U.S. History Chapter 27

1. Chapter 27: The
Depression Begins

2. Quote
• “Ours is a land rich in resources, stimulating in its glorious beauty,
filled with millions of happy homes, blessed with comfort and
opportunity. In no nation are the institutions of progress more
advanced. In no nation are the fruits of accomplishment more
secure. In no nation is the government more worthy of respect. No
country is more loved by its people. I have an abiding faith in their
capacity, integrity, and high purpose. I have no fears for the future
of our country. It is bright with hope.”
• Herbert Hoover

3. Artist Reactions to the New Deal: Photography

4. Artist Reactions to the New Deal: Photography

5. Quote
• “...With the gales came the dust. Sometimes it was so thick that it
completely hid the sun. Visibility ranged from nothing to fifty feet,
the former when the eyes were filled with dirt which could not be
avoided, even with goggles.”
• Lawrence Svobida

6. Artist Reactions to the New Deal: Photography

7. Artist Reactions to the New Deal: Photography

8. Artist Reactions to the New Deal: Photography
• “A big ‘For Sale’ sign in a Chicago yard
mutely tells the tragic story of Mr. and
Mrs. Ray Chalifoux, who face eviction
from their apartment. With no place to
turn, the jobless coal truck driver and his
wife decide to sell their four children.
Mrs. Lucille Chalifoux turns her head
from camera above while her children
stare wonderingly. On the top step are
Lana, 6, and Rae, 5. Below are Milton, 4,
and Sue Ellen, 2”.

9. Artist Reactions to the New Deal: Abstract
Expressionism

10. Artist Reactions to the New Deal: Abstract
Expressionism

11. Artist Reactions to the New Deal: Abstract
Expressionism

12. Artist Reactions to the New Deal: Abstract
Expressionism

13. Quote
• "There is no cause to worry. The high tide of prosperity will
continue."
• Andrew W. Mellon, Secretary of the Treasury, September 1929

14. Artist Reactions to the New Deal: African
American Art

15. Artist Reactions to the New Deal: African
American Art

16. Artist Reactions to the New Deal: African
American Art

17. Quote
• “While the crash only took place six months ago, I am convinced
we have now passed the worst, and with continued unity of effort,
we shall rapidly recover. There is one certainty of the future of a
people of the resources, intelligence and character of the people of
the United States - that is, prosperity.”
• Herbert Hoover

18. Artist Reactions to the New Deal: Native
American Art

19. Artist Reactions to the New Deal: Native
American Art

20. Artist Reactions to the New Deal: Rediscovering
America

21. Artist Reactions to the New Deal: Rediscovering
America

22. Quote
• Economic depression cannot be cured by legislative action or
executive pronouncement. Economic wounds must be healed by
the action of the cells of the economic body - the producers and
consumers themselves.
• Herbert Hoover

23. Artist Reactions to the New Deal: Propaganda

24. Chapter 27: The
Depression Begins
Section 1: The Stock Market Crashes

25. The Election of 1928: Herbert Hoover
• Republican Candidate
• Geologist
• Secretary of Commerce under Harding and
Coolidge
• Represented rural, agrarian interests
• Vowed to enforce Prohibition
• Quaker
The government should
be “an umpire instead of a
player in the economic
game”

26. The Election of 1928: Alfred E. Smith
• Democratic Candidate
• Four-time governor of New York
• Represented urban, industrial interests
• Also vowed to enforce Prohibition, but openly
admitted to breaking it
• Roman Catholic

27. Question
• Why might the American public have an issue with Smith being a
Catholic?
• Why did many of the settlers of America come here?
• What was their religion?

28. Catholics in the White House?
• Some Americans thought that America would just
become another branch of the Vatican if controlled
by a Catholic
• Rumors circulated that Catholic churches in D.C.
had been turned into armories
• Hoover tried to help squash these rumors, but the
damage had already been done

29. Catholics in the White House?
• America would not have its first Catholic
president until John F. Kennedy in 1960
• He is still the only Catholic president to
serve

30. The Radio
• Newer and more popular invention at
this time
• Played a huge role in the Election of
1928
• This was the first time for many
Americans that they were able to hear
the voice of the presidential
candidates
• Americans did not like Smith’s New
York accent, while Hoover sounded
dignified

31. The Election of 1928
• Prosperity under the Republicans throughout the 1920s led
Americans to place their trust in Hoover
• Led to an impressive victory
“Two cars in
every garage!”

32. The Election of 1928

33. President Hoover
• Hoover was extremely optimistic about
America’s future
• Appointed many different commissions
to investigate societal problems in
America
The United States will soon
be “in sight of day when
poverty will be banished
from this nation.”

