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HERBERT HOOVER & THE DEPRESSION

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

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HERBERT HOOVER & THE DEPRESSION

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  1. HERBERT HOOVER& THE DEPRESSION THE 1930’S Chapter 22

  2. 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 • Believes in “rugged individualism” • An orphan & self-made man who worked his way through Stanford and up • Great administrator, efficient, honest & humanitarian

  3. 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 Herbert Hoover Alfred E. Smith Republican Democrat “A Dry Country Quaker” “A Wet City Catholic” ELECTION OF 1928

  4. 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)

  5. 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

  6. 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”

  7. 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

  8. 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

  9. “Rugged Individualism” Government should help people to help themselves “Hand-ups” not Hand-outs Hoover on Government & Business/Economy:

  10. 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

  11. 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

  12. PUBLIC WORKS PROJECTS • Approves $2.25 billion public works program • Most famous project: • Boulder Dam – later called Hoover Dam – on CO River, 1930-36

  13. MANY UNEMPLOYED BECAME HOMELESS: • No $ to pay rent or mortgage • Evicted • Or moved in with relatives when possible • Many lived inHoovervilles • Boxcar population also grew (Hobos)

  14. 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

  15. Milk dumped by dairy farmers

  16. 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

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