Stock prices made the rich, richer. Consumers piled up huge debts as they purchased goods on credit, and living beyond what they could afford.
Farmers went into debt and overproduced, to much product no buyers. There was declining trade from the US to other countries and higher taxes.
spending decreased, unemployment grew, banks closed, taxes rose, reparations, and trade collapsed
Americans lost their homes; unemployment rose; people could not afford to get married or have children; farmers crop prices dropped and they couldn’t make money; people moved to shantytowns/Hoovervilles; bread lines & soup kitchens opened; children quit school to help their families earn money
People bought stocks (shares w companies), stock values rose (bull market), and buying on margin encouraged more customers, people overspeculated on stocks, using borrowed money.
Banks also invested in the stocks so they suffered big losses in the market crash. Individuals pulled their money out further wekening the banks. The banks also took out loans that they couldn’t pay off, losing their investors whom could not repay loans. Dwindling reserves caused banks to close.
American banks stopped making loans abroad and demanded repayment of previous foreign loans. Other countries could not handle this loss and depression set in.
, The wealthier people weren’t buying enough goods to keep the economy booming therefore the low income workers couldn’t buy what they needed or wanted.
By the early 1930’s, 1 in 4 workers was jobless. Others had shortened hours or pay cuts. Many lost their homes. People sold apples and pencils on the street, begged, and picked through garbage.
people lost their homes; unemployment rose; people could not afford to get married or have children; farmers crop prices dropped and they couldn’t make money; people moved to shantytowns/Hoovervilles; bread lines & soup kitchens opened; children quit school to help their families earn money
For farmers living in the Midwest, the Dust Bowl changed their lives permanently. Whole towns were forced to move because of the failing soil and bug attacks. The whole Midwest was deserted after the Dust Bowl because it was unsuitable for living. In some ways, the Dust Bowl was brought upon the farmers by themselves, by overworking the soil, they made the ground hard and dry, causing drought. The are was hit so bad because most of the Midwest’s industry is agriculture.
Many people fled from the drought seeking work in California where work was already hard to come by.
Minorities suffereed too – “Last to be hired, and first to be fired” . Mexican Americans faced repatrition (convining minority to return to their country of origin), Okies looked for work in California.
Rural poor suffered more, farmers lost overseas market, rural poor went through a drought which caused farmers to lose their farms.
President Hoover believed that too much intervention on the part of the federal government during the Depression would destroy American individuality and self-reliance, and that public-private cooperation was the way to achieve high long-term growth.
In 1929, in an effort to reduce municipal aid services burdens and combat white American unemployment, Hoover instituted the Mexican Repatriation program. This resulted in the forced migration of over 500,000 Mexicans and Mexican Americans to Mexico
Smoot-Hawley Tariff raised the tariff on thousands of imported items as part of a failed effort to encourage the purchase and growth of American-made goods, raise federal revenue, and protect farmers.
He believed in “rugged individualism” and relied on the individual, the churches and private charities, and the local and state governments to handle most of the economic help that was needed.
He broke with Republicans and did away with the taxes that had been placed on citizens during the Coolidge administration. He thought that would allow for more income being spent to help the economy rebound. He spent $500 million a year on public works and government programs to build or improve government properties. The most famous was the Hoover (Boulder) Dam. Congress established the Reconstruction Finance Corporation (continued by FDR) which created an agency to help banks, railroads, and other key businesses to stay in business thus helping the economy