Democrat Alfred E. Smith (Gov. of NY) Republican Herbert Hoover (Sec. of Commerce under Coolidge) Winner Hoover (easily)

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2 Democrat Alfred E. Smith (Gov. of NY) Republican Herbert Hoover (Sec. of Commerce under Coolidge) Winner Hoover (easily)

3 Born in Iowa Orphaned at 10 years old Studied engineering at Stanford Made a lot of money as a mining engineer in Africa, China, Australia, and Russia During WWI, he served as head of the Commission for Relief - Fed 10 million in Belgium and France When the U.S. entered WWI, he came back to lead the Food Administration After the war, Wilson put Hoover in charge of economic relief for all of Europe

4 Hoover became very popular throughout the U.S. It was not clear what political party he belonged to - Could have been nominated for President by the Democrats, but he declared himself as a Republican Became Sec. of Commerce under Pres. Harding and Coolidge

5 Terms Boom- There is a high level of demand, inflation increases, unemployment falls, and growth in national incomes accelerates. Bust- or recessions, when demand is low, inflation decreases, unemployment rises and national income falls. Trader- is someone who buys and sells financial instruments such as stocks.

6 Investor- a person who makes investments, it is a person who buys and hold, rather than one who buys and sells frequently. Stock- represents ownership in a corporation. Bubble- A bubble occurs when speculation causes the price to increase, thus producing more speculation. The market price then reaches absurd levels and the bubble is usually followed by a sudden drop in prices, know as a market crash.

7 What was the Stock Market Crash of 1929???

8 It was also called the Great Crash or the Crash of 29, it occurred in late October, It started on October 24th Black Thursday and continued through October 29, 1929 Black Tuesday, when share prices on the NYSE collapsed and a record number of stocks were trades.

9 Thursday, October 24, ,894,650 shares changed hands on the NYSE a record. Monday, October 28, 1929 over 9,250,000 shares were traded On Black Tuesday, a record of 16.4 million shares were traded.

10 1. Stocks were overvalued- Some people thought that stocks were overbought. The rising share prices encouraged more people to invest, as they hoped the shares would rise further, thus fueling further rises.

11 2. Margin Buying- At the time, you could put 10% down to buy stock. For every dollar invested, a margin user would borrow $9 worth of stock. If a stock went up 1%, the investor would make 10%! This also works the other way around, if a stock drops too much, a margin holder could lose all of their money AND still owe their broker money as well.

12 3. Federal Policy Adolph Miller was the new president of the Federal Reserve Board and he set out to tighten monetary policy. He aggressively raised interest rates on broker loans. Interest rates were raised several times to cool the overheated stock market.

13 4. Bad Banking Structure In the 1920 s, banks were opening up at the rate of 4 to 5 per day. There were few federal restrictions to determine startup capital needed for a new bank, or how much of its reserve could be lent. Banks were closing at the rate of 2 a day between 1923 and By 1932, 40% of all banks were wiped out Bank runs started.

14 5. Smoot-Hawley Tariff Act It applied tariffs to more than 3,200 products This was more than any previous tariffs.

15 Millionaire margin investors became bankrupt instantly, as the stock market crashed on October 28th and 29th. Many bankrupt speculators, who were once aristocracy, committed suicide by jumping out of buildings. By November of 1929, the Dow sank from 400 to 145 Between October 29 and November 13 over $30 billion disappeared from the economy. U.S. Steel went from $262/share in Sept to $22 by the end of 1929 Montgomery Ward went from $138 to $4 General Motors went from $73 to $8

16 Americans confidence in the economy was severely shaken The financial system was in shambles During the years following 1929, many banks and businesses failed Even bank patrons who had not invested in shares became broke Many Americans lost their savings and their jobs, some people no longer had money to buy goods and products. Fewer customers meant more companies and factories had to close By the early 1930s the US was in the Great Depression

17 1. The securities and Exchange Commission (SEC)- established to lay down the law and punish violators 2. The Glass-Stegall Act- passed which banned any connection between commercial banks and investment banking. Over the past decade thought, the fed and banking regulators have softened some of the Glass-Stegall Act. 3. FDIC- established to insure individual bank accounts for up to $100,000 which eliminated the rationale for bank runs (to get one s money before the bank runs out ). Backed by the FDIC, the bank could fail and go out of business, but then the government would reimburse depositors.

