Herbert Hoover became the 31st president of the United States of America when he defeated Governor Alfred E. Smith of New York in 1928. Hoover enjoyed only half a year of the prosperous times left by his predecessor. At first, Hoover was reluctant to interfere with the economy, but the stock market crash made the drastic changes, and by 1932 more than 12 million Americans were out of work. Hoover decided to use the power of the federal government to help the situation. He passed laws that enabled the government to help business and provide credit for homeowners and farmers. As the economy remained at a low, private and local relief funds became exhausted. Against his own principles, therefore, Hoover reluctantly turned to the government’s money to help out poor people. By this time his actions were too late, Hoover’s democratic opponents had already stereotyped him into the wrong image and this would haunt him and his party for the rest of his life.
Hoover’s presidency was thwarted by unfortunate events, and his status as an astute businessman was overshadowed. He believed in “rugged individualisation”, people working hard for themselves. However, when 12 million of his people were unemployed he could not live by this and others of his policies. Nominated for re-election in 1932, Hoover was defeated by Franklin D. Roosevelt.
After studying about all 3 presidents in detail, I believe Calvin Coolidge was the most successful president. Both Warren G. Harding and Herbert Hoover had problems while they were at office. Harding had numerous scandals linked with his name, as well as a corrupt cabinet. Despite having a good rap or with the people, the illegal business deals marred his name. Hoover had the unfortunate task of dealing with the great depression and this left a great strain on his presidency; I don’t believe he dealt with the crisis very well.
Calvin Coolidge overshadowed the scandals of the previous president by making America the richest country in the world by 1928. He was also very popular and was a very easygoing man. He was an excellent businessman and was very economically minded. I believe he did the best job for America out of the 3.
Qu.2) The 1920s were boom years in the US economy, taxes were cut so people had more money to spend, and America profited greatly from this highly fortuitous decade. At the beginning of the 20th century, America was the world’s dominant industrial nation. Raw materials were at a surplus; such as coal and oil and farming land was in abundance. With machines becoming more readily available for company owners, people turned out goods more quickly and cheaper than ever. At the time government figures showed for the first time that more than half the population lived in cities or towns.
Machines improved America’s production rate by around 50 per cent during the 1920s. The savings in production costs, together with fairer policies towards workers, resulted in higher salaries for workers. As their earnings increased, demands from consumers became greater (consumer goods), aiding the boom. The increased demands for goods led to increased production. Goods such as; washing machines, refrigerators, vacuum cleaners and radios were so sort after that businesses built new factories and renovated existing ones. The new businesses meant new jobs, creating opportunities for more people. The new jobs meant that people had more money to spend, so the demand for products increased again, therefore once again infiltrating the economic boom.
With more jobs and more money available, people could afford to buy the new goods. The demand for products was so great that prices for consumer goods were steady, and in some cases dropping. The main reason for prices to fall was because of Henry Ford’s idea of assembly line techniques. This meant that because of mass production companies were able to increase the amount of consumer goods, in this case cars, and therefore make goods more cheaply.
During the 1920s America had three presidents who had different approaches to the economic system. All three agreed that the government should pay as little part in economic life as possible, and give business what it wanted. One president famously said, “The business of America is business.” It was believed by businessman that if taxes were low people would have more money to save. These investments would aid the expansion of industry. Throughout the 1920s taxes were cut, time after time.
The economic boom was aided by the easily available credit. Again encouraged by car companies, this credit enabled consumers to purchase the goods they wanted with a small deposit, with the rest paid in instalments over weeks and months. Another ploy by business people was to introduce the mail order catalogue, which became very popular in the early 1920s. This gave people who lived who lived out in the country, an opportunity to buy goods, and benefit from the consumer boom. Everything was available to buy through the post, even the latest fashions.
Trade Unions were not popular with employers and businessmen. Trade unions were an association of laborers in a particular trade, industry, or plant, formed to obtain by collective action improvements in pay, benefits, working conditions, and social and political status. Employers used to use violence to prevent strikes and they would refuse to pay union members. Employers wanted long working hours and less pay, it was a time when profits were rising fast. It wasn’t until Henry Ford showed the “enlightened attitude” in paying wages above the hourly rate, and he cut hours of work. This increased the incomes for most families and again increased the demand for goods because people had even more money to spend.
