Transcript The Great Depression

The Great Depression
Causes and Hoover
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October 29, 1929 the US stock market
crashed.
Known as “Black Tuesday”.
Wall Street marked the beginning of the
Great Depression, but did not cause it.
Causes
Distribution of Wealth
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Unequal distribution of wealth.
0.1% of the richest Americans had as
much total income as the bottom 42%.
Half the nation lived below the subsistence
level.
Not enough purchasing power to keep the
economy going.
Oligopolies
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Oligopolies dominated American industry
Led to “administered prices”.
Kept prices artificially high
Did not rely on supply and demand.
Agriculture, Industry and Banks
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Suffered from overproduction
Prices were declining and farmers had
heavy debt.
Coal and textile industries suffered the
same.
Banks were poorly managed and
regulated.
Foreign Trade
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US crash caused panic in Europe
Great Depression became global
European nations defaulted on loans
European nations stopped purchasing
American goods.
US exports fell by 70% from 1929-1932
Federal Government
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Didn’t enforce antitrust laws.
Encouraged oligopolies and high prices
Failed to regulate banks and the stock
market.
Reduced taxes on the wealthiest
Opposed labor unions which kept workers
wages and purchasing power low
No affective agricultural policy
High tarrifs discouraged foreign trade
Hoover
Volunteerism
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Hoover believed voluntary, private action
would solve the Depression.
Did not want federal intervention
Asked business leaders to maintain
employment and wage levels
Business leaders couldn’t do it.
Felt charities, through private donations,
should help the needy.
Believed the economy would naturally
right itself.
Hoover’s Approach
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As the economy worsened, Hoover began
to take some action.
Congress cut taxes to increase consumer
buying power.
Increased public works budget to create
jobs.
Reconstruction Finance Corporation lend
funds to banks, insurance companies and
railroads.
Hoover was seen as indifferent to the
peoples’ suffering.
Bonus Army
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1932, veterans of WWI demanded
payments of service bonuses that weren’t
due until 1945.
Hoover refused to meet with them
10,000 veterans created a shantytown at
the edge of Washington.
Response
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General Douglas MacArthur led cavalry,
infantry and tanks against the “bonus
army”. (July 28, 1932)
The shantytown was burned down and
several veterans died.
Election of 1932
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With no hope for victory, Republicans
renominated Hoover
Democrats nominated Franklin D.
Roosevelt.
In 1932, the Democratic and Republican
platforms differed very little.
FDR knew he would win just because
Hoover wouldn’t.