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Unformatted text preview: Stock Market Crash: Causes Herbert Hoover was in presidency. Automobile industry became one of the biggest industries around. I ts funding was aided by the federal government. White collar workers had more money and more leisure time b/c economy grew during the 20s. People were told to go out and just spend by means of Advertising. There was mass production..new products automobiles radios fridges irons CONSUMER-GOODS REVOLUTION.. 1920s marked a period of consumption. People had credit cards and kept buying on them, which caused high consumer demand. Plus, people bought stocks on credit and couldnt pay the banks. Personal indebtedness rose though. People even started pulling their money out of banks. Banks were then failing. America wanted the allies from wwI to repay their war loans, and the allies wanted reparations from Germany. Furthermore, U.S. enacted tariffs that prevented other nations from selling their goods to Americans. So, American banks extended credit to foreign customers. More debt just piled on top. So, b/w 1921 and 1928 banks failed, there was overproduction and under consumption. How did farmers and industrialists respond to overproduction/underconsumption differently? o Industrialists slowed down their production, like the automobile. They cut back on production and laid off workers. o Farmers crops piled up and they became poorer. They crowded into 2-3 room run-down cabins. They ate on whatever they could hunt or fish. Also, they created the National Farmers Holiday Association. They dumped milk in ditches and took a break from shipping crops to markets. Deepening of the Depression o Hoover- He was very optimistic, patient, and confident. He claimed there wasnt anyone starving. He had believed in voluntarism. People just should help each other out. The New Deal: 1932-1939: President Franklin D. Roosevelt o How was he elected? He was optimistic and self-confident. He combined health benefits with political overtures to southern Democrats. I t made him a rare politician. He was a Democratic New Yorker from the urban and immigrant wing with whom Southern Dems felt comfortable to. He had already showcased himself in New York with providing Temporary Emergency Relief Administration: 20 million in aid for poor earning gratification of poor and attention of politicians. He promised people work and security, but he didnt explain how: a new deal. Whatever it was, people thought itd be better than Hoover. o Why did he have so much political power? He was a great politician. HE was able to attract support from farmers, factory workers, immigrants, city folk, af.a., women, and progressive intellectuals. There was a popular mandate for change and it was loud and clear. Roosevelt was there to hear the cry. Roosevelt was willing to experiment....
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