HIST 151 003 1st Edition Lecture 22 Outline of Last Lecture I Chapter 23 From New Era to Great Depression 1920 1932 cont Outline of Current Lecture II Chapter 23 From New Era to Great Depression 1920 1932 cont Origins of the Great Depression Hoover Hoovervilles Hoover blankets hogs R F C Sum Up the 1920 s Current Lecture Origins of the Great Depression Economic institutions fell apart By 1927 consumer spending had flattened and was beginning to drop America was the only sovereign nation with a financial surplus Businesses made too many products started building inventories Massive storage facilities European nations were not interested in America s products refused to buy they were in their own economic crisis Government did not get involved Laissez Faire U S loaned out cash to European nations and tacked on interest o Britain France Italy Germany etc were borrowing did not and would not be able to pay back the U S U S Government began loaning Europe money to pay for the expenses caused by WWI U S began running out of money in the red Housing construction slowed and businesses ceased to be created Protective tariffs in the U S went up making it almost impossible for Europe to ship or receive goods because of the tax increase With cuts in consumer buying came cuts in employment hourly waged workers laid off By January 1929 U S had reached a recession All of the U S had been buying on credit since the Progressive Era no real money but had real interest rates many items bought on credit were repossessed by the companies providing the credit October 29th 1929 Wall Street Manhattan New York Stock Market plunged hit the floor and kept going down o Stock market allowed anyone to purchase stock These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Allowed buying on margin investors only had to pay 10 of the purchase price up front when purchasing a stock some did not have to pay up front an I O U would often be how stocks were purchased Largest one day loss in stock market history Hoover Hoovervilles Hoover blankets hogs Hoover was initially blamed for the Great Depression even though he was only in office for eight months Hoover administration did nothing to address the situation at first o Told people that they should have learned to handle their money better Shanty towns ghettos were established Hoovervilles tent cities composed of cardboard boxes for walls and tarps for a roof Those residing in Hoovervilles ate Hoover hogs boiled rabbits and slept with Hoover blankets newspapers R F C Hoover Administration puts into place the Reconstruction Finance Corporation Money that happened to be accumulated by the government was to be saved and handed back out to large and small businesses in hopes to get the economy running again Congress did not like the idea kept the money but did not hand it out to businesses Ingenious idea but too little too late o When F D R is elected into office he picks up where Hoover administration left off believed that the R F C was a stroke of genius Sum Up the 1920 s European stocks declined did not purchase from the U S The return of Laissez Faire prevented Government interference assisted in the drop of the economy Once again most of the wealth resided within the top 2 of the United States similar to the situation during the Gilded Age Unemployment level skyrocketed to 25