Stock Market Crash

• 1929

• A sharp decline in U.S. stock market values in 1929 that contributed to the Great Depression of the 1930s

• Speculation had increased, and inflation led to the value of stocks dropping

• Investors began selling their stocks at a very high rate

Hawley-Smoot Tariff

• 1930

• Was a peacetime protective tariff with a very high rate

• Raised the price of imports to the point that they became unaffordable for all but the wealthy, and it dramatically decreased the amount of exported goods, thus contributing to bank failure

• Eventually contributed to the Great Depression

Great Depression

• 1929-1941

• The result of the Stock Market Crash

• Americans lost all confidence in American banks

• Consumer spending and investment dropped, causing steep declines in industrial output and employment as failing companies laid off workers

Margin Buying

• Getting a loan from your brokerage and using the money from the loan to invest in more securities than you can buy with your available cash

• Allowed ordinary people with little financial acumen to borrow money from their stockbroker and put down as little as 10 percent of the share value

• Many investors who had traded on margin were forced to sell off their stocks to pay back their loans

Pumping and Dumping

• Used to quickly raise the artificial value of stocks

• Investors would sell stocks while falsely advertising their growth potential

• Perpetrators of a pump-and-dump scheme already have an established position in the company's stock and will sell their positions after the hype has led to a higher share price

Herbert Hoover

• Managed the US Food Administration during World War I

• Believed that the federal government shouldn’t provide social welfare to the needy

• Proposed the Reconstruction Finance Corporation

• Led the Hoover Commission, a body appointed by President Harry S. Truman in 1947 to recommend administrative changes in the federal government

Hoovervilles

• Tent cities filled with economic refugees during the Great Depression

• Testified to the housing crisis that accompanied the employment crisis of the early 1930s

• Named after Herbert Hoover because he was greatly blamed for the Great Depression

Charles Mitchell

• A wealthy NYC financier

• His corrupt stock investments eventually led to the Stock Market Crash

• Made illegal stock transactions, speculated in his own bank’s securities, and engaged in income tax evasion

Joseph P. Kennedy

• Pulled out his money before the stock market crash

• Made a large fortune as a stock market and commodity investor and later rolled over his profits by investing in real estate and a wide range of business industries across the United States

• Leader in the Securities and Exchange Commission

McNary-Haugen Bill

• 1920s

• The government was committed to buying surplus crops in order to prevent waste and to help farmers economically

• Formulated as part of FDR’s New Deal in the Great Depression

Reconstruction Finance Corporation

• 1932 - Founded by Hoover

• The government providing loans to banks and corporations led to deflation decreasing and consumption and employment increasing

• During the New Deal, FDR expanded the Reconstruction Finance Corporation

Bonus Army

• WWI veterans who wanted their war retirement bonuses early, but weren’t able to get them

• 1932 - Marched and camped in DC to protest

• Hoover called the US Army who forcibly drove the veterans away

  • Severely damaged Hoover’s reputation

Election of 1932

• 1932

• Democratic New York Governor Franklin D. Roosevelt defeated Republican incumbent president Herbert Hoover in a landslide, with Hoover winning only six Northeastern states

• FDR promoted more government involvement in the American economy in order to resolve the Great Depression

• His New Deal was composed of huge Progressive reform

Franklin Delano Roosevelt

• A Progressive Democrat

• Landslide victory in the election of 1932

• His New Deal, which funded public works projects with deficit money, promoted relief, recovery, and reform

• Used fireside chats in order to stay updated with the American public

New Deal

• 1933-1941

• Focused on the 3 goals of relief, recovery, and reform

• Passed agencies that employed American citizens to lessen the effects of the Great Depression

• Stabilized the economy and provided jobs and relief to those who were suffering

Eleanor Roosevelt

• An active activist

• First Lady of the US

• Used lectures, radio broadcasts, and a newspaper column to promote her ideas

• One of the leaders in the Universal Declaration of Human Rights, an international document adopted by the United Nations General Assembly that enshrines the rights and freedoms of all human beings

Frances Perkins

• A Progressive reformer

• Fought for worker safety and reducing the female work week

• Served in FDR’s cabinet

• Served as the 4th United States secretary of labor from 1933 to 1945

Brains Trust

• FDR’s advisors that were composed of professors, lawyers, economists, etc.

• Gathered to assist him during the 1932 presidential campaign

Beer and Wine Revenue Act

• 1933

• Legalized the sale of beer and wine as a preliminary step to ending Prohibition

• Allowed sale of alcoholic beverages of no more than 3.2 percent alcohol

Relief, Recovery, and Reform

• The 3 goals of FDR’s New Deal

• Relief meant that the president wanted to help those in crisis immediately by creating jobs, bread lines, and welfare. Recovery was aimed at fixing the economy and ending the Depression. Reform was President Roosevelt's objective of finding the sources of the Depression and creating a plan so that it would never happen again.

First Hundred Days

• 1933

• An unprecedented number of reform bills were passed by a Democratic Congress to launch the New Deal

• Bills focused on labor issues and providing unemployment relief

• Nicknamed the “Rubber Stamp” Congress because of how quickly the bills were passed

Bank Holiday

• 1933

• President Franklin Roosevelt declared a "banking holiday," ordering all banks in the United States closed until government audits declared them solvent

• When the banks reopened, stock prices increased again and Americans put money back into their bank accounts

Huey P. Long

• An American politician who served as the 40th governor of Louisiana from 1928 to 1932 and as a United States senator from 1932 until his assassination in 1935

• Believed that the New Deal wasn’t progressive enough

• Worked on state projects in Louisiana

• Believed that there should be a minimum annual income for families

John Maynard Keynes

• Founder of the ideas of Keynesian economics

• Wrote Economic Consequences of the Peace

• Suggested that public works should be funded with deficit money during the New Deal

BIG PICTURE

• Speculation + corrupted investment → Stock Market Crash

• Consumption ↓ → Unemployment

• Hoover - Opposed gov’t giving social welfare

• FDR - New Deal

• New Deal - Relief, recovery, reform (public works + gov’t regulations)