Ch 17 Notes
American History
Election of 1928-
- Hoover- (R)- continue the prosperity of the ‘20s (wins)
- Smith- (D)- Catholic
Stock Market- ‘20s = Bull Market- rising prices (Bear Market = falling prices)
- people want to buy stocks while the market is good
- more people are getting into the market
o margin buying- pay for part, borrow the rest
· as long as prices are high that’s OK, but if prices drop, these people will sell quick to pay off debts
o stock options from companies
o people use excess $ to buy stock
- Stock prices
o Generally reflect the stock’s actual value (how good the company is doing)
o ‘20s-went up b/c of supply/demand (more people in market, limited supply of stocks)
§ causes some stock prices to be higher than their actual worth
o speculation- buy stock betting the market will rise so can sell later
· lots of people buying causes prices to rise
Crash-
- some sense its time to get our while the market is high, sell their stock
- result- prices drop some, some people panic and sell more stock before prices fall more- causes prices to drop more
- margin buyers are selling quick so they can pay off their debts
Banks-
1. loaned $ to speculators- can’t get loan back
2. some banks invested $ in stock market and lost it
-result
- some banks have no money = close down, people lose their money
- people panic and try to get their money out of banks before they collapse, but there’s not enough cash there, banks collapse
Depression- causes
- overproduction
o farmers/factories produced too much
o most Americans couldn’t afford to buy goods
- unequal distribution of wealth
o the richest .1% had same $ as bottom 42%
o 80% of people had no savings
o poor can’t afford to buy stuff to stimulate the economy
o rich invested in the market instead of buying goods which would help more
- Exports
o Down,
banks loan domestically instead of to
§
o US raises tariff to help US businesses
§
- FED
o Kept interest rates low too long, banks made risky loans
o Unemployment up- FED raised rates, harder for people to borrow to bail themselves out
Depression-
- by 1933 25% unemployment
- income dropped from $2300 to $1600 per year
- families-
o sell cars, houses, furniture, jewelry
o phone was 1st to go
o people cut out luxuries
o still buy- cigarettes, refridge, radios
- fashion
o simple, more conservative, easier to make
o less makeup, darker colors
§ not draw attention to self?
Getting by-
- soup kitchens/bread lines- by private charities/local gov’ts
- homeless- evicted for not making rent payments/house payments
o shanty towns- Hoovervilles
- wanderers- hobos- rode the rails looking for work or just to escape
Dust Bowl-
- drought killed vegetation in plains, wind storms blow dust for miles
- many Plains farmers left their farms move to CA (often from OK)
o Okies- Grapes of Wrath
Ways to escape-
- movies- Clark Gable, Spencer Tracy, Henry Fonda, Jimmy Stewart, Groucho Marx
o Greta Garbo, Marlene Dietrich, Vivian Leigh, also- Walt Disney
o Gone with the Wind, Mr. Smith Goes to Washington, The Three Stooges, The Wizard of Oz
- Radio- Burns and Allen, The Shadow, The Lone Ranger, Dick Tracey
- Literature- John Steinbeck- The Grapes of Wrath, Of Mice and Men
- People continued to go to movies, buy radios even during the Depression
Sec 3
- prevent panic
o no runs on banks
o keep businesses from layoffs
o keep people buying stuff
- $ to banks/businesses
o loans to keep industry going (NCC, RFC)
- public works- govt jobs for building projects
o not
too many-
- Relief- many by state/local gov’ts or private charities (community chests)
Public Outrage-
- hunger marches
o protest against gov’t un-involvement
o led by American Communist Party
o shows major shift, in the ‘20s Commies were hated, shows how desperate people were
- Farmers
o Some destroy crops/prevent delivery
o Hope to reduce supply and cause prices to rise
o Won’t work, not widespread enough
Bonus Army- 1932
- WWI vets want bonus $ promised them from WWI
- March on Wash DC, camp out in Hoovervilles
- Army called in to force them out (tear gas, tanks, bayonets)- 2 die
- Looks bad to country, using force on own veterans/citizens
-
Hoover has no chance of reelection after this in 1932