1. The Great Depression

2. How much to blame is Hoover?
“Hoover failed as president not because he sat idly by and waited for market forces to right the economy, as many believed - mistakenly, at the time - but because he aggressively pursued policies that ran in a direction counter to what the nation and its economy needed.” - Steven Felzenberg

3. Some Ideas Associated with Hoover
Volunteerism and localism
Trickle down economics
1. What were some radical responses to his policies?

4. Hoover’s Policies
Hoover falsely believes that high wages were the cause rather than the result of American prosperity. - Presses Corporate execs not to cut employees and wages. (Associationalism)
Tied to “Real Bills” financial policy of loaning. short term bank loans to be repaid by production of goods and services hence no expansion of money supply - Under this theory central banks restrict credit during downturns and expand during boom times.
After all his public works programs create a large deficit he pushes through the largest tax increase in U.S. History!! - Keynes would not approve.

5. Hoover’s Stubborness
Famous economists like Yale’s Irving Fisher are begging Hoover to reinflate and expand the money supply and make the Fed be the lender of last resort but to no avail.
1,028 economists sign an open letter in the New York Times warning Hoover not to sign the Hawley-Smoot Tariff. Hoover signs the bill anyhow

6. Attempts to Help Farmers
Agricultural Marketing Act created bureaucracy to help farmers with prices
Required voluntary cooperation to reduce crops, give gvt no power to limit production
Farm Board has budget of $500 million to loan to cooperatives, buy up surplus goods but lacks money to deal with the crisis
Hawley-Smoot Tariff increases rates on 75 farm products from 26% to 50%
Also raises rates on 925 manufactured goods

7. Hawley - Smoot Tariff of 1930 Find in Ch. 21
Hawley - Smoot Tariff of 1930 Find in Ch Notes (Take Notes on This)
This was done in part to help farmers by increasing the tariff on agricultural imports.
The farmers overproduction was due in large part to Hoover’s policies during WWI.
The results of the tariff bear out economists’ warnings.
U.S. imports decline from $7.034 billion in 1929 to $2.402 billion by 1933
U.S. exports fell from $5.886 billion in 1929 to $2.044 MILLION in 1932!!

8. Hoover’s Efforts: Too little, too late
Home Loan Bank provides money to banks, insurance companies to give out low-interest mortgages
Glass-Steagall Banking Act allows paper currency to support the Federal Reserve System
Allows major banks to pay gold to European creditors
Reconstruction Finance Corporation created to provide federal loans to banks, railroads, other businesses
Of $300 million for local relief, only gives out $30 million
Only uses 20% of $1.5 billion for public works
Helps large corporations avoid collapse, gives no direct aid to small businesses

9. The Bonus Army June 1932, 20,000 WWI veterans camp out in DC
Want early payment of pension bonuses
When Congress rejects the Bonus Bill, 2,000 veterans refuse to leave
Late July, Hoover orders the Army to remove the remaining veterans
Troops drive veterans out with tanks, tear gas
Three killed, including a baby

12. Hoover’s Place in History? (Take down in notebooks)
Hoover will do a first round of public works programs that will be modeled by FDR. It won’t make a change but it was a model.
Hoover would discretely funnel money to state and local governments but did not want people to know it was coming from government so they would not feel dependent on the federal government and stifle individual initiative.
Hoover’s RFC is the new entity that will make the government the lender of last resort but most of its policies don’t kick in until FDR’s term begins.
Hoover secretly took food and blankets to the Bonus Army protestors the night before MacArthur took harsh actions.

13. Progress of the Depression
Stock market crash triggers economic decline
9,000 banks close/bankrupted in
Depositors lose at least $2.5 billion
Money supply declines by 1/3 from
Federal Reserve responds by raising interest rates in 1931
GNP falls from $104 billion in 1929 to $76 billion in 1932
Business investment falls from $16 billion in 1929 to 1/3 of a billion in 1933
Wholesale price index falls 32% by 1933
Farm income falls from $12 billion to $5 billion

14. Unemployment during the Depression
1929, 1.5 million Americans unemployed
million unemployed
Cities particularly hit - Cleveland has 50%, Toledo, 80%
Farm income decreases 60% from
1/3 of farmers lose land
Unemployment for black males higher than national average

15. Impact for African Americans
By 1932, half of all blacks in South unemployed
Unemployment in NYC up to 50% for black men
Supreme Court overturns conviction of Scottsboro boys
NAACP supports formation of the Congress of Industrial Organizations
Over 500,000 blacks join labor movement

16. Hispanics and Women
Hispanic population increases dramatically in 20th century, due to no immigration restrictions, WWI
Over 500,000 return to Mexico during 1930s
Excluded from most relief programs, have few educational or social facilities
Strong belief that no woman whose husband was employed should accept a job
From , illegal for more than one family member to have a federal civil service job
22 states consider prohibiting women from working in paid jobs
By end of Depression, 25% more women working than at start of Depression, mostly in non-professional jobs
24% of white women, 38% of black women

17. Social Issues in the Great Depression
Divorce rate declines due to cost of divorces
Marriage and birth rates both decline
Some view Depression as the fault of individuals
Others see the Depression as a societal issue, not the fault of individuals, want a collective response
Farm Security Administration documents plight of rural Americans
Many writers focus on exposing social injustice
Agee describes lives of Southern families
Steinbeck’s The Grapes of Wrath, Cannery Row
Other cultural products provide light entertainment
Movies are mostly lavish musicals, comedies

18. 1932 Presidential Election