1929 - 1942

The Depression

Election of 1928

Alfred E. Smith Herbert Hoover

Hoover Wins

o Americans had enjoyed prosperity for a decade.

o Hoover promised that we would end poverty in U.S.

o Americans credited Republicans for their good fortune.

o Hawley-Smoot kept tariffs high to protect industry and farmers.

o Alfred Smith was easily defeated.

The Crash

Americans had been buying on margin for yrs.

On Black Tuesday, the market crashed.

There was a run on the market.

Everyone wanted to sell their stocks in the most successful companies.

The market lost about $30 billion in 1 month.

Effects of the Crash

Stock market crash caused a panic in the US

Banks had made their money by charging interest on loans as well as investments.

When loans weren’t paid, bankers foreclosed on homes and businesses.

When people aren’t paying back, banks cannot make loans.

The economy won’t grow.

Causes of the Great Depression

Over-speculation in the market.

Over-extended credit.Over-production in

industry.Poor economic

decisions by gov’t – tariffs.

A world DepressionDust Bowl.

Dust Bowl

By 1933, parts of Texas, Kansas, Oklahoma, Missouri, & Ark had dried up (Colorado)

Rain had ceased and terrible dust storms blew away topsoil.

Much of the blame could be placed on terrible, greedy farm practices.

New Deal efforts to stop foreclosures were met w/ opposition in the Supreme Court.

LAISSEZ-FAIREVS.

REALITY

Hoover and the Depression

Hoover’s Philosophy

Hoover tried to explain the Depression as part of the business cycle.

Following downturn will be continued growth.

America simply had to wait it out.

He believed in rugged individualism.

Americans can do anything they set their minds to.

Hoover’s Solutions

Early on, he advised us to pull ourselves up by our bootstraps.

He was afraid that handouts would make us lazy.

Hoover thought more gov’t spending was wasteful and would slow recovery.

He changed his mind.

Hoover’s New Policy

Hoover tried to get labor, business and banks to work together.

Little short-term success

He also began a huge works project…

…Boulder Dam in Nevada

It provided water to 7 states and flood control.

Also used to generate electricity.

Stubborn Hoover

As Americans blamed Hoover, he refused to give direct relief.

He hoped money to states would trickle down.

He tried to reform banks and bring down interest rates for homes.

Reconstruction Finance Corp was his last major effort to prop up banks and business.

Final Straw

Veterans of WWI were desperate for cash.

They marched on D.C. to demand their bonuses.

They were known as the “Bonus Army”.

Some were paid, but gov’t didn’t have $ to pay all.

They were asked to leave.2,000 did not and were

forced to leave – some were killed.

Hoover never recovered.

CHAPTER 13THE NEW DEAL

1933-1938

New Deal

As mentioned, the New Deal was FDR’s program: bring Relief, Recovery & Reform

Eleanor Roosevelt was the most influential First Lady to live in the White House.

People didn’t know what the New Deal was, but they wanted something.

What they got was experiments!

Hundred Days Congress

By law, the President cannot spend tax-payer dollars.

Congress must appropriate all money and FDR needed Congress’ help.

The first 100 days of FDR’s admin. was met with all the help he wanted.

Congress passed everything the Pres. sent them.