The Great DepressionThe Great Depression

Causes and HooverCauses and Hoover

October 29, 1929 the US stock October 29, 1929 the US stock market crashed.market crashed.

Known as “Black Tuesday”.Known as “Black Tuesday”. Wall Street marked the beginning of Wall Street marked the beginning of

the Great Depression, but did not the Great Depression, but did not cause it.cause it.

CausesCauses

Distribution of WealthDistribution of Wealth

Unequal distribution of wealth.Unequal distribution of wealth. 0.1% of the richest Americans had as 0.1% of the richest Americans had as

much total income as the bottom much total income as the bottom 42%.42%.

Half the nation lived below the Half the nation lived below the subsistence level.subsistence level.

Not enough purchasing power to keep Not enough purchasing power to keep the economy going.the economy going.

OligopoliesOligopolies

Oligopolies dominated American Oligopolies dominated American industryindustry

Led to “administered prices”.Led to “administered prices”. Kept prices artificially highKept prices artificially high Did not rely on supply and demand.Did not rely on supply and demand.

Agriculture, Industry and Agriculture, Industry and BanksBanks

Suffered from overproductionSuffered from overproduction Prices were declining and farmers Prices were declining and farmers

had heavy debt.had heavy debt. Coal and textile industries suffered Coal and textile industries suffered

the same.the same. Banks were poorly managed and Banks were poorly managed and

regulated.regulated.

Foreign TradeForeign Trade

US crash caused panic in EuropeUS crash caused panic in Europe Great Depression became globalGreat Depression became global European nations defaulted on loansEuropean nations defaulted on loans European nations stopped European nations stopped

purchasing American goods.purchasing American goods. US exports fell by 70% from 1929-US exports fell by 70% from 1929-

19321932

Federal GovernmentFederal Government Didn’t enforce antitrust laws.Didn’t enforce antitrust laws. Encouraged oligopolies and high pricesEncouraged oligopolies and high prices Failed to regulate banks and the stock Failed to regulate banks and the stock

market.market. Reduced taxes on the wealthiestReduced taxes on the wealthiest Opposed labor unions which kept Opposed labor unions which kept

workers wages and purchasing power workers wages and purchasing power lowlow

No affective agricultural policyNo affective agricultural policy High tarrifs discouraged foreign tradeHigh tarrifs discouraged foreign trade

HooverHoover

VolunteerismVolunteerism Hoover believed voluntary, private Hoover believed voluntary, private

action would solve the Depression.action would solve the Depression. Did not want federal interventionDid not want federal intervention Asked business leaders to maintain Asked business leaders to maintain

employment and wage levelsemployment and wage levels Business leaders couldn’t do it.Business leaders couldn’t do it. Felt charities, through private Felt charities, through private

donations, should help the needy.donations, should help the needy. Believed the economy would Believed the economy would

naturally right itself.naturally right itself.

Hoover’s ApproachHoover’s Approach As the economy worsened, Hoover As the economy worsened, Hoover

began to take some action.began to take some action. Congress cut taxes to increase Congress cut taxes to increase

consumer buying power.consumer buying power. Increased public works budget to Increased public works budget to

create jobs.create jobs. Reconstruction Finance Corporation Reconstruction Finance Corporation

lend funds to banks, insurance lend funds to banks, insurance companies and railroads.companies and railroads.

Hoover was seen as indifferent to the Hoover was seen as indifferent to the peoples’ suffering.peoples’ suffering.

Bonus ArmyBonus Army

1932, veterans of WWI demanded 1932, veterans of WWI demanded payments of service bonuses that payments of service bonuses that weren’t due until 1945.weren’t due until 1945.

Hoover refused to meet with themHoover refused to meet with them 10,000 veterans created a 10,000 veterans created a

shantytown at the edge of shantytown at the edge of Washington.Washington.

ResponseResponse General Douglas MacArthur led General Douglas MacArthur led

cavalry, infantry and tanks against cavalry, infantry and tanks against the “bonus army”. (July 28, 1932)the “bonus army”. (July 28, 1932)

The shantytown was burned down The shantytown was burned down and several veterans died.and several veterans died.

Election of Election of 19321932

With no hope for victory, Republicans With no hope for victory, Republicans renominated Hooverrenominated Hoover

Democrats nominated Franklin D. Democrats nominated Franklin D. Roosevelt.Roosevelt.

In 1932, the Democratic and In 1932, the Democratic and Republican platforms differed very Republican platforms differed very little.little.

FDR knew he would win just because FDR knew he would win just because Hoover wouldn’t.Hoover wouldn’t.