34. The Agricultural Marketing Act
• Hoover had promised relief to farmers for the nation’s growing
agricultural problems
• Congressmen from rural states demanded the government buy farmers’
surplus and sell it abroad
• Hoover disagreed, but supported the Agricultural Marketing Act
• Meant to help farmers market produce more efficiently and adjust supply
to demand

35. The Agricultural Marketing Act
• Also created the Federal Farm Board with $500 million to help
existing farm organizations and form new ones
• Established cooperatives such as the National Livestock Marketing
Association and the American Cotton Cooperative Association
• Too little too late…

37. The Stock Market
• The market value of securities, or stocks and bonds, more than
tripled between 1925 and 1929
• $27 billion to $87 billion
• For example, over three months a share in General Motors rose
from $209 to $303
• A month later in September 1929 that share would be worth $452

38. The Stock Market
• Speculation- engaging in a risky
business venture on the chance a
quick and sizeable profit can be made
• People bought shares they thought
would rise in price when they were
still cheap, then sold them once the
price went up
• Buy low, sell high

39. The Stock Market
• Buying on the margin was another popular practice
• This meant a person could make a small, cash down payment and
borrow the rest from a stockbroker
• The broker would hold the shares of stocks bought on the margin as
collateral for the loan
• Brokers loaned billions of dollars

40. The Stock Market
• By 1929, broker’s loans were in excess of $7 billion and stock was
greatly overpriced in comparison to profits
• The Federal Reserve Board tried to stop banks from loaning
money to use to buy stocks, but banks didn’t listen…
• The stock market began to waver in September 1929

41. The Stock Market
• On Thursday October 24th, almost 13
million shares of stocks were traded
• The stocks’ values dropped and brokers
demanded investors repay their loans or
they would sell
• Investment bankers like J.P. Morgan tried
to purchase as many shares as they
could to stabilize the market

42. Black Tuesday
• On October 29th, the stock market
collapsed
• 16 million stocks were sold in one day
• This cost investors around $30 billion
• One-third of all of the goods and services
produced in the U.S. at that time
• 1.5 million Americans invested in stock,
and many of them lost their entire life
savings

43. Comparison
• Stockbrokers and investment bankers had $7 billion invested in
the stock market through loans, but after the stock market
crashed, investors lost $30 billion.

46. Cause of the Great Depression
• The collapse of the stock market was only the start…
• 1. Overproduction of goods due to laborsaving machinery
• 2. Installment Buying
• An agreement whereby a purchaser made a down payment and paid the
rest of the cost in periodic regular installments, adding an interest charge
• 3. Decrease in consumer spending
• Those who could afford to buy industrial
products, such as automobiles, already did
• The rich were still getting richer and the
poor poorer

47. Causes of the Great Depression
• 4. Agricultural Slump
• Banks held mortgages on farmland in exchange for loans
• The value of that land was decreasing making it more difficult for farmers
to get credit
• Farm surpluses caused a drastic decrease in farm prices, even when the
government stepped in
• 5. The Stock Market Crash of 1929
• President Coolidge’s policies contributed to an uneven distribution of
wealth and failed to discourage risky stock market ventures
• It was a downward spiral from here…

49. Question
• If you were the President of the United States at this time, what
programs might you put in place to help get the nation back on it’s
feet?

50. Video
• https://www.youtube.com/watch?v=TtttXC9tFPU
• 2:49-8:30

51. THE GREAT DEPRESSION
1. On your first slip, write down your profession or place of
employment. If you rely on a spouse to support you, indicate
that on your slip.
2. On your second slip, write down how much money you have
saved up in the bank.
3. A few years ago, you saw stocks were rising in value and decided
to invest your disposable income. On your third slip, write down
how much money you have invested in the stock market.
4. On the fourth slip, write down whether you rent an apartment or
own a house.

52. THE GREAT DEPRESSION
• You’ve just woken up on October 29th 1929. The sun is shining
through your bedroom window and it looks like its going to be a
nice day. You step outside to retrieve your newspaper, and you see
the headlines.

53. THE GREAT DEPRESSION
• Shocked and worried about what this
will mean for your investments, you
rush to get ready and head to the
stockbrokers to sell all of your stock
and retrieve what money you still can.
When you get there, he begs you not to
sell and tells you that what you’ll make
from selling will only cover the cost of
what you still owe him from buying on
the margin. You decide to sell anyway
just in case the stock market drops
even more.

