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Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
Hoover, the Stock Market Crash and the Depression
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Hoover, the Stock Market Crash and the Depression

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  • This is a great slide show! What is your source for your list of famous losers on Wall Street, slide 25? And where did you find the b/w illustrations on the slides following?
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  • http://personal.ashland.edu/~jmoser1/coolidge.htm – Explanation of veto
  • GM out of the DOW - http://blogs.barrons.com/techtraderdaily/2009/06/01/cisco-replaces-gm-in-dow-jones-industrials/
    It is an index that shows how 30 large, publicly owned companies based in the United States have traded during a standard trading session in the stock market.[1] It is the second oldest U.S. market index after the Dow Jones Transportation Average, which was also created by Dow.
  • September the Stock Market had some unusual up & down movements
    October 24, the market took a plunge .
    On October 29, now known as Black Tuesday, the bottom fell out
    16.4 million shares were sold that day – prices plummeted
    People who had bought on margin (credit) were stuck with huge debts
  • “On Margin,” by James Montgomery Flagg, appeared on November 15, 1929. In the speculative fever of the roaring twenties, many people had made their stock investments with borrowed money. When stocks fell and creditors called in the loans, the results were ruinous.
  • “Just what he wanted,” by William Kemp Starrett, appeared on December 6, 1929, reflecting the false hopes many were then placing in what turned out to be a treacherous bear market rally. In fact, stocks still had a long way to fall before they would finally bottom out in 1932.
  • “Finis,” also by Starrett, appeared three weeks later, on December 27. It sums up how many stock investors felt about the year 1929 (and may feel today about 2008). (For those too young to remember, the machine in the background is an old-fashioned stock ticker, which printed incoming stock quotes on “ticker tape,” as shown in the foreground.)
  • Indeed, a number of the early cartoons focused wrily on the fate of previously well-to-do investors, now fallen on hard times. The drawing below by Ed Graham appeared on December 6, 1929. As the Depression worsened, vast numbers of unemployed men would adopt the expedient of hopping freight trains in search of work. Relatively few, admittedly, were former shareholders.
  • “Up three points,” by Frank Hanley, is from January 10, 1930. It plays on the popular mythology of the time, according to which bankrupt stockholders were throwing themselves from the windows of New York skyscrapers in droves.
  • The Tariff Act of 1930, otherwise known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff (P.L. 71-361)[1] was an act, sponsored by United States Senator Reed Smoot and Representative Willis C. Hawley, and signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels.[2]
    The overall level tariffs under the Tariff were the second-highest in US history, exceeded (by a small margin) only by the Tariff of 1828[3] and the ensuing retaliatory tariffs by U.S. trading partners reduced American exports and imports by more than half.
    Some economists have opined that the tariffs contributed to the severity of the Great Depression.[4][5][6]
  • since people could not buy, productivity was cut back = further unemp.
    so w/ additional unemployment  purchasing power declined again  reduced productivity yet again (= ECONOMIC CYCLE)
  • That spring about 15,000 World War I vets arrived in Washington to support a proposed bill
  • Hoover called the Bonus marchers, “Communists and criminals”
    On June 17, 1932 the Senate voted down the Putnam Bill
  • Dust Bowl – American Memory http://memory.loc.gov/ammem/afctshtml/tsme.html
  • Strange fruit – anniversary of a lynching http://www.npr.org/templates/story/story.php?storyId=129025516
  • Transcript

    • 1. PBS: American Experience1930sPBS: American Experience1930s
    • 2. Objectives  Discuss how Hoover went from being a symbol of twenties business success to a symbol of depression failure.  Explain how the stock-market crash set off the deep and prolonged Great Depression.
    • 3. Visual InterpretationVisual Interpretation  From your seat, you will take a look at 2 paintings.From your seat, you will take a look at 2 paintings.  In your notebook, respond to the following:In your notebook, respond to the following: 1.)1.) Think of and write downThink of and write down 2 adjectives to describe2 adjectives to describe the feeling of the illustration.the feeling of the illustration. 2.)2.) IdentifyIdentify the time period of the illustration and in 2-the time period of the illustration and in 2- 3 sentences,3 sentences, describedescribe the illustration and the message itthe illustration and the message it is conveying.is conveying. 3.)3.) Identify and explainIdentify and explain 3-5 factors within each3-5 factors within each illustration that aided you in identifying the time periodillustration that aided you in identifying the time period the illustration is from.the illustration is from.
