Crash and Depression HUSH Unit 7 Herbert Hoover

Crash and Depression HUSH Unit 7

Herbert Hoover • Former Secretary of Commerce • Millionaire • Organized food relief in WWI • Believed in limited government • Elected president in 1928 – Republican

The 1920’s • Infant mortality had declined • Life expectancy was 59% for men and 63% for women • Economy appears healthy • “Poverty will be banished from this nation” – President Herbert Hoover

Economies in the 1920 s • High confidence in business • Harding, Coolidge, and Hoover equated the interests of the nation with the interests of business • Many wildly buying stocks on margin • Welfare capitalism-meet workers needs without unions

The Economic Danger Signs 1. Uneven prosperity: – – large corporations dominated industry 71% of families earned less than $2, 500 a year 2. Buying on credit resulted in an increase in debt 3. Speculation in stock market – buying on margin 4. Overproduction of goods; industry slowed 5. Hardships for farmers; prices fell; debt 6. Trouble for workers – low wages

The Crash! • Great Crash, collapse of the stock market • Dow Jones Industrial Average – Black Thursday, Oct. 24, market dropped, causing some panic – Black Tuesday, Oct. 29, 16. 4 million shares were sold • Business cycle, periods in which the economy grows, then contracts • World is affected • Banks close • World-wide investments fall

Black Tuesday

Causes of the Great Depression 1. Stock Speculation – People bought stock with borrowed money 2. Government policies – Federal Reserve system cut interest rates in the 1920 s to spur growth, then restricted the money supply to discourage lending. – Hindered recovery 3. Unstable economy – Wealth unevenly distributed; overproduction; low wages for farmers and many workers

Effects of the Great Depression • Millions lose jobs, homes, farms – ¼ unemployed by 1932 • Gross National Product (GNP) falls dramatically – total value of goods and services produced annually • Many banks fail – 5, 500 by 1933 • Poverty leads to problems • Global economy suffers

Social Effects of Great Depression 1. Homelessness – 2. Hoovervilles – shanty towns, built of tar paper, cardboard, or scrap material Farm Distress – low prices caused many to lose farms • 3. milk dumped Impact on health – 4. Stress on breadwinners and homemakers Discrimination increases • • • Lynching increase Many Hispanics and Asian. Americans deported “Scottsboro Boys” accused of rape

Hoovervilles

The “Scottsboro Boys” The Scottsboro case later inspired Harper Lee's famous work, To Kill a Mockingbird.

Agricultural/Geographic Effects: The Dust Bowl • Region in the Great Plains where drought and dust storms took place during the 1930’s Inappropriate farming techniques had been used for decades • – Extended over southeastern Colorado, southwestern Kansas, the panhandles of Texas and Oklahoma, and northeastern New Mexico.

“Migrant Mother” • Dorothea Lange – • Famous photographer of era “Migrant Mother” is her most famous picture

The Highpoints of 1930’s • People pulled together to help each other – Soup kitchens • Political solutions – Americans trusted the democratic process. • Repeal of Prohibition: Twentyfirst Amendment • Empire State Building built – 102 stories

st 21 Amendment • The eighteenth article of amendment to the Constitution of the United States is hereby repealed.

Hoover’s Plan • Voluntary business action – Laissez-faire – Unpopular with people • Hoover blamed the depression on “world-wide economic conditions beyond our control” and said that prosperity was just around the corner • Public works – Hoover Dam • Reconstruction Finance Corp (RFC) – helped banks extend loans

Hawley-Smoot Tariff • Hoover did decide to protect American businesses from competition by enacting the Hawley-Smoot Tariff • It was the highest tariff in history • Many countries retaliated and American exports and imports plunged by more than half. • The tariff was replaced by lower bilateral (2 country) agreements in the mid 1930 s.

Hoover Dam • Highest concrete arch dam in the U. S. , built on the Colorado River at the Arizona-Nevada border. • The dam, completed in 1936, is used for flood and silt control, electric power, irrigation, and domestic and industrial water supplies.

The Bonus Army • In the summer of 1932, 20, 000 jobless WWI veterans marched on Washington demanding pension bonus • Hoover called on General Douglas Mac. Arthur, who used force and caused injuries among the veterans • The media reports helped to defeat Hoover in 1932

Election of 1932 • Republican candidate – Herbert Hoover • Democratic candidate – Franklin Delano Roosevelt

Franklin Delano Roosevelt • Democrat • Governor of New York • Had contracted polio in his 20’s • His wife, Eleanor, was 6 th cousin – and also related to TR! • Eleanor Roosevelt worked for public housing legislation, birth control, and better conditions for working women • Ready to experiment with ways to turn economy around

FDR Wins • FDR wins by 7 million popular votes • Battle between those who felt government could not fix people’s problems and those who felt that the Depression required governmental help • Supporters of FDR – – – Urban workers/Coal miners Minorities (racial, ethnic and religious) Immigrants of Catholic and Jewish descent Southerners Liberal farm groups Intellectuals