Corporate Debt – Companies overextended themselves and lied about their assets to get loans, which got the banking system all screwed up.
Speculation – Ah, does this sound familiar? In addition to heavy investment by companies, people were buying on margin (put a down payment on stocks w/o having the money to pay the full amount, then buy more stocks on the profits), so when people tried to sell what they had bought on margin to minimize their losses prices collapsed and brokers were put into big trouble since they didn’t actually have the $ to pay people with.
Lack of Recovery in Farming – Farmers never recovered from the post-war recession, as they faced a return of foreign competition and were often unable to repay their debts.
Internat’l Problems – Following the war the US upped tariffs, which caused Europeans to stop buying our goods.
Gov’t Policies – The gov’t followed very lassiez-faire policies w/easy credit and low discount rates, which stimulated the speculation mania.
Hoover/Grand Coulee Dams – This was more successful, as Hoover’s encouragement of public works did indeed provide new jobs.
Federal Farm Board (created in 1929 under the Agricultural Marketing Act) – The FFB lent money to cooperatives so they could buy crops and thus keep them off the market.
Reconstruction Finance Corporation – Theoretically, through lending money to groups at the top of the economy, the RFC was going to help people all over (filter-down system), but it didn’t work.
Issues were the New Deal (which Landon criticized as unconstitutional laws), a balanced budget, and low taxes. Roosevelt carried all states but Maine and Vermont.
– In order to avoid having to use our military power, we trained people to do it for us (nat’l guards) and supported dictators (“He may be a SOB, but he is our SOB” – FDR)