Hoover The Crash The Great Depression

Hoover & The Crash The Great Depression & The New Deal (1929 -1940) Chapter 26, Section 1

Essential Question: • Should the Government Intervene in the Lives of its’ Citizenry? Explain.

Herbert Hoover • Secretary of Commerce Under Calvin Coolidge • Won the 1928 Presidential Election • Republican = Believed in Laissez Faire! • 3 Republicans in a Row During 1920’s: Harding, Coolidge & Hoover • Considered One of the WORST Presidents! (Great Depression)

The Big Jinx! • In One of Herbert Hoover’s Campaign Speeches, He Said: – “We shall soon be in sight of the day when poverty will be banished from this nation” – JINX! – Why Did Herbert Hoover Believe This?

4 Industries in Trouble During the “Roaring Twenties” • Agriculture (Farming) – Overproduction of Crops with New Equipment = Lower Prices/Profits • Railroads: – People Buying Cars • Textile Mills: – Mass Production of Textiles = Lower Prices • Mines: – Other Forms of Energy

The Growing Poor • By 1929, 71% of Americans Only Made $2500 Per Year (Below the Poverty Level) • Unemployment Rate Was Growing • African Americans Struggled to Get Jobs! (Racism)

1 st Cause of Great Depression: Overproduction • Businesses Made More Goods! (Better Tech!) • Even Though Prices of Goods Went Down, So Did Peoples Salaries! • People Stopped Buying Goods! (Businesses Could Not Pay for Materials, Salaries, Equipment, Etc) • Businesses Had to Cut Costs ($$$) to Survive (Fire Workers!)

Overproduction!

2 nd Cause of Great Depression: Buying on Credit • Installment Buying: – During the 1920’s Most Americans Bought on Credit • When Americans Salaries Dropped, They Paid Off Their Debts Instead of Buying New Goods! • Businesses Sold Less/ More Overproduction • Is This Happening Today?

3 rd Cause of Great Depression: Speculation • During the 1920’s Stock Prices Kept Going Up! • Speculation is the Buying & Selling of Stocks in Hope of Making a Quick Profit! • Most Americans Bought Stock in Companies & Sold It to Make $$$ • Is This Happening Today?

Wall Street NYC

4 th Cause of Great Depression: Buying on Margin • Investors Took Out Loans From Banks to Buy Stocks • If Stock Goes Up, Sell the Stock, Pay Back the Loan to the Bank, Make a Profit! (Awesome!) • If Stock Goes Down… Uh-Oh!

1928 Presidential Election • Herbert Hoover Won the 1928 Presidential Election by a Landslide • Predicted More Prosperity for America (The Big Jinx!) • Republican – Laissez Faire (Hands Off)

Black Tuesday • October 29 th, 1929 • As The Stock Market Kept Going Lower & Lower, Americans Panicked & Tried to Sell All of Their Stocks! • Nobody Wanted To Buy! Everyone Was Afraid as Prices Kept Dropping! • The Stock Market Crashed! • Is This Happening Today?

Outside the NYSE

Failure of the Banks! • When the Stock Market Crashed, Banks Demanded Customers to Pay Back Their Loans! • People Who Bought on Margin Could Not Pay Back Their Loans! Banks Ran Out of Money! • Citizens Ran to the Bank To Pull Out Their Savings! Banks Had No $$$ To Give! • 9, 000+ Banks Went Out of Business!

Business Failures 1929 • When The Market Crashed, People Stopped Buying Goods! • Thousands of Businesses Went Bankrupt! • To Save $$$, Businesses Fired Workers! • No Work, No Paycheck! No Paycheck, Can’t Buy Goods! Businesses Fire More Workers, More People Have No Paycheck…. . Bad Cycle!

Unemployment & Hunger • 25% Unemployment in 1933 (1 out of Every 4 Americans) • Americans Bought Less Products = Businesses Fired More Workers! • Poverty, Homelessness & Hunger! • Everyone Affected!

Global/World Wide Depression • The Great Depression Lasted From 19291941 (When the U. S. Entered WWII) • Many Countries Around the World Took Loans From U. S. Banks to Help Rebuild After WWI • When American Banks Crashed, So Did the World’s Economy!

Herbert Hoover: Laissez Faire Response! • Herbert Hoover was a Republican = Believed Government Intervention Should NOT Take Place! • He Cut Government Spending on Projects & Raised Taxes • Plan Made Sense But TOTALLY BACKFIRED! • Why Did Hoover’s Plan Make Things Worse?

“Rugged Individualism” • Herbert Hoover Did NOT Want to Give Federal Relief ($$$ & Food) to the Poor – Feared Citizens Would Then Rely on the Government (Dependent) • Hoover Believed in the “Rugged Individual” • Americans Had to Be Tough Through Hard Times! Suck It Up! • Why Do YOU Think Americans Think of Hoover as One of the Worst Presidents Ever?

Private Charities • Herbert Hoover Asked Private Charities to Help! • Salvation Army, The American Red Cross & Religious Groups Did As Best As They Could! • The Demand for Food, $$$, Shelter & Jobs Was too High!

Hoover Flags • Americans Blamed Herbert Hoover For Their Suffering! • Hoover Flags & Hoovervilles Were Used to Blame Herbert Hoover for the Depression • Hoover Finally Changed His Laissez Faire Beliefs! (Too Little, Too Late!)

Hoovervilles

Public Works Projects • Government Funded (Paid For) Projects • Projects to Improve Infrastructure = Roads, Dams, Airports, Bridges, Tunnels • Projects Would Give People Jobs! • Reverse the Cycle! – Jobs = Paychecks = Spending = Investment Capital = Businesses Hire More Workers = More Paychecks = Etc…

The Hoover Damn (AZ & NV)

Public Works Projects Today!

The Bonus Army • 12, 000 -15, 000 WWI Veterans Marched on Washington D. C. , Summer of 1932 • Wanted Their Bonuses Early Because They Were Broke! Needed the $$$! • They Refused to Leave Until They Got Their Bonuses! • Set Up Camp in D. C. !

Hoover & Senate Say NO! • Herbert Hoover & the Senate Vote Down a Bill to Give WWI Bonuses Early • Most Veterans Went Home. Some Stayed & Protested! • General Douglass Mac. Arthur & the Present Army Kicked Them Out of D. C. – Fighting Broke Out! – Present U. S. Army Used Tear Gas & Force!

Hoover Looks Really Bad! • Americans Were Very Upset for the Harsh Treatment of the Bonus Army! • Hoover Looked Really Bad! America Would Look For Change! • FDR – Democrat Will Win the 1932 Election!

Essential Question: • Should the Government Intervene in the Lives of its’ Citizenry? Explain.