Pre Class

What were the 3 areas of economic trouble in the 1920s?

HOMEWORK: Read Chapter 22, Section 1, pages 656 -660, do the Section 1 assessment, page 660,

Questions 1-6

A New PresidentA New President

Herbert Hoover (Rep.)Herbert Hoover (Rep.)

““We in America We in America are are

nearer to the nearer to the final triumph final triumph over poverty over poverty

than ever than ever before.” before.” -1928 speech -1928 speech

accepting the Republican accepting the Republican nomination for the nomination for the

PresidencyPresidency

Young Hoover supporter in 1928

The Stock Market in the The Stock Market in the 1920s1920s

The Stock Market The Stock Market took off and took off and investing in the investing in the market increasedmarket increased

DOW roseDOW rose-Measure of the -Measure of the market’s healthmarket’s health

Many shareholders Many shareholders were those who were those who hoped to strike it hoped to strike it richrich

New York Stock Exchange

By 1929, 4 million Americans owned stocks

SEEDS OF TROUBLESEEDS OF TROUBLE Speculation:Speculation: buying buying

stocks & bonds hoping stocks & bonds hoping for a quick profitfor a quick profit

Buying on the Margin:Buying on the Margin: paying a small paying a small percentage of a stock’s percentage of a stock’s price as a downprice as a down payment payment and borrowing the restand borrowing the rest

Unrestrained buying & Unrestrained buying & selling selling with very little with very little government interventiongovernment intervention People couldn’t pay back People couldn’t pay back

borrowed money if value borrowed money if value of stock declined…of stock declined…

The Stock Market’s bubble was about to break

THE 1929 THE 1929 CRASHCRASH

September the Stock September the Stock Market had some unusual Market had some unusual up & down movementsup & down movements

October 24, the market October 24, the market took a plunge . took a plunge .

On October 29, On October 29, now now known asknown as Black Tuesday Black Tuesday, , the bottom fell outthe bottom fell out

16.4 million shares were 16.4 million shares were sold that day – prices sold that day – prices plummetedplummeted

People who had bought on People who had bought on margin (credit) were margin (credit) were stuck with stuck with huge debtshuge debts

By mid-November, investors had lost about $30 billion

Stock Market Crash

SpeculationBuying

OnMargin

Loss Of

Confidence

Falling Stock Market

Prices

A World Wide A World Wide DepressionDepression

toughest tariff in toughest tariff in U.S. history called U.S. history called the the Hawley- Hawley- Smoot Tariff Smoot Tariff (1930)(1930)

It was meant to It was meant to protect U.S. protect U.S. industry yet had industry yet had the opposite effectthe opposite effect

Other countries Other countries enacted their own enacted their own tariffs and soon tariffs and soon world trade fell world trade fell 40%40%

CAUSES OF THE CAUSES OF THE GREAT DEPRESSIONGREAT DEPRESSION

TariffsTariffs & war & war debt policiesdebt policies

U.S. U.S. demand lowdemand low, , industries failingindustries failing

Farmers Farmers sufferingsuffering

Easy Easy credit credit led to led to debt and less debt and less spendingspending

Unequal Unequal distribution of distribution of incomeincome

HARDSHIPS DURING HARDSHIPS DURING DEPRESSIONDEPRESSION

The Great Depression The Great Depression brought hardship, brought hardship, homelessnesshomelessness, and , and hunger to millionshunger to millions

Across the country, Across the country, people lost their jobs, people lost their jobs, and their homesand their homes

Some built Some built makeshifts shacks makeshifts shacks out of scrap materialout of scrap material

Before long whole Before long whole shantytowns shantytowns (sometimes called (sometimes called HoovervillesHoovervilles in mock in mock reference to the reference to the president) sprung uppresident) sprung up

SOUP SOUP KITCHENSKITCHENS

One of the common One of the common features of urban features of urban areas during the era areas during the era were were soup kitchens soup kitchens and bread linesand bread lines

Soup kitchens and Soup kitchens and bread lines offered bread lines offered free or low-cost food free or low-cost food for peoplefor people

Unemployed men wait in line for food – this particular soup

kitchen was sponsored by Al Capone

RURAL LIFE DURING RURAL LIFE DURING THE DEPRESSIONTHE DEPRESSION

While the Depression While the Depression was difficult for was difficult for everyone, farmers did everyone, farmers did have one advantage; have one advantage; they could grow food they could grow food for their familiesfor their families

Thousands of farmers; Thousands of farmers; however, however, lost their lost their landland

