Transcript Hoover Responds to the Great Depression

Write down the following prompts / questions in
notebooks, leaving two lines between preparing for a video
clip about 1929 - 1935 “Stormy Weather”:
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(1) Percentage of mortgages in default …
(2) The old faith of self-reliance …
(3) National government in 1930 …
(4) How did people forget their troubles?
(5) Why were our nation’s leader’s scared?
(6) 100,000 American during the 1930’s went to …
• (7) What were some of the words spoken by Adolf Hitler?
• (8) Why was this environment perfect for the rise of
Hitler?
• (9) Things named after Hoover …
• (10) Four million unemployed in 1930, but in 1933 …
Europe in the
Great Depression
and Its Response
• What do you
notice in the
chart?
Deflation
Banking Crisis
• (2) Mid-1920’s Low
interest rates by
• (1) Early 1920’s
Federal Reserve
Expanding operations,
taking out loans
Credit
Freeze
Banking Crisis
• (4) 1930-31,
Bank Runs
• (3) Late-1920’s Stock
market speculation,
• (5) Early 1930’s, Fed.
as commercial banks
Makes Mistakes, does
invest depositors $$$
nothing
Bank Failures
** 600 bank
failures a
year
between
1921 - 1929
Keynesian Economics
• Recessions
can be caused
a drop in
aggregate
demand.
• Definition: governments should engage in
“short-term deficit spending, generating
economic growth.”
Economic Problems In Europe and
Political Responses
• By 1932, European trade fell to 1/3 of 1929
levels
• U.S.S.R., fairly isolated from global economic
problems and Five-Year Plans …
• France not connected to U.S. trade, but
suffered drops in tourism …
• Great Britain engages in infrastructure
improvements …
Causes that Supported Failure of “Weimar
Republic (1918-1933)” and Rise of Hitler
• (1) For Germany,
resentment over the
Treaty of Versailles
• (2) Economic Instability
• (3) Political Instability
with Parliamentary
governments
• (4) Fears regarding
communism
Problem #1 – Treaty of Versailles and
Loss of National Honor
Paris 1919: Six Months that Changed the World
Consequences of Treaty
• (2) Severe punishment of Germany: including,
war guilt clause & war reparations
"The Allied and Associated Governments affirm and Germany
accepts the responsibility of Germany and her allies for
causing all the loss and damage to which the Allied and
Associated Governments …”
• (3) Germany must reduce the Navy and Army
and disband its Air Force
• (4) Allied Powers take over German colonies
Problem #2 - Economic Instability
• The Weimar Republic has a difficult time paying the war
loan, so it prints more money, too much money.
• The German “Mark” and the Dollar, 1914 – 1923
Date
– July, 1914
– January, 1919
– January, 1920
– July, 1921
– January, 1922
– January, 1923
– August, 1923
– September, 1923
– November, 1923
Exchange rate, $1 = ___ Marks
4.2 marks
8.9
64.8
76.7
493.2
17,972.0
4,620,455.0
98,860,000.0
4,200,000,000,000.0 marks
U. S. Foreign Policy and German
Economy
• Dawes Plan (1924)
– U.S. loans to Germany allow it to pay
reparations to Allied Countries
• German Economic Recovery,
1923-29
• Germany profoundly affected by
Stock Market Crash of 1929
Calvin
Coolidge,
1923 - 1929
Problem #3 - Parliamentary
Governments
• Governments in Italy and Germany could not form a
coalition of support, leading to political instability.
• Parliamentary governments require a coalition of elected
officials to establish a government, for instance …
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30% Liberals (i.e. Social Democrats or Workers’ Party)
25% Socialist Party (a little more liberal)
40% Conservatives (“Tories” or “Catholic Popular Party”)
5% Fascist / Nationalist Party
How does Hitler become Dictator of
Germany?
• Problem #4 - Rise of International communism
• “From each according to his ability, to each according to his
need”
– Karl Marx, Communist Manifesto
• January of 1933, Hitler is named Chancellor
• Feb. 27, 1933, burning of the Reichstag, legislative building
• Enabling Act of 1933, Hitler becomes dictator
Germany Responds Economically to
the Depression…
• 1933 – Germany begins the
“Autobahn”
• 1934 – Hitler initiates buildup of military
Hoover Responds to the Great Depression
• Conventional economic
thought …
• Hoover Dam (1931 – ‘36)
benefits …
– Water supply
– Hydro-electric power
– Flood control
• Reconstruction Finance
Corporation (1932) …
– $2 Billion to banks, companies,
railroads, etc.
• Emergency Relief Act
(1932) …
– $$$ to states for public
works projects
Hoover Responds to the Great Depression
• By 1932, unemployment
is at 24% …
• Bonus Army (1932) …
– 40,000 war veterans
want their promised
bonus
– U.S. Army evicts veterans
from Washington D.C.
Write down the following prompts / questions in
notebooks, leaving two lines between preparing for a video
clip about 1929 - 1935 “Stormy Weather”:
–
–
–
–
–
–
(1) Percentage of mortgages in default …
(2) The old faith of self-reliance …
(3) National government in 1930 …
(4) How did people forget their troubles?
(5) Why were our nation’s leader’s scared?
(6) 100,000 American during the 1930’s went to …
• (7) What were some of the words spoken by Adolf Hitler?
• (8) Why was this environment perfect for the rise of
Hitler?
• (9) Things named after Hoover …
• (10) Four million unemployed in 1930, but in 1933 …