THE ROARING TWENTIES to the GREAT DEPRESSION

HERBERT HOOVER

Coolidge chooses not to run again; opens door for Sec. of Commerce HooverDecries socialism with cries of “rugged individualism”

Idea that individuals should help themselves out – gov’t should not be involved in people’s 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?

President Herbert Hoover, Henry Ford, Thomas Edison, and Harvey Firestone at Edison's 82nd birthday. Ft. Myers, Florida, February 11, 1929.

Herbert Hoover Alfred E. SmithRepublican Democrat“A Dry Country Quaker” “A Wet City Catholic”“Rugged Individualism” “Rum, Romanism & Ruin”

ELECTION OF 1928

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

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 nation’s largest cities

ELECTION OF 1928

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

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 thebeginning, butnot the causeof the GreatDepression

CAUSES OF THE CRASH: EASY CREDIT!!

Speculation (buying risky stocks – to get rich quick - hoping for a quick profit)

Buying on margin (buying stocks on CREDIT)

CAUSES OF THE CRASH:

GREED INFLATED SENSE

OF PROSPERITY GOVERNMENT’S

LAISSEZ-FAIRE POLICY TOWARDS BUSINESS

Crash Statistics:Approx. 1.5 million Americans in the stock market16 million shares sold on 10/29/29Loss of $30 billion

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”

Hoover on Government & Business/Economy:

“Rugged Individualism”

Government should help people to help themselves

“Hand-ups” not Hand-outs

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 country’s 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

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.

OVERPRODUCTION & UNDERCONSUMPTION

HOOVER’S 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 gov’t to

stimulate the economy from the top via aid to corporations, public works, etc.

PUBLIC WORKS PROJECTS

Approves $2.25 billion public works program

Most famous project: Boulder Dam –

later called Hoover Dam – on CO River, 1930-36

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

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 rejected their demands & Hoover asks “army” to disperse Most go home; Hoover

bought 6,000 train fares But thousands remained

Hoover orders removal “without the use of force” Gen. Douglas MacArthur – tear gas, tanks, machine

guns, bayonets, burns Hooverville Hoover takes full responsibility but …

Hoover-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

(doesn’t want war with Japan) & instead issues Stimson Doctrine U.S. won’t 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 ….?