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Prosperity and Depression. Unit 2 Chapter 7 The Twenties 1919 – 1929 Chapter 8 The Great Depression Chapter 9 The New Deal. The Great Depression 1928 - 1932. Chapter 8. Overview. Understand these terms:

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Prosperity and depression

Prosperity and Depression

Unit 2

Chapter 7 The Twenties 1919 – 1929

Chapter 8 The Great Depression

Chapter 9 The New Deal


The great depression 1928 1932

The Great Depression1928 - 1932

Chapter 8


Overview

Overview

Understand these terms:

  • Recession – decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

    • http://www.frbsf.org/education/publications/doctor-econ/2007/february/recession-depression-difference


Overview1

Overview

Understand these terms:

  • Recession – A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

    • Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.

    • http://www.frbsf.org/education/publications/doctor-econ/2007/february/recession-depression-difference


Overview2

Overview

  • Recession – A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

http://indianblogworld.com/2009/08/reassessing-recession/


Overview3

Overview

Understand these terms:

  • Depression – a severe recession.

  • Economists do not have a standard definition

  • Perhaps a 10% decline in real Gross Domestic Product

    When your neighbor loses his job, it’s a recession.

    When you lose your job, it’s a depression.


Overview4

Overview

Let’s examine the statistics behind the Great Depression…


Overview5

Overview

http://www.uri.edu/artsci/newecn/Classes/Art/INT1/Mac/Measure/Lab/LM1.U.html


Overview6

Overview

http://en.wikipedia.org/wiki/Great_Depression


Overview7

Overview


Overview8

Overview


Overview9

Overview

With which statement do you most agree?

  • The U.S. government should intervene in the economy during a depression

  • The U.S. government should intervene in the economy during an economic boom

  • The U.S. government should never intervene in the economu


Causes of the depression

Causes of the Depression

Section 1


Learning objectives

Learning Objectives

  • Discuss the weaknesses in the economy of the 1920s.

  • Explain how the stock market crash contributed to the coming of the Great Depression.

  • Describe how the Depression spread overseas.


Terms and people

Terms and People

  • Herbert Hoover

  • Speculation

  • Black Tuesday

  • Business cycle

  • Great Depression

  • Hawley-Smoot Tariff


Assignments

Assignments


Assessments

Assessments

  • Quiz, Section 8.1 and overview

  • Test, Chapter 8


Why it matters

Why it Matters

Our objective:

  • How did the prosperity of the 1920s give way to the Great Depression?

  • In other words, where did all that wealth go?


Prosperity hides trouble

Prosperity Hides Trouble

  • Consumption of goods was up; Stock market was up

  • America’s economy was bullish

    • Bull Market - increasing investor confidence, and increased investing in anticipation of future price increases


Optimism sweeps hoover to victory

Optimism Sweeps Hoover to Victory

  • As Republican presidents has presided over the growing economy

  • Voters chose another Republican

  • Herbert Hoover


Optimism sweeps hoover to victory1

Optimism Sweeps Hoover to Victory

  • Self made millionaire from work in mining

  • Left private sector to devote himself to public service

  • Gained wide respect for organizing Belgian Relief during World War I


Optimism sweeps hoover to victory2

Optimism Sweeps Hoover to Victory

  • Ran U.S. Food Administration, post war agency devoted to helping devastated populations

  • Criticized for helping the Bolsheviks by providing food aid to the Soviet Union, Hoover responded in the following speech, “Twenty million people are starving. Whatever their politics, they will be fed.”


Optimism sweeps hoover to victory3

Optimism Sweeps Hoover to Victory

  • Political philosophy:

  • Encourage competition in economy

  • Also encourage voluntary cooperation between labor and industry


Optimism sweeps hoover to victory4

Optimism Sweeps Hoover to Victory

  • Coolidge chose not to run

  • Al Smith (a Catholic) of New York was his Democratic opponent

  • Voters saw in Hoover a accomplished man of integrity


Optimism sweeps hoover to victory5

Optimism Sweeps Hoover to Victory

  • Landslide victory for Hoover


Problems plague the agricultural sector

Problems Plague the Agricultural Sector

  • Farmer made up one fourth of the workforce

  • Farming greatly expanded to meet demand created by World War I

  • Farmers in debt to finance wartime expansion and mechanization - tractors

  • At end of war, production of food greatly exceeded demand – crop prices fell and kept falling


Problems plague the agricultural sector1

Problems Plague the Agricultural Sector

  • Depression hit agriculture first (and would last the longest)

  • So, one fourth of American economy was barely surviving


Wealth is unevenly distributed

Wealth is Unevenly Distributed

  • Rising wages masked an uneven distribution of wealth

  • While factory workers’ wages rose 8%, factory output increased by 32%

  • As a result, worker incomes rose modestly, while rich investor incomes skyrocketed.


