1. Election of 1928  Herbert Hoover (Republican)  Food Administration director in WWI  Al Smith (Democrat)  Men of contrasts

3. Hoover Policies  Main Focus: Depression  Rugged Individualism--___________  Did give some help--_____________  Believed in “trickle down” economics

6. Remember Pro-Business Presidents  Harding  Coolidge  Herbert Hoover elected in 1928 “Hoover certainly is a wonder, and I wish we could make him President of the United States. There could not be a better one.”—Franklin Roosevelt“Hoover certainly is a wonder, and I wish we could make him President of the United States. There could not be a better one.”—Franklin Roosevelt  Blamed for Depression

9. Post-War Economic Boom  Americans earning more money than ever  More money to spend on luxury goods  Americans became “stock crazy” 1927 NYSE traded 500 billion stocks1927 NYSE traded 500 billion stocks 1929 NYSE traded 1.1 billion1929 NYSE traded 1.1 billion

10. Depression on the Horizon  Unemployment beginning to rise  Farmers losing land  Stock prices dropping  Stock market crash just a “drop in the bucket” as cause for Great Depression

11. So, What Caused It?  1. Republican domestic and international economic policies  2. Unchecked stock speculation  3. Weak and unregulated banking institutions  4. Overproduction of goods  5. Decline of farming  6. Unequal distribution of wealth

12. Coolidge Mellon Hoover

13. 1. Republican Policies  Pro-business  “trickle down” economics Tax cut for richTax cut for rich Make up for it by increase in middle classMake up for it by increase in middle class Gap b/t rich and poor increasedGap b/t rich and poor increased  European debt not forgiven  More $ loaned to get GB and Fr out of debt  That makes no sense does it?

15. 2. Stock Speculation  Started as real estate speculation  Leads to stock speculation  Prices inflated by buyers  People were warned industry could not support high stock prices

17. Stock Market Crash 1929  Investors began to sell while price was high  October 29, 1929 (Black Tuesday)  rush to sell at any price

18. 3. Weak and Unregulated Banks  Banks who loaned $ for speculation began to fail  Selling on “margin”  Republican “laissez faire” policies toward banks

20. 4. Overproduction of Goods Overproduction of GoodsOverproduction of Goods  High demand during war  New machines increase production  Industrialist believed in unrestricted capitalism and growth  Farms could sell all that was grown

22. 5. Decline of Farms  $ borrowed to buy new equipment to produce more, could not be paid back after war  Farms foreclosed but banks could not re-sell  Droughts and Dust Bowl

24. 6. Unequal Distribution of Wealth  Gap b/t rich and poor wide  1920s prosperity was all smoke and mirrors  Industry b/ca richer, workers replaced by machines  Buying on credit

35. Change to Great Depression Exercise

36. Hoover’s Response “We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.” Herbert Hoover, 1928

37. Hoover’s Response  No direct relief (“rugged individualism”)  Turn to church and community for help  Only used federal agencies to help in small doses Urged business and labor to work togetherUrged business and labor to work together Hoover DamHoover Dam Reconstruction Finance Corporation (“trickle down”)Reconstruction Finance Corporation (“trickle down”) Hawley Smoot TariffHawley Smoot Tariff

38. Hoover and the Bonus Army PPPPatman Bill WWI pension paid in 1932, not 1945 HHHHoover orders “Bonus Army” to be disbanded Douglas MacArthur and Dwight Eisenhower KKKKilled Hoover’s chances of winning the election in 1932

40. Election of 1932  Hoover took no responsibility for economic problems "No president must ever admit he has been wrong""No president must ever admit he has been wrong"  Campaign slogans: "The Worst is Past," "Prosperity is Just Around the Corner"  Franklin Roosevelt preached a brand of cautious liberalism, rejecting Hoover's conservatism  Campaign slogan: "Happy Days are Here Again"  FDR won 57% of the popular vote and Democrats took control of both the House and Senate

41. FDR’s Solution  Relief  Recovery  Reform

42. Franklin D. Roosevelt’s Plan Franklin D. Roosevelt’s Plan