Hoover and The Great Depression
by Herbert Hoover was elected President of the United Stated in 1928 just in time for the Great Depression of the 30’s. During the 1920’s new companies like General Motors had issued stock that was making many an investor seemingly wealthy. A great number of successful men were operating in shady territory.
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Herbert Hoover was elected president in 1928 just in time for the Great Depression. The paper wealth being acquired marked a rot in the American economy with wealthy men of the day building empires based on deception. Nowhere was prosperity more apparent than on Wall Street, home of the New York Stock Exchange. America had suffered depressions before. But none of them had been capitalized like the depression of the 1930’s. None ever lasted so long or were so devastating. 1,300 banks failed and and there was no such thing as Federal Deposit Insurance guaranteeing the savings of working people. 5,000 banks closed in three years. Without banks to extend credit, businesses and factories closed, forcing more people into unemployment lines.
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In 1931 Henry Ford blamed the laziness of workers on the situation. A short time later he closed a plant forcing 75,000 people out of work. The American people received another shock when the empires of Samuel Insull and Ivar Kreuger came down with a crash. Insull had built an pyramid of holding companies and used them to push up the value of stock. By 1932 their artificial value had fallen to their true worth, declining by 96%. Indicted by a Grand Jury Insull fled to Greece. When Greece signed a extradition with the United States, Insull dressed as a woman and fled to Turkey. Kreuger was also revealed as a swindler. Once an advisor to President Hoover, he had stolen more than 3 million dollars from investors. He shot himself before the worst of his schemes were brought to light.
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In earlier times the majority of people had lived on farms and produced what they needed to survive. But the American economy had been revolutionized and with factories and businesses closing all around them the people were in a desperate straits. Nobody knows what the jobless rate really was. Official numbers say from 25 to 50 percent but it could possibly have been more than that.
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Through three desperate years, Herbert Hoover continued to voice optimism. Hoover thought the depression was part of the business cycle. He made long pronouncements saying the corner had been turned, but instead things turned bleaker. When the International Apple Shippers Association sold its surplus to unemployed men on credit to sell on the street for a nickel apiece. Herbert Hoover said, “Many people have left their jobs for a more profitable one of selling apples.” Henry Ford who had put 75,000 men out of work and on the road as hobos in search of work, said of the hundreds of thousands of wandering men, women, and children, “It’s the best education in the world for those boys, that traveling around. They get more experience in a month than they would in years of school.” J.P.Morgan thought that there were 25 or 30 million families in the “leisure class” able to employ servants. He was surprised to be told there were fewer than two million servants in the entire country.
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Prosperity was always just around the corner according to Hoover but the country never seemed to reach that corner. Hoover has come down in history as a do nothing Nero who played the fiddle while Rome burned. Hoover was steadfast in his refusal to allow the government to help the jobless, homeless, and starving through government relief programs he saw as socialist and communist. Hoover staunchly refused to issue aid. it was completely contrary to his notion of “rugged individualism.”
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Post Commentunown971
On November 13, 2009 at 5:39 am
Great article, Ruby! Keep it up.
Themax
On November 13, 2009 at 5:52 am
great to knew about that man,very well written article!!
thanks for sharing
svishnugopal
On November 13, 2009 at 6:18 am
i knew a lot of new details abt this man..thnks
Teves
On November 13, 2009 at 6:21 am
Nice information…
deep blue
On November 13, 2009 at 6:44 am
Great historical tidbits of American history here. The history of people making big money and losing it all afterwards isn’t a new issue after all. Might as well start earning in cents than gain so much and hang myself afterwards. Thanks Ruby.
AlmaG
On November 13, 2009 at 6:53 am
I learned something new today thanks Ruby for this great article!
lillyrose
On November 13, 2009 at 7:00 am
very interesting article Ruby.
Sunitha Stalin
On November 13, 2009 at 7:06 am
very informative article.
ken bultman
On November 13, 2009 at 7:36 am
Love these history lessons. It took a world war to break the full grip of that depression. That was a terrible way to get people back to work.
Christine Ramsay
On November 13, 2009 at 7:47 am
Thank you for another detailed and well written look at American history.
Christine
Papa Sparks
On November 13, 2009 at 8:10 am
I really enjoy these historical pieces a lot. Well-done my friend.
chitragopi
On November 13, 2009 at 9:11 am
Nice and interesting article.
J J Neuman
On November 13, 2009 at 9:48 am
Hoover goes down as maybe the worst president we’ve had. The only thing I can think of that he did well was the Hoover Dam. These events leading up to, and during the crash, remind me so much of what’s out there today (crooked CEOs, bank failures, ponzi schemes, unemployment so high that we are not even sure the numbers they are telling us are accurate, etc.) Kudos to FDR for unemployment insurance, getting to be a way of life in my home state of Michigan…
Ramalingam
On November 13, 2009 at 9:57 am
A very interesting article.President Hoover\’s apathy, became the strength of President F.D.Roosevelt, who actually bailed out US from the great depression through a series of economic reforms and reconstruction.It is pathetic to note that Ford caused unemployment to 75,000 hapless American workers.Anyhow, US had always been paying a heavy price, to learn something new, whether it be economy or war.But what is wonderful about your history is you have got nothing to hide about.