Many turned to tenant Many turned to tenant farming and barely farming and barely scraped out a livingscraped out a living

Between 1929-1932 almost ½ million farmers lost their land

THE DUST BOWLTHE DUST BOWL A A severe droughtsevere drought

gripped the Great gripped the Great Plains in the Plains in the early early 1930s1930s

Wind scattered the Wind scattered the topsoil, exposing sand topsoil, exposing sand and gritand grit

The resulting The resulting dust dust traveledtraveled hundreds of hundreds of milesmiles

One storm in 1934 One storm in 1934 picked up millions of picked up millions of tons of dust from the tons of dust from the Plains an carried it to Plains an carried it to the East Coastthe East Coast Kansas Farmer, 1933

“The Plow that Broke the Plains”

Dust storm approaching Stratford, Texas - 1934

Storm approaching Elkhart, Kansas in 1937

Dust buried cars and wagons in South Dakota in 1936

HARDEST HIT HARDEST HIT REGIONSREGIONS

Kansas, Oklahoma, Kansas, Oklahoma, Texas, New Mexico, Texas, New Mexico, and Colorado were and Colorado were the hardest hit the hardest hit regions during the regions during the Dust BowlDust Bowl

Many farmers Many farmers migratedmigrated to to California and California and other Pacific Coast other Pacific Coast statesstatesBoy covers his mouth to avoid

dust, 1935

Photographer Dorothea Lange captures a family headed west to escape the dust

storms

CONDITIONS CONDITIONS FOR FOR

MINORITIESMINORITIES Conditions for African Conditions for African

Americans and Latinos Americans and Latinos were especially difficultwere especially difficult

UnemploymentUnemployment was the was the highest among highest among minorities and their minorities and their paypay was the was the lowestlowest

Increased violenceIncreased violence (24 (24 lynchings in 1933 lynchings in 1933 alone)alone) marred the marred the 1930s1930s

Many Mexicans were Many Mexicans were “encouraged” to return “encouraged” to return to their homelandto their homeland

As conditions deteriorated, violence

against blacks increased

HOBOES HOBOES TRAVEL TRAVEL

AMERICAAMERICA The 1930s created the The 1930s created the term term “hoboes”“hoboes” to to describe describe poor drifterspoor drifters

300,000 transients – or 300,000 transients – or hoboes – hitched rides hoboes – hitched rides around the country on around the country on trains and slept under trains and slept under bridges (thousands bridges (thousands were teenagers)were teenagers)

Injuries and death was Injuries and death was commoncommon on railroad on railroad property; over 50,000 property; over 50,000 people were hurt or people were hurt or killedkilled

EFFECTS OF EFFECTS OF DEPRESSIONDEPRESSION

Suicide rate roseSuicide rate rose more more than 30% between than 30% between 1928-19321928-1932

Alcoholism roseAlcoholism rose sharply sharply in urban areasin urban areas

Three times as many Three times as many people were admitted to people were admitted to state mental hospitalsstate mental hospitals as in normal timesas in normal times

Many people showed Many people showed great great kindness to kindness to strangersstrangers

Additionally, many Additionally, many people developed habits people developed habits of of savings & thriftinesssavings & thriftiness

CAUSES OF THE CAUSES OF THE GREAT DEPRESSIONGREAT DEPRESSION

TariffsTariffs & war & war debt policiesdebt policies

U.S. U.S. demand lowdemand low, , industries failingindustries failing

Farmers Farmers sufferingsuffering

Easy Easy credit credit led to led to debt and less debt and less spendingspending

Unequal Unequal distribution of distribution of incomeincome

SECTION 3: SECTION 3: HOOVER HOOVER

STRUGGLES STRUGGLES WITH THE WITH THE

DEPRESSIONDEPRESSION After the stock After the stock market crash, market crash, President Hoover President Hoover tried to reassure tried to reassure AmericansAmericans

He said, “Any lack He said, “Any lack of confidence in the of confidence in the economic future . . . economic future . . . Is foolish”Is foolish”

He recommended He recommended business as usualbusiness as usual

Herbert Hoover

A little about Herb….

"A private meeting with Hoover is like sitting in a bath of ink."--Secretary of State Henry Stimson

A far cry from the campaign promises…

“A Chicken in Every Pot and a Car in Every Garage.”