54. THE GREAT DEPRESSION
• You leave upset, but comforted knowing that you still have some
money in the bank to support your family with. Just then, you hear
in passing that the banks had been using their customers money to
invest in stocks themselves. Without the permission of their
customers, banks around the nation had invested and
subsequently lost money playing the stocks. You rush to the local
branch of your bank to take out any money you can.

55. THE GREAT DEPRESSION
• Unfortunately, everyone else had the same idea as you. The bank
did not have enough money to give everyone their savings back so
only the first few people who made it to the bank that day got their
savings back.

56. THE GREAT DEPRESSION
• Now most of the town is worried about money and stop buying
anything that is unnecessary. If your job belongs to one of those
industries, you will most likely be laid off or have your wages
greatly diminished.

57. THE GREAT DEPRESSION
• With even less money in circulation because of the lowering of
wages and layoffs, those of you who have more essential services
begin to be laid off as well, since your employers simply cannot
afford to pay you.

58. THE GREAT DEPRESSION
• You now have no job, no savings, no
investments… but at least you have a
home, right?
• Renters, how will you pay for rent with
no money coming in or saved up?
• Homeowners, technically, you don’t own
your homes, the banks do. You give them
a mortgage payment each month that
goes toward the loan you took out when
you purchased the home. Once you can
no longer pay your mortgage payments,
the bank will foreclose on your property,
and you too will become homeless.

59. THE GREAT DEPRESSION
• Many people found themselves in this exact predicament in
1929/1930 after the stock market crashed.
• How do you think they felt? What would you have done if you had
experienced the effects of the stock market crash firsthand?

60. Chapter 27: The
Depression Begins
Section 2: Hoover’s Policies

61. Question
• Hoover’s slogan of “two cars in every garage” became “two families
in every garage”
• What does this suggest about America following the stock market
crash?

62. President Hoover
• President Hoover was deeply devoted
to the nation, but he was inflexible
and lacked practical political
experience
• Midterm elections saw a shift of
power in the legislature from
Republican to Democrat
• Hoover was, therefore, unable to
control Congress when it came to the
tariff issue

63. The Hawley-Smoot Tariff
• Originally meant as a protection for farmers, but by the time it
passed, it had become the highest protective tariff in peacetime
history
• Over a thousand economists wrote to Hoover urging him to veto
the bill claiming it would…
• Help inefficient producers
• Raise consumer prices
• Reduce foreign markets
• Cause ill will toward the U.S. in other
countries

64. The Hawley-Smoot Tariff
• Not signing it would isolate him from other Republicans and
abandon his hopes at a new tariff commission
• So, he signed it into law in 1930
• Within one year, 25 foreign nations passed laws restricting
purchases of American goods
• Some companies bypassed these new international barriers by
establishing factories overseas
• Farmers, obviously, could not do this

65. Question
• When this tariff was originally written, it was meant to protect
farmers. How did this tariff end up effecting farmers?
• Did it hurt them or support them?

67. Farmers
• Between 1929 and 1932, the average farmers’
income was cut by more than half
• The Farm Board did end up buying surplus
crops, but that only drove the price further
down
• In 1932 the Farm Board stopped purchasing
surplus, but farmers still wouldn’t stop planting
excess crops
• Hoover’s relatives in Iowa were even suffering

69. Reconstruction Finance Corporation
• Had $2 billion in federal resources
• Made loans to hard-pressed railroads, insurance companies, and
banks
• But, NOT to individuals
• Hoover feared direct government involvement when rebuilding the nation
• These projects were designed to pay their way
• Toll bridges and dams that would produce electricity are a good example

70. President Hoover’s Strong Resolve
• Hoover had campaigned against paternalism of the federal
government and state socialism
• He opposed direct federal relief for the unemployed
• It would weaken self-respect and undercut private charities
• The Garner-Wagner bill sought to give direct aid to the
unemployed, so Hoover vetoed it
• Hoover also vetoed the Norris bill which would have given
the government the right to produce and sell electricity
• He did not want the American people to rely on the
government

71. Affairs in Latin America
• As a Quaker and a pacifist, Hoover desired
world peace above all
• War was morally wrong
• Hoover travelled to Latin America as a sign of
goodwill and in an attempt to improve
relations, after military intervention in
several Latin American countries
• He pulled troops out of Nicaragua and passed the
Clark memorandum which clarified that the
Monroe Doctrine did not justify American
intervention in Latin America

72. Disarmament
• Being a pacifist, favored disarmament
• He went to the London Naval Conference of 1930 to try and get the
largest military powers to reduce the size of their navies
• Italy and France both refused to sign
• He also proposed an abandonment of aggressive weapons at the
Geneva Convention within the League of Nations
• This didn’t take
• With Japan and Germany rising in power, nations were looking for
“collective security”

73. Moratorium
• Hoover saw reparations repayment as a “European problem” even
though most of the money was owed to the U.S.
• The rising number of poor and unemployed Germans disagreed leading to
the rise of the Communist and Nazi Parties
• With the allies unwilling to forgive any German debt (which they
needed to pay back America), Hoover proposed an international
moratorium that suspended all war-debt payments to the U.S. for
one year
• Secretary of State Henry Stimson suggested the debts be cancelled
completely, but Hoover refused to go that far

74. Question
• How did the moratorium help Germany?
• The Allied Nations?
• The U.S.?
• Why didn’t Hoover just cancel the debts?

