Herbert Hoover

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					QUESTION
How did the Prosperity of the
 1920s give way to the Great
 Depression?
THE GREAT DEPRESSION
Worst
Economic Slump
in U.S. History

1929-1933
Prosperity was not even in
 country
Northeast, Upper Midwest,
 and West Coast were doing
 well
South, Midwest did poorly
WEALTH in 1929
1% of Americans controlled 34%
 savings
80% of Americans had no savings
Henry Ford had personal income of
 $14 million
Average personal income was $750
Economy was strong based on
 World War I
Installment buying
5% of Americans earned 33% of
 income
Credit Today
 Average credit card debt per household with
  credit card debt: $15,799
 · 609.8 million credit cards held by U.S.
  consumers
 Average number of credit cards held by
  cardholders: 3.5
 Total U.S. consumer debt: $2.43 trillion, as
  of May 2011
                  1920s
 106,521,537 people in the United States
 2,132,000 unemployed
 Unemployment 5.2%
 Life expectancy: Male 53.6
 Female 54.6
 Average annual earnings
 $1236; Teacher's salary $970
 It took 13 days to reach California from
 New York There were 387,000 miles of
 paved road.
                1930s

 Population: 123,188,000
 Life Expectancy: Male, 58.1; Female, 61.6
 Average salary: $1,368
 Unemployment rises to 25%
 Car Sales: 2,787,400
 Food Prices: Milk, 14 cents a qt.; Bread, 9
 cents a loaf; Round Steak, 42 cents a
 pound
 Lynchings: 21
The Great Depression took
place from 1930 to 1939
 During this time the prices of stock fell
  40%.
 9,000 banks went out of business.
 9 million savings accounts were wiped
  out.
 86,000 businesses failed.
 Wages were decreased by an average of
  60%. The unemployment rate went from
  9% all the way to 25%.
 About 15 million jobless people./122 mil
The Roaring 20’s
 The new concept of
  “credit”
 People were buying:
   Automobiles
   Appliances
   Clothes
 Fun times reigned
   Dancing
   Flappers
   Drinking
       Why was this bad?
 Credit system
   People didn’t really
    have the money they
    were spending
 WWI
   The U.S. was a major
    credit loaner to
    other nations in
    need
   Many of these nations
   could not pay us back
The Stock Market
 People bought
 stocks on margins
   If a stock is $100 you
   can pay $10 now and
   the rest later when
   the stock rose
 Stocks fall
   Now the person has
   less than $100 and no
   money to pay back
              With people panicking
And then….    about their money
              investors tried to sell
              their stocks
                This leads to a huge
                  decline in stocks
                 Stocks were worthless now
              People who bought on
               “margins” now could not
               pay
              Investors were average
               people that were now
               broke
STOCK MARKET
HOW DID IT WORK?
WHAT IS THE BULL MARKET?
WHAT IS THE BEAR MARKET?
Made it easy for all to buy
Repossessed if payments were
 missed
Stock Market opened to all
 Americans
Some were novice
EXAMPLE OF GET RICH QUICK
    ABC Automobile company
      Want to expand
      Look for investors, go public
      Sell 10,000 shares for $100 each
      Shares are called STOCK
      Dividend= percentage of profits
Speculation
Margin
Buyer puts 10% down on a stock
Broker provides rest as a loan or
 margin
Buyer gambles that stock is
 going to increase
RCA started at $85 and a year
 later was $549
If stock price rose buyer made
 money
Buying on installment credit
Government had subsidized farms
 during WWI: paid $2/bushel of
 wheat
By 1929 Price was less than
 .67/bushel
Farmers fell into debt
If price fell, the broker called in
 margin demanded immediate
 payment
Usually investor or buyer lost
 everything
BUBBLE BURSTS
October 24, 1929
“Black Thursday”
Stock prices plummeted
13 million shares were sold
29 th and30 th16 million shares
 were sold
By two weeks time index price
 fell by 50%
30 billion dollars were lost in
 the next weeks
FEDERAL RESERVE SYSTEM
Known as the Fed
Central Banking system
 established in 1913
Money made through open
 market transactions
Raise and lower interest rates
1929-1939
 Stock market
  crash
 Didn’t realize
  the effect it
  would have
 No money to
  replenish what   Many found being broke
                        humiliating.
  was borrowed
 Herbert Hoover was
  president at the start
 Philosophy: We’ll make it!
 What He Did: Nothing
 The poor were looking for
  help and new ideas on
  how to correct or help
  were coming
Hoover Facts
 Never took a salary/ He was a millionaire
 Approved the Star Spangle Banner as National Anthem
 Spoke Chinese
Son had 2 alligators sometimes wandered White House
HOOVER Program
 Urged leaders of business, labor,
  agriculture to cooperate and not cut
  production
 $423 million for Public Works
  programs
 Agricultural Marketing Act 1929
    Farm Board would make loans
HOOVER Program
 Hawley-Smoot Tariff 1930: protected
  farm products
 International financial panic in 1931
 RECONSTRUCTION FINANCE
  CORPORATION: RFC
    Provided federal loans to banks,
    railroads, businesses
   Only lent funds to ones with
    substantial collateral
 Farmers were already feeling the
  effects
    Prices of crops went down
    Many farms foreclosed
 People could not afford luxuries
    Factories shut down
    Businesses went out
 Banks could not pay out money
 People could not pay their taxes
    Schools shut down due to lack of
     funds
Many waited in unemployment
lines hoping for a job.
People in cities would wait in line for
bread to bring to their family.
Some families were forced to relocate
because they had no money.
“Hooverville”
 Some families were
 forced to live in shanty
 towns
   A grouping of shacks and
    tents in vacant lots
 They were referred to as
 “Hooverville” because of
 President Hoover’s lack
 of help during the
 depression.
A drought in the South lead to
dust storms that destroyed crops.