The boom years were very prosperous times for America, and because of it they became the richest country in the world. However, I believe this could have lead them into a false sense of security having had such good fortune, they were unaware of the problems that could occur.
Qu.3) In 1929 a story fed by speculation caused millions of people into panic selling. On 24 Oct 1929, 13 million shares changed hands, with further heavy selling on 28 Oct and the disposal of 16 million shares on 29 Oct. Many shareholders were ruined, banks and businesses failed, and in the Depression that followed, unemployment rose to approximately 17 million.
The repercussions of the Wall Street crash, experienced throughout the USA, were also felt in Europe, worsened by the reduction of US loans. A world economic crisis followed the crash, bringing an era of depression and unemployment.
The years prior to the crash had been very prosperous with share prices increasing rapidly and people investing lots of money. However, gradually the prices of shares began to slow down and this raised concern amongst some shareowners. The share prices worried some businessmen to the extent that they sold their shares without taking the risk that they might drop. News spread fast that people were selling their shares and people acted on speculation and chose to sell their shares as well, resulting in a massive fall in share prices.
During the 1920s farmers began using machinery to produce their crops, there by increasing the amount of food produced. However, they produced too much and were left with surplus food. Overproduction meant food prices had to be lowered; this meant lower incomes for the farmers and farm workers. With the high tariffs put on foreign goods, it was more expensive to trade so farmers were making no profit on their goods and gradually losing money.
The high tariffs would not have mattered as long as Americans could have consumed everything made in America. However it did matter when there were huge amounts of surplus goods. Surpluses could not be sold abroad. Only the richer people could afford to buy goods made in factories, and once they had bought all the cars, radios, and other consumer goods that they need, the demand for these things dropped. The factories were forced to respond by producing fewer goods. This meant laying off workers causing an increasing rate of unemployment.
Over the weekend of the 26th and 27th of October something happened which made another big fall in share prices certain. Many brokers who had sold shares “on the margin” had borrowed money from the banks to buy shares in the first place. The banks were now demanding repayment of their money. To repay the banks, the brokers in their turn had to ask their customers for more margin. The only way in which their customers could pay more margin was to sell more shares. This again infiltrated the share prices to fall.
The effect on the American economy was severe. Many bankruptcies came about because of the crash and destroyed what confidence there was in American business. In the Great Depression that followed, around 13 million people became unemployed. The people became desperate in a crisis, and the lack of government support through these desperate times led directly to the election win for Franklin D. Roosevelt in the 1932 presidential election.
The problems for American people increased as the Wall Street Crash led America into the Great Depression. The result was drastically falling output and drastically rising unemployment; by 1932, U.S. manufacturing output had fallen to less than half its 1929 level, and unemployment had risen to between 12 and 15 million workers. The Great Depression began in the United States but quickly turned into a worldwide economic fall mainly because of the special and close relationships that had been made between the United States and European economies after World War I. The United States had emerged from the war as the major financier of Europe, whose national economies had been greatly weakened by the war itself, by war debts, and, in the case of Germany and other defeated countries, by the need to pay war reparations. So once the American economy slumped and the flow of American money to Europe dried up, the quality of people’s lives tended to deteriorate as well. The Depression hit hardest those nations that most deeply relied on the America, Germany and Great Britain. In Germany, unemployment rose sharply in late 1929, and by early 1932 it had reached 6 million workers. Britain was less affected, but its industries remained seriously depressed until World War II.
Despite the new government 1n 1932, mass unemployment and economic stagnation continued, though on a somewhat reduced scale, with about 15 percent of the work force still unemployed in 1939 at the outbreak of World War II. After that, unemployment dropped rapidly as American factories were flooded with orders from overseas for arsenal. The depression ended completely soon after the United States' entry into World War II in 1941. In Germany the crisis contributed to Adolf Hitler's rise to power in 1933. The Nazis' propaganda and rapidly expanding army ended the Depression in around 1936. At least in part, the Great Depression was caused by the weakness in economy that had been overlooked because of the economic boom.
