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Hoover and the Great Depression – “The Great Depression and the New Deal,”
Overall main idea: Between 1929 and 1933, the American economy collapsed into the Great
Depression for various reasons, but Hoover’s efforts to limit its problems were unpopular and
ineffective in the short term.
Hard Times in Hooverville
Main idea: The 1920s American economy collapsed, leaving many Americans unemployed, homeless, and in difficult
conditions.
Winter of 1932-33 was particularly difficult
Some Americans were brought to the point of starvation and suicide
Crash!
Main idea: The Great Depression began with the stock market crash, but was caused by a number of long-term economic
problems.
October 1929 – stock market crashed on Wall Street, meaning the prices of stocks dropped tremendously and
irregularly, as prices for goods dropped, investors couldn’t pay loans to pay for the stocks, and other investors panicked and
sold their stock quickly to avoid worse loss; “Black Tuesday” was October 29, 1929, although there were several other
“black” days in which stocks also fell a large amount
Great Depression – the period of economic collapse and crisis through the 1930s
*Causes of the Great Depression:*
Stock market crash (see above)
Unequal distribution of wealth and income (disparity in wealth): the majority of wealth in American
society was owned by a small percentage of Americans, therefore most Americans couldn’t afford to buy the huge amount
of products (especially large purchases like cars) being manufactured during the Roaring 20s; when products aren’t being
bought, a company can’t pay for its costs to run the company, especially the large-scale companies of the 20s; therefore
companies went out of business and therefore lots of American jobs were lost, further contributing to a lack of products
being bought
Consumer debt: so many Americans couldn’t afford products that they took out risky loans and used
installment plans to buy them; when too many problems hit or they lost their jobs, they couldn’t afford to pay the loans
Artificially high prices because of oligopolies: because there was little competition in the economy,
companies could charge higher prices than what supply and demand dictated, and most Americans couldn’t afford them;
also this made companies seem like they were worth more than what they really were ,therefore making their stocks look
like they were worth more than they were
“Sick” industries: Agriculture, coal, and textiles were collapsing under overproduction, low prices, and
heavy debt; drought hit farms; banks were poorly and riskily managed, leading to bank runs and lack of money to pay off
losses
International problems: Europe was still struggling with debt and rebuilding after World War I,
depending on American investments; American tariffs (including the Hawley-Smoot Tariff of 1930—the highest tariff in
U.S. history) blocked international trade and caused other countries to raise their tariffs; U.S. exports dropped to 70% by
1932
Government policies: failure to enforce anti-trust laws, failure to regulate banking or the stock market,
low taxes on the wealthy and businesses, opposition to labor unions, high tariffs, and mistakes by the Federal Reserve in the
money supply—they kept interest rates low in the 1920s to encourage more spending, then when the depression hit, they
raised them, discouraging investment and spending when it was actually needed
The Depression Spreads
Main idea: The depression spread as more businesses shut down, workers lost jobs and crop prices fell, leading Americans
to lose their land and homes.
Factories shut down or cut back and industry production went way down – 50% of its 1929 level in 1932
Unemployment went up and production went down – by 1932, 25% of Americans were out of work and income
dropped by 50%
One of the biggest problems is that depressions often work in a cycle, as can be seen in the unequal distribution of
wealth above—one thing leads to another leading to another, which affects the original cause. Example: Joe lost his job, so
he can’t pay the payments for his Ford automobile; with Ford not making as much money, they can’t afford to pay all their
workers, so they lay off more workers (which now can’t pay off their debts like Joe) and cut back on car production; with
car production cut back, the steel and rubber industries suffer, so they cut back production and lay off workers; workers
can’t afford to pay their loans on their houses, so banks collapse and give out less loans to businesses; with less loans,
businesses can’t invest in new machinery and production suffers, leading to more cut backs…etc.
Farmers couldn’t pay mortgages and lost their farms; city dwellers couldn’t pay rent and lost their homes; evicted
families moved in with relatives or moved into Hoovervilles – shantytowns of makeshift housing (shacks, boxes, tents)
named after Herbert Hoover, who Americans blamed for not helping them; Oklahoma City and New York City had large
Hoovervilles covering miles of public land
Soup kitchens and breadlines put together by charities could hardly keep up with the demand; states nor the
Federal government had large-scale relief services either
“Women’s Jobs” and “Men’s Jobs”
Main idea: Women, especially married, were often fired from jobs during the depression as employers intended to provide
more for male “breadwinners.”
