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Crash and Depression
HUSH Unit 3
Herbert Hoover• Former Secretary of
Commerce • Millionaire• Organized food relief
in WWI• Believed in limited
government• Elected president in
1928– Republican
The 1920’s• Infant mortality had declined• Life expectancy was 59% for men and 63% for women• Economy appears healthy• “Poverty will be banished from this nation”
– President Herbert Hoover
Economies in the 1920sEconomies in the 1920s
• High confidence in business• Harding, Coolidge, and
Hoover equated the interests of the nation with the interests of business
• Many wildly buying stocks on margin
• Welfare capitalism-meet workers needs without unions
The Economic Danger Signs1. Uneven prosperity:
– large corporations dominated industry– 71% of families earned less than $2,500 a year
2. Buying on credit resulted in an increase in debt3. Speculation in stock market
– buying on margin
4. Overproduction of goods; industry slowed5. Hardships for farmers; prices fell; debt6. Trouble for workers
– low wages
The Crash!• Great Crash, collapse of the stock market• Dow Jones Industrial Average
– Black Thursday, Oct. 24, market dropped, causing some panic
– Black Tuesday, Oct. 29, 16.4 million shares were sold
• Business cycle, periods in which the economy grows, then contracts
• World is affected• Banks close• World-wide investments fall
Black Tuesday
Causes of the Great Causes of the Great DepressionDepression
1. Stock Speculation– People bought stock with borrowed money
2. Government policies – Federal Reserve system cut interest rates in the 1920s
to spur growth, then restricted the money supply to discourage lending.
– Hindered recovery
3. Unstable economy– Wealth unevenly distributed; overproduction; low
wages for farmers and many workers
Effects of the Great Depression
• Millions lose jobs, homes, farms– ¼ unemployed by 1932
• Gross National Product (GNP) falls dramatically – total value of goods and services produced annually
• Many banks fail– 5,500 by 1933
• Poverty leads to problems• Global economy suffers
Social Effects of Great Depression1. Homelessness
– Hoovervilles – shanty towns, built of tar paper, cardboard, or scrap material
2. Farm Distress – low prices caused many to lose farms
• milk dumped
3. Impact on health– Stress on breadwinners and
homemakers
4. Discrimination increases • Lynching increase• Many Hispanics and Asian-
Americans deported• “Scottsboro Boys” accused of
rape
Hoovervilles
The “Scottsboro Boys”
The Scottsboro case later inspired Harper Lee's famous work, To Kill a Mockingbird.
Agricultural/Geographic Effects: The Dust Bowl
• Region in the Great Plains where drought and dust storms took place during the 1930’s
• Inappropriate farming techniques had been used for decades
– Extended over southeastern Colorado, southwestern Kansas, the panhandles of Texas and Oklahoma, and northeastern New Mexico.
“Migrant Mother”
• Dorothea Lange– Famous
photographer of era
• “Migrant Mother” is her most famous picture
The Highpoints of 1930’s
• People pulled together to help each other– Soup kitchens
– “Kind Hearted Woman”
• Political solutions – Americans trusted the democratic
process.
• Depression humor– Will Rogers
• Repeal of Prohibition Twenty-first Amendment
• Empire State Building built– 102 stories
Will Rogers-American Humorist
• Actor, comedian, social commentator– "My ancestors didn't come over on the
Mayflower, but they met the boat." – “I never met a man I didn’t like.” – Well, what shall I talk about? I ain't
got anything funny to say. All I know is what I read in the papers.”
– "There's no trick to being a humorist when you have the whole government working for you."
• Killed in a plane crash in 1935 with famous aviator, Wiley Post
21st Amendment• Section 1. The eighteenth
article of amendment to the Constitution of the United States is hereby repealed.
• Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use there in of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
• The "Kind Hearted Woman" symbol of the Great Depression which became a way for one transient person to communicate to the next that the house outside which the sign was scratched or drawn was a home where a meal might be obtained and human kindness was present.
Hoover’s Plan• Voluntary business action
– Laissez-faire
– Unpopular with people
• Hoover blamed the depression on “world-wide economic conditions beyond our control” and said that prosperity was just around the corner
• Public works– Hoover Dam
• Reconstruction Finance Corp (RFC)– helped banks extend loans
Hawley-Smoot Tariff• Hoover did decide to protect American businesses
from competition by enacting the Hawley-Smoot Tariff
• It was the highest tariff in history• Many countries retaliated and American exports
and imports plunged by more than half. • The tariff was replaced by lower bilateral (2-
country) agreements in the mid 1930s.
Hoover Dam• Highest concrete arch
dam in the U.S., built on the Colorado River at the Arizona-Nevada border.
• The dam, completed in 1936, is used for flood and silt control, electric power, irrigation, and domestic and industrial water supplies.
Effects: The Bonus ArmyEffects: The Bonus Army• In the summer of 1932,
20,000 jobless WWI veterans marched on Washington demanding pension bonus
• Hoover called on General Douglas MacArthur, who used force and caused injuries among the veterans
• The media reports helped to defeat Hoover in 1932
Election of 1932• Republican candidate
– Herbert Hoover
• Democratic candidate– Franklin Delano
Roosevelt
Franklin Delano Roosevelt• Democrat • Governor of New York• Had contracted polio in his
20’s• His wife, Eleanor, was 5th
cousin – and also related to TR!
• Eleanor Roosevelt worked for public housing legislation, birth control, and better conditions for working women
• Ready to experiment with ways to turn economy around
FDR Wins• FDR wins by 7 million popular votes• Battle between those who felt government could
not fix people’s problems and those who felt that the Depression required governmental help
• Supporters of FDR– Urban workers/Coal miners– Minorities (racial, ethnic and religious) – Immigrants of Catholic and Jewish descent– Southerners– Liberal farm groups– Intellectuals
Read your Chapters!• Thanks to Mrs. Overcash!!
