gr 9 depression hoover

8/3/2019 Gr 9 Depression Hoover

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The stock market crash of 1929

revealed weaknesses in the

American economyand triggered

a spreading economic crisis.


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Uneven distribution of wealth during the 1920s.

For most Americans, rising prices swallowed up any increase in

salary.

Coal miners and farmers were very hard hit

Four out of every five families couldnt save any money during

the so-called boom years.

Credit allowed Americans to buy expensive goods, many people

reached their credit limits, and purchases slowed.

Warehouses became filled with goods no one could afford to

buy.


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On Thursday, October 24, 1929, some nervous investors began

selling their stocks and others followed, creating a huge sell-off

with no buyers.

Stock prices plunged, triggering an even greater panic to sell.

But the next Monday the market sank again, and Black

Tuesday, October 29, was the worst day, affecting stocks of

even solid companies.

The damage was widespread and catastrophic. In a few short

days the market had dropped in value by about $16 billion,

nearly one half of its pre-crash value.


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Impact on Business

The Crash crushed businesses,because banks couldnt lendmoney.

Consumers cut back theirspending on everything butessentials, and companies wereforced to lay off workers.

Unemployed workers had evenless money to make purchases,and the cycle continued.

In the year after the crash,American wages dropped by $4billion and nearly 3 millionpeople lost their jobs.

The decline in world trade in the 1930s created misery around the worldand contributed to the nations slide into the Great Depression.


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Impact on Europe

The fragile economies of Europe were still struggling from World War I.They had borrowed a great deal of money from American banks thatthe banks now wanted back.

With U.S. buying power down, foreign businesses were less able toexport their products and were forced to fire workers.

Governments tried to protect themselves by passing high tariffs,

making foreign goods expensive.


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The year following the crash of October 1929 saw a sharp drop ineconomic activity and a steep rise in unemployment.

Unemployment reached a staggering 25 percent, and among some

groups the numbers were even higher:

In the African American neighborhood of Harlem, for example,unemployment reached 50 percent in 1932.


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In 1931 rain stopped falling across much of the Great Plains region.

This drought lasted for several years, and millions of people had fled the area by the

time it lifted.

Agricultural practices in the 1930s left the area vulnerable to droughts.

When wind storms came, they stripped the rich topsoil and blew it hundreds of miles.

The dust sometimes flew as far as the Atlantic Coast.

The storms came year after year, and the hardest hit areas of Oklahoma, Kansas,

Colorado, New Mexico, and Texas eventually became known as the Dust Bowl.


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Herbert Hoover came to the presidency with a core set of beliefs he hadformed over a long career in business and government service.

He believed in:

as little government intervention as possible.

unnecessary government threatened prosperity and the spiritof the American people.

rugged individualism.

Hoover thought it was important not to destroy peoples beliefin their own responsibility and power.


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Hoovers Response to the Great Depression

Direct Action

Businesses cut jobs andwages, and state and localgovernments cut programsand laid off workers.

The crisis persuaded Hooverto go against his beliefs andestablish the ReconstructionFinance Corporation in1932, a program thatprovided $2 billion indirect government aid to

banks and institutions. Later that year he askedCongress to pass the FederalHome Loan Bank, a programto encourage home building.

Hoovers core beliefsthat government should not provide direct aid,but find ways to help people help themselvesshaped his presidency.

Ideas and Beliefs

Before the market crash, Hoovertried to help farmers bystrengthening farmcooperatives.

Cooperative: an organizationowned and controlled by itsmembers, who work togetherfor a common goal

After the crash, Hoovercontinued to believe in voluntaryaction, and he urged businessand government leaders not tolay off workers, hoping that theircooperation would help theeconomic crisis pass.


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The Act

One of Hoovers major efforts to address the economic crisis was the

1930 Smoot-Hawley Tariff Act.

Tariffs are fees on imported goods that raise their cost, making itmore likely that American purchasers buy cheaper American goods.

The Smoot-Hawley Tariff Act was a disaster.

Originally designed to help farmers, it was expanded to include alarge number of manufactured goods.

The high tariff rates were unprecedented.

When European nations responded with tariffs on American goods,international trade fell dramatically.

By 1934 trade was down two thirds from its 1929 level.

The Smoot-Hawley Tariff Act

The Effects


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The Nation Responds to Hoover

Questions of Credibility

Hoover eventually sawthe limitations of hisideals and pushed forsome direct relief, but

his optimistic claimsabout the economyundermined hiscredibility with voters.

Questions of Compassion

As economic conditions grew worse,his unwillingness to consider givingdirect relief to the people becamehard for most Americans tounderstand.

When Hoover finally broke his statedbeliefs and pushed for programs likethe Reconstruction FinanceCorporation, people wondered whyhe was willing to give billions ofdollars to banks and businessesbut not to individuals.


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The Bonus Marchers

In May 1932 some World War I veterans

pressure the federal government to pay a veterans bonus

was not due for many years, needed the money.

soldiers began clearing the area of veterans, violence erupted

and the camp went up in flames, injuring hundreds.

many Americans were greatly disturbed by the sight of soldiers

using weapons against homeless veterans. The publics opinion of Hoover fell even more.


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The Voters React

Trying to balance the budget, Hoover pushed for and signed a large tax

increase in 1932.

This move was highly unpopular, because voters wanted more government

spending to aid the poor.

The 1930 Congressional election provided early signs that the public was fed

up with President Hoover.

Democrats finally won the majority of seats in the House of Representatives

and made gains in the Senate.

By the 1932 presidential election, it seemed certain Hoover would lose the race.

The Great Depression showed few signs of ending, and Hoovers ability toinfluence people and events was nearly gone.


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gr 9 depression hoover

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