Two Responses to the Depression Instructional Goal: Effectively compare the responses of President Hoover and Roosevelt during the Great Depression

REVIEWING THE SITUATION

Bread lines during the Great Depression. By 1932, at least one of every four American workers was unemployed, median family income had dropped by 50 percent, a hundred thousand businesses had failed, corporate profits had plummeted from $10 billion to $1 billion, and the gross national product was cut in half.

  1929 1933 Banks in operation 25,568 14,771  Prime interest rate 5.03% 0.63% Volume of stocks sold (NYSE) 1.1 B 0.65 B Privately earned income $45.5B $23.9B Personal and corporate savings $15.3B $2.3B

Introduction Read section 31.2 (pg. 394-95) – It discusses the “ideological responses to the economic crisis.” Considering the problems we have discussed connected to the Great Depression, which approach do you think would help the United States the most? Conservative Liberal Radical Definition / Examples Lesson # 1 - Hoover

History Alive – Images and Quotes The Radical The Liberal The Conservative

Radical Liberal Radical Conservative Liberal Conservative

Hoover’s Immediate Response Tried to reassure the nation. Continue as usual. “Rugged Individualism”  American people will work hard, hold high moral values, engage in creative problem solving, waste less, and focus on independence Gov’t should play a limited role Opposed any welfare programs (no direct aid to the people) Believed that direct aid = corruption, laziness, and a connection to socialism Herbert Hoover, Address to the Chamber of Commerce of the United States - May 1st, 1930 While the crash only took place 6 months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty in the future of a people of the resources, intelligence, and character of the people of the United States-that is prosperity. Herbert Hoover, Rugged Individualism Campaign Speech - October 22, 1928 I should like to state to you the effect of the extension of government into business upon our system of self government and our economic system. But even more important is the effect upon the average man. That is the effect on the very basis of liberty and freedom not only to those left outside the fold of expanded bureaucracy but to those embraced within it. Herbert Hoover, Annual Message to the Congress on the State of the Union - December 2nd, 1930 Economic depression can not be cured by legislative action or executive pronouncement.

Hoover’s Response “… Republicans followed a trickle-down theory… They reasoned that, if government legislation protected the wealth of big corporations and the well-to-do, their continued investments would expand the economy and a better life would ‘trickle down’ to workers and consumers in general. Hoover believed in “trickle down” (top to bottom) economy Laissez-faire economics Local / Community Aid & Volunteerism Small Government

Hoover’s Programs “Two courses were open to us. We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to the Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put that program in action.” ~ Herbert Hoover, 1932 Hoover did not just do nothing 1) The Boulder Dam (History Channel Video) 2) Committee for Unemployment Relief Encouraged people and businesses to contribute to privately organized welfare funds called community chests 3) Federal Home Loan Bank Act Lowered mortgage rates for homeowners and farmers in order to avoid foreclosure 4) Reconstruction Finance Corporation Lent $2 billion to banks, insurance companies, loan associations, railroads, and other businesses w/ the hope of jumpstarting businesses Served as indirect relief (so it did not violate Hoover’s Rugged Individualism)

Above: May, 1935

Reaction to Hoover Hooverisms Hoover’s response confused and angered many Americans

Bonus Expeditionary Army # 1 --- 10,000-20,000 WWI vets and families arrive in Washington D.C. in 1932 Led by Walter Waters # 2 Support the Patman Bill  Authorized gov’t to pay a bonus to WWI vets who had not been compensated for their service $500 per soldier # 3 Hoover believed they were “communists and persons with criminal records.”

Disbanding the Bonus Army # 4 Hoover respected their right to peacefully assemble Provided food and supplies to create a shantytown # 5 Hoover opposed the bill and it is eventually rejected by Congress Most of the Bonus Army leaves, but 2,000 stay to meet w/ the President 1,000 soldiers (led by Douglas MacArthur and Dwight D. Eisenhower) arrive to remove the Bonus Army B.A. is gassed (many injured, few die) # 6 The public is stunned by military response (McArthur’s choice, not Hoover’s) Hoover looks very bad and ensures that the Election of 1932 will go against him