highest protective tariff of all time
• Designed to protect American industries
• Contributed to world trade falling by 40%
• Increased unemployment
• http://www.youtube.com/watch?v=dxPVyieptwA
The Great Depression
• 1929-1941• Economy was in a
severe decline and millions were out of work
• Long Term Causes• Tariffs and war debt
policies• Farming problems• Consumer Debt• Unequal distribution of
income• Major industries in
decline