Tuesday October 29, 1929. The stock market crashed.
American's in the end started to have protest movements.
The public invested in stock and they expected money in return.
Because the economy was so good in the 1920 the bank just gave out loans and didn't care.
They only had to pay 10% of the stocks actually value which is called "Buying On Margin"
They needed long term investments so they could pay bills. Because of all of this it gave everyone a false sense of security and everything would be okay.
In the beginning of October 1929 everyone lost confidence in the banks and the market collapsed. Because of this it had a ripple effect on the economy.
The Economic Cycle *Since people could not afford to buy such things, making of such things were cut back. The purchasing power went down.
For the factories to produce such things the people had to be there to demand for such things.
The only jobs that were available were electricians and mechanics. But no other jobs were added to the economy.
42 % of Americans were below the poverty line. 58% fell above the poverty line which was the in the middle class. Because of the middle class and they losing their jobs it ruined the whole country.
he didn't think that he government played a role in the economy.
He made the policy of Voluntary NON - Coecive Cooperation (tax breaks)
He wanted the Europeans to purchase american goods.
In 1931 they had the Tariff Wars
They made the Smoot Hawley to protect the U.S. industry
We borrowed from the German banks. It was called the Bank of INT'l settlement
The government did not like Hoover, but they persuaded Congress to Establish the Reconstruction Finance Corporation,
He had them have the power to make emergency loans to banks.
1 out of every 4 Americans were unemployed.
Nat'l income was 50% of what it has been before,.
Repubs. was nominated and Hoover really didn't have a chance.
The winner by a huge amount was Franklin Delano Rooservelt.