Easy credit hides problems

Easy Credit Hides Problems

  • Easy credit and installment buying lead people to purchase goods they can’t pay for

  • By 1929, Americans had more than $6 billion in personal debt — more than double the 1921 level


The stock market crashes

The Stock Market Crashes

Until September 1929, the stock market continued to rise.

Many people borrowed money to buy stock, assuming prices would continue to go up.

Some economists feared that stocks were over-priced.


The stock market crashes1

The Stock Market Crashes

Speculation– when investors gamble that stock prices will rise

  • Speculators were willing to buy stocks with borrowed money that they hope would be paid off by rising stock value


The stock market crashes2

The Stock Market Crashes

https://onlineint.optionsxpress.com/educate/advanced/margin.aspx


The stock market crashes3

The Stock Market Crashes

  • Margin requirements during the 1920s was only 10%.

  • Stock sellers – brokerage firms – had loaned stock buyers the other 90%

  • Black Tuesday – October 24, 1929, the day the stock market crashed

  • Crash in stock prices caused brokers to call in these loans, which stock buyers could not pay back


The stock market crashes4

The Stock Market Crashes

  • Given widespread speculation on rising stock values, what recreational activity was (is?) buying stock most like?


The stock market crashes5

The Stock Market Crashes

On October 29th, the stock market went into a free fall as investors tried to sell at any price.

16 million shares were sold on “Black Tuesday.”

Billions of dollars were lost in a few hours.

Many who bought stocks on margin were wiped out.


The stock market crashes6

The Stock Market Crashes

  • In growth periods, workers are hired, wages rise, and demand for products increases.

  • In contraction periods, workers are fired, wages drop, and demand for products falls.

The Great Crash was a hallmark of the nation’s business cycle. The economy periodically grows and then

contracts.


The stock market crashes7

The Stock Market Crashes

The stock market crash didn’t start the Great Depression by itself. Instead, it quickened the collapse of the U.S. economy.


The stock market crashes8

The Stock Market Crashes

  • How would headlines like these effect the confidence of consumers and investor?


The stock market crashes9

The Stock Market Crashes

  • How did the stock market crash connect to the banking system?


The stock market crashes10

The Stock Market Crashes

  • Review the causes of the crash listed below:


The stock market crash

The Stock Market Crash

  • Is it a myth that the stock market crash caused the Great Depression?

    • Unemployment peaked at 9% two months after the crash and fell to 6.3% by June, 1930

    • Unemployment started climbing to historic highs in the months following Hoover signing the Hawley – Smoot Tariff Act


The stock market crash1

The Stock Market Crash

  • And Hoover kept U.S. currency on the gold standard – government guarantees fixed rate of exchange for dollars into gold

    • Consequence is government could not expand money supply by printing more money after accepting greater public debt


The stock market crash2

The Stock Market Crash

Was the stock market crash really a psychological blow Americas which caused a catastrophic loss of confidence

  • Did we simply panic and then fail to understand?


The stock market crash3

The Stock Market Crash

“The administration did not publicly address the market devaluation until several days (6) after the event, while Hoover held steadfast to the notion that economic laws and a conservative fiscal philosophy would allow the economy to self-correct.”

  • LIMITED TO FOLLOW, The Early Public Opinion Apparatus of the Herbert Hoover White House, by BRANDON ROTTINGHAUS, Northwestern University, AMERICAN POLITICS RESEARCH, 2003


The stock market crash4

The Stock Market Crash

  • Hoover’s early judgment of the stock market crash was supported by the majority of newspaper editorialists – at least for a short while


The great depression begins

The Great Depression Begins

America enters of desperate economic period unmatched in its severity

  • Lasts approximately 1929 – 1941

  • Within the Great Depression, there would be recovery, then recession, then recovery

  • To this day, the causes and effects of the Great Depression are still debated


The banks collapse

The Banks Collapse

Connection existed between stock market crash and banks

  • Banks had made loan to stock speculators

  • Now with huge drop in stock values, speculators could not sell stocks to settle loan debt to banks

  • Bad debts held by banks pile up quickly; bank reserve funds run low – too low

  • Customers begin to withdraw savings accounts to meet their immediate needs…


The banks collapse1

The Banks Collapse

The banking system feels the effects of the crash first.People fear that their money will be lost so they run to the bank and attempt to withdraw their funds.

