Social Science--Economic Crisis and the End of the Roaring Twenties

What did the Southern wing of the democratic party look like in 1928

• White, native-born protestants

• Anti-evolution

• Prohibitionists / “drys”

• Pro-KKK

What did the Northern wing of the democratic party look like in 1928

• Irish and Italian immigrants

• Catholic

• Anti-prohibition / “wets”

Who did the Southern democrats primarily support in the 1924 democratic primaries

William Gibbs McAdoo

Who did the Northern democrats primarily support in the 1924 democratic primaries

Alfred E. Smith

How many ballots did it take for the democratic party to come to a compromise in the 1924 primary elections

103 ballots

Who did the democratic party compromise on in the 1924 primary elections

West Viriginia’s John Davis

Who were the democrat and republican candidates in the 1928 election

• Democrat: Alfred E. Smith

• Republican: Herbert Hoover

Where is Al Smith from

Manhattan’s Lower East Side

What made Al Smith’s nomination historical

He was the first Catholic presidential candidate of a major party

What journal published an open letter from a lawyer that aimed to demonstrate the conflict between catholicism and the constiturion’s mandate of religious pluralism

The Atlantic

Which Southern states did Smith win

Arkansas, Alabama, Louisiana, Mississippi, Georgia, and South Carolina(The “Solid South”)

Which Northern states did Smith win

Massachusetts and Rhode Island

How many electoral votes did Smith win in the 1928 election

87 electoral votes

By how many votes did Smith lose the popular vote in the 1928 election

6 million

What was Hoover’s role in government prior to presidency

Secretary of Commerce under Presidents Harding and Coolidge

What significant work did Hoover do as Secretary of Commerce

• Directed the Harding Administration’s response to the 1921 recession as chair of the President’s Conference on Unemployment

• Acted as the driving force behind the adoption of a federal regulatory framework for radio

What was Hoover’s nickname

The Great Engineer

Where is Hoover from

Born in Iowa and raised in Oregon

What made Hoover stand out in the elections

• He had a technical business background as an engineer(American politicians were mostly lawyers)

• He was unusually well-travelled: lived in Australia, China, and England; worked in Africa, Central and South America, and Russia

• He was the first president from the West Coast

• The first member of the Society of Friends to occupy the White House

What was Hoover’s second nickname and where did it originate from

The Great Humanitarian; He founded a non-governmental organization after World War 1 that delivered emergency food rations to starving European civilians

What was the Great Mississippi Flood(Spring 1927)

Heavy rainfall led to massive flooding along the Mississipi River and extended to nearly one thousand miles from Cairo, Illinois, to New Orleans, Louisiana; 1000 people died and 1.5 million fled their homes

What was Hoover’s role in the Great Mississippi Flood

He spent three months marshaling 33,000 relief workers as well as $42 million to rescue and care for flood refugees while tackling the clean-up and reconstruction process.

What was the experience of African Americans during Hoover’s relief operations

• They were relegated to crowded camps with fewer tents, blankets, and beds than the white refugee camps

• Sharecroppers were forcibly prevented from leaving the camps in order to placate white plantation owners who feared the loss of their tenant workforce

• They were forced to labor at the camps without pay

How did Hoover win back the African-American vote in 1928

He asked several prominent African Americans to an advisory commission to investigate the allegations and accepted the commission’s recommendations

What advancement in foreign policy came right before Hoover’s election

The Kellog-Briand Pact which officially renounced war as “an instrument of national policy”and pledged to pursue a peaceful resolution to all international conflicts(August 27, 1928)

American Individualism(1922)

A book released by Herbert Hoover articulating his personal governing philosophy

Elements of Hoover’s worldview

• Federal bureaucracy must not be allowed to grow too large or too powerful

• Whenever possible, the government should encourage private entities to voluntarily follow a course of action rather than forcing their hand with a state mandate

• Too much government involvement in the lives of ordinary citizens risked a slide toward socialism that would erode individualism

• Supreme confidence in his own abilities

The Agricultural Marketing Act

An Act signed by Hoover that promised to tackle the issue of agricultural surpluses

What was the justificiation for liberal economists’ belief that the American economy would no longer be bound by the boom and bust cycle

• Increased productivity and efficiency

• Technological innovation

• Modern “scientific” corporate management

• More accurate statistics

Buying on margin

borrowing money from a broker to purchase securities, using investments as collateral, allowing investors to purchase large amountd of stock with very little money up front

What was it risky that buying on margin was the main source of Wall Street speculation

When stock prices fell, brokerages issues margin calls that triggered forced sell-offs and caused the whole edifice to collapse

What forms of stock market manipulation were practiced in the 1920s

• Insider trading

• Investors poolinf their resources in order to secretly purchase a massive amount of a given stock, artificially raising the value, then dumping the stock before the value fell

Which Congressional reform aimed to end stock manipulation

The 1934 Securities and Exchange Act

What percentage of Americans owned stock in the 1920s

8%

Black Thursday

On October 24, 1929, the stock market experienced a major panic and a record number of shares were traded as investors rushed to sell(more than13 million shares were traded)

Black Tuesday

On October 29, 1929, the stock market experienced an even steeper crash; Dow Jones Industrial Average fell a record 38 points

How much did the value of stocks listed on the NYSE decline in October 1929

• Declined on aevrage by 37.5 percent

• Cumulative value dropped by $26.1 billion

What was the total value of all stocks listed on the NYSE by July 1st, 1932

$15.6 billion, down 82% from pre-crash levels

What was the value of one share of Montgomery Ward stock before and after the crash

