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THE ROARING TWENTIES to the GREAT DEPRESSION

THE ROARING TWENTIES to the GREAT DEPRESSION. HERBERT HOOVER. President Herbert Hoover, Henry Ford, Thomas Edison, and Harvey Firestone at Edison's 82nd birthday. Ft. Myers, Florida, February 11, 1929. Coolidge chooses not to run again; opens door for Sec. of Commerce Hoover

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THE ROARING TWENTIES to the GREAT DEPRESSION

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  1. THE ROARING TWENTIES to the GREAT DEPRESSION HERBERT HOOVER

  2. President Herbert Hoover, Henry Ford, Thomas Edison, and Harvey Firestone at Edison's 82nd birthday. Ft. Myers, Florida, February 11, 1929. • Coolidge chooses not to run again; opens door for Sec. of Commerce Hoover • Decries 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?

  3. 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 Herbert Hoover Alfred E. Smith Republican Democrat “A Dry Country Quaker” “A Wet City Catholic” “Rugged Individualism” “Rum, Romanism & Ruin” ELECTION OF 1928

  4. ELECTION OF 1928

  5. 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

  6. 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 the beginning, but not the cause of the Great Depression

  7. 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)

  8. 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 market 16 million shares sold on 10/29/29 Loss of $30 billion

  9. 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”

  10. “Rugged Individualism” Government should help people to help themselves “Hand-ups” not Hand-outs Hoover on Government & Business/Economy:

  11. 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

  12. OVERPRODUCTION & UNDERCONSUMPTION • 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.

  13. 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.

  14. PUBLIC WORKS PROJECTS • Approves $2.25 billion public works program • Most famous project: • Boulder Dam – later called Hoover Dam – on CO River, 1930-36

  15. 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

  16. 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

  17. Hoover orders removal “without the use of force” • Gen. Douglas MacArthur – tear gas, tanks, machine guns, bayonets, burns Hooverville • Hoover takes full responsibility but …

  18. 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 ….?

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