herbert hoover & the depression
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HERBERT HOOVER & THE DEPRESSION. THE 1930’S Chapter 22. President Herbert Hoover, Henry Ford, Thomas Edison, and Harvey Firestone at Edison's 82nd birthday. Ft. Myers, Florida, February 11, 1929. Coolidge chooses not to run again; opens door for Sec. of Commerce Hoover - PowerPoint PPT PresentationTRANSCRIPT
HERBERT HOOVER& THE DEPRESSION
THE 1930’S
Chapter 22
Coolidge chooses not to run again; opens door for Sec. of Commerce Hoover
Believes in “rugged individualism” An orphan & self-made man who worked his way through Stanford and up
Great administrator, efficient, honest & humanitarian
President Herbert Hoover, Henry Ford, Thomas Edison, and Harvey Firestone at Edison's 82nd birthday. Ft. Myers, Florida, February 11, 1929.
Herbert Hoover Alfred E. SmithRepublican Democrat“A Dry Country Quaker” “A Wet City Catholic”
ELECTION OF 1928
Represents rural (“country”) agrarian interests
Favored Prohibition (“dry”) Radio helped him
(dignified, serious) Slogan: “A chicken in every
pot & two cars in every garage!”
Wins by landslide mainly due to the Republican prosperity of the 20s
Represents urban (“city) & industrial interests
Favors Prohibition, but admits that he drinks (“wet”)
Radio hurts him (a strong NY accent & too much joking)
Hurt by Republican anti-Catholic smear tactics
The Stock Market of the 1920s: Stock Market = system for buying and
selling shares of companies Long period of rising prices (bull market)
convinced many Americans to invest in the stock market 3 to 4 million Americans involved (10%)
Speculation (buying risky stocks – to sell, not hold - hoping for a quick profit)
Buying on Margin (buying stocks on credit)
Buying on margin works like this:
You could buy stock with only a 10% down payment You borrow the remaining 90% from the stockbroker Then, you sell it & pay off broker & keep remaining
profit BUT, when stock prices start going down, everybody
tries to sell & prices keep plummeting Broker then sells off your stock, gets less than what
you owe him Now you have no stock, and still owe your loan to the
broker Broker borrowed from the banks to loan $ to you so
now the broker can’t pay the banks / banks go under
Stocks & bonds tripled in value during the last half of the 1920s but eventually crashed. STOCK MARKET CRASHED ON
OCTOBER 29, 1929 KNOWN AS “BLACK TUESDAY”
CAUSES OF THE CRASH: EASY CREDIT!!
Installment Plan Buying on margin (buying stocks on
credit) GREED & A FALSE SENSE OF PROSPERITY
Americans feel rich because they have a lot of stuff / BUT, bought it on CREDIT
GOVERNMENT’S LAISSEZ-FAIRE POLICY TOWARDS BUSINESS Leave the economy alone & it will take
care of itself
EFFECTS OF THE CRASH:
MASSIVE UNDEREMPLOYMENT (still have a job, but less hours) & UNEMPLOYMENT
FAILURE OF BANKS Government drops
Laissez-Faire policies Worst year is 1932
Hoover on Government & Business/Economy:
“Rugged Individualism”
Government should help people to help themselves
“Hand-ups” not Hand-outs
CAUSES OFTHE GREATDEPRESSION
Overproduction Too many goods, can’t
consume them all Stock Market Crash
Brokers’ loans over $850 billion
Abuse of Easy Credit “Installment Plan”
High Tariffs caused other nations to
charge U.S. high tariffs & hurt trade
Uneven Distribution of Income 1% at $100,000 – 71% at
less than $2,500
HOOVER’S RESPONSE Philosophy of “rugged
individualism” The belief that all individuals, or nearly
all individuals, can succeed on their own and that government help for people should be minimal.
Makes him seem unsympathetic/cold Hoovervilles, Hoover blankets, Hoover
flags “Too Little, Too Late”
“Two Families in Every Garage” Spends $ on public works: new
public buildings, roads, parks, dams to create jobs
PUBLIC WORKS PROJECTS Approves $2.25
billion public works program
Most famous project: Boulder Dam –
later called Hoover Dam – on CO River, 1930-36
No $ to pay rent or mortgage Evicted Or moved in with
relatives when possible
Many lived in HoovervillesHoovervilles
Boxcar population also grew (Hobos)(Hobos)
MANY UNEMPLOYED BECAME HOMELESS:
FARMERS:
Overproduction is primary problem Prices too low “Farmer’s Holidays”
Stopped food shipments Destroyed food – if scarce, price
goes up Dumped Milk - Burned corn for fuel
Milk dumped by dairy farmers
BONUS ARMY - May 1932 20,000 WWI Veterans seeking early payment of a
bonus due them in 1945 Set up Hoovervilles, demonstrated daily outside
Capitol Senate rejected their demands & Hoover asks “army”
to disperse Most go home; Hoover bought 6,000 train fares But thousands remained
Hoover orders removal “without the use of force” Gen. Douglas MacArthur – tear gas, tanks, machine
guns, bayonets, burns Hooverville Hoover takes full responsibility