• Before: $138

• 3 years after the crash: $4

How did John D. Rockefeller respond to the crash

Told people that this was a ripe time to invest and said that he had purchased a large amount of common stock since the crash

How did Treasury Secretary, Andrew Mellon, perceive the crash

As a natural and healthy force that would rid the system of speculators who attempted to game the system for and easy profit

What was the impact of the continuation of the construction of the Empire State Building

It served as a physical monument to New York's determination to defy economic headwinds

What percentage of New York City construction workers had lost their jobs by 1932, a year after the Empire State Building was completed

64%

Despite most Americans not being directly impacted by the stock market, how did the crash affect them

It punctured the illusion of infinite prosperity and had profound psychological effects on Americans:

• Overall spednding on durable consumer goods dropped by 20% in 1930

What impact did the depression have on the car industry

• Ford’s total sales were nearly halved from 1930 to 1931, and the company reported an annual loss of $37 million

• General Motors laid off 100,000 of its 260,000 employees from 1929 to 1931

What impact did the depression have on agricultural markets

• Crop prices, which already dropped after World War 1 ended, continued to drop; the price of cotton fell from 16.8 cents per pund in 1929 to 9.5 cents in 1930, then 5.7 cents in 1931

What impact did the depression have on home ownership

• In 1930, 150,000 Americans lost their homes

• In 1933, average foreclosures topped a thousand per day

• By the end of 1933, half of all American mortgages were in default

What impact did the depression have on banks

• Banks wereleft undercapitalized and overleveraged

• In 1929, 659 banks with $20 million worth of deposits failed

• In 1930, 1352 banks holding $852 million in deposits failed

• In 1931, 2294 banks holding $1.7 billion in deposits failed

• Bank runs

• During Hoover’s presidency, 1 out of every 5 banks would fail

• On December 11, 1930, the Bank of United States in New York collapse

Which 1946 film depicts a bank run similar to those in the great depression

It’s a Wonderful Life: Local banker George Bailey, played by Jimmy Stewart, succsessfully staves a run on his small-town bank by convincing his neighbours not to sell

Estimated unemployment rate in 1930

9%

Estimated unemployment ratein 1931

16%

Estimated unemployment rate in 1932

24%

What did the Dawes Plan and the Young Plan do

Introduced an illusion of stability of the international economy sustained by the continuing availability of American credit; The U.S gave loans to Germany, which used the loans to pay reperations to Britain and France, which used those reperations to pay their debts to the U.S

Which countries fell into a recession due to the crash, other than the United States

• Germany

• Polans

• Argentina

• Brazil

• Canada

How did Hoover respond to the international recesssions

He successfully pushed for Congress to freeze all international debt payments for one year in 1931

U.S foreign investment in 1928

$1.25 billion

U.S foreign investment in 1929

$628 million

U.S foreign investment in 1930

$360 million

Smoot-Hawley Tariff(June 1930)

Raised taxes on imports to their highest rates ever

Economists’ reaction to the Smoot-Hawley Tariff

1,038 members of the American Economic Association sent an open letter begging Hoover to veto the bill

International reaction to the Smoot-Hawley Tariff

• France instituted an auto tariff

• Canada levied a tariff on 125 classes of U.S producs

• Switzerland endorsed a boycott of U.S imports

How did rural Americans suffer during the great depression

• Agricultural levels fell in 1932 to 48% of the already low 1929 levels

• A severe drought in 1930 ruined crops across the Midwest and Southern Plains and triggered massive dust storms the next year

• Farmers migrated from the Dust Bowl region to California

Okies

Poor migrants(given the name because many of them came from Oklahoma)

What novel was inspired by the plight and humanity of the Dust Bowl migrants

The Grapes of Wrath(1939) by John Steinbeck

Why was Hoover against government intervention during the great depression

• He was a strong believer in laissez-faire economics

• He was using previous economic recessions as his primary reference point; during the 1920-21 economic downtrurn, as the Chair of the President’s Conference on Unemployment, Hoover relied on the voluntary cooperation of private actors rather than state intervention

What actions did Hoover take during the great depression

• Invited a group of industrial leaders to the White House and secured a promise that they would not reduce wage rates(many did anyway)

• Increased federal spending on public works, like the Hoover Dam, and encourages state and loacl authorieties to do the same to create jobs

• Created the Reconstruction Finance Corporation in January 1932

How was national debt affected by the decrease in government tax revenue and increase in government spending

Rose by $3.3 billion from 1930 to 1932

What role did Franklin D. Roosevelt have during Hoover’s presidency

He was the New York Governor

What did FDR do about the depression while he was a governor

Coordinated an emergency public relief program that dedicated $20 million to helping 300,000 famillies

What happened during the midterm elections of 1930

The Republican party, Hoover’s party, lost  control of both the Senate and House of Representatives—they lost 52 seats and the Speaker’s gavel

Hoovervilles

Shantytowns built by the homeless during the great depression

What did world war 1 veterans do during the great depression

• Pressed Congress and the White House to pay their war service bonuses, scheduled for 1945, immediately

• The “Bonus Expeditionary Force” marched on Washington, D.C to lobby lawmakers in the spring of 1932

• After Senate voted down the bonus bill in July, thousands of veterans camped the National Mall and occupied buildings on Pennsylvania Avenue

How did Hoover respond to the actions of veterans

He ordered federal troops under the command of General Douglas McArthur to evict the Bonus Army; they deployed tear gas and tanks to drive the bonus veterans out of their camps then burnt the makeshift wooden structures to the ground