1. Economic Boom & Bust

2. Warren G. Harding 1865 – 1923 29th President (1921-3)
Elected on a campaign of a “Return to Normalcy” – a return to isolationism, less social reform, and increased economic growth
Harding was an honest man, but put too much trust in his friends and political allies, giving them positions in his cabinet
Died in office from a massive heart attack, possibly brought on by the stress of scandals

3. The Ohio Gang
Harding’s corrupt friends from back home came to be called the “Ohio Gang”
They abused their positions by accepting bribes, illegally selling government property
Harding was deeply embarrassed by the actions of his friends
Most notorious member was Secretary of the Interior Albert B. Fall

4. Teapot Dome Scandal
Sec. Fall had secretly leased federal lands to private oil companies in return for $300,000 in bribes
When the scandal broke, Fall became the first cabinet member to go to prison and Harding’s reputation was ruined

5. Calvin Coolidge 1872 – 1933 30th President (1923-9)
Became President upon Harding’s death
Known as “Silent Cal” for his terse, serious manner
“The business of the American people is business”: Coolidge supported businesses and a laissez-faire economy

6. Andrew Mellon & the Mellon Program
1855 – 1937
Sec. of Treasury to 3 Presidents
His program included applying business principles to managing the federal budget
Believed that economic growth required balancing the budget, reducing the federal deficit, and cutting taxes

7. Economic Boom
Rise in the standard of living during the 1920s led to increased sales of consumer goods which in turn created more jobs
Mechanization of factories led to greater efficiency and a drop in prices for manufactured goods, further encouraging consumerism

8. Consumer Credit
For the first time, individuals began to regularly borrow money and go into debt to purchase consumer goods (cars, appliances, radios, etc.) because credit became easy to come by and carried no social stigma
Consumers began to use “installment plans” to buy expensive items

9. Growth of the Middle Class
As corporations began to expand and have specialized departments such as sales, marketing, accounting, engineering, and management, the number of people living at the middle-class level grew tremendously

10. Welfare Capitalism
Companies began allowing workers to buy shares of stock, participate in profit sharing, and receive benefits such as medical care and pensions
This led to increased spending among the working class and less reliance on unions, since they no longer seemed necessary

11. Farmers in Crisis
Technological advances such as pesticides and tractors led to both higher crop yields and increased debt for farmers
Increased crop yields led to a drop in crop prices
Government efforts to help farmers were repeatedly vetoed by Pres. Coolidge, who believed in laissez-faire

12. Election of 1928
Coolidge decided to not run for re-election, instead supporting his Sec. of Commerce Herbert Hoover as the Republican nominee
Democrats ran NY Gov. Alfred E. Smith, the first Catholic to run for President
Hoover won in a landslide

13. Herbert Hoover
1874 – 1964
31st President ( )
Took office at a time of unparalleled prosperity and optimism, but by the end of his presidency, the US was at the bottom of its deepest economic depression in history

14. Stock Speculation
A long period of growth in the stock market convinced millions of Americans to take a risk and invest in stocks
Investors began “buying on margin” – borrowing the money to buy stocks, believing those stocks would grow in value and allow them to easily repay the loans; but, if prices dropped, they panicked and sold quickly to avoid taking large losses

15. “Black Tuesday”
In late October, 1929 stock prices began to slip, triggering a mass sell-off as investors panicked
On Tuesday, Oct. 29 the bottom fell out – the market lost $15 billion in a single day
The market continued to plunge for the next 3 years and didn’t recover until after WWII – a period known as the “Great Depression”

16. Banking Collapse
Banks had made numerous loans to stock speculators and had also invested heavily themselves in the stock market
When the market collapsed, banks lost big and had to stop lending
With credit restricted, the economy went into a recession
Many banks could not absorb their losses and closed; people who had deposited their money in these banks lost everything – this caused further panic and people began to withdraw their money from banks

17. Hawley-Smoot Tariff Tariff Act of 1930
Government passed the 2nd highest tariff in US history in an attempt to protect US industry, but the tariff badly hurt the sale of US goods overseas as foreign nations raised their tariffs against the US
This worsened the US economic situation

