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Republican candidate
Herbert Hoover
“A chicken in every
pot and a car in
every garage”
Democrat candidate
Alfred E. Smith
Outcome: - Hoover wins Times are Great! Why Make a Change?
- Public opinion is in favor of the Republicans
- Farming Crisis Overproduction = Surplus Crops NOT sold Demand & Prices Fall = Can’t Pay Loans & Lose Farms
- Living on Credit Living beyond means = False Sense of Prosperity Credit Easily Available = Business Support Consumer Debt
- Unequal Distribution of Wealth Rich got richer in the 1920’s while the Poor got poorer
- Industrial Issues Key Industries NOT making much profit in the 1920’s Coal Mining down due to new sources of energy Boom Industries (automobiles, construction) weaken
- Less Consumer Spending Rising prices, idle wages, overbuying = Less Spending
- Stock Market Bull Market in the 1920’s = Rush to buy Stock (3% buy) Market Speculation buy with idea to make a quick buck
while ignoring the risks Buying on Margin pay for stock with a down payment
and borrowing the rest to pay
September 1929
- Stock prices peak
then begin to fall
October 24, 1929
- Stocks plunge & investors unload shares
- Result: Stock Market Panic
October 29, 1929
“Black Tuesday” Stock Market Crashes(16.4 million shares dumped and stock prices plummet)
- Rush on the Banks People withdraw their money Result “failure of banks”
Result:
- Banks run out of money
- Millions of Americans lose life savings
1929 = 600 banks close1933 = 11,000 banks fail
- U.S. Economy Falls Business's go Bankrupt (90,000 close) Gross National Product is cut in half (104 to 59 billion) Workers lose jobs (1 in every 4) Unemployment Rate Rises (25% in 1933)
People cant afford food Find food at Soup kitchens
and in Bread Lines
- People lose homes Shantytowns created
Nicknamed “Hoovervilles”
African Americans & Latinos Face highest level of
unemployment Face violence and
discrimination
Women Targets of resentment
for having jobs
Children Poor diets & malnutrition Lack of healthcare Had to drop out of school Ruse in child labor
Farmers and Rural Areas Could grow their own food Faced foreclosure of farms Many turned to tenant farming
The Dust Bowl (1933-1936) Overproduction + Drought = No Crops Winds + Drought + Bad Soil = Dust Storm
Outcomes
- cannot grow food = evictions
- farmers leave their land & homes
President Hoover’s Belief:
- govt. should only play a limited role in solving
the economic problems
- opposed federal welfare & direct relief to needy
Hoover Attempts to Help:
- Hawley-Smoot Tariff- highest tariff on imported
goods in U.S. history
- Boulder Dam Project- creates construction jobs
- Federal Farm Board- farm cooperatives aimed at
raising crop prices
- National Credit Corp.- loaned money to small banks
to help prevent bankruptcy
- Federal Home Loan Bank Act- lowered mortgage rates
and refinances
- Reconstruction Finance Corp.- $2 billion in to large
businesses (trickle
down theory)
The Bonus Army (1932): - Patman Bill to pay WWI vets bonus now instead of
1945 is introduced by Congress
- WWI veterans march on Washington D.C. to show support of paying wartime bonus now
Outcome:
1. created a “shantytown” in D.C.
2. Bill fails veterans told to leave they refuse
3. Hoover orders troops to forcibly disband Bonus Army
4. American public stunned by treatment of veterans