18 Hoover s Response After the Wall Street crash, Hoover was slow to react He assured the public that prosperity was just around the corner He proposed a number of relief programs, but insisted that state and local governments pay for them - This was logical because local officials know the need of the people better - This would not work though because state and local governments had no money

19 Shanty towns constructed of boxes and crates sprouted up to house the homeless called Hoovervilles 1 out of 4 workers were jobless Hoover was blamed for the Great Depression

20 Typical picture capturing the number of people who were unemploye d and looking for a job. (Circa 1935)

21 Unemploye d shown at Volunteers of America Soup Kitchen: Washington, D.C. (Circa 1936)

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23 Destitute pea pickers in California. Mother of seven children. (Circa February 1936)

24 Migrant family looking for work in the pea fields of California. (Circa 1935)

25 Spring 1932 Thousands of unemployed veterans formed a Bonus Army demanding payments they were due from the government They marched on Washington They had no money to pay for hotels so they camped in empty government buildings and on government land Hoover called the army to drive them away

26 He used the Agricultural Marketing Act to keep farm prices up Spent money on public works Formed the Reconstruction Finance Corporation to save large corporations, banks, and insurance companies Hoover refused to provide direct relief for individuals because he thought it would be dangerous to give charity He finally gave $20 million in loans to be paid back

27 Foreign banks were hurting after WWI American banks made large loans to European banks June 1931 Germany and Austria were on the verge of financial collapse Hoover decided that we would postpone war debt payments for one year (owed to us by our allies) and asked other countries to do the same (even for Germany) All debtor nations except Finland ended up defaulting (not paying)

28 Memories and horrors of WWI haunted Americans Under Pres. Calvin Coolidge the U.S. signed the Kellogg- Briand Pact with Great Britain, France, Germany, Japan, and about 60 other nations The pact was signed to renounce war as an instrument of national policy in their relations with one another The countries agreed to seek the solution of all disputes or conflicts by peaceful means Named for Sec. of State Frank Kellogg and French Foreign Minister Aristide Briand Signed in Paris in August 1928 As a result, countries felt safe and agreed to start downsizing their armies and navies

29 Before U.S. had problems in Latin American (Mexico and Nicaragua) - We would get involved and we would receive backlash (guerillas) Hoover wanted to improve relations with Latin America He announced that the U.S. would no longer interfere in the domestic affairs of these countries and we would respect the governments in power

30 1931 Japan seized Manchuria (U.S. protested) 1932 Japan attacked Shanghai The U.S. was more concerned with our own depression Sec. of State Henry Stimson suggested we place a trade boycott against Japan Hoover refused thinking it might lead to war (Hitler and Mussolini will remember this and how the U.S. backed down)

31 People blamed Hoover for the Great Depression Hoover Flag Name for a man s empty pockets turned inside out People made up songs about Hoover They wanted change in the White House Republicans nominated Hoover Democrats nominated Franklin D. Roosevelt (Gov. of NY)

32 Roosevelt loved campaigning Crowds cheered Roosevelt and booed Hoover Hoover claimed that the depression wasn t his fault it was world conditions that caused it Hoover called Roosevelt a chameleon on a plaid Roosevelt said Republicans caused the stock market crash - He promised a New Deal and a rapid recovery of prosperity for business and agriculture - His speeches were very general (hard to disagree) New Deal Name given to FDR s campaign

33 Democrat Franklin D. Roosevelt Republican Herbert Hoover Winner - Roosevelt

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35 A drought is an abnormally dry period when there is not enough water to support agricultural, urban or environmental water needs. An extended period of below-normal rainfall. The Dust Bowl was a series of dust storms in the central US and Canada in the mid to late 1930 s, caused by massive droughts and decades of inappropriate farming techniques.

36 The Great Plains covers all or parts of the US states of Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming. In Canada the provinces of Alberta, Manitoba, and Saskatchewan. A Dust Storm (or sandstorm) is a meteorological phenomenon common in dry arid and semi-arid regions.

37 Economic instability- Overproduction following WWI The lands were planted to wheat year after year without a thought as to the damage that was being done. Grasslands that should have never been plowed were plowed up. Millions of acres of farm land in the great plains were broken. Damage done to the plains After the land had been stripped of its natural vegetation, the ecological balance of the plains was destroyed, leaving nothing to hold the soil when the rains dried up and the winds came in the 1930 s.

38 Who-The farmers were mostly affected, however, anyone living in the area was affected. When- The drought began in 1934 and lasted until Where- Its primary area of impact was the Southern Plains. It covered parts of Texas, Arkansas, Oklahoma, Colorado, Kansas, and New Mexico

39 Migration- As John Steinbeck wrote in his 1939 novel The Grapes of Wrath:"And then the dispossessed were drawn west- from Kansas, Oklahoma, Texas, New Mexico; from Nevada and Arkansas, families, tribes, dusted out, tractored out. Car-loads, caravans, homeless and hungry; twenty thousand and fifty thousand and a hundred thousand and two hundred thousand. They streamed over the mountains, hungry and restless - restless as ants, scurrying to find work to do - to lift, to push, to pull, to pick, to cut - anything, any burden to bear, for food. The kids are hungry. We got no place to live. Like ants scurrying for work, for food, and most of all for land."

40 Thousands of families lost everything to the dust storms, and were forced to uproot and migrate to California. Anywhere from 300,000 to 400,000 migrated Migrants were called Okies or Arkies Life in Cali wasn t much better- Work was scarce, the pay was meager, and the living conditions were primitive.

41 New Deal- Government formed the Soil Conservation Service (now the Natural Resources Conservation Service) Goals: Providing emergency supplies Establishing health care facilities Establishing government-based markets for farm goods Providing the supplies, technology, and technical advice necessary to research, implement, and promote appropriate land management strategies.

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