Hoover, FDR and the Election of 1932

The Stock Market Crashes In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381. On October 23 and 24, the Dow Jones Average quickly plummeted, which caused a panic. On Black Tuesday, October 29, 1929, most people sold their stocks at a tremendous loss. This collapse of the stock market is called the Great Crash. Overall losses totaled $30 billion.

The Great Depression The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression. The stock market crash of 1929 did not cause the Great Depression. the Great Crash and the Depression were the result of deep underlying problems with the country’s economy. The Great Depression lasted from 1929 until the US entered World War II in 1941. Unemployed laborers, unable to pay their rent, became homeless. Unemployment rates: 1921 to 1929 3.7% on average By 1933 24.9% For those who kept their jobs their hours or wages were cut 10-30%.

Herbert Hoover – 31st President, 1929-1933

Hoover’s Cautious Response to Depression Fails Hoover followed a ‘hands-off’ policy. Hoover used a policy called ‘volunteerism’ Keep employment, wages, and prices at current levels Called on government to reduce taxes, lower interest rates, and create public works programs. Hoover had faith in localism, the policy of handling problems at the local level Some Americans called on a rejection of capitalism and an acceptance of socialism Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). Gave more than $1 billion of government loans to business and railroads. Trickle-down economics

Hoover’s Limited Strategy Hoover convinced business leaders to help maintain public confidence in the economy. To protect domestic industries, Congress passed the Hawley-Smoot tariff. European countries also raised their tariffs, and international trade suffered a slowdown. Hoover did not support federal public assistance because he believed it would destroy people’s self-respect and create a large bureaucracy.

Hoover and the Bonus Army Finally, public opinion soured for Hoover when he called the United States Army to disband a protest of 20,000 unemployed World War I veterans called the Bonus Army. Hoover ordered the Bonus Army out of Washington FDR was quoted as saying “this wins the election for me.”

The Election of 1932: Hoover v. FDR Franklin Roosevelt Believed that government had a responsibility to help people in need. Much of his support came from urban workers, coal miners, and immigrants in need of federal relief. Roosevelt won 57 percent of the popular vote and almost 89 percent of the electoral vote. Herbert Hoover Believed that federal government should not try to fix people’s problems. Argued that federal aid and government policies to help the poor would alter the foundation of our national life. Hoover gave very few campaign speeches and was jeered by crowds.

Franklin Delano Roosevelt – 32nd President 1933-1945

FDR’s New Deal and the Three R’s Franklin Delano Roosevelt (FDR) knew that restoring a sense of hope and building public confidence were essential to calming panic and creating support for his plans. In the first hundred days of his presidency, Roosevelt pushed many programs through Congress to provide relief, recovery, and reform. 15 major bills that focused on banking failures, agricultural overproduction, the business slump and soaring unemployment Relief – To help people cope with the depression Recovery – To help end the depression Reform – To prevent future economic problems

FDR’s Fireside Chats FDR used radio to speak to people directly People felt that they had a personal relationship with FDR People began to feel as if FDR has personally given them a job or saved their home