But banks don’t have enough of their money on hand as cash. These bank runs cause banks to fail.


The banks collapse2

The Banks Collapse

  • Outstanding debt continues to build

    • But incomes drop 20 – 50%

    • Prices for goods fall

  • But the original debt is still at the same dollar amount

  • Banks accumulating far too many bad loans

  • Banks attract far less investment, leaving little money or inclination to loan…


The banks collapse3

The Banks Collapse

  • Bank runs are a psychological event – customers and bankers react emotionally, in a panic.


The banks collapse4

The Banks Collapse

  • Dramatization of bank run from the classic movie, It’s a Wonderful Life, 1946

http://www.youtube.com/watch?v=lbwjS9iJ2Sw


The banks collapse5

The Banks Collapse


The banks collapse6

The Banks Collapse


The banks collapse7

The Banks Collapse


The banks collapse8

The Banks Collapse


The banks collapse9

The Banks Collapse

  • With all we have learned about economics, with all that the federal government can do, could bank runs happen again?


The banks collapse10

The Banks Collapse

  • So, bank runs and failures haven’t happened since the 1930s, right?


Businesses close and unemployment rises

Businesses Close and Unemployment Rises

  • Collapse of stock prices and reduced consumer spending (they lost so much in stocks and banks) decreased demand for goods and services

  • American economy was already overproducing goods before the crash


Businesses close and unemployment rises1

Businesses Close and Unemployment Rises

  • Factories closed, causing worker layoffs.

  • This lowered demand for goods.

  • By 1933, the unemployment rate reached 25%.


Businesses close and unemployment rises2

Businesses Close and Unemployment Rises


Businesses close and unemployment rises3

Businesses Close and Unemployment Rises

  • It’s called a deflationary spiral


Tariffs add to the woes

Tariffs Add to the Woes

  • Tariff – national government imposes a tax on imported goods with intention of preventing cheaper foreign goods from harming domestic business


Tariffs add to the woes1

Tariffs Add to the Woes


Tariffs add to the woes2

The strategy was a mistake. Other nations retaliated and raised tariffs as well.

The resulting drop in world trade only made the glut of American factory and farm products harder to sell.

Tariffs Add to the Woes

Congress passed the Hawley-Smoot Tariff to protect American manufacturers from foreign competition.


Tariffs add to the woes3

Tariffs Add to the Woes


Tariffs add to the woes4

Tariffs Add to the Woes


The depression goes global

The Depression Goes Global

  • Europeans by 1929 still burdened by war debt payment

    • European governments had to tax citizens or borrow from U.S. to pay the war debts

    • Europeans also personally invested in U.S. stock market

  • Germany was politically crippled by past hyperinflation in 1923 and weak national democratic government – Weimar Republic


The depression goes global1

The Depression Goes Global

  • European economics received significant stimulus from American loans

    • Our banking system was collapsing – no money left to loan the Europeans

  • U.S. does suspend war loan payments from France and England

    • Now Germany suspends all payments of war reparations agreed to in the Treaty of Versailles


The depression goes global2

The Depression Goes Global

As international trade falls, a global drop in business leads to a worldwide depression.


What causes the great depression

What Causes the Great Depression?

  • Low Interest Rates – Before the Depression began, Federal Reserve kept interest rates low; companies borrowed money and expanded more than necessary

  • Easy Consumer Credit – lead to overconsumption and left consumers vulnerable to any economic downturn

  • Overproduction – Companies made more goods than could be sold

  • Uneven Distribution of Wealth – Not everyone who wanted consumer goods could afford them


What causes the great depression1

What Causes the Great Depression?

  • High Tariffs-Tariffs restricted foreign demand for American products

  • Falling Demand – With too many goods unsold, production was cut back and employees were laid off

  • Stock Market Speculation – Low interest rates encouraged borrowing money to speculate, endangering bank solvency.