Men were more likely to work in industry and “women’s jobs” of low-paid service, teaching, sales, and clerical
jobs weren’t as affected by the depression – many businesses fired women to try and give men more jobs, but often men
wouldn’t take “women’s jobs” anyway
Despite the firings, the number of married women in the workforce increased in the depression as they tried to
provide for their families
Families in the Depression
Main idea: The Great Depression affected traditional family structure through desertion, malnutrition, and more femaleheaded households.
Desertion and postponement of marriages increased, but divorce declined because of the expense; birthrates fell
Men were often humiliated by not being able to support their families; number of female-headed households
increased; women sewed their own clothes, grew their own food, took in extra work and boarders
Some parents and older siblings sacrificed their own hunger in order to let younger children eat; some children
died of starvation and many suffered from malnutrition; lots of older children left home, some as hobos, traveling across the
country
“Last Hired, First Fired”
Main idea: Minorities suffered from racism and unemployment worse than whites in the Great Depression.
Howard University said that African-Americans were the “Last to be hired and the first to be fired”; manual labor
jobs that were typically dominated by blacks were now being taken by desperate whites; some charities refused to care for
blacks; local relief agencies set higher requirements for blacks
Hispanic-Americans were similar in the West, as they lost jobs to whites in farming and suffered from racism;
nearly 500,000 left the U.S.; deportation was encouraged by white Westerners
Protest
Main idea: While most Americans were resigned to the Depression, some protested.
Many families stole food or coal or other resources on occasion
Communists and Socialists organized “unemployment councils” to protest and aid citizens, but were sometimes
met with resistance and violence from authorities
One example of rural protest was farmers blocking and destroying the shipment of produce to urban areas in an
effort to limit supply and drive up prices
Hebert Hoover and the Depression
Main idea: President Hoover’s limited measures to aid in the depression led to his unpopularity and defeat in the election
of 1932.
The Limits of Voluntarism
Main idea: Hoover’s ideas of voluntarism and resistance to direct Federal relief to Americans were unable to cope with the
needs of the Depression.
Hoover believed that voluntary, private action should be used to aid in the Depression, not Federal intervention –
he worked with major business owners to pledge employment and wage levels (they later ignored them); he created the
President’s Organization for Unemployment Relief, which raised money to donate to private charities; he vetoed
Congressional attempts at Federal relief
Hoover: “The American way of relieving distress [is through] the voluntary agencies of self help in the
community.”
However, private charities and organizations did not have the resources or preparation for such a large scale of
crisis; neither did local governments
Hoover moved towards slightly more activist policies, like encouraging tax cuts and public works programs to
create jobs, and creating the Reconstruction Finance Corporation (RFC) in 1932 – loaned Federal money to banks,
insurance companies and railroads in the hope of stimulating the economy and so “trickling down” to ordinary Americans
Yet Hoover’s ideas were seen as indifferent to ordinary Americans and a protector of big business that had caused
the Depression; hence his name in “Hoovervilles,” “Hoover Wagons,” “Hoover blankets,” “Hoover flags,” etc.
Repudiating Hoover: The 1932 Election
Main idea: Due to his policies and his reaction to the Bonus Army, the unpopular Herbert Hoover was defeated by
Democrat Franklin D. Roosevelt in the 1932 Presidential election.
Bonus Army – unemployed veterans of World War I who marched on Washington in 1932 to demand payment of
their pension bonuses that weren’t due to them until 1945; Hoover refused to meet with them, the Congress refused their
plan, and Hoover sent Federal troops to push them out of their Hooverville and vacant buildings in Washington
Reports of the violent reaction to the Bonus Army were broadcast across the country and were the nail in the
coffin for Hoover’s unpopularity with the American people
Election of 1932 – Republicans nominate Hoover for reelection, Democrats nominate Franklin D. Roosevelt
Franklin Delano Roosevelt – from an upper class family in New York, cousin of Theodore Roosevelt, Harvard
educated, lawyer, state legislator, assistant secretary to the Navy, governor of New York, and vice-Presidential candidate in
1920 (similar to his cousin Teddy); polio in 1921 crippled him and he had to walk with crutches or a wheelchair
Eleanor Roosevelt was also very active in politics and society, organizing and campaigning
Republican and Democratic platforms were similar, but Roosevelt pledged “a new deal” for the American people
since the old deal under Hoover and laissez-faire Republicanism wasn’t working; however, the election revolved mostly
around rejecting Hoover, who received few votes
Before Roosevelt was inaugurated, the Depression got even worse
Overall main idea: Between 1929 and 1933, the American economy collapsed into the Great
Depression for various reasons, but Hoover’s efforts to limit its problems were unpopular and
ineffective in the short term.