           “The Dust Bowl”
The South Was Buried
Crops turned to dust=No food
 to be sent out
Homes buried
Fields blown away
South in state of emergency
Dust Bowl the #1 weather
 crisis of the 20th century
 The Dust Bowl
Overproduction of land
Unsuitable for farming
Droughts
Windstorms
KS,CO,TX,NM,OK
 Farmer Exodus
Farmers and Families pack
 –up
Head West on Route 66
California
“Okies”
The Grapes of Wrath
Two Families During
the Depression
   FAILED FARM
A Farm Foreclosure
Some families tried to make money by
selling useful crafts like baskets.
 Family Life
Emphasis on Family
Stayed at home
Played Board Games
Monopoly ( 1933)
Radio
Neighborhood help
 Men in the Streets
Men could not support their
 families
Some even abandoned them
300,000 became “Hoboes”
No Direct relief from the Fed.
 Gov,
 Women Struggle
Many Women canned food or
 sewed clothes to make money.
Faced resentment that they had
 it easier than men.
Many thought married women
 should not hold jobs with men
 out of work.
Received less money than men.
 Children Suffer
Poor Diets =Malnutrition
Rickets, other diseases
2,600 schools closed
300,000 out of school
“Hoover Tourists”
“If I leave my mother, it will
 mean one less mouth to feed.”
 Eugene Williams 13
Unemployment
 Northeast, Midwest: 50-80%
  unemployment
 Private Charities attempted to help
  but ran out of funds
 Farm income declined 60% from
  1929-1932
African Americans
 ½ of all Black Americans lived in
  the South at start of Great
  Depression
 Close to 400,000 moved north
 2 million : ½ the total black
  population was on some form of
  relief by 1932
Social and Psychological Effects
1928-1932 Suicide rate rose by 30%.
3x admittance to mental hospitals
No doctors or dentists
No college for young people
No marriage, or children
Distrust of banks and the market
Habits of Savings and Thriftiness
Forms of entertainment
 Radio: Amos n Andy, Dick Tracy and The Lone
  Ranger
 Movies: Grapes of Wrath, Disney, Mickey Mouse,
  Snow White, Wizard of Oz
 Literature: Gone with the Wind, Life Magazine
RADIO
 Lone Ranger
 Amos and Andy
 Orson Welles




                  war_worlds_orson_1938.mp3
Popular Protests
Farmer’s Holiday Association
 Farmer’s strike, ended in
  failure
BONUS ARMY
BONUS ARMY
20,000 WWI Vets marched on
 Washington to collect 1945
 promised bonus
Gen. MacArthur sent in to
 disperse them
Major mistake for Hoover’s
 image
Bonus Army
Technically it was not a bonus
Veterans wanted the money
 now
Needed the money for
 necessities
Bonus Army
Congress could not afford
 payments
Yet they appropriated $100,000
 for the marches return home
½ took offer
Bonus Army
McArthur along with junior
 officers Patton and Eisenhower
Used tanks guns and tear gas to
 remove veterans
Others occupied buildings to be
 knocked down for public work
 projects
July 28, 1932 police tried to evict
 squatters
2 veterans killed stalemate
 continued
*FDR*    When he was
          inaugurated
          unemployment had
          increased by 7
          million.
         Poor sections (like
          Harlem) had 50% of
          the pop.
          unemployed
         Instated the “New
          Deal”
         Yea! Frankie!
   OKIES
SCHOOL during DEPRESSION
HOOVERVILLE
CHRISTMAS DINNER
Line in front of Bank
BREAD LINE
BREAD Line
Herbert Hoover
Last of Republican Presidents
 until 1952
Declares “ Chicken in every Pot”
Accepts 1928 nomination
       President Hoover
“The Trouble with capitalism
 is capitalist; they’re too dam
 greedy”.
Hoover’s inaction
Downplayed Slump
Felt the Market would recover
 on its own
Laissez Faire attitude
 Did not want public to become
  dependent on government
 Pleaded with industry to keep
  wages high/as a result industries
  kept some wages high but cut hours.
 By 1933 US Steel did not have a
  single full-time employee
SMOOT – HAWLEY TARIFF
Drove the average tariff rate
 on imported goods up 60%
Europe retaliated
Hoover’s Response
Unemployment Relief :
 funded by Community Chests
 (welfare funds)
Believed in indirect relief
Public Works
Hoover’s Response
Public Works:
 Build federal roads,
  buildings,dams
 Provided jobs to stimulate the
  economy
Hoover’s Response

 Reconstruction Finance
 Corporation (RFC) 1932-1953
  Lend 2 billion to banks,insurance
   companies,railroads
  Indirect Relief
  Aided 5,000 firms
Hoover would not give direct
 aid to unemployed
Private Charities
Opposition to direct relief
Cemented his reputation as
 doing nothing to ease
 depression
Shack villages were called
 Hooversvilles
Herbert Hoover
Newspapers wrapped around
 people were called Hoover Blankets
Broken down cars were called
 Hoover wagons
Pockets turned inside out were
 called Hoover Flags
Jackrabbits were called Hoover
 Rats
ELECTION OF 1932
FDR Franklin D. Roosevelt
Elected President
New outlook for United
States

				
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posted:9/14/2012
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