What causes the great depression2

What Causes the Great Depression?

There were several causes of the Great Depression. There is still disagreement over which are most important.

hardships in Europe and rural America

uneven distribution of wealth

speculation in the stock market

increased personal debt


Summation

Summation

  • Discuss the weaknesses in the economy of the 1920s.

  • Explain how the stock market crash contributed to the coming of the Great Depression.

  • Describe how the Depression spread overseas.


Americans face hard times

Americans Face Hard Times

Section 2


Learning objectives1

Learning Objectives

  • Examine the spread of unemployment in America’s cities.

  • Discuss the impact of the Great Depression on rural America.

  • Explain the human and geographical factors that created the Dust Bowl.


Terms and people1

Terms and People

  • Bread line

  • Hooverville

  • Tenant farmer

  • Dust bowl

  • Okies

  • repatriation


Assignments1

Assignments


Assessments1

Assessments


Why it matters1

Why It Matters

Our objective:

  • How did the Great Depression affecct the lives of urban and rural America?


Misery and despair grip america s cities

Misery and Despair Grip America’s Cities

How did the Great Depression affect the lives of urban and rural Americans?

The stock market crash signaled the end of boom times and the economy staggered into the Great Depression. Desperate poverty gripped the nation leaving a permanent impression on those who lived through it.

Tested by extreme hardship, this generation forged a strong character and will to restore prosperity.


Searching for a job and a meal

Searching for a Job and a Meal

Between 1921–1929, the unemployment rate never rose above 4%. By 1933, however, it was near 25%.

Those who managed to keep their jobs had their wages and hours cut.

Few Americans understood the causes of the Great Depression, but everyone felt the impact.


Searching for a job and a meal1

Searching for a Job and a Meal


Searching for a job and a meal2

Searching for a Job and a Meal


Searching for a job and a meal3

Searching for a Job and a Meal


Searching for a job and a meal4

Searching for a Job and a Meal


Searching for a job and a meal5

Searching for a Job and a Meal

  • Ironic and iconic Life Magazine photograph


Searching for a job and a meal6

Searching for a Job and a Meal

  • Bread lines – where charities or local agencies gave food to the poor


Descending into poverty

Descending into Poverty

For many, the only food available came from public soup kitchens or bread lines run by charitable organizations.

People sold their property to buy food.


Descending into poverty1

Descending into Poverty


Descending into poverty2

Descending into Poverty

  • Brother, Can you Spare a Dime?

  • http://www.youtube.com/watch?v=4F4yT0KAMyo

  • What was this song saying?


Descending into poverty3

Descending into Poverty

  • Photo essay of the Great Depression - Unemployed men vying for jobs at the American Legion Employment Bureau in Los Angeles during the Great Depression.

http://www.english.illinois.edu/maps/depression/photoessay.htm


Descending into poverty4

Descending into Poverty

  • Emergence of the hobo – a migrant worker often penniless; origin of term unknown; started to appear at turn of century

  • http://www.squidoo.com/depression-era-cooking


Looking for a place to live

Looking for a Place to Live

The homeless lived in empty railroad cars, in cardboard boxes, or in shacks built on public land or empty lots.

Hoovervilles appeared in major cities across the country.


Looking for a place to live1

Looking for a Place to Live

  • Hoovervilles – shantytowns set up on empty land in cities and named after the President


Looking for a place to live2

Looking for a Place to Live

  • Hooverville, Central Park, New York City, 1930


Poverty devastates rural america

Poverty Devastates Rural America

  • Rural America had already been in hard economic times before the stock market crash

  • Now it would feel the full force of economic collapse

  • And the full force of an ecological disaster unparalleled in American history


Commodity prices plunge

Commodity Prices Plunge

  • Great Depression put even more downward pressure on crop prices

  • 1919 – bushel of wheat sold for $2.16

  • 1932 – bushel of wheat sold for $0.38

  • Family farms simply ended; others stayed only by tremendous sacrifice and determination


Commodity prices plunge1

Commodity Prices Plunge

http://mrortlieb.weebly.com/causes-of-the-great-depression.html


Farmers lose their farms

Farmers Lose Their Farms

Bankers sold the land and equipment at auction. Some farmers became tenant farmers, working for bigger landowners. Others decided to leave in search of work elsewhere in the U.S.

