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HERBERT HOOVER “THE GREAT ENGINEER” THE ELECTION OF 1928 • HOOVER – DRY, PROTESTANT & NATIVE • SMITH – WET, CATHOLIC & IMMIGRANT • PERSONIFICATION OF DIVISIONS WITHIN AMERICA • HOOVER 58% OF POPULAR VOTE “THE FINAL TRIUMPH OVER POVERTY” • DEMOCRATIC GAINS IN CITIES SHOWS SHIFT IN ELECTORATE HE’S NOT YOUR FATHER’S REPUBLICAN • OPPOSED CUTTHROAT COMPETION • CORPORATE COOPERATION • WELCOMED WELFARE CAPITALISM • ADVOCATED VOLUNTARISM • 250 BUSINESS CONFERENCES • TRADE ASSOCIATION • 8 HOUR WORK DAY • DIVISION OF CO. RIVER H2O THE STOCK MARKET AND AMERICAN ECONOMY BEFORE OCTOBER 1929 • UNEVEN DISTRIBUTION OF WEALTH – 60% BELOW POVERTY • TRADITIONAL INDUSTRY REPLACED BY NEW CAUSING UNEMPLOYMENT – UMW 500K 1920 TO 75K 1928 – AFL 5.1MILL TO 3.4 • FARM PRICES DROP 40% 1920-21 • BANK FAILURES RAMPANT IN MIDWEST (550 1928-29) • RICHEST 1% OWN APPROX. 40% COUNTRY’S WEALTH • SHAREOWNERS FROM 4 TO 20MILL BUT PRICE DIDN’T = VALUE • BUYING ON CREDIT LED TO DEBT WHICH LED TO LOAN RESTRIC- TIONS & SCARCE CREDIT • REDUCED SPENDING LED TO DEC- LINING PRICES BLACK THURSDAY 10/24/29 & THE ONSET OF THE DEPRESSION • UNDER COOLIDGE 5 YR ARTIFICIAL RISE • MELLON TAX BILL CONTRIBUTED TO RAMPANT CONSUMER SPENDING • HOOVER CLOSES MARKET FRIDAY & MONDAY “BUSINESS OF U.S. IS ON A SOUND & PROSPEROUS BASIS” • Construction industry tanked in 1928 • FRB increased interest rates to reduce money supply but banks kept making loans • Tight $ policy in ’30’s reduced $ available for investment & growth & hurt recovery efforts BLACK TUESDAY 10/29/29 • DJIA 100 TO 381 1924-28 • DJIA 41 IN 1932 • DJIA 381 MID 1950’S • EARLY SEPT. PRICES FALTER • BLACK THURSDAY 13 MILL SOLD • BLACK TUESDAY ANOTHER 16MILL SHARES SOLD RUGGED INDIVIDUALISM • Immediate reaction- discount seriousness of depression • Aid to business NOT individuals • Responsibility lies with local government & charities • Public Works: Hoover Dam too little too late ACTING OUTSIDE THE REPUBLICAN IDEOLOGICAL BOX • FEDERAL FARM BOARD ’29 • stabilize prices and to promote the sale of agricultural products. To help farmers stabilize prices by holding surplus grain & cotton in storage. Created before crash & powers expanded afterwards. • RECONSTRUCTION FINANCE CORP – 1932: Lent money to banks, insurance companies, NOT individuals. Helped prevent further decline but…..unemploy- ment reaches 6-7 mill by 1932 13 million out of work • Businesses had no obligation to abide by voluntary restraints & cooperation THE BONUS MARCH 1932 OF THE BONUS ARMY • demand for immediate cash-payment redemption of their service certificates • World War Adjustment Act of 1924 had awarded them bonuses in the form of certificates redeemable in 1945. Each Service Certificate bore a face value equal to the soldier's promised payment plus compound interest • AG Wm Mitchell ordered to clear vets from gov’t property – 2 vets killed • D. MacArthur with cavalry & tanks forcibly moved vets & families off of property & burned their makeshift houses DON’T FORGET FOREIGN POLICY! • STIMSON DOCTRINE 1932 as a result of Japan’s invasion of Manchuria in 1931. Letters sent to China & Japan that US will NOT recognize legality of seizures made in violation of treaties. HH “We’re not the world’s policeman” • No impact on Japan & they bomb Shanghai in 1932 & withdraw from League • Clark Memorandum 1930 -The primary point was that the Monroe Doctrine was based on conflicts of interest between the United States and European nations, rather than between the United States and Latin American nations.
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