Economy Appears healthy
Hoover was a self-made millionaire- widely admired
Organized food relief in Europe during WW1
Sec. of Commerce under Harding-Coolidge
1925 market value of all stocks $27 billion
1928 alone stock values rose $11.4 billion
Weathervane of nation’s economy
Oct. 1929, stock values hit $87 billion
Value of worker’s wages risen 40%
Unemployment below 4%
“Everybody Ought to be Rich”
Business success became a religion for some
1929 article stated saving 15$ a week over 20 years could bring a $400 a month income from investment
“Anyone can be rich, but ought to be rich”.
New approach to labor relations
Employers raised wages and provided benefits
Economic danger Signs
Uneven prosperity –The rich were getting richer and the poor were getting poorer
Buying on credit- people were buying things that they couldn’t afford
Playing the Stock Market-
Too many Goods, Too Little Demand- factories were making too many goods due to the assembly line and faster working, therefore the companies/factories went bankrupt.
Trouble for Farmers –they faced over production and the government didn’t give them enough money for their farm.
Trouble for Workers- Workers were being laid off because with the overproduction of goods the factories didn’t have enough money to pay the workers.
12.2) The Stock Market Crash
Dow Jones Industrial Average- average of stock prices of major industries
The Market crashes
Prices for many stocks soared far above their real value in the terms of the company’s earnings and assets
Oct. 29, 16.4 million shares were sold, compared with average 4 million to 8 million shares per day= GREAT CRASH
The Crash effects millions
Great Depression- a severe economic decline that lasted from 1929 until the U.S entered WW2 in 1941(12 years)
The Gross National Product (GNP)- total value of goods and services a country produces annually ($103 billion in 1929)
12.3) Social effects of the Great Depression
Homeless built Shanty towns called “Hoovervilles”
The Dust Bowl
A region in the great plans where drought and dust storms took place for much of the 1930’s
22.4) Surviving the Great Depression
Prohibition is Repealed
2/1933 Congress passed 21st amendment repealing prohibition.
22.5) The election of 1932
Voluntary Action Fails
Hoover believes voluntary controls by U.S