1. Hoover and the Depression

3. IV. Hoover Hoover as President (1928-1932)
Soundly defeated Al Smith in 1928
Ran on reputation as efficient and honest.

6. IV. Hoover Associative State:
Not premised on governmental coercion or intervention.
Preferred a voluntary, non-governmental approach to economic matters, the better, he reasoned, to protect the "American character.“
E.g., gov. to encourage cooperation between unions and corporations, not regulate them
Not premised on governmental coercion or intervention.
Preferred a voluntary, non-governmental approach to economic matters, the better, he reasoned, to protect the "American character.“
E.g., gov. to encourage cooperation between unions and corporations, not regulate them.

7. Herbert Hoover Hoover stated the the economy would continue to grow
Suggested that poverty would “soon be banished from this earth”
Oct 21, 1929, in Detroit, Hoover still hailed the stability of the economy

8. Problems with the economy
Dependency on large industries
Overexpansion of credit
Agriculture and textiles were depressed industries during the 1920s
Only World War I helped agriculture
Republican tariffs hurt other manufacturing
Easy credit -> over $7 billion in products were purchased on credit
Buying on margin -> banks and brokerage firms gave out loans for stock purchases

9. Problems with the economy
Additional note on credit expansion -> economists warned that this large debt would cripple consumers
Foreign trade dilemma -> flow of American money to foreign nations slowed, and tariff barriers kept foreigners from trading with USA

10. Problems with the economy
Purchasing power declined
Cost of basic necessities = $2, average annual income = $1,500
Maldistribution of wealth -> when the market crashed, the wealthy stopped spending
Overspeculation -> too many people committed to high-stakes investments
Many consumers could not afford to purchase goods

11. Black Thursday, Oct 24, 1929
Investors began to sell their shares upon news of rising interest rates
Dumping of so much stock caused prices to drop

12. Black Tuesday, Oct 29, 1929 Margin Purchases
Stock losses exceeded total USA expenditures during WW I
Stock prices plummeted
GM from $73 to $8
U.S. Steel from $262 to $22
Consumers who “bought on margin” were unable to repay loans

13. Post-October 1929 Voluntary cooperation Federal Farm Board
Businesses should not lay off workers
Industry should create part-time work
Surplus crops were purchased and given to the needy

14. Hoovervilles

18. Hoover would not agree to direct relief
Hawley-Smoot Tariff -> raised tariff rates to 100%, causing other nations to stop trading with the USA
Reconstruction Finance Corporation -> provided $1.5 billion in loans to banks and businesses

19. Bread lines, food lines

20. Selling apples
6,000 people were selling apples for 5¢ each on the streets of New York City by 1930

21. Too little, too late
Hoover finally admitted that private initiative had failed to stem the depression

22. Bonus Army fiasco
20,000 WW I Vets converged on the Capital, demanding immediate payment of a bonus due in 1945

24. Hoover called out the military to break up the Camps

25. Roosevelt and the 1932 election
Promised a “New Deal” for the American people