Wall Street Crash and Hoover's Response

Wall Street Crash

• Share prices plummeted rapidly in 1929, with a total of $64 billion worth of shares traded on the Wall Street Stock Market.
• Investors panicked and quickly sold their shares, fearing business collapse and consequent share devaluation.
• This triggered a sharp drop in share prices, escalating into a Wall Street panic, known as "Black Thursday."
• On Black Thursday, shares lost $26 billion in value.
• Banks were forced to recall loans, lacking funds to cover share sales, impacting businesses significantly.
• Deflation reduced credit and caused numerous business failures.
• Overproduction in agriculture depressed prices, further harming businesses and causing job losses.

Intervention and Volunteerism

• President Hoover favored volunteerism and a laissez-faire economic approach, promoting minimal government intervention.
• He believed markets would self-correct, and businesses would overcome the crisis independently.
• Hoover championed "rugged individualism," encouraging self-reliance rather than government assistance.
• Despite his initial stance, the Depression's severity compelled some government intervention.
• The 1930 Smoot-Hawley Tariff increased import taxes by 40% to protect American businesses.
• This tariff, however, backfired, provoking retaliatory tariffs from other countries, harming American exports and exacerbating the Depression.
• The 1932 Emergency Relief and Construction Act provided loans to businesses for infrastructure projects (e.g., the Hoover Dam) to create jobs and boost the economy.
• These measures aimed to alleviate the crisis, but they proved insufficient in addressing the depression's severity.

Unemployment, Homelessness, and Hoovervilles

• The Wall Street Crash triggered business struggles, resulting in job losses and decreased savings.
• Between 1930 and 1933, nine thousand banks collapsed, leading to $2.5 billion in lost savings.
• Farming income plummeted to $2 billion in 1932, a third of its 1929 value, due to the Dust Bowl and poor weather.
• Industrial wages declined by 50% in 1933, forcing layoffs at companies like Ford.
• Widespread unemployment and financial hardship soared homelessness.
• By 1933, unemployment reached a quarter of the American workforce.
• Lack of income and housing forced many to construct makeshift shantytowns, called "Hoovervilles," in major cities, named after President Hoover due to perceived inaction.
• Hoovervilles offered shelter to the unemployed and homeless through rudimentary structures and community support.
• The birth rate declined due to financial hardship and housing shortages.
• Immigrants and Black Americans disproportionately suffered from unemployment and poverty, facing discrimination.

Bonus Army Marches

• The Bonus Army comprised World War I veterans demanding immediate payment of a promised $625 bonus, originally due in 1945.
• In 1932, they marched to Washington D.C. to demand payment, facing economic hardship.
• Congress rejected their plea, yet the veterans refused to leave, camping outside the White House to pressure the government.
• President Hoover ordered the U.S. Army to disperse the veterans, resulting in tear gas, injuries, and deaths. This shocked the public.
• This incident severely damaged Hoover's reputation, highlighting his perceived insensitivity to veterans' struggles.