THE ROARING TWENTIES to the GREAT DEPRESSION

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THE ROARING TWENTIES to the GREAT DEPRESSION

• HERBERT HOOVER

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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
• Decries socialism with cries of rugged
  individualism
• Idea that individuals should help themselves out
  govt should not be involved in peoples
  economic lives nor in national economics in
  general.
• An orphan self-made man who worked his way
  through Stanford
• Great administrator, efficient, honest
  humanitarian.role during WWI?

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ELECTION OF 1928
Herbert Hoover Alfred E. Smith Republican Demo
crat A Dry Country Quaker A Wet City
Catholic Rugged Individualism Rum, Romanism
Ruin

• Represents urban, industrial interests
• Favors Prohibition, but admits that he drinks
• Radio hurts him (NY accent too much joking)
• Hurt by Republican anti-Catholic smear tactics
• Lost, even though he won in all nations largest
  cities

• Represents rural agrarian interests
• Favored Prohibition
• Radio helped him (dignified, serious)
• Slogan A chicken in every pot two cars in
  every garage!
• Wins by landslide mainly due to his association
  with Republican prosperity of the 20s

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ELECTION OF 1928
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HOOVER DOMESTIC POLICY

• AGRICULTURAL MARKETING ACT
• Federal Farm Board to lend to farm organizations
  seeking to buy, sell store surpluses
• But, prices will just keep falling
• HAWLEY-SMOOT TARIFF, 1930
• Highest peacetime tariff in history! Raised
  Fordney-McCumber from 40 to almost 60
• Backfired WHY?
• Caused foreign trade with U.S. to plummet
• Caused other nations to raise tariffs
• Caused U.S. factories to move overseas

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Securities (stocks bonds) tripled in value
during the last half of the 1920s.

• STOCK MARKET CRASHED ON OCTOBER 29, 1929
• KNOWN AS BLACK TUESDAY

Marks the beginning, but not the sole cause of
the Great Depression
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CAUSES OF THE CRASH

• EASY CREDIT!!
• Speculation (buying unstable, risky stocks to
  get rich quick - hoping for a quick profit)
• Buying on margin (buying stocks on CREDIT)

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CAUSES OF THE CRASH

• GREED
• INFLATED SENSE OF PROSPERITY
• GOVERNMENTS LAISSEZ-FAIRE POLICY TOWARDS BUSINESS

Crash Statistics Approx. 1.5 million Americans
in the stock market 16 million shares sold on
10/29/29 Loss of 30 billion
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EFFECTS OF THE CRASH

• MASSIVE UNDEREMPLOYMENT UNEMPLOYMENT
• 1930 4 million jobless
• 1932 12 million jobless (25)
• FAILURE OF BANKS
• Questioning of Laissez-Faire policies
• Trend away from materialism toward social
  consciousness

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Hoover on Government Business/Economy

• Rugged Individualism
• Government should help people to help themselves
• Hand-ups not Hand-outs

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CAUSES OF THE GREAT DEPRESSION

• Overproduction underconsumption
• Income Disparity
• Growing gap between rich poor since profits
  from production going back into production, not
  wages
• 1 of population hold 34 of countrys savings
• 1 at 100,000 71 at less than 2,500
• Abuse of Easy Credit
• Installment Plan
• Buying stock on margin

• High Tariffs WWI Debts
• World Depression

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OVERPRODUCTION UNDERCONSUMPTION

• Factories were producing products, however wages
  for workers were not rising enough for them to
  buy them.
• Too few workers could afford to buy the factory
  output.
• The surplus products could not be sold overseas
  due to high tariffs and lack of money in Europe.

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HOOVERS 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
• Trickle down theory
• Does believe in using power of govt to stimulate
  the economy from the top via aid to corporations,
  public works, etc.

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PUBLIC WORKS PROJECTS

• Approves 2.25 billion public works program
• Most famous project
• Boulder Dam later called Hoover Dam on CO
  River, 1930-36

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Reconstruction Finance Corp.

• 1932
• A U.S. government lending corporation gives
  to aid business and farm organizations
• Loan to banks and businesses (railroads,
  insurance, etc.) help put people back to work
• Effects would trickle down to those on the bottom
• Not enough to overcome problems of Depression
• BUT, an important bridge between previous
  laissez-faire policies the New Deal

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BONUS ARMY - May 1932

• 20,000 WWI Veterans seeking early payment of the
  bonus due them in 1945
• Set up Hoovervilles, demonstrated daily outside
  Capitol
• Senate rejects their demands Hoover asks army
  to disperse
• Most go home Hoover even bought 6,000 train
  fares
• But thousands remained

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• Hoover orders removal without the use of force
• Gen. Douglas MacArthur tear gas, tanks, machine
  guns, bayonets, burns Hooverville
• Hoover takes full responsibility but

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Stimson Doctrine

• Hoover is Quaker, Pacifist
• Favors disarmament
• Japan invades Manchuria, Sept. 1931
• What did this violate?
• China asks League for help / League asks U.S. for
  help Japanese condemned leave the League
• League called for embargo of Japan but US refuses
  (doesnt want war with Japan) instead issues
  Stimson Doctrine
• U.S. wont recognize any territorial acquisitions
  made by force
• Basically, US will be neutral, Japan did nothing
  to threaten America U.S. will not police the
  world
• What message did this send to the rest of the
  world and leaders such as .?

 U.S. Sec. of State Henry Stimson