Herbert HooverHerbert Hoover

31st PresidentDiO: 1929-1933Republican Born: August 10, 1874 in West Branch, IowaElected from: California Died: October 20, 1964 in New York, VP: Charles Curtis

(1) The Election of 1928(1) The Election of 1928A. Democrats-

1. ALFRED E. SMITH

a. Received votes from urban and industrial areas

b. Catholic – against

prohibition!

c. Received 87 Electoral Votes

B. Republicans- 1. HERBERT HOOVERa. Received votes from

rural and agrarian areasb. “The government

should be an umpire, not a player in the game.”

c. Received 444 Electoral Votes and 58% of Popular Votes

HOOVER WINS 1928 ELECTION

• Republican Herbert Hoover ran against Democrat Alfred E. Smith in the 1928 1928 electionelection

• Hoover emphasized years of prosperity under Republican administrations

• Hoover won an Hoover won an overwhelming victoryoverwhelming victory

Young Hoover supporter in 1928

C. The radio made this C. The radio made this election the first election the first public electionpublic election

1. Speeches and commentary could be heard by all2. Prohibition was once again the major issue of the election.3. The prosperity in the 1920s was

seen as the “Republican’s Doing.”

D. Prohibition- should it continue even though it was not working?

1. Most people still wanted it to continue.

2. It was called the “Noble Experiment.”

Foreign Troubles on the Horizon

(3) The Young Plan• REMEMBER: the Dawes Plan was put into

operation (1924),but, it became apparent that Germany could not meet the huge annual payments.

• SO…The Young Plan was a program for payment of German reparations payment of German reparations debts after World War Idebts after World War I

• Hoover thought it would help end the economic depression in Europe

(7) Japan Invades Manchuria

• In 1931, the Japanese Army attacked In 1931, the Japanese Army attacked Chinese troops in ManchuriaChinese troops in Manchuria in an event commonly known as the Manchurian Incident. Essentially, this was an attempt by the Japanese Empire to gain control over the whole province, in order to eventually encompass all of East Asia. This proved to This proved to be one of the causes of World War II.be one of the causes of World War II.

• The US told Japan to back out or measures The US told Japan to back out or measures would be taken. Japan didn’t care!would be taken. Japan didn’t care!

(9) Manchuria, Hoover-Stimson Doctrine

• 1932 - Japan’s seizure of Manchuria brought this pronouncement by Hoover’s Secretary of State, Henry Stimson, that the U.S. would not recognize any the U.S. would not recognize any changes to China’s territory, by changes to China’s territory, by Japan Japan nor any impairment of China’s sovereignty.

II. Financial TroublesCauses of The Stock Market

Crash -1929

A. Quick fixes for economic woes 1. Remember “Sick Industries”?

a. Textile Industries b. Coal Industries c. Agriculture d. Railroads

e. These industries were

dragging the economy down because they were

not stimulating enough growth

FARMERS STRUGGLE

• No industry suffered as much as agriculture

• During World War I European demand for American crops soared

• After the war demand After the war demand plummeted.. “When the plummeted.. “When the farmers ain’t happy…”farmers ain’t happy…”

• Farmers increased production sending prices further downward

Photo by Dorothea Lange

a. Congress called a special session to discuss the problems

i. The government should not get involved in buying and selling and price fixing

(2)Agricultural Marketing Act (2)Agricultural Marketing Act (1929)(1929) helped farmers use helped farmers use their organizations to their organizations to produce more efficiently; produce more efficiently; “Too little Too late”“Too little Too late”

CONSUMER SPENDING DOWN

• By the late 1920s, American consumers were consumers were buying lessbuying less

• Rising prices, stagnant wages and overbuying on credit were to blame

• Most people did not have the money to buy the flood of goods factories produced

GAP BETWEEN RICH & POOR

• The gap between rich The gap between rich and poor widenedand poor widened

• The wealthiest 1% saw their income rise 75%

• The rest of the population saw an increase of only 9%

• More than 70% of American families families earned less than $2500 earned less than $2500 per yearper yearPhoto by Dorothea Lange

THE STOCK MARKET • By 1929, many Americans

were invested in the Stock Market

• The Stock Market had become the most visible most visible symbolsymbol of a prosperous American economy

• The Dow JonesDow Jones Industrial Average was the barometer of the Stock Market’s worth

