Hoover & the Hoover & the Great CrashGreat Crash

(1929 - 1933)(1929 - 1933)

Labor Unrest• Gastonia Strike (1929)• S. Textile Mill• 1,000 on strike• Natl. Guard ; 2 workers killed• Vigilante violence • Labeled as communists or anarchists

Gastonia Strike (1929)

Republican Leadership

• Coolidge chooses not to run for re-election

• Nominate Herbert Hoover• Engineer• Senator• WWI Board appointments

1928 Election

Herbert Hoover• “I have no fears for the future of

our country.” - Inaugural Address, 1929

• Stabilize business ; agriculture

• “Prosperity is just around the corner…” c. 1932

Hoover & Agriculture• Agricultural Marketing Act (1929)• Co-Ops• Federal Farm Board ; $500 mil.

• Hawley-Smoot Tariff (1930)• Highest duties ever• Economists cry for change! • Too damaging to foreign market

Economic Troubles• FL real-estate boom; bust• “Great Bull Market”• “Stock-on-Margin”• “Balloon-Style” mortgages

• “[there is] nothing fundamentally wrong with the stock market or with the underlying business and credit structure.”

- Unknown Bank Pres., Oct. 22, 1929

Oct. 29, 1929

• “Black Tuesday”

• Largest 1 day loss• 16.4 mil. shares sold• 3 mil. on ‘busy day’• Wall St. stocks fall 37%

Numbers Crash• 1929: 452 stock avg.

• 1932: 52 stock avg.

• 1933: NYSE stock decline 80% in value

Stock Prices, 1920-35

Numbers Crash• 1929-32: Personal incomes decline

by 50%

• 1929-33: 9,000 bank closures

• 1933: 13 mil. unemployed

Causes of Depression• Consolidated 30% of wealth in top 1%• Increase in profits ; decrease in

purchasing power• Mellon Tax Cuts lead to speculation• Anti-Labor lowers wages ; low CBAs• Gold Standard fails to provide necessary

flexibility ; $$ supply tightens

“Hoovervilles”

“Hoovervilles”

Hoover Responds• Expediate govt. construction

projects• Modest Tax reductions• Farm Board & Fed. Reserve reduce

interest rates• Rejected increased govt. spending• No social welfare

Relief Acts• Recon. Finance Committee (1932)• $500 mil. Budget, $2 bil. Spending power• Loans to bank, farms, RRs

• Fed. Home Loan Bank Act (1932)• Discount banks for mortgages

• Emergency Relief & Construction Act (1932)• RFC $300 mil. for state relief loans

Civil Unrest• Farmers protest foreclosures• NE farmers burn crops ; block

deliveries• “Bonus Expeditionary Force”• WWI vets.• 43,000 marchers in DC• 17,000 vets.

“Bonus Army”

Hoover Reforms Fail• Hoover reluctant to abandon passive

approach • Market crash beyond his control• Diminished public trust ; support• Reforms not enough to offset

• “I can’t be Theodore Roosevelt…I have no Wilsonian qualities.”

- Hoover, c. 1933

“Great Depression”