1.1. 1920's U.S. Economy was based on the productivity – purchasing power - employment cycle.
1.2. Overproduction
1.3. a 2nd major problem: uneven distribute of wealth.
1.4. 0.1% at top owned as much as bottom 42% of American families (42% below poverty line)
1.5. of the 58% above the poverty line, most fell into the middle class category - they were not wealthy; they had jobs b/c of the industrialization & consumerization of the American market place.
1.6. Raised to a high leve.
1.7. By 1932 1 out of 4 was unemployed.
2. President Hoover
2.1. He didn't believe that the government should play an active role in the economy.
2.2. VOLUNTARY NON - COERCIVE COOPERATION where he gave tax breaks in return for private sector economic investment.
2.3. He worked out a system with European powers that owed U.S. money as a result of WWI debts = HOOVER MORATORIUM - put a temporary stop to war debt & reparations payments.
2.4. Hoover continued to try... • he persuaded Congress to establish the RECONSTRUCTION FINANCE CORPORATION.
2.5. Increasingly became unpopular with the American people.
3. Banks
3.1. German and Austria banks both tried to surpass but most went into bankruptcy. Because they loaned out money to each other that they couldn't pay.
3.2. The cause was the Soviet union trying to pay back banks.
4. Stock Crash
4.1. Oct. 29th, 1929
4.2. Lasted till 1942
4.3. Created the Great Depression
4.4. BUYING ON MARGIN, and the balance was paid at a later date.
4.5. STOCK SPECULATION - people would buy and sell stocks quickly to make a quick buck.
4.6. All tried to sell at once and bottom fell out of market = panic selling.
4.7. Ripple effect on the economy.
4.8. The poor couldn't buy anything compared to what little they originally had.
4.9. This decline in consumption among the middle class ruined the whole country
5. Election
5.1. 1932
5.2. Franklin D. Roosevelt won.
6. American Opinion of Hoover
6.1. people were frustrated - isolated protest movements EX: Dairy farmers frustrated w/low price of milk refuse to sell (dump it) EX: WW1 veterans (pensions discontinued by congress) march on Washington = BONUS MARCH (by BONUS ARMY)
6.2. Basically not happy with how things were being done or that the Depression was only getting worse.