Between 1930 and 1934, nearly a million farmers lost their farms, homes, and farm equipment because they could not pay their mortgages.


Farmers lose their farms1

Farmers Lose Their Farms

  • Resistance to bank auction of farms – penny auctions


The great plains becomes a dust bowl

The Great Plains Becomes a Dust Bowl

Millions of tons of topsoil were blown away in giant dust storms.

  • Farmers had dug up thick prairie grasses to plant wheat so there was nothing to hold the soil in place.

  • 100 mile-per-hour winds blew dust clouds 8,000 feet tall in Oklahoma, Texas, New Mexico, and Colorado.

  • Wildlife and farm animals suffocated in the choking winds.


Great plains states

Great Plains States


The great plains becomes a dust bowl1

The Great Plains Becomes a Dust Bowl

The remaining farmers on the Great Plains suffered a terrible drought, which led to the Dust Bowl.

Dust storms destroyed millions of acres of farmland.


Http www weru ksu edu weru new weru multimedia multimedia html

http://www.weru.ksu.edu_weru/new_weru/multimedia/multimedia.html

The Great Plains Becomes a Dust Bowl

Black Sunday

Colorado, 1937


Http www weru ksu edu weru new weru multimedia multimedia html1

http://www.weru.ksu.edu_weru/new_weru/multimedia/multimedia.html

The Great Plains Becomes a Dust Bowl

  • Dustbowl Migrant Mother of 7 children

  • Florence Owens Thompson

  • 32 years of age

  • Photographer Dorothea Lange, February 1936

  • Photo became icon of the tragedy of the Dustbowl.


Http www weru ksu edu weru new weru multimedia multimedia html2

http://www.weru.ksu.edu_weru/new_weru/multimedia/multimedia.html

The Great Plains Becomes a Dust Bowl

  • Iconic image called her the Migrant Mother.

  • We did not know who she was until 1978.


Prosperity and depression

The Great Plains Becomes a Dust Bowl


Woody guthrie 1912 1967

Woody Guthrie, 1912 - 1967


Prosperity and depression

Wind Erosion Loss Map of USARed Marks Regions of Greatest Loss http://www.weru.ksu.edu_weru/new_weru/multimedia/multimedia.html


What caused the dustbowl http www weru ksu edu weru new weru multimedia multimedia html

What Caused the Dustbowl?http://www.weru.ksu.edu_weru/new_weru/multimedia/multimedia.html

  • Late 1920’s and 1930’s.

  • Prolonged, severe drought.

  • Overgrazing and overfarming.

  • Protective grasses stripped away.

  • Prairie’s normally persistent winds literally blew away the soil.


Ecological effects of dust bowl

Ecological effects of Dust Bowl

  • Dust storms spread from plains to as far as East Coast.

  • Lack of vegetation of any kind denied ecosystem the evaporative cooling that plants provide – over 1200F in Kansas!

  • Plagues of insects – centipedes, locust – sought protection from heat in farmer homes.

  • Predators destroyed by loss of habitat; prey jackrabbit populations exploded, further decimating any remaining vegetation.


Dust bowl effects on humans

Dust Bowl Effects on Humans

  • Certain widespread lung disease

  • Poverty and near starvation on a massive scale

  • One in four families abandoned their farms; many migrating to California in hope of migrant farming work

    • “Okies”

    • Grapes of Wrath and Of Mice and Men by John Steinbeck

    • Woody Guthrie


The great plains becomes a dust bowl2

The Great Plains Becomes a Dust Bowl

  • Surviving the Dust Bowl, The American Experience

    • http://video.pbs.org/video/1311363860/

    • 52.31 minutes


Desperation causes migration

Desperation Causes Migration

In old trucks, they moved west or to northern cities. 800,000 Okiesleft Texas, Oklahoma, Missouri, and Arkansas alone. Rural states lost population during the 1930s.

Those who could afford it bought distressed neighbors’ farms at low prices to build expanded commercial farms.

Farmers who had lost their land, called Okies regardless of where they were from, were forced to leave.


Desperation causes migration1

Desperation Causes Migration

  • Okies – legitimately refers to native of Oklahoma

  • During depression, used as deragatory term about migrant workers escaping the Dust Bowl


Desperation causes migration2

Desperation Causes Migration

  • Or did the term Okie simply come from the auto license plate?


