Stock Market Crash 1929 How would the consumerism

Stock Market Crash 1929

How would the consumerism of the 1920 s create problems in the economy?

Problems • Rising prices of goods, consumers spent less $ • Bought goods on Credit/large debt • Unequal distribution of wealth

• Industries fell: • Railroads • Coal Mining • Housing: creating loss in other businesses like construction, furniture, appliances, etc

What are the problems of the farmers?

Price Supports • Support of certain price levels at or above market values by gov’t, for key products • Coolidge vetoed bill that would help farmers with this

What are the problems with the businessmen?

Speculation • Buying stocks and bonds on the chance that they might make a quick or a large profit, ignoring risks.

Buying on Margin • Paying a sm. % of a stock’s price as a down payment and borrowing the rest.

Dow Jones Industrial Avg. • Most widely used barometer of the stock market’s health • Based on the stock prices of 30 representative lg. firms trading on the NY Stock Exchange

Fight for President • Republican Herbert Hoover vs. Democrat Alfred E. Smith (outgoing, witty, career politician, Catholic)

• Hoover declared, “We in America are nearer to the final triumph over poverty than ever before…. The poorhouse is vanishing among us. ” • Hoover won 58% of pop vote, 444 to 87 electoral votes

Black Tuesday • October 29, 1929 • Stock Market Crash • People and Corps. Tried to sell stocks before the prices fell even lower.

The Great Depression 1929 -1941

Causes

• Say’s Law: long persistent unemployment was impossible. Any unemployment is temporary and business is the main driver in econ. (Supply creates demand) Keynes new theory explained why the GD occurred • • Old and decaying industrial base Crisis in the farm sector Availability of easy credit Unequal distribution of $

Hawley-Smoot Tariff Act • Congress passes highest protective tariff in US history • Designed to help farmers and manufacturers from foreign competition • But significantly reduces the world trade

Suffering and Hardship in the Great Depression

How is each group affected by the Great Depression? • Women/Children – Children were given away if the family couldn’t afford to keep them/feed them – Developed savings habits of thriftiness • Men – High suicide rate • Cities – Shantytowns – Soup kitchens – Bread lines

• Farms – Dust Bowl – Could grow some food to feed families as opposed to the cities • Latinos/African Americans – Unemployment higher than other groups – 1933: 24 African-Americans died by lynching – Hundreds of thousands of Mexicans returned to Mexico NO FEDERAL SYSTEM FOR DIRECT RELIEF

Dust Bowl

Herbert Hoover deals with the Problems

• “Rugged individualism” – society succeeds through own efforts • Used Caution – asked employers/union leaders to work together, not fire, not strike • 1930 s gets Democrats in Congress

• Hoover Blankets = • Hoover Flags = • Hoovervilles =

Responses of the People • Farmers: burn crops/ “Farm Holiday” – refuse not to work/ blockade roads hope that food shortage increase prices

Hoover Takes Action • Public Works Programs to +jobs on roads, dams, etc • Tried to +$ of crops for farmers • Tried to get big banks to help sm. Banks

Hoover Dam • Boulder Dam (Hoover Dam): to jump start econ. /+jobs – CO River

Bonus Army • WWI vets marched to D. C. to pass legislation • Patman Bill: Vets were to get $ for WWI in 1945, but Patman thought they should get it now) • 1 st gave them food, they set up shantytowns – when Senate voted it down, Hoover asked them to leave • +1, 000 gassed under command of Mac. Arthur and Eisenhower

1932 Presidential Election

March 1933 • FDR’s Inaugural Address, “The only thing you have to fear…is fear itself. ”

For the needy Financial reform Economic recovery

st 1 hundred days… Passed 15 pieces of legislation n One day after taking office (March 5 th) = Bank Holiday – closed all banks to prevent further withdrawals. n

Fireside Chat • Goal: Get New Deal legislation passed • Restore faith in the banks • Informal and relaxed – put legislation in terms people could understand

The New Deal

New Deal Legislation • Banks Glass-Steagall Banking Act of 1933 (FDIC) • Stock Market Federal Securities Act; SEC • Farmers AAA • Work Projects CCC, WPA, NYA (youth) • Unions NIRA; NRA; Wagner Act, NLRB • Regional development TVA • Housing HOLC, FHA • Elderly/Unemployed/Dependant children and

Critics of the New Deal: Father Charles Coughlin wanted guaranteed income, nationalized banks l Dr. Francis Townsend FDR wasn’t doing enough for the elderly and poor l Senator Huey Long “Share Our Wealth” program/ “Every Man a King” l Supreme Court expanded the power of the federal government l

Court-Packing Bill • NIRA, AAA struck down by Supreme Court • Wanted to reorganize Fed Judiciary so he could appoint 6 new members • Wanted over 70 yrs & 6 mos. to retire • Damaged image b/c he was blurring lines of separation of powers • Resignations on Ct. allowed FDR to appoint 7 new justices in 4 yrs.

New Deal’s Impacts: On Women • Key positions in Gov’t • Frances Perkins: 1 st female cabinet member • NRA paid women less • FERA/CWA only hired 1: 10 women • CCC hired only men

On African Americans • Mary Mc. Leod Bethune – head in NYA to provide job training/benefits to African American youth • “Black Cabinet” – influential African-Americans to advise FDR Administration on racial issues

On Civil Rights Issues FDR didn’t support civil rights b/c afraid of upsetting voters n FHA, CCC, TVA not hire African-Americans n Paid less in New Deal n In general, African Americans support FDR, and left Republican Party n

On Mexican-Americans • Got less than African-Americans • 1920 s many were farm workers • CCC and WPA helped some Mexican-Americans, but also wouldn’t help migrant workers (no permanent address)

On Native Americans • Strong gov’t support in ND • 1924 got full citizenship by law • 1933 John Collier was appointed to Commissioner of Indian Affairs – gov’t protection of NA land

New Deal Coalition • diverse groups came together to support Democratic Party • Allowed Democrats to dominate politics in ’ 30 s and ’ 40 s

Unions • ND supported unions – Wagner Act • Main bargaining tactic – sit-down strikes: owners couldn’t hire strikebreakers to do work • Violent strikes: GM, Ford, Chicago Republic Steel (Memorial Day Massacre) – 1937 10 killed