18. Rugged Individualism or Direct Relief?
US had long believed in “rugged individualism” – the idea that it was up to the individual to take care of himself
As the economy collapsed and unemployment soared, people began to support the idea of “direct relief” – the government should act to help those who could no longer help themselves

19. Herbert Hoover

20. The Dust Bowl
From 1930 – 36, a terrible drought, coupled with decades of damage to the topsoil from plowing, led to wind erosion and huge dust clouds
Thousands of farmers lost everything and were forced to move west and work as migrant farmers

22. Dorothea Lange 1895 – 1965 Photojournalist
Lange's photographs humanized the tragic consequences of the Great Depression and profoundly influenced the development of documentary photography

23. Lange’s Photos

24. John Steinbeck
1902 – 1968
Author of The Grapes of Wrath, a Pulitzer Prize winning novel about the tragedies which befell his fictional family of Oklahoma farmers during the Dust Bowl
Also wrote Of Mice and Men, a story about the tragic relationship between two poor migrant farmers

25. Hoover’s Public Response
After “Black Tuesday,” Hoover worked hard to assure Americans that the economy would recover quickly
Hoover stepped up a propaganda campaign aimed at boosting consumer confidence

26. Hoover’s Private Response
Hoover, however, knew that the economy was extremely unstable
He held multiple meetings with business leaders trying to win pledges that factories would remain open, but to no avail

27. National Credit Corporation
Hoover tried to ease the nation’s credit crisis with the creation of the NCC
The NCC held a pool of private money that it could lend to banks so that banks could continue to offer loans; the NCC, however, never had enough cash to meet the demand and so was a failure

28. Reconstruction Finance Corporation
When the NCC failed, Hoover resorted to government lending
The RFC was created to make direct loans to banks & railroads
Even the RFC could not meet the demands for loans, and the economy continued to fail

29. Emergency Relief & Construction Act
In desperation, the government approved $1.5 billion in spending on public works projects and an additional $300 million to provide “direct relief” – money provided directly to families in need

30. Hunger Marches
Crowds of the unemployed and hungry began to hold large-scale demonstrations across the US
The largest was organized by the American Communist Party in Washington DC; protesters chanting “Feed the hungry, tax the rich” were blocked from marching by the police

31. Farmers Revolt
Meanwhile, desperate farmers began to destroy their crops and produce in an effort to increase prices
Some even resorted to burning their crops for heat in their home
Anger continued to grow as more and more farmers had their land foreclosed on by banks

32. Breadlines & Soup Kitchens
As unemployment approached 30%, many people began to rely heavily on soup kitchens and breadlines run by churches, charitable organizations, & some city governments in order to survive

33. Hoovervilles
In large cities, as people could no longer afford to pay rent, they were forced into homelessness
Many began to live in homemade shacks that they built in any open space available – whole villages of such shacks began to appear, mockingly referred to as “Hoovervilles”

34. Hobos
Hundreds of thousands of homeless, jobless men began to live a nomadic lifestyle, moving from place to place usually by illegally hiding on freight trains
Often lived in temporary Hoovervilles called “hobo jungles” along the railroad tracks

36. The Bonus Army
In 1924, Congress had promised to pay every WWI veteran a $1000 bonus in 1945
May 1932 – over 15,000 vets arrived in DC to lobby Congress to move the bonuses up – Congress voted against the idea

38. Hoover Responds to the Bonus Army
After the vote, much of the Bonus Army remained in Washington, living in Hoovervilles and vacant buildings
Pres. Hoover ordered them dispersed; after the DC police failed, Hoover sent in US Army, who used tear gas and bayonets to clear the Bonus Army out

39. Election of 1932
Republicans nominated Hoover, while Democrats ran NY Gov. Franklin Delano Roosevelt
Hoover continued his mantra that recovery was just around the corner, while Roosevelt pledged himself to a “new deal” for the American people
Roosevelt won easily

40. Franklin Delano Roosevelt
1882 – 1945
32nd President ( )
President throughout most of the Great Depression and WWII
Roosevelt had been paralyzed from the waist down from polio since 1921, making him our only physically disabled president, however, he carefully controlled his public appearances so that the public wasn’t constantly reminded of his disability