75. The Hoover-Stimson Doctrine
• When Japan took control of Manchuria, they violated the Nine-
Power Treaty of 1922 and breached the charter of the League of
Nations
• China appealed to the League of Nations to help, who appealed to
the U.S.
• Hoover refused to consider any economic or military action
• Secretary Stimson further defined the U.S. stance by saying the U.S.
would not recognize any territorial gains that violated the Kellogg-
Briand Pact

76. The Hoover-Stimson Doctrine
• This policy of non-recognition ultimately did
nothing to help China and irritated Japan
• Hoover, still a pacifist, believed that military
action or economic sanctions would cause war
• During the Great Depression, there was a move
back towards isolationism as America focused
on internal problems
• Without public support, it would be foolish for the
U.S. to get involved
The United States
does not exist to
police the world!”

77. Question
• What message did the U.S. send to leaders such as Adolf Hitler by
not taking action against Japan?

78. Chapter 27: The
Depression Begins
Section 3: The Depression Worsens

79. The Depression Worsens
• While the majority of Americans did not lose their jobs, they did
see a reduction in hours and wages
• 800 banks failed within 2 months of 1931, taking all of their
client’s money with them
• 30,000 companies closed in 1932 alone
• Loss of confidence and hope also played a large part in the gloomy
atmosphere of the Great Depression
• Some suffered such severe emotional effects that they became
unemployable

80. Question
• “While the majority of Americans did not lose their jobs, they did
see a reduction in hours and wages”
• This sounds bad, but, for many people, having their wages
decrease made little difference. Why is that?
• What happened to the price of goods during this time?

81. The Depression Worsens
• Business leaders were scared to open
new factories, banks were scared to lend
any money, and stock market prices just
kept dropping
• Stock in the Radio Corporation of
America went from $101 in 1929 to
$2.50 in 1932
“I’m afraid, every man is afraid. I
don’t know, we don’t know
whether the values we have are
going to be real the next month or
not.”
-Steel Industrialist Charles
Schwab

82. Want in the Land of Plenty
• The American people, especially those in big
cities, were starving
• This is ironic, because farmers were
producing more than they could sell
• Farmers were heating their homes with excess
grains
• They called for “farmer’s holidays” to prevent
food shipments to cities
• Some farmers in Iowa even dumped milk trucks
on the side of the road to make milk scarce and
raise its price
• In cities, people were picking through
garbage to find scraps to eat

83. The Depression Worsens
• Business leaders promised not to cut wages any further, but by
1931 they had no other option
• U.S. Steel Corporation cut wages by 10%
• Other industries saw salaries decrease by 40% and hourly wages
decrease by 60%
• The average family income fell from $2,300
in 1929 to $1,600 in 1932
• In 1940, 4 million workers were
unemployed, and by 1933 that number
had more than tripled (+12 million)

84. Breadlines and Soup Kitchens
• Local governments and private
charities began opening soup kitchens
and breadlines to try and feed the
poor
• Hoover’s Reconstruction Finance
Corporation did loan money to state
governments for relief, but, eventually,
the funds ran out
• In Toledo, Ohio, they could only spend
2 cents for each relief meal they
served
• For some, this was their only meal of the
day

85. “Hoovervilles”
• Those who could not pay their rent or mortgage payments were
evicted from their homes
• They either went to live with relatives if they could, or they ended
up in makeshift communities called Hoovervilles, named after
President Hoover
• Still more slept in
doorframes or on
park benches

86. Quote
• “Here were all these people living in rusted-out car bodies. I mean
that was their home. There were people living in shacks made of
orange crates. One family with a whole lot of kids living in a piano
box. This wasn't just a little section, this was maybe ten miles wide
and ten miles long. People living in whatever they would junk
together.”
• On the Oklahoma City Hooverville

87. “Brother can you
spare a dime?”

