17 terms

Hoover and the Great Depression

4th and final set to senechal's 2nd midterm
-not a good speaker and very unattractive
-presidency came at a bad time
-campaign remarks were thrown back in his face later on
what were the weak spots in the economy that lead to the great depression?
A. Farming and Overproduction B. "Sick Industries" C. The stock market crash did not cause the great depresion
Why did farms overproduce?
1. boom of the 1920's caused more hungry mouths to feed in cities 2. during war time 3. bought alot on credit (land & luxeries) (harding didnt help and said let competition take care of it/coolidge almost passed NcNary-Haugen Act, 1927)
NcNary-Haugen Act, 1927
-the government would buy up all surplus wheat and cotton to stabilize domestic prices and then dump excess goods at basement prices on the international market with a small tax on farmers to pay this
-smartest thing Coolidge ever did was veto this bill because it would have exacerbated the problem by supporting overproduction
What were the "sick industries"?
-coal was being replaced by electricity -textile industries(fashions were changing) -railroads(automobile)
Did the new deal help the great depression?
no only war-time industries did
Causes of Great Depression
A. Industrial Overproduction B. Misdistribution of Wealth C. Tax Policy D. Speculative Mania E. Big part of but didn't cause (Black Tuesday, November 22, 1929)
How did industrial overproduction affect the great depression?
-wages increased 8% production increased 20% -factories anticipated economy to keep expanding - construction industry and the automobile industry
-construction industry peaked in 1926 and then entered recession conditions
-automobile industry peaked in 1928, and then it slowed down rapidly
-two pillars of the economy were crumbling
-as you decrease production then more people are without jobs so they have less purchasing ability
-huge problem that we only had two pillars and did not diversify enough
-great multiplier industries became the great divisors
Misdistribution of wealth during the great depression
-top one percent of Americans had 60% of the wealth
-if middle class had more money they could have purchased more
-put money into speculative investments and stocks
-didn't create strong purchasing power
How did speculation attribute to the great depression?
- buying on the margin (Black Tuesday, November 22, 1929)
Why people believed in Hoover
-claim to fame was ensuring food for everyone during WWI
-people thought he could handle complicated issues under pressure
-in the 1920s, presidents were supposed to be dignified, reserved statesmen
Hoover's ideology
-lacked the philosophical capability to deal with an unprecedented issues
-very traditional, conservative, republican beliefs
- laissez-faire government
-balanced budget
-high tariffs
-gold standard
Hoover's first attempt at warding of GD?
Failure of Volunteerism -Hoover asked businesses to keep production levels up and keep all employees and asked labor unions not to demand higher wages
-didn't work, businesses had to go under
Hoover's (too late) response to the GD
-Agricultural Marketing Act, 1929 -Hawley-Smoot Tariff, 1930 -Reconstruction Finance Corporation, 1932
Agricultural Marketing Act, 1929
-funded several government corporation to buy up surplus wheat and cotton to stabilize prices and dump excess overseas
-similar to McNary-Haugen Act, but this time it passed so farmers began to produce more because the government was going to bail them out
-program ended after 2 years and half a billion dollars of tax payers money
-realized buying up surplus wasn't going to help
Hawley-Smoot Tariff, 1930
-75 agricultural tariffs and 900 industrial tariffs
-raised American import taxes to its all time high of 50%
-hurt economy badly and pulled the rug out from a ton of European Nations
-Europeans couldn't get loans from our weekend banks, couldn't sell their products and lessened consumer demand
-Europe retaliated by placing high import tariffs on our goods which basically ended international trade
-tariff raised the price of domestic goods
Reconstruction Finance Corporation, 1932
-1.5 billion used as loans for self paying products
-basically limited construction to tole highways
-only 20% was utilized
-300 million given to help feed and house the hungry
-people didn't have to work for wages, they were just given money
-government didn't want people to expect free handouts
-on 30 million went out because it was a loan, not a grant and states didn't want to worry about paying back the debt
-1.6 billion dollars to help businesses but only if they had significant collateral that they could pay back if they got into trouble
-meant that small businesses were left out