Few americans escape hard times

Few Americans Escape Hard Times

  • As the Great Depression rolled on, Americans began to fear an inescapable poverty as the new normal


The depression attacks family life

The Depression Attacks Family Life

Family life was hurt by the Great Depression.

Those who still had jobs lived in fear that their next paycheck would be their last.

Those who were still working felt guilty because friends and relatives were unemployed.

America’s birthrate fell to its lowest level on record.

Some teens ran away and families broke up.


Minorities suffer hardships

Minorities Suffer Hardships

Minorities suffered even more during the depression.

  • As Okies moved west to find work, Mexicans and Mexican Americans faced fierce competition for jobs.

  • Local governments urged repatriation for Mexican Americans.

  • Even in good times, African Americans were “last hired and first fired.”

  • Many were thrown off southern farms where they were sharecroppers.


Summation1

Summation

  • Examine the spread of unemployment in America’s cities.

  • Discuss the impact of the Great Depression on rural America.

  • Explain the human and geographical factors that created the Dust Bowl.


Hoover s response fails

Hoover’s Response Fails

Section 3


Learning objectives2

Learning Objectives

  • Discuss how Hoover’s initial conservative response to the depression failed.

  • Explain the changes in the President’s policies as the crisis continued.

  • Describe how Americans reacted to Hoover’s relief programs.


Terms and people2

Terms and People

  • Localism

  • Reconstruction finance Corporation

  • Trickle-down economics

  • Hoover Dam

  • Bonus Army

  • Douglas MacArthur


Assignments2

Assignments


Assessments2

Assessments


Why it matters2

Why It Matters

Our objective:

  • Why did Herbert Hoover’s policies fail to slve the country’s economic crisis?


Cautious response to depression fails

Cautious Response to Depression Fails

  • The Gigantic Forces of Depression Are Today in Retreat”: Hoover Insists That Things Are Getting Better

  • October 22, 1932

  • http://historymatters.gmu.edu/d/5062


Hoover turns to volunteerism

Hoover Turns to Volunteerism

Herbert Hoover did not cause the Great Depression, but Americans looked to him to solve the crisis.

He tried a number of different approaches, but in the end hefailed to discover the right formula for stopping the crisis.


Hoover turns to volunteerism1

Hoover Turns to Volunteerism

Hoover was not alone in preferring not to intervene in the economy

  • Most economists of the day agreed hands-off is best

  • Widespread belief among government officials and economists that the economic drop, though very serious, would self-correct

  • Though weak businesses may suffer and collapse, the strong would survive


Hoover turns to volunteerism2

Hoover Turns to Volunteerism

Self correction by the economy was often seen in past economic crisis and panics and was inherent in the business cycle


Hoover turns to volunteerism3

Hoover Turns to Volunteerism

Even today, the economic “facts on the ground” often move faster that policy makers can identify and understand them.

  • Example: Economic lagging indicators – data that changes only after the economy has already changed, such as long term unemployment rate


Hoover turns to volunteerism4

Hoover Turns to Volunteerism

Hoover saw that he must do something:

Asked businesses to keep wages, employment, and prices at current levels

Called for tax cuts, lower interest rates, and public works

Asked wealthy to donate more money to charity


Volunteerism fails to bring relief

Volunteerism Fails to Bring Relief

Hoover’s actions under idea of volunteerism assumed people would act together, for the benefit of all, and rationally.

  • Instead, people and corporations acted in their own self-interest

  • Companies laid off workers and cut wages in face of intense competition for the few jobs left


Volunteerism fails to bring relief1

Volunteerism Fails to Bring Relief

But volunteerism failed:

  • Towns and states didn’t have the necessary resources to deal with the depression.

  • Hoover did not support direct federal aid to individuals.

Hoover put his faith in localism,a policy whereby problems are best solved at the local and state levels.


Hoover adopts more activist policies

Hoover Adopts More Activist Policies

  • Economic historians do not blame Hoover for causing the Great Depression

  • Remember in the beginning most economists were in agreement with Hoover

  • However…

    • As President the people expected Hoover to deal effectively with the situation

    • Hoover would be reminded of this when the 1930 midterm elections was devastating to his party


Hoover adopts more activist policies1

Hoover Adopts More Activist Policies

The RFC gave billions of dollars to banks and large businesses.