88. The Bonus Army
• In May 1932, around 1,500 unemployed
Army Veterans marched on Washington
D.C. demanding early payment of a bonus
that Congress had promised to them come
1945
• They set up camp right across from the
White House, so that they could hold daily
demonstrations
• Over time, their numbers increased to
more than 20,000
• Hoover initially supported their right to
protest, as long as it remained peaceful…

89. Question
• Who’s side would you have taken, the government or the Bonus
Army?
• They were demanding their bonuses 13 years early
• Why was the government waiting so long to give them their bonuses?

90. The Bonus Army
• Congress rejected their demands, and almost all of the men left
• About 2,000 stayed behind and violence erupted
• There was a small clash between the protestors and police, which
led to Hoover calling in the Army
• General Douglas MacArthur used tanks, machine guns, and tear
gas to clear the area of all protestors
• Then, they burned down their camps

91. Question
• Now who’s side would you take, the government or the Bonus
Army?
• Do you think Hoover’s forces used excessive force?

92. Fears of Revolution
• Lloyds of London, an insurance
company, began writing riot
insurance policies for the U.S.
• The people blamed their old idols,
industrialists and bankers, for the
Great Depression, and called on
Congress to increase regulation
• This unrest lead to the emergence of
two radical political parties that had
been kept at bay up until this point…

93. The Communists and Socialists
• Both of these groups called for government control over the basic
means of production and distribution
• But they refused to work with one another
• Socialists proposed they gain power through persuasion and the
ballot box
• Communists believed capitalism needed to be overthrown by
violent revolution
• This is what Marx predicted in his Communist Manifesto
• The Omelet Theory

94. The Omelet Theory
• Earl Browder, General Secretary of the Communist Party, proposed
that, just as it is impossible to make an omelet without breaking
eggs, it is impossible to make a revolution without breaking heads

95. The Election of 1932
• Democratic Candidate- Franklin
Delano Roosevelt
• Governor of New York
• In his run for governor in 1928, he was
remarkably popular with the public
• His platform urged the repeal of
Prohibition and made broad
proposals for reform and recovery
• First Democrat to personally accept
his nomination at the Democratic
National Convention

96. The Election of 1932
• Republican Candidate- Herbert Clark Hoover
• Reluctantly renominated
• Had to defend his policies in the middle of the
Great Depression
• Said the economic collapse came as a result of
economic collapse abroad and that without his relief
measures it could have been much worse
• Unfortunately, the public was not convinced that
Hoover had their best interests at heart
“You cannot extend the
mastery of government over
the daily life of a people
without somewhere making
it master of people’s souls
and thoughts”

98. The Election of 1932
• Roosevelt carried 42 of 48 states
• Showed a widespread willingness to blame Republicans for the
Great Depression and accept and expect government welfare
• Socialists polled nearly 1 million votes!
• Communists polled 100,000
• Together that’s 2% of the popular vote
• Before Roosevelt took over, the 20th Amendment was passed that
changed the presidential inauguration from March 4th to January
20th

99. The 20th Amendment
• The “Lame Duck” Amendment
• Roosevelt was still sworn in on March 4th, leaving the nation
practically without a leader for four months
• During this time the banking system disintegrated and the nation
went into a panic
• State governments closed banks until confidence could be restored

100. 23
20
4
8

101. Question
• Why didn’t Hoover do anything to try and solve the issues with the
banking system?

102. The Election of 1932

103. Vote!
• http://etc.ch/gLU2
• https://directpoll.com/c?XDVhEtWpzYEmTvUh1wj5c4Fp7gShAVzf

104. Herbert Hoover and Charles
Curtis
Franklin Roosevelt and John
Nance Garner
“Happy days are here again”“We are turning the corner”

105. President Hoover

106. Governor Roosevelt

107. President Hoover’s Platform
• Continual anti-depression measures: wage cuts, National Credit
Association, Reconstruction Finance Corporation loans to public
institutions and private corporations; Federal Farm Board
• National, state and local governments balance their budgets
• International conference (monetary policies, commodity prices, trade
problems)
• Shorter work week
• Limit military production, disarmament
• Cooperative agricultural organizations
• Interstate utilities and interstate commerce regulation
• Immigration quotas
• Prohibition

108. Governor Roosevelt’s Platform
• New Deal reform policy
• Reduce federal spending
• Balanced budget
• Federal unemployment relief
• New public works projects
• Repeal of Prohibition

109. President Hoover Campaigns
• https://www.youtube.com/watch?v=rkTEUJw6Zus

110. Governor Roosevelt Campaigns
• https://www.youtube.com/watch?v=-mqWhDwAFmk (3:03)

111. Vote!
• http://etc.ch/gLU2
• https://directpoll.com/c?XDVhEtWpzYEmTvUh1wj5c4Fp7gShAVzf