What was hoover arguing against

Herbert Hoover: Impact and Legacy. Breadcrumb U. David E. Herbert Hoover Essays Life in Brief. Life Before the Presidency. Campaigns and Elections. Domestic Affairs. Foreign Affairs. Life After the Presidency. The volume of Western Union telegrams tripled, and telephone lines could not meet the demand, as investors sought any means available to dump their stock immediately.

Rumors spread of investors jumping from their office windows. Fistfights broke out on the trading floor, where one broker fainted from physical exhaustion. Stock trades happened at such a furious pace that runners had nowhere to store the trade slips, and so they resorted to stuffing them into trash cans.

When the final bell rang, errand boys spent hours sweeping up tons of paper, tickertape, and sales slips, as shown in Figure To put this in context, a trading day of three million shares was considered a busy day on the stock market. People unloaded their stock as quickly as they could, never minding the loss. Banks, facing debt and seeking to protect their own assets, demanded payment for the loans they had provided to individual investors.

Those individuals who could not afford to pay found their stocks sold immediately and their life savings wiped out in minutes, yet their debt to the bank still remained.

The financial outcome of the crash was devastating. Any effort to stem the tide was, as one historian noted, tantamount to bailing Niagara Falls with a bucket. The crash affected many more than the relatively few Americans who