• The Dow is a measure based on the price of 30 large firms

Playing the Market

a. Investors poured millions of dollars into the stock market

i. Bull market- upward trend in stocks

ii. Bear market- downward trend in stocks

STOCK PRICES ROSE THROUGH THE 1920s

• Through most of the 1920s, stock prices rose steadily

• The Dow reached a high The Dow reached a high in 1929 of 381 pointsin 1929 of 381 points (300 points higher than 1924)

• By 1929, 4 million Americans owned stocks

New York Stock Exchange

SEEDS OF TROUBLE(4) Causes of the stock

market crash:• By the late 1920s, problems problems

with the economy emergedemerged• Speculation:Speculation: Too many

Americans were engaged in speculation – buying stocks & bonds hoping for a quick profit

• Americans were buying “on Americans were buying “on marginmargin”” – paying a small percentage of a stock’s price as a down payment and borrowing the restThe Stock Market’s bubble was

about to break

(4)THE 1929 CRASH• In September the Stock

Market had some unusual up & down movements

• On October 24, the market took a plunge . . .the worst was yet to come

• On October 29, now known On October 29, now known as Black Tuesdayas Black Tuesday,, the bottom fell out

• 16.4 million shares were 16.4 million shares were sold that day – prices sold that day – prices plummetedplummeted

• People who had bought on margin (credit) were stuck with huge debtshuge debts

By mid-November, investors had lost about $30 billion

(5) THE GREAT

DEPRESSION

• The Stock Market crash signaled the beginning the beginning of the Great Depressionof the Great Depression

• The Great Depression is generally defined as as the period from the period from 1929 – 1940 in 1929 – 1940 in which the economy which the economy plummeted and plummeted and unemployment unemployment skyrocketedskyrocketed

• The crash alone did not cause the Great Depression, but it hastened its arrival

Alabama family, 1938 Photo by Walter Evans

FINANCIAL FINANCIAL COLLAPSECOLLAPSE

• After the crash, many Americans panicked Americans panicked and withdrew their and withdrew their moneymoney from banks

• Banks had invested in the Stock Market and lost money

• In 1929- 600 banks banks failfail

• By 1933 – 11,000 of the 25,000 banks nationwide had collapsed

Bank run 1929, Los Angeles

GNP DROPS, UNEMPLOYMENT

SOARS

• Between 1928-1932, the U.S. Gross National Product (GNP)(GNP) – the total output of a nation’s goods & services – fell nearly 50%fell nearly 50% from $104 billion to $59 billion

• 90,000 businesses businesses went bankruptwent bankrupt

• Unemployment Unemployment leapedleaped from 3% in 1929 to 25% in 1933

(6) HAWLEY-SMOOT TARIFF

• The U.S. was not the only country gripped by the Great Depression

• Much of Europe suffered throughout the 1920s

• In 1930, Congress passed the the toughest tariff in U.S. toughest tariff in U.S. historyhistory called the Hawley- Smoot TariffHawley- Smoot Tariff

• It was meant to protect It was meant to protect U.S. industry yet had U.S. industry yet had the opposite effectthe opposite effect

• Other countries enacted Other countries enacted their own tariffs and their own tariffs and soon world trade fell soon world trade fell 60%60%

(5) CAUSES OF THE GREAT (5) CAUSES OF THE GREAT DEPRESSIONDEPRESSION

(1) Tariffs & war debt policies

(2) U.S. overproduction of products and low demand

(3) Farm sector crisis(4) Easy credit(5) Unequal distribution

of income

III. Hoover’s Policies(8) Reconstruction Finance Plan-

a move away from Laissez a move away from Laissez Faire , it attempted to provide Faire , it attempted to provide relief (immediate help) by relief (immediate help) by

loaning state governments’loaning state governments’ $ 1. He refused to provide Federal

Aid to citizens because he thought is would inflate the Federal Budget.

2. A plan proposed by Sens. La Follette, Jr. and Costigan would give states $375 million for direct aid to unemployed.

3. Hoover rejected the bill on his idea of rugged individualism- success comes through individual effort and private enterprise.

THE Midst of the GREAT

DEPRESSION

Photos by photographer Dorothea Lange

C. Fear of Revolution1. The American people began to get

restless - blamed the depression on bankers and industrialists.

