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Learn about the Great Depression, its causes, and Herbert Hoover's approach as the Republican President from 1929 to 1933. Explore his belief in laissez-faire capitalism, the effects of speculation and Black Tuesday, the impact of the Business Cycle, and the consequences of the Hawley-Smoot Tariff. Discover the hardships faced by Americans, such as breadlines and Hoovervilles, and the challenges for farmers during this time. Understand the Dust Bowl, the migration of Okies, and the controversial Repatriation policies. Lastly, explore the concept of Trickle-Down Economics and the significance of the Reconstruction Finance Corporation and Hoover Dam.
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Herbert Hoover • Republican President from 1929 to 1933; As a believer in laissez-faire capitalism, Hoover refused to intervene in the economy at the onset of the Great Depression, believing that the business world would fix itself. As a result, Hoover received a great deal of the blame for the Depression.
Speculation / Black Tuesday • Speculation – Practice of investing money in the stock market gambling on stock increases to turn a quick profit. Most speculation purchases in the 1920s were made with borrowed money. (Buying on Margin) • Black Tuesday – October 29th, 1929; The stock market collapsed as 16 million shares of stock were sold leading to Billions of dollars of losses & the onset of the Great Depression.
Business Cycle • The periodic growth and contraction of the economy.
Hawley-Smoot Tariff • Passed by Congress in June 1930; Raised prices on foreign imports so that they could not compete in American markets, leading European countries to enact protective tariffs of their own. Increasing tariffs worldwide caused the Great Depression to worsen worldwide.
Great Depression • Period lasting from 1929 to 1941 in which the American and Global economies faltered and unemployment soared.
Bread Line • Run by charities or public agencies during the Depression; Bread lines were often the only place for the unemployed to get a free scrap of food.
Hoovervilles • Makeshift shantytowns of tents and shacks built on public land or vacant lots during the Great Depression.
Tenant Farmers • Farmers who are paid to work land that is not their own by a bigger landowner; During the Great Depression many farmers who lost their farms to foreclosure were forced to become tenant farmers.
Dust Bowl • Farmland stretching from North Dakota in the north to Texas in the south which, due to a prolonged drought, experienced gigantic dust storms and saw a dramatic drop in agricultural production in the 1930s.
Okies • Americans who left the Dust Bowl region and headed west, most often to California, in search of jobs and a new life.
Repatriation • Efforts by local, state, and federal government to encourage or force immigrants and their naturalized children to return to their nation of origin; During the Great Depression whites in the southwest argued for the repatriation of Mexican immigrants, who they believed were taking jobs from white Americans. As a result, hundreds of thousands of people of Mexican ancestry were pushed out of the United States.
Localism • Political belief held by President Hoover that economic problems can best be solved at local and state levels, not by the national government.
Reconstruction Finance Corporation • Created by Congress in 1932, the RFC gave more than a billion dollars of government loans to railroads, large businesses, and banks hoping to jumpstart the economy but failing to do so.
Trickle-Down Economics / Hoover Dam • Trickle-Down Economics – Theory that money poured into the top of the economic pyramid (i.e. Banks and Big Businesses) will trickle down to the based. (i.e. average workers) The RFC exemplifies this theory. • Hoover Dam – Government funded public-works project built from 1930 to 1932 on the Colorado River, providing jobs to workers in the southwest along with electricity & water for residents of southwestern states.
Bonus Army • 20,000 World War I veterans who marched on Washington in the summer of 1932 to demand the bonus which they were promised to receive in 1945. The veterans argued that they needed the money early due to the economic hardships of the Depression and occupied government buildings, refusing to leave until they were paid.
Douglas MacArthur • American army general who, in the summer of 1932, forced the Bonus Army out of Washington D.C., ordering his troops to shoot tear gas into the crowds and use bayonets if necessary. President Hoover was blamed for the use of military force against American veterans, leading to his defeat in the Presidential election of 1932.
