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The Great Depression. 1929-1941.
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Causes Of The Great Depression.
• Herbert Hoover elected president in 1928.
• He is the third Republican president in a row.
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Long Bull Market And A HUGE Bubble.
• Stock mania and buying on “Margin” caused the price of stocks sky high.
• What determines the price of a stock?
• Supply and Demand. Period!
• A sell off and Margin call caused the market to collapse.
• The “emperor has no clothes!”
CRASH! Oct. 29th-”Black Thursday.”
• Speculation v. investing.
• $30 billion lost. Equal to all the TOTAL wages Americans had earned in 1929.
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Investing Isn’t Saving
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Causes of The Great Depression.
• Overproduction.
• Low wages.
• High Tariffs.
• Farmers going broke.
• Uneven distribution of income.
• Mistakes by Federal Reserve.
• Stock Market bubble.
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Bank Failures.
• Why were banks hit so hard by the Stock Market Crash?
• They had invested their money in the stock market.
• They had loaned money to investors for the stock market.
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No F.D.I.C.• Bank runs were common.
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Depression Worsens.• 25 percent unemployment.
• G.D.P. cut by 50 percent!
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Makeshift Villages.
• Many families lost their homes.
• They lived in shacks or tents on the edge of town.
• These little communities were called “Shantytowns” or “Hoovervilles.”
• Thousands of “Hobo’s” stole rides on the trains looking for work.
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Environmental Disaster.
• Dust Bowl adds to depression woes.• Bad farming techniques and drought
cause much of the Midwestern and Great Plains states soil to blow away in the wind.
• Huge ecological disaster cause thousands to move. Many came west to CA.
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Escaping the Depression.
• Hollywood Fantasy Factory.
• Radio.
• Monopoly Game played for hours.
• Sports.
Hoover Finally Responds.
• Hoover felt, at first, that the market would correct itself in a short time.
• “Prosperity is just around the corner.”
• Things only got worse.
• Hoover did start some public works projects to create jobs.
• This didn’t help much.
Pumping Money Into The Economy.
• Reconstruction Finance Corp. was created to help banks loan out more money.
• Emergency Relief and Construction Act-1932.
• Too little and too late. The economy had crashed hard.
Mood of America BAD!
• Hunger Marches.
• Farmers revolt.
• Bonus Marchers-Army.
• Hoover called out the army on the Bonus marchers.
• Most Americans thought this was pretty ruthless and unfair!
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