2. Radical alternatives: The unrest in society led to the rise of socialism and communism.

3. Both alternatives claimed to be the best for America.

4. Most Americans clung to their democratic traditions and expressed their anger at the ballot box

HARDSHIPS DURING DEPRESSION

• The Great Depression brought hardship, homelessnesshomelessness, and hunger to millions

• Across the country, people lost their jobs, and their homes

• Some built makeshifts shacks out of scrap material

• Before long whole shantytowns (sometimes called HoovervillesHoovervilles in mock reference to the president) sprung up

Breadlines and Soup Kitchens

• One of the common features of urban areas during the era were soup kitchens soup kitchens and bread linesand bread lines

• Soup kitchens and bread lines offered free or low-cost food for people

Unemployed men wait in line for food – this particular soup kitchen was

sponsored by Al Capone

CONDITIONS FOR MINORITIES

• Conditions for African Americans and Latinos were especially difficult

• Unemployment Unemployment was the highest among minorities and their paypay was the lowestlowest

• Increased violenceIncreased violence (24 lynchings in 1933 alone) marred the 1930s

• Many Mexicans were “encouraged” to return to their homeland

As conditions deteriorated, violence against blacks

increased

RURAL LIFE DURING THE DEPRESSION

• While the Depression was difficult for everyone, farmers did have one advantage; they they could grow food for their could grow food for their familiesfamilies

• Thousands of farmers, however, lost their landlost their land

• Many turned to tenant farming and barely scraped out a living

Between 1929-1932 almost ½ million farmers lost their land

EFFECTS OF DEPRESSIONEFFECTS OF DEPRESSION

• Suicide rate roseSuicide rate rose more than 30% between 1928-1932

• Alcoholism roseAlcoholism rose sharply in urban areas

• Three times as many people were admitted to state mental state mental hospitalshospitals as in normal times

• Many people showed great kindness to strangerskindness to strangers

• Additionally, many people developed habits of savings savings & thriftiness& thriftiness

HOOVER STRUGGLES WITH THE

DEPRESSION• After the stock market

crash, President Hoover tried to reassure Americans

• He said, “Any lack of confidence in the economic future . . . Is foolish”

• He recommended business as usual

Herbert Hoover

HOOVER’S PHILOSOPHY• Hoover was not quick to Hoover was not quick to

reactreact to the depression• He believed in “rugged “rugged

individualism”individualism” – the idea that people succeed through their own efforts

• People should take care of themselves, not depend on governmental hand-outs

• He said people should “pull themselves“pull themselves up by their bootstraps”

Hoover believed it was the individuals job to take care of themselves, not the governments

HOOVER’S SUCCESSFUL DAM PROJECT

• Hoover successfully organized and authorized the construction of the Boulder DamBoulder Dam (Now called the Hoover Dam)

• The $700 million project was the world’s tallest damworld’s tallest dam (726 feet) and the second largest (1,244 feet long)

• The dam currently provides electricity, flood control and water for 7 western states

Any Dam questions?

HOOVER TAKES ACTION: TOO LITTLE TOO

LATE

• Hoover gradually softened his position on government intervention in the economy

• He created the Federal Federal Farm BoardFarm Board to help farmers

• He also created the National Credit Organization that helped smaller banks

• His Federal Home Loan Federal Home Loan Bank ActBank Act and Reconstruction Finance Reconstruction Finance CorpCorp were two measures enacted to protect people’s homes and businesses

Hoover’s flurry of activity came too late to save the economy or

his job

(10) BONUS ARMY

• A 1932 incident further damaged Hoover’s image

• That spring about 15,000 That spring about 15,000 World War I vets arrived in World War I vets arrived in WashingtonWashington to support a proposed bill

• TheThe Patman Bill would have authorized Congress to pay a bonus to WWI vets immediately

• The bonus was scheduled The bonus was scheduled to be paid in 1945 --- The to be paid in 1945 --- The Army vets wanted it NOWArmy vets wanted it NOW

BONUS ARMY TURNED DOWN

• Hoover called the Bonus marchers, “Communists and criminals”

• On June 17, 1932 the Senate Senate voted down the voted down the Patman BillPatman Bill

Thousands of Bonus Army soldiers protest – Spring 1932

BONUS MARCHERS CLASH WITH

SOLDIERS

• Hoover told the Bonus marchers to go home– most did

• 2,000 refused to 2,000 refused to leaveleave

• Hoover sent a force Hoover sent a force of 1,000 soldiers of 1,000 soldiers under the command under the command of General Douglas of General Douglas MacArthurMacArthur and his aide DwighDwight Eisenhower

AMERICANS SHOCKED AT TREATMENT OF WWI VETS

• MacArthur’s 12MacArthur’s 12thth infantry gassed more than 1,000 infantry gassed more than 1,000 marchers, including an 11-month old baby, who died

• Two vets were shot and scores injured• Americans were outraged and once again, Hoover’s Hoover’s

image sufferedimage suffered

Hoover had little chance to be re-elected in 1932