his 112 chapter 26 the shaken dream and the new deal, 1929-1933
Post on 13-Dec-2015
213 Views
Preview:
TRANSCRIPT
HIS 112Chapter 26
The Shaken Dream and the New Deal, 1929-1933
Overview
Country was optimistic in 1928 when Herbert Hoover was elected as president
Hoover knew there were some weaknesses in the economy and some divisions in society but thought he could fix all that
When the stock market crashed in 1929, Hoover and everyone else was shocked
This crash affected the whole economy and resulted in the Great Depression
Americans couldn’t understand why people were going hungry when farmers bins were overflowing, people were out of work when they were willing and able, and factories closed when they could function
Americans’ belief that if you work hard, you will succeed, was shaken
They looked to Herbert Hoover for help, and he did little
So they didn’t re-elect him in 1932 Franklin D. Roosevelt, a Democrat,
became president
The New Day, 1929-1933
This was the name given to the Hoover Administration
His cabinet was comprised largely of wealthy businessmen who believed in the old ways and in a capitalist utopia; they didn’t want innovation
Hoover did have a group of young advisors called the New Patriots who felt science and efficiency could be applied to government
There was some business optimism: a new building called the Empire State Building was being built; when this office building was completed in 1931, many offices were left vacant
Hoover believed that individuals were responsible for themselves
Government should have only a limited role in people’s lives
This thinking did not match the reality
The Crash and the Great Depression The stock market crashed on 29 October
1929 There had been warning signs; however,
Hoover felt the stock market’s ills could be quarantined from a generally healthy economy
Causes: Increasing weakness of the economy of the 1920s
1._______________________________________________________________________________________________
2._______________________________________________________________________________________________
3._______________________________________________________________________________________________
Underconsumption1.___________________________________
____________________________________
2._______________________________________________________________________
Unequal distribution of income1.
____________________________________________________________________________________________________________
2._______________________________________________________________________
Large Corporations____________________________________
________________________________________________________________________________________________________________________________________________________________________________________________________________________
Speculation in the stock marketStock purchases made with borrowed moneyPeople bought stock “On Margin”
Put 10% of purchase price down When stock goes up, sell some and pay off what is
owed Brokers’ loans totaled $6 billion by the summer of
1929
International economic troubles U.S. had loaned lots of money to Europe after World
War I These loans stopped at the end of 1920s Europeans could not borrow more money and they
couldn’t sell goods easily in U.S. because of tariffs They bought less from U.S. and defaulted on loans The depression became international in scope
Government policies and practicesLack of federal regulation to curb speculation
in the marketFederal Reserve had easy-credit policies and
charged low discount rates
Little or no economic information availableNo computers, for example, to give instant
information
top related