    • 4. Alexandre Hogue (American, 1899 – 1994), Drouth Stricken Area, 1934, Oil on canvas “Dust Bowl Ballads” (Woodie Guthrie)
    • 5. From theFrom the RoaringRoaring ’20s’20s toto TheThe GreatGreat DepressionDepression
    • 6. From Prosperity to PovertyFrom Prosperity to Poverty 3 major areas of economic trouble in the3 major areas of economic trouble in the 1920s1920s:: 1.)1.) IndustryIndustry 2.)2.) AgricultureAgriculture 3.)3.) Consumer SpendingConsumer Spending
    • 7. IndustryIndustry  Railroads, Textiles & SteelRailroads, Textiles & Steel sufferedsuffered - RR’s competing with the automobile- RR’s competing with the automobile  Mining & Lumber no longer in demandMining & Lumber no longer in demand -new forms of energy (fuel oil, natural gas)-new forms of energy (fuel oil, natural gas)  Housing Market fellHousing Market fell (loss of jobs)(loss of jobs)
    • 8. Agriculture: Farmers StruggleAgriculture: Farmers Struggle  Demand for crops fell after WWIDemand for crops fell after WWI -Surpluses-Surpluses -Unpaid loans for land & equipment-Unpaid loans for land & equipment  Farmers couldn’t pay back loansFarmers couldn’t pay back loans  Banks foreclosed on farmsBanks foreclosed on farms -Banks failed-Banks failed Photo by Dorothea Lange
    • 9. Helping FarmersHelping Farmers  McNary-Haugen BillMcNary-Haugen Bill -federal price-supports for key products (wheat, corn,-federal price-supports for key products (wheat, corn, cotton & tobacco)cotton & tobacco) -govt. would buy surplus crops at guaranteed prices and-govt. would buy surplus crops at guaranteed prices and sell them on the world marketsell them on the world market -Vetoed by Coolidge twice-Vetoed by Coolidge twice
    • 10. Consumer SpendingConsumer Spending  Americans Living beyondAmericans Living beyond their means with CREDITtheir means with CREDIT  Uneven distribution ofUneven distribution of incomeincome -1920s favored Big Business-1920s favored Big Business -70% + of American families-70% + of American families earned less than $2,500 perearned less than $2,500 per yearyear  Mass production madeMass production made wages high, prices lowwages high, prices low  Advertising targetedAdvertising targeted consumersconsumers Photo by Dorothea Lange
    • 11. Advertising in the 1920s  Madison Avenue” was first used to describe the advertising industry and in which many products are sold because they hold out the promise of a more modern and freer life, filled with exciting opportunities to consumer new products.  Some ads stressed that ordinary Americans could have the same products as the rich and the socially prominent. Others described natural products are superior to artificial products. Many ads for cars and refrigerators treated these products as objects worthy of worship by surrounding them with halos. Invented characters like General Mills' Betty Crocker and Philip Morris's little bellhop, Johnny helped consumers establish a personal connection with a particular product.  Target women as consumers; “shop therapy” invented  Psychologists (behaviorists) used to design campaigns  Offered installment plans (credit)
    • 12. First million dollar ad campaign!
    • 13. “I’ll go without food before I’ll see us give up the car” ~ Middletown
    • 14. Think Critically…Think Critically…  How will these 3 areas of economic troublesHow will these 3 areas of economic troubles help to pave the way for the Great Depression?help to pave the way for the Great Depression?  Predict the events in each area (industry,Predict the events in each area (industry, agriculture, consumerism)agriculture, consumerism) Think about:Think about: What happened in industry?What happened in industry? What happened in agriculture?What happened in agriculture? What happened to consumers?What happened to consumers?
