During the period 1929 – 1930 people were getting rich quick but they haven’t seen the deeper side of the US. The percentage of people that was rich was only a mere 5% and a huge 78% of people which is about 6 million families were only earning $3000 or less a year, and were only barely scraping through. The reason why the percentage is so high is because mostly people were farmers and due to the First World War the French used their wheat lands as trenches so they didn’t have any wheat so the US had mass production in wheat. Not long the European had risen back to the state they were in and the farmers in the US still had a lot left it turned out that the sales dropped a big 63%. Another fact that made farmers poor as well was to borrow a large amount of money to buy a tractor this was because farmers thought that the demand will stay high so they will turn wealthy, but that never happened.
So this turned out those farmers was very poor. Due to this the sales of company has seen what will happen and stopped producing goods. Also the home markets were nearly saturated due to the rich having everything already and the poor not being able to afford it. This lead to mass production but nobody buying any.
To save money companies and shops had sacked a lot of people to reduce the amount they have to spend so a lot of people were unemployed, but in some cases before people had the chance to sack people the companies had to be shut down.
By 1929 the US was in debt because everyone was certain that even if they borrowed money they can return with the way things are right now. But this never happened.
The causes of this caused the major Wall Street crash also it was known on the day of Black Thursday which was the day of the major share collapse, which was when people was seeing that since companies was doing so well their shares was a never ending way to get money so even the poorest of people bought shares and had gained money this was because owning shares was made easy when it could be bought on credit by a way which was a 10% deposit called a margin this made it so that even a small investment you could make a lot of money. Some people even invested in their whole life savings to buy a lot of shares. To show how much the shares went up by the following quote was by J.K. Galbraith “By Summer of 1929, stock prices had nearly quadrupled compared to four years earlier. Transaction ran to 5 million a day. Few held shares for income. What counted was the increase in capital values.” But when it first started that shares were falling at a high rate people were all selling their shares. This caused the economy to collapse and the US is in trouble. This was a description by the stock exchange guardian “They roared like lions. They hollered and screamed, clawed at one another’s collars. It was a bunch of crazy men. Every once in a while, when shares in radio or Steel took another tumble, you’d see some poor devil collapse and fall to the floor.”
By 1929 people saw the crash coming so the banks raised interest rates hoping people would get off the margin but this was not effective. So something had to be done about it.
The inability of the Republicans to solve the problem
The government thought that the economy would soon recover by itself, but he was wrong. The reason why Hoover did this was because of Laissez-Faire. This is a economic theory this is saying that the government should leave the economy as it is and should interfere as little as possible in the operation of trade and the relation between employers and workers. This is so the economy would be there to benefit everyone. This theory fits into individual freedom. Hoover unluckily was the one that put laissez faire to show its destruction, but Hoover believed in rugged individualism..
The other reason why Hoover failed was because he said that “We, in America today, are nearer to the final triumph over poverty than ever before in the history of any land. The poor is vanishing from among us.” Also said by Calvin Coolidge in autumn 1929 “No Congress ever assembled has met with a more pleasing prospect than that which appears at the present time. We have tranquility and contentment… and the highest record of years of prosperity.” This was not what the matter later on the year.
Hoover believed in rugged individualism meaning that people ought to be left alone whether they succeed of fail so this left to people blaming the government when the crash began because of the government not helping. To make matters worse people wanted Hoover to increase the amount of jobs by building more buildings, dams or railways but he resisted these demands this made him extremely unpopular.
The consequence of Hoover resisting the peoples demands they were out of homes and had to build shanty places to live. This was named the Hoovervilles this was because it made sound more posh or in most peoples eyes to say that Hoover made this happen. “People living in old, rusted out car bodies or in shacks made of orange crates. One family with a whole lot kids were living in a piano box. This wasn’t just a little district; this was maybe ten miles long and ten miles wide. People were living in anything they could junk together.” Said by Peggy Terry quoted in S. Terkels book Hard times in 1970. This was a way of pinning down Hoover. Other ways of making it sound worst was to include some phrases like Hoover blankets which was meaning people slept underneath sheets of newspaper. Another term was when men pulled out their trouser pockets meaning they were penniless that were named Hoover flags. People even felt shameless from stealing this was because they needed it for not only themselves but also for the children as well even though people stole some felt they where worthless not even able to manage one meal.
Here are some quotes showing how people felt not only in their conditions but also how they felt about Hoover, Also said by Hoover himself.
“I see nothing in the present situation that is either menacing or warrants pessimism. During the winter months there may be some slackness or unemployment, but hardly more than at this season each year. I have every confidence that there will be a revival of activity in the spring and that during the coming year the country will make steady progress.” By Andrew Mellon, The secretary of the treasury, January 1930.
“We have been passing through one of those great economic storms which periodically bring hardship and suffering upon our people. I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty in the future of a people that is, prosperity.” By Hoover in May 1930
“We can say with satisfaction of this period of nearly twenty months of continuous economic decline that we have has fewer strikes and lockouts than in normal times; that we have had no mob violence worth noting… with only local and unnecessary exceptions there has been no starving… The first duty of the government that is, to secure social tranquility and to maintain confidence in our institutions has been performed.” By Hoover in May 1931.
In the early 1930s conditions in the US just got worse and worse people lost their jobs more than ever. 11000000 in 1932. Despite that Hoover still oppose the government interference. This was because of his belief in rugged individualism. He was not lazy but his lack of imagination was getting in the way. He thinks that companies should repair themselves and not always rely on the government.
This shows how strongly he believes in this. “I want to see the free rise of ability, character and intelligence. Each industry should assist its own employees. Economic wounds must be healed by… the producers and consumers themselves. Each community and each state should assume its full responsibility for organization of employment and relief of distress.” By W. laFeber and R. Polenbergs book.
Hoover was at his last straw people started to vote for a new president. Hoover was replaced by Democratic candidate Franklin D Roosevelt Governor of New York State.
The reason why Hoover lost was because people completely lost confidence in him but he tried at the last minute to help the people he set out private charities and individual states to help people. This did not help at all and to finish it off the Hawley Smoot tariff was introduced this was to increase the taxes which people hated.
Something has to be done
In conclusion Hoover was overpowered by Roosevelt. This is because.Even though Hoover tried his best he was not very good simply of the reason of him believing in rugged individualism. This did not help but Hoover did nothing to help so people decided another way was needed this was the FDR.
Hoover’s idea compared to Roosevelt was not very good. Even though Hoovers were good to his people he did not have the ability to persuade people that he was good so people didn’t like him much. Also since when he joined all the problems that arrived were so devastating that Hoover couldn’t repair.
The rise of FDR was so powerful that most people voted for him this was because people thought he could change everything and that his plan the New Deal was excellent.