The idea was that they would lend to, and invest in, struggling businesses who would hire workers and thus end the depression.

In 1932, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). The RFC employed a policy known as trickle down economics.


Hoover adopts more activist policies2

Hoover Adopts More Activist Policies

  • Hoover believed the result of the RFC would be greater willingness of banks to loan money to business who would then hire more workers, increase production…

  • Can be called trickle-down economics – money supplied to top of economy would eventually reach the lower levels

  • The RFC failed when businesses did not hire more workers.


Hoover adopts more activist policies3

Hoover Adopts More Activist Policies

One policy that did succeed was the construction of Boulder Dam (later renamed Hoover Dam) across the Colorado River.

Started in 1930, the huge dam provided power for millions and irrigation for farm land, and put thousands to work.


Hoover dam

Hoover Dam


Hoover dam1

Hoover Dam


Hoover dam2

Hoover Dam


Hoover dam3

Hoover Dam


Hoover dam4

Hoover Dam


Hoover dam5

Hoover Dam

  • Now take out your iPads…

    • Find ten interesting facts about the Hoover Dam

    • Write them down and email them to me NOW and get five points.

    • You have ten minutes.

    • http://www.online-stopwatch.com/


Americans protest hoover s failures

Americans Protest Hoover’s Failures

Public soon saw Hoover as unfeeling and unsympathetic to their plight

  • Relief – by whatever means – was sought by many


Some urge radical change

Some Urge Radical Change

Capitalism itself was attacked as a dying system at the cause of the depression

  • Socialism, Communism and Fascism found supporters in the United States

    • Strong, centralized governments which forced radical change were seen as solutions

  • How to distinguish between these four systems?


Some urge radical change1

Some Urge Radical Change

Many grew disillusioned during the Great Depression.

  • Some blamed Hoover and some blamed capitalism.

  • Some were World War I veterans who wanted a bonus that was promised to them.

  • In 1932, those veterans formed the Bonus Army and marched on Washington.


The bonus army marches on washington

The Bonus Army Marches on Washington

Hoover ordered General Douglas MacArthurto remove the veterans. He used tear gas, cavalry, tanks, and troops with fixed bayonets.

Press photos of troops using excessive force angered the American public.

20,000 veterans set up camps and occupied vacant buildings. In July, police tried to evict them and riots erupted.


The bonus army marches on washington1

The Bonus Army Marches on Washington

The eviction of the Bonus Army doomed Hoover’s bid for re-election.

Americans were ready for new leadership and a greater role for the government in solving problems.


The bonus army marches on washington2

The Bonus Army Marches on Washington

http://www.youtube.com/watch?v=mSC1lbfXfRQ


The aftermath dooms hoover

The Aftermath Dooms Hoover

Why did Herbert Hoover’s policies fail to solve the country’s economic crisis?

As the Great Depression spread misery across America, Herbert Hoover struggled unsuccessfully to respond to the nation’s problems.

As a result of Hoover’s failed response, in 1932 Americans would turn to a new leader and increased government intervention to stop the depression.


The aftermath dooms hoover1

The Aftermath Dooms Hoover

  • Landslide victory for Franklin D. Roosevelt, 1932


The aftermath dooms hoover2

The Aftermath Dooms Hoover


The aftermath dooms hoover3

The Aftermath Dooms Hoover

  • “Only Thing We Have to Fear Is Fear Itself”: FDR’s First Inaugural Address

  • March 4, 1933

  • http://historymatters.gmu.edu/d/5057


The aftermath dooms hoover4

The Aftermath Dooms Hoover

  • How should history – how do you – judge Herbert Hoover?


Summation2

Summation

  • Discuss how Hoover’s initial conservative response to the depression failed.

  • Explain the changes in the President’s policies as the crisis continued.

  • Describe how Americans reacted to Hoover’s relief programs.


Assessments3

Assessments


Prosperity and depression

  • Activity showing danger of credit?

  • What is the stock market? How are stocks valued?

  • Charts of wealth distribution of 1920s

  • Use scanned pics from section

  • Interviews of survivors of depression

  • Songs from the depression


Prosperity and depression

  • Today’s social safety net

  • Social security

  • FDIC

  • Farm price support

  • Soil conservation service

  • Welfare/EBT

  • WIC

  • Church charities

  • Secular charities


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