HOOVER’S HOOVER’S PHILOSOPHYPHILOSOPHY

Hoover was not quick to Hoover was not quick to reactreact to the depression to the depression

He believed in He believed in “rugged “rugged individualism”individualism” – the idea – the idea that people succeed that people succeed through their own effortsthrough their own efforts

People should take care People should take care of themselves, not of themselves, not depend on governmental depend on governmental hand-outshand-outs

He said people should He said people should “pull themselves up by “pull themselves up by their bootstraps”their bootstraps”Hoover believed it was the individuals

job to take care of themselves, not the governments

HOOVER’S HOOVER’S SUCCESSFUL DAM SUCCESSFUL DAM

PROJECTPROJECT Hoover successfully Hoover successfully

organized and organized and authorized the authorized the construction of the construction of the Boulder DamBoulder Dam (Now (Now called the Hoover called the Hoover Dam)Dam)

The $700 million The $700 million project was the project was the world’s world’s tallest damtallest dam (726 feet) (726 feet) and the second largest and the second largest (1,244 feet long)(1,244 feet long)

The dam currently The dam currently provides electricity, provides electricity, flood control and water flood control and water for 7 western statesfor 7 western states

Any dam questions?

The Hoover Dam

http://www.pbs.org/wgbh/americanexperience/hoover/

HOOVER TAKES HOOVER TAKES ACTION: TOO LITTLE ACTION: TOO LITTLE

TOO LATETOO LATE Hoover gradually softened Hoover gradually softened

his position on his position on government intervention government intervention in the economyin the economy

He created the He created the Federal Federal Farm BoardFarm Board to help to help farmers farmers

He also created the He also created the National Credit National Credit OrganizationOrganization that helped that helped smaller banks smaller banks

His His Federal Home Loan Federal Home Loan Bank ActBank Act and and Reconstruction Finance Reconstruction Finance CorpCorp were two measures were two measures enacted to protect people’s enacted to protect people’s homes and businesseshomes and businesses

Hoover’s flurry of activity came too late to save the

economy or his job

BONUS BONUS ARMYARMY

A 1932 incident further A 1932 incident further damaged Hoover’s imagedamaged Hoover’s image

That spring about That spring about 15,000 World War I vets15,000 World War I vets arrived in Washington to arrived in Washington to support a proposed billsupport a proposed bill

The The Patman BillPatman Bill would would have authorized have authorized Congress to pay a bonus Congress to pay a bonus to WWI vets immediatelyto WWI vets immediately

The bonus was The bonus was scheduled to be paid in scheduled to be paid in 1945 --- The Army 1945 --- The Army vets vets wanted it NOWwanted it NOW

BONUS ARMY BONUS ARMY TURNED DOWNTURNED DOWN

Hoover called Hoover called the Bonus the Bonus marchers, marchers, “Communists “Communists and and criminals”criminals”

On June 17, On June 17, 1932 the 1932 the Senate voted Senate voted down the down the Putnam BillPutnam Bill

Thousands of Bonus Army soldiers protest – Spring 1932

BONUS MARCHERS BONUS MARCHERS CLASH WITH SOLDIERSCLASH WITH SOLDIERS

Hoover told the Hoover told the Bonus marchers to go Bonus marchers to go home– most didhome– most did

2,000 refused to leave2,000 refused to leave Hoover sent a force of Hoover sent a force of

1,000 soldiers under 1,000 soldiers under the command of the command of General General Douglas Douglas MacArthurMacArthur and his and his aide aide Dwight Dwight EisenhowerEisenhower

AMERICANS SHOCKED AMERICANS SHOCKED AT TREATMENT OF AT TREATMENT OF

WWI VETSWWI VETS

MacArthur’s 12MacArthur’s 12thth infantry gassed more than infantry gassed more than 1,0001,000 marchers, including an 11-month old marchers, including an 11-month old baby, who diedbaby, who died

Two vets were shot and scores injuredTwo vets were shot and scores injured Americans were outraged and once again, Americans were outraged and once again,

Hoover’s image sufferedHoover’s image suffered

Hoover had little chance to be re-elected in 1932

The Great DepressionThe Great Depression Bank & Business FailuresBank & Business Failures

-Banks invested people’s money into -Banks invested people’s money into stock marketstock market

-By 1933, 11,000 of the nation's -By 1933, 11,000 of the nation's 25,000 banks had failed25,000 banks had failed

-No insurance on savings accounts; -No insurance on savings accounts; people lost their moneypeople lost their money

Unemployment reached 25%Unemployment reached 25%

-1 out every 4 people without a job-1 out every 4 people without a job