Ch 24: Crash and Depression

Black Friday and the onset of the great depression led people to loose all they had.  In 1925 the market value was 27 billion and by October 1929 the market value had raised to 87 billion causing stockbrokers to lend buyers up to 75% of a stocks cost.  Lending institutions would lend out money freely.  This all went down hill on October 24, 1929 also known as “Black Friday.” Prices fell and some stocks found no buyers, the economy went into depression.  Structural weakness in the American economy made the 1920s prosperity unstable.  
Key industries such as railroads, steel, textiles, and mining lagged technologically in the 1930s and weren’t able to attract the investment needed to stimulate recovery.  All analysis linked the U.S depression to a global economic crisis.By 1933 nearly more than fifty-five hundred banks had closed and unemployment stood at 25 percent and those who still had jobs faced cuts in their pay and hours.  President Hoover urged business leaders to maintain wages and employment.  Unemployment was a local issue and therefore Hoover advised city and state officials to create public-works projects.  in 1931 he was able to persuade the nations largest banks to create a private lending agency to help smaller banks make business loans. 
The public turned against Hoover and the crisis got worse.  Hoover called for a tax increase which angered the Americans even more.  In January Hoover recommended that Congress set up a new agency called the Reconstruction Finance Corporation(RFC).  The RFC was establish to make loans to banks and other lending institutions.  Hoovers unpopularity deepened, some people were living in boxes and packing crates only keeping them warm with newspapers also known as “Hoover blankets. ”  The suicide rate increased and violence threatened to erupt in some cities when landlords evicted families unable to pay their rent.

In the election of 1932 Americans refused to have Hoover as president any longer.  President Franklin D. Roosevelt gain presidency and the democrats had the congress and white house now.  Roosevelt showed confidence and the people were captured by that.