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The Great Depression

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Jarod Roll

on 17 October 2016

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Transcript of The Great Depression

The Great Depression

HIS 106
Dr. Roll
1928 Presidential Election:
Hoover (R) vs. Al Smith (D)

Smith the first Catholic candidate; from NYC and against prohibition
Hoover -- 21.4 million
Smith -- 15 million
Hoover, 1928: "We in American today are nearer to the final triumph over poverty than ever before in the history of any land."
Chrysler Building, 1927
Empire State, 1929-1931
Causes of the Great Depression:
--credit fueled consumption
--over-production
--not enough consumer demand (income inequality)
--restrictions on world trade
--restrictions on global movement of people
The numbers, 1920-1929 (or, the measure of Mellon):
--income of bottom 80% of earners up 11%
--income of top 1% of earners up 75%
In 1929:
--top 1.2% owned 32.4% of all wealth
--top .07% of business controlled over 22% of national wealth
--90% of consumer durable purchases on credit
--71% of Americans earned less than $2500 threshold
--80% of Americans had no savings
--consumer durable purchases down 20% in 1930 alone
--corporate investment down from 16% of GDP to 2%, 1929-1931
--deflation sets in
Hoover and Congressional Democrats:
--Democrats retake Congress in 1930
--both call for balance budgets
(lower spending and higher taxes)
Bank crisis: 1930-1933
1931: world trade stops
--WWI and US immigration restriction already a drag on global capitalism
--WWI repayments stop in 1931
--crisis in Germany
--UK goes off gold standard
1932: some new ideas
--Glass-Steagall Act of 1932
(Federal Reserve recapitalizing members banks)
--Reconstruction Finance Corporation
(loans to businesses, banks)
--but still no direct aid to individuals; unemployment to 25%
--some states did begin giving relief to people; NY, under Gov. Franklin D. Roosevelt, pioneered an emergency relief administration that aided 300,000 families; other states copied
The crisis worsens:
--unemployment
--cities over 50% (Toledo over 80%)

Bonus Army, 1932
Hoover's response:
--conferences with business leaders to maintain employment
--Smoot-Hawley Tariff, 1930: largest tariff increase in US history (barrier to free trade), after Republicans had already raised tariffs in 1921 and 1922
--no relief to people; would destroy work ethic
Mellon's "New Era" Bull Market, 1924-29
Pushing the limit on how many big purchases one could make on credit and meet the repayments:
--car companies introduced yearly models to encourage new purchases
--car companies paid car dealers to destroy used cars
--car companies extended more credit more willingly
Full transcript