T.Rex McGoogle
On November 13, 2009 at 10:03 am
Remembering the past often helps us to avoid their record lows
in the depression. It was 3 Republicans in office in a row from the 1920’s: Harding, Coolidge and then Hoover that set us up for the all time low financial crisis.
Patrick Bernauw
On November 13, 2009 at 10:33 am
Informative article, well written… and it’s always good to see today in the perspective of yesterday…
Lex92
On November 13, 2009 at 10:51 am
Ihave no idea what I would have done in Coolidge’s position… but it’s apparently some sort of tarrif he signed the put us in the Great Depression. (It was said in New Deal or Raw Deal by an economic’s professor at Hillsdale college…that college is amazing id go there if i had the money…anyway the book is about FDR and his policies and it said that FDR campaigned to get ridof the tarrif Hoover signed that most likely got us in the depression…but FDR never did) As for FDR getting us out of the Depression… I don’t believe he did after reading that book…what really got us out of the Depression was unfortunately a war.
Hoover didn’t do anything about the Depression and that’s why no one likes him as a president… but other than what FDR did, what could Hoover have done is what I think…especially after reading that book…
Pinaki Ghosh
On November 13, 2009 at 10:57 am
Great write Ruby.
xoxo
On November 13, 2009 at 11:57 am
Interesting article. Very well written. Another well done, Ruby. Thanks.
martie
On November 13, 2009 at 12:02 pm
It was a difficult time for everyone and Hoover certainly didn’t help.
K.Reshma
On November 13, 2009 at 12:35 pm
Well written, excellent historical piece
Marie Antoinette
On November 13, 2009 at 2:30 pm
Excellent, I enjoyed reading it and love these type of articles. Great piece!
CRYSTAL EVANS
On November 13, 2009 at 3:27 pm
well written article ruby. u did great again
hfj
On November 13, 2009 at 3:51 pm
Great article and pictures. Those were truely depressing times in American history. Well done.
Beth Suess
On November 13, 2009 at 5:45 pm
Informative article, well written, thanks for sharing!
Frances Lawrence
On November 13, 2009 at 6:18 pm
It was a terrible time for so many people but Hoover was no help at all.
Tanya Wallace
On November 13, 2009 at 8:45 pm
As always Ruby this was a wonderful historical write,very well reseached,interesting and an excellent read!
Brenda Nelson
On November 13, 2009 at 9:38 pm
I wonder why they called it the Great depression, a better name would have been the Crappy depression.
Hoover was a jerk, as usual the rich got richer and that is all they cared about.
Eunice Tan
On November 13, 2009 at 10:16 pm
Good history, great lesson
Shirley Shuler
On November 13, 2009 at 10:19 pm
Thanks Ruby, for another fine history lesson. I always enjoy these articles, looking forward to the next one!
rajagiri
On November 14, 2009 at 12:37 am
it’s a good article
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LoveDoctor
On November 14, 2009 at 1:12 am
Great historical information. good job.
wonder
On November 14, 2009 at 2:07 am
Great historical fact.They can be related here.Agood post.
PR Mace
On November 14, 2009 at 5:25 am
Great article and an interesting look into that time peroid.
whodoyouthink51
On November 14, 2009 at 10:25 am
Very Very interesting article it caught my eye and i just couldn’t stop reading it. Very well done and built with a lot of information and facts. Thank you for the good read and also the education.
Leonardo da Vinci E.
On November 14, 2009 at 6:45 pm
Any economic system is an artificial system;Those men tended to put system ahead of the torture of flesh and blood which depended on them to take action on their behalf. That spirit is still with us in the world today. To allow flesh and blood to suffer while men in positions of power make ivory tower discussions. We learn from your article that men in positons of great trust affecting millions can make serious mistakes.What comes first system or the welfare of flesh and blood creatures? The new movie 2012 addresses that question.
Ron Fields
On November 15, 2009 at 4:51 am
There were many things Hoover did wrong, and there many things FDR did wrong that prolonged the Great Depression. Actually, Hoover and FDR turned what would have been a regular recession into a depression. Also, the Federal Reserve tightened credit and raised interest rates when business started slowing down — just the wrong thing to do. See my post here about how the Federal Reserve really exacerbated the Great Depression: http://socyberty.com/economics/fed-chief-ben-bernanke-the-right-man-in-the-right-place-at-the-right-time/.
Also Hoover signed into law the Smoot-Hawley tariff act which severely restricted global trade at a time when more trade was needed, and FDR encouraged unionization, raised taxes, and passed restrictive laws all limiting the flexibility of the market to adjust and taking away crucial capital for investment in new productive businesses.
The Great Depression was a huge lesson in what not to do during an economic crisis. We have very poor leaders during that time who did not understand economics.
Thanks, Ruby. Another very thought-provoking piece. Keep ‘em coming!
NickFord
On November 15, 2009 at 7:13 am
This is very interesting. I enjoyed the article.
Jamaicafest
On November 15, 2009 at 11:25 am
A very informative and thought provoking article. So many lessons to be learned.
Crissleigh
On November 19, 2009 at 3:18 am
To think people were able to make it through that! What a strong stock people came from back then. I know people say we a in a depression now but compaired to that we are just in a economic slump. This was a great history lesson and a great read. I really enjoy all your articles, very informative. Great job!
CutestPrincess
On December 5, 2009 at 12:25 am
Comprehensive and well written article as usual. Thanks.