The Great Depression & The New Deal (1929-1940) Chapter 26, Section 1 Hoover & The Crash The Great Depression & The New Deal (1929-1940) Chapter 26, Section 1

Essential Question: Should the Government Intervene in the Lives of its’ Citizenry? Explain.

Herbert Hoover Secretary of Commerce Under Calvin Coolidge Won the 1928 Presidential Election Republican = Believed in Laissez Faire! 3 Republicans in a Row During 1920’s: Harding, Coolidge & Hoover Considered One of the WORST Presidents! (Great Depression)

The Big Jinx! In One of Herbert Hoover’s Campaign Speeches, He Said: “We shall soon be in sight of the day when poverty will be banished from this nation” JINX! Why Did Herbert Hoover Believe This?

4 Industries in Trouble During the “Roaring Twenties” Agriculture (Farming) Overproduction of Crops with New Equipment = Lower Prices/Profits Railroads: People Buying Cars Textile Mills: Mass Production of Textiles = Lower Prices Mines: Other Forms of Energy

The Growing Poor By 1929, 71% of Americans Only Made $2500 Per Year (Below the Poverty Level) Unemployment Rate Was Growing African Americans Struggled to Get Jobs! (Racism)

1st Cause of Great Depression: Overproduction Businesses Made More Goods! (Better Tech!) Even Though Prices of Goods Went Down, So Did Peoples Salaries! People Stopped Buying Goods! (Businesses Could Not Pay for Materials, Salaries, Equipment, Etc) Businesses Had to Cut Costs ($$$) to Survive (Fire Workers!)

Overproduction!

2nd Cause of Great Depression: Buying on Credit Installment Buying: During the 1920’s Most Americans Bought on Credit When Americans Salaries Dropped, They Paid Off Their Debts Instead of Buying New Goods! Businesses Sold Less/ More Overproduction Is This Happening Today?

3rd Cause of Great Depression: Speculation During the 1920’s Stock Prices Kept Going Up! Speculation is the Buying & Selling of Stocks in Hope of Making a Quick Profit! Most Americans Bought Stock in Companies & Sold It to Make $$$ Is This Happening Today?

Wall Street NYC

4th Cause of Great Depression: Buying on Margin Investors Took Out Loans From Banks to Buy Stocks If Stock Goes Up, Sell the Stock, Pay Back the Loan to the Bank, Make a Profit! (Awesome!) If Stock Goes Down… Uh-Oh!

1928 Presidential Election Herbert Hoover Won the 1928 Presidential Election by a Landslide Predicted More Prosperity for America (The Big Jinx!) Republican – Laissez Faire (Hands Off)

Black Tuesday October 29th, 1929 As The Stock Market Kept Going Lower & Lower, Americans Panicked & Tried to Sell All of Their Stocks! Nobody Wanted To Buy! Everyone Was Afraid as Prices Kept Dropping! The Stock Market Crashed! Is This Happening Today?

Outside the NYSE

Failure of the Banks! When the Stock Market Crashed, Banks Demanded Customers to Pay Back Their Loans! People Who Bought on Margin Could Not Pay Back Their Loans! Banks Ran Out of Money! Citizens Ran to the Bank To Pull Out Their Savings! Banks Had No $$$ To Give! 9,000+ Banks Went Out of Business!

Business Failures 1929 When The Market Crashed, People Stopped Buying Goods! Thousands of Businesses Went Bankrupt! To Save $$$, Businesses Fired Workers! No Work, No Paycheck! No Paycheck, Can’t Buy Goods! Businesses Fire More Workers, More People Have No Paycheck….. Bad Cycle!

Unemployment & Hunger 25% Unemployment in 1933 (1 out of Every 4 Americans) Americans Bought Less Products = Businesses Fired More Workers! Poverty, Homelessness & Hunger! Everyone Affected!

Global/World Wide Depression The Great Depression Lasted From 1929-1941 (When the U.S. Entered WWII) Many Countries Around the World Took Loans From U.S. Banks to Help Rebuild After WWI When American Banks Crashed, So Did the World’s Economy!

Herbert Hoover: Laissez Faire Response! Herbert Hoover was a Republican = Believed Government Intervention Should NOT Take Place! He Cut Government Spending on Projects & Raised Taxes Plan Made Sense But TOTALLY BACKFIRED! Why Did Hoover’s Plan Make Things Worse?

“Rugged Individualism” Herbert Hoover Did NOT Want to Give Federal Relief ($$$ & Food) to the Poor Feared Citizens Would Then Rely on the Government (Dependent) Hoover Believed in the “Rugged Individual” Americans Had to Be Tough Through Hard Times! Suck It Up! Why Do YOU Think Americans Think of Hoover as One of the Worst Presidents Ever?

Private Charities Herbert Hoover Asked Private Charities to Help! Salvation Army, The American Red Cross & Religious Groups Did As Best As They Could! The Demand for Food, $$$, Shelter & Jobs Was too High!

Hoover Flags Americans Blamed Herbert Hoover For Their Suffering! Hoover Flags & Hoovervilles Were Used to Blame Herbert Hoover for the Depression Hoover Finally Changed His Laissez Faire Beliefs! (Too Little, Too Late!)

Hoovervilles

Public Works Projects Government Funded (Paid For) Projects Projects to Improve Infrastructure = Roads, Dams, Airports, Bridges, Tunnels Projects Would Give People Jobs! Reverse the Cycle! Jobs = Paychecks = Spending = Investment Capital = Businesses Hire More Workers = More Paychecks = Etc…

The Hoover Damn (AZ & NV)

Public Works Projects Today!

The Bonus Army 12,000-15,000 WWI Veterans Marched on Washington D.C., Summer of 1932 Wanted Their Bonuses Early Because They Were Broke! Needed the $$$! They Refused to Leave Until They Got Their Bonuses! Set Up Camp in D.C.!

Hoover & Senate Say NO! Herbert Hoover & the Senate Vote Down a Bill to Give WWI Bonuses Early Most Veterans Went Home. Some Stayed & Protested! General Douglass MacArthur & the Present Army Kicked Them Out of D.C. Fighting Broke Out! Present U.S. Army Used Tear Gas & Force!

Hoover Looks Really Bad! Americans Were Very Upset for the Harsh Treatment of the Bonus Army! Hoover Looked Really Bad! America Would Look For Change! FDR – Democrat Will Win the 1932 Election!

Essential Question: Should the Government Intervene in the Lives of its’ Citizenry? Explain.