    • 15. A New PresidentA New President  Herbert Hoover (Rep.)Herbert Hoover (Rep.) ““We in America areWe in America are nearer to the finalnearer to the final triumph over povertytriumph over poverty than ever before in thethan ever before in the history of any land.”history of any land.” --1928 speech accepting the1928 speech accepting the Republican nomination for theRepublican nomination for the PresidencyPresidency
    • 16. Young Hoover supporter in 1928
    • 17. The Stock Market in the 1920sThe Stock Market in the 1920s  Bull market – pricesBull market – prices risingrising  DOW roseDOW rose -Measure of the market’s-Measure of the market’s healthhealth  Investors wereInvestors were optimisticoptimistic New York Stock Exchange By 1929, 4 million Americans owned stocks
    • 18. Seeds of TroubleSeeds of Trouble  Speculation:Speculation: buying stocks &buying stocks & bonds hoping for a quick profitbonds hoping for a quick profit  Buying on the Margin:Buying on the Margin: payingpaying a small percentage of a stock’sa small percentage of a stock’s price as a downprice as a down payment andpayment and borrowing the restborrowing the rest  Unrestrained buying & sellingUnrestrained buying & selling with very little governmentwith very little government interventionintervention  People couldn’t pay backPeople couldn’t pay back borrowed money if value of stockborrowed money if value of stock declined…declined…
    • 19. By mid-November, investors had lost about $30 billion
    • 20. THE 1929 CRASHTHE 1929 CRASH  On October 29 -On October 29 - Black TuesdayBlack Tuesday  16.4 million shares16.4 million shares were sold– priceswere sold– prices plummetedplummeted  People who hadPeople who had bought on marginbought on margin (credit) were stuck(credit) were stuck with huge debtswith huge debts
    • 21. A World Wide DepressionA World Wide Depression  Hawley- Smoot Tariff (1930) – raises tariff toHawley- Smoot Tariff (1930) – raises tariff to 60%60%  Other countries enacted their own tariffs andOther countries enacted their own tariffs and soon world trade fell 40%soon world trade fell 40%
    • 22. Objective  Indicate how Hoover’s response to the depression was a combination of old-time individualism and the new view of federal responsibility for the economy.
    • 23. CAUSES OF THE GREATCAUSES OF THE GREAT DEPRESSIONDEPRESSION  Tariffs & war debtTariffs & war debt policiespolicies  Overproduction inOverproduction in industry andindustry and agricultureagriculture  Easy credit led toEasy credit led to debt and lessdebt and less spendingspending  UnequalUnequal distribution ofdistribution of incomeincome
    • 24. How did the Crash Affect theHow did the Crash Affect the People?People?  Bank & Business FailuresBank & Business Failures -Banks invested people’s money into stock-Banks invested people’s money into stock marketmarket -By 1933, 11,000 of the nation's 25,000 banks-By 1933, 11,000 of the nation's 25,000 banks had failedhad failed -No insurance on savings accounts; people lost-No insurance on savings accounts; people lost their moneytheir money  Unemployment reached 25%Unemployment reached 25% -1 out every 4 people without a job-1 out every 4 people without a job
    • 25. A Vicious Cycle Unemployment Purchasing Power Productivity
    • 26. HOOVER AND THEHOOVER AND THE DEPRESSIONDEPRESSION  Hoover recommendedHoover recommended business as usual; notbusiness as usual; not quick to reactquick to react  ““rugged individualism”rugged individualism” –people succeed through–people succeed through their own efforts, taketheir own efforts, take care of themselves, notcare of themselves, not depend on governmentdepend on government hand-outshand-outs Herbert Hoover ““Any lack of confidence in the economic future . . . IsAny lack of confidence in the economic future . . . Is foolish”foolish”
    • 27. Hoover believed it was the individuals job to take care of themselves, not the governments DepressionDepression AppleApple SellersSellers
    • 28. Immediately After the Crash  Hoover encouraged voluntary non- coercive cooperation  charitable organizations to give aid to the poor  employers shouldn’t lay off workers/lower wages  laborers shouldn’t strike
    • 29. Hoover’s “Trickle Down”Hoover’s “Trickle Down” Approach: Too Little Too LateApproach: Too Little Too Late  ““trickle down” – aid to banks, businesses, NOTtrickle down” – aid to banks, businesses, NOT individualsindividuals  Hoover DamHoover Dam  Reconstruction Finance Corporation -Reconstruction Finance Corporation - government lending bank; big business benefitedgovernment lending bank; big business benefited mostmost  Norris-La Guardia Anti-Injection ActNorris-La Guardia Anti-Injection Act  Agriculture Marketing ActAgriculture Marketing Act  Federal Farm Board (Grain/CottonFederal Farm Board (Grain/Cotton Stabilization Corps – bought surpluses)Stabilization Corps – bought surpluses)  Hawley-SmootHawley-Smoot
    • 30. BONUSBONUS ARMYARMY  19321932  Patman BillPatman Bill would havewould have authorized Congress toauthorized Congress to pay a bonus to WWIpay a bonus to WWI vets immediatelyvets immediately  The bonus wasThe bonus was scheduled to be paid inscheduled to be paid in 1945 --- The Army vets1945 --- The Army vets wanted it NOWwanted it NOW 43000 marchers, 17000 vets and their families
    • 31. BONUS ARMYBONUS ARMY TURNED DOWNTURNED DOWN Thousands of Bonus Army soldiers protest – Spring 1932 The Bonus Army, their wives and children were driven out with fixed bayonets and adamsite gas, an arsenical vomiting agent, and their shelters and belongings burned.
    • 32. AMERICANS SHOCKED ATAMERICANS SHOCKED AT TREATMENT OF WWI VETSTREATMENT OF WWI VETS  MacArthur’s 12MacArthur’s 12thth infantry gassed more than 1,000 marchers,infantry gassed more than 1,000 marchers, including an 11-month old baby, who diedincluding an 11-month old baby, who died  Two vets were shot and scores injuredTwo vets were shot and scores injured  Americans were outraged and once again, Hoover’s imageAmericans were outraged and once again, Hoover’s image sufferedsuffered
    • 33. Hoover had little chance to be re-elected in 1932
    • 34. “Brother, Can you Spare a Dime?”“Brother, Can you Spare a Dime?”
    • 35. HARDSHIPS DURING THE DEPRESSIONHARDSHIPS DURING THE DEPRESSION  hardship,hardship, homelessnesshomelessness, and hunger for millions, and hunger for millions  people lost their jobs, and their homespeople lost their jobs, and their homes  Some built makeshifts shacks out of scrap materialSome built makeshifts shacks out of scrap material  shantytowns (shantytowns (HoovervillesHoovervilles) sprung up) sprung up
    • 36. SOUP KITCHENSSOUP KITCHENS  soupsoup kitchens andkitchens and bread lines inbread lines in urban areasurban areas  free or low-free or low- cost food forcost food for peoplepeople Unemployed men wait in line for food – this particular soup kitchen was sponsored by Al Capone “Street of Forgotten Men, 1930 )
    • 37. RURAL LIFE DURING THERURAL LIFE DURING THE DEPRESSIONDEPRESSION  farmers did have onefarmers did have one advantage; they could growadvantage; they could grow food for their familiesfood for their families  Thousands of farmers lostThousands of farmers lost their landtheir land  Many turned to tenantMany turned to tenant farming and barely scrapedfarming and barely scraped out a livingout a living Between 1929-1932 almost ½ million farmers lost their land
    • 38. THE DUST BOWLTHE DUST BOWL  AA severe droughtsevere drought gripped thegripped the Great Plains in theGreat Plains in the earlyearly 1930s1930s  Wind scattered the topsoil,Wind scattered the topsoil, exposing sand and gritexposing sand and grit  The resultingThe resulting dust traveleddust traveled hundreds of mileshundreds of miles  One storm in 1934 picked upOne storm in 1934 picked up millions of tons of dust frommillions of tons of dust from the Plains an carried it to thethe Plains an carried it to the East CoastEast Coast Kansas Farmer, 1933
    • 39. “The Plow that Broke the Plains”
    • 40. Dust storm approaching Stratford, Texas - 1934
    • 41. Storm approaching Elkhart, Kansas in 1937
    • 42. Dust buried cars and wagons in South Dakota in 1936
    • 43. HARDEST HIT REGIONSHARDEST HIT REGIONS  Kansas, Oklahoma,Kansas, Oklahoma, Texas, New Mexico,Texas, New Mexico, and Coloradoand Colorado  Many farmers migratedMany farmers migrated to California and otherto California and other Pacific Coast statesPacific Coast states Boy covers his mouth to avoid dust, 1935
    • 44. Photographer Dorothea Lange captures a family headed west to escape the dust storms
    • 45. Southern trees bear a strange fruit, Blood on the leaves and blood at the root, Black body swinging in the Southern breeze, Strange fruit hanging from the poplar trees. Pastoral scene of the gallant South, The bulging eyes and the twisted mouth, Scent of magnolia sweet and fresh, And the sudden smell of burning flesh! Here is a fruit for the crows to pluck, For the rain to gather, for the wind to suck, For the sun to rot, for a tree to drop, Here is a strange and bitter crop. Abel Meeropol, performed by Billie Holiday “Strange Fruit”“Strange Fruit” (video footage)(video footage)
    • 46. CONDITIONS FORCONDITIONS FOR MINORITIESMINORITIES  UnemploymentUnemployment was the highestwas the highest among minorities,among minorities, their pay was thetheir pay was the lowestlowest  Many MexicansMany Mexicans werewere “encouraged” to“encouraged” to return to theirreturn to their homelandhomeland 24 lynchings in 1930 alone
    • 47. HOBOESHOBOES TRAVELTRAVEL AMERICAAMERICA  The 1930s created the termThe 1930s created the term “hoboes” to describe poor“hoboes” to describe poor driftersdrifters  300,000 transients – or300,000 transients – or hoboes – hitched rideshoboes – hitched rides around the country on trainsaround the country on trains and slept under bridgesand slept under bridges (thousands were teenagers)(thousands were teenagers)  Injuries and death wasInjuries and death was common on railroadcommon on railroad property; over 50,000 peopleproperty; over 50,000 people were hurt or killedwere hurt or killed Dorothea Lange Tramps and hobos are commonly lumped together, but in their own sight they are sharply differentiated. A hobo or bo is simply a migratory laborer; he may take some longish holidays, but soon or late he returns to work. A tramp never works if it can be avoided; he simply travels. Lower than either is the bum, who neither works nor travels, save when impelled to [3]
    • 48. EFFECTS OF DEPRESSIONEFFECTS OF DEPRESSION  Suicide rate rose more than 30% between 1928-1932Suicide rate rose more than 30% between 1928-1932  Alcoholism rose sharply in urban areasAlcoholism rose sharply in urban areas  Three times as many people were admitted to stateThree times as many people were admitted to state mental hospitals as in normal timesmental hospitals as in normal times  Many people showed great kindness to strangersMany people showed great kindness to strangers  Additionally, many people developed habits of savingsAdditionally, many people developed habits of savings & thriftiness& thriftiness
    • 49. Pre Class What were the 3 areas of economic trouble in the 1920s? Briefly explain how, by the end of the ’20s, each of these areas showed signs that danger was on the horizon.
    • 50. Stock Market Crash Speculation Buying On Margin Loss Of Confidence Falling Stock Market Prices
    • 51. Pre Class - Define the following:Pre Class - Define the following:  Buying on the marginBuying on the margin  SpeculationSpeculation  How didHow did margin buyingmargin buying andand speculationspeculation affect the stockaffect the stock market?market?  Led to consumer confidence in theLed to consumer confidence in the market and more buyingmarket and more buying  Led to a great increase in stock pricesLed to a great increase in stock prices and strong market (and strong market (bull marketbull market))  Led to a steeper decline in stock pricesLed to a steeper decline in stock prices – a CRASH – when prices began to– a CRASH – when prices began to dropdrop

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