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Crash & Depression. Chapter 32 (Cont.). 4/2011. The Stock Market Crash. 1929. Section 1. The “Roaring 20’s” was coming to an end. Review: Stock Market Boom. Summary: Stock Market Bust. Black Thursday October 24, 1929. The Dow Jones Industrial Average peaked at $381 in September

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Crash & Depression


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crash depression

Crash & Depression

Chapter 32

(Cont.)

4/2011

black thursday october 24 1929
Black ThursdayOctober 24, 1929
  • The Dow Jones Industrial Average peaked at $381 in September
  • By October 24th, stock prices began to fall
  • Example - GE went from $400 to $283
the market crashes
The Market Crashes

Panic on Wall Street

Investors crowd the sidewalk outside of the NYSE

black thursday october 24 19292
Black Thursday - October 24, 1929
  • Pres. Hoover - business “is on a sound and prosperous basis”
  • Group of bankers bought shares to stabilize prices
  • Not enough to stop the panic
monday october 28 1929
Monday October 28, 1929
  • Investors continued to sell
  • Prices continued to drop

Investors continued to panic

black tuesday october 29 1929
Black Tuesday – October 29, 1929
  • Tried to sell stocks at any price
  • Bankers called in their margins
  • Losses totaled $30 billion dollars
slide12

High of $381

Low of $34

the ripple effect of the crash
The Ripple Effect of the Crash
  • Less people able to buy goods (decline of GNP)
  • Leads to contraction
  • Severe contraction = depression
  • This contraction was so severe, it is known as the Great Depression
the great depression stock market crash to wwii
The Great Depression -Stock Market Crash to WWII
  • Approximately 1/3 of US banks failed
  • Unemployment reached 25%
  • GNP went from $103 billion to $56 billion
the worldwide impact
The Worldwide Impact
  • Countries depended on the USA for capital, markets, and goods
  • Contractions began in Europe
  • Result - they could not buy American products
  • (Germany was particularly hard hit)
underlying causes of the depression
Underlying Causes of the Depression
  • All of the warning signs that were ignored from the 1920’s.
  • Lack of government oversight
  • Lack of government response

Note: Natural disasters did not cause the Great Depression but effected severity of it

natural disasters
Natural Disasters

From floods in the Northeast to droughts in the Midwest

social effects of the depression1
Social Effects of the Depression
  • Hoovervilles
  • Hobos - approx. 1 million
  • Farm distress
    • low prices due to low demand
    • evictions and foreclosures
hoovervilles
Hoovervilles

Shantytown in Central Park

the dust bowl 1931 1940
The Dust Bowl(1931-1940)
  • Drought and poor environmental practices
  • Effected Great Plains and the Midwest
  • Hardest hit were Oklahoma, Kansas, and Nebraska
  • Top soil blew into the Atlantic Ocean
  • Created a desert in the center of the USA
  • Displaced millions of farmers
poverty increased social problems
Poverty Increased Social Problems
  • Alcoholism, spousal abuse, child abuse, suicide, and violence increased
  • Health and nutrition decreased
  • Hoover claimed that no one starved but historians estimate as many as 1 million people died from the effects of the Depression
poverty increases social problems
Poverty Increases Social Problems
  • Divorce, marriage, and birth rates declined
  • Homeless people moved in with relatives
  • “Last hired, first fired”
  • Lynchings increased
  • Japanese & Mexicans

were deported

scottsboro boys
Scottsboro Boys
  • March, 1931 - 9 African Americans were accused of raping two white women
  • They were convicted and sentenced to die without even seeing a defense attorney
  • They were later exonerated but not until four of them had spent many years in jail

Scottsboro Boys with National Guard

survival1
Survival
  • People helped one another
  • States provided relief
  • Local charities assisted millions
  • Those that survived never completely forgot what it was like to live through the Great Depression
surviving the great depression1
Surviving the Great Depression
  • People helped each other
  • Farmers assisted each other
    • Penny auctions
    • Violence prevented some foreclosures
surviving the great depression2
Surviving the Great Depression
  • Estimated 1,000,000 hobos rode the rails
  • Approx. 250,000 of them teenagers
surviving the great depression4
Surviving the Great Depression
  • Political movements like the Socialist and Communist Parties gained membership
  • Entertainment

like this new

board game

provided a

pleasant diversion

signs of change
Signs of Change

Prohibition was repealed

in 1933

signs of change1
Signs of Change

The Chrysler building was overshadowed by the Empire State Building in 1931

signs of change2
Signs of Change
  • By 1935
    • Calvin Coolidge died
    • Al Capone was convicted of tax fraud
    • Babe Ruth retired
    • Lindbergh baby was kidnapped and found dead
  • America’s heroes were changing
president hoover
President Hoover:
  • Assured the American people the economy was improving
  • Insisted it was a normal business cycle
  • Thought direct relief should come from charity
  • Asked business leaders to maintain wages voluntarily
president hoover s response
President Hoover’s Response
  • Agricultural Marketing Act of 1929 - was supposed to buy excess crops from farmers to increase demand
  • Hawley - Smoot Tariff - largest tariff in history (1930)
president hoover s response1
President Hoover’s Response
  • Reconstruction Finance Corp. - lent money to large corporations, banks, and insurance companies (1932)
  • Trickle down economics
president hoover s response2
President Hoover’s Response
  • Public works projects like new buildings, bridges, and roads
  • Boulder Dam is built, later renamed Hoover Dam (take as many dam pictures as you like)
president hoover s response3
President Hoover’s Response
  • “Rugged individualism”
  • No (federal) government handouts
  • Gave little direct relief until 1932
president hoover s response4
President Hoover’s Response
  • 1932 signed the Home Loan Bank Act to lower interest rates on mortgages
  • 1932 allowed the federal government to give money to the states for relief programs
peoples responses to hoover
Peoples’ Responses to Hoover
  • “Too little, too late”
  • People blamed him for the Depression
  • Called him heartless and cold
the bonus army
The Bonus Army
  • World War I veterans promised a bonus but not until 1945
  • 1932 - 20,000 went to Washington to demand immediate payment
  • Stayed in Washington in Hoovervilles to embarrass the President
the bonus army1
The Bonus Army
  • March to the White House led to a confrontation with the army
  • General Douglas MacArthur was called in to quell the uprising
  • He used tanks, gas, and 4 Calvary units against unarmed marchers
the bonus army2
The Bonus Army
  • US Army burned the shantytown and caused a riot
foreign policy
Foreign Policy
  • 1928 – before taking office, toured Latin America on a Goodwill Tour (on-board a battleship!)
  • During Depression, ended intervention in several Latin American countries due to the economy
    • Withdrew from Haiti & Nicaragua
    • Less money for foreign aid to friendly governments
election of 1932
Election of 1932

“This campaign is more than a contest between two men….It is a contest between two philosophies of government.”

Herbert Hoover, October 1932

election of 19321
Herbert Hoover

“trickle down economics”

rugged individualism

normal business cycle

Franklin D. Roosevelt

“prime the pump” (Keynes)

organized relief efforts for the state of NY

promised immediate aid and hope for the future

Election of 1932
election of 19322
Franklin D. Roosevelt won by 7,000,000 votes

Herbert Hoover only won 6 states

FDR would start the New Deal upon his inauguration in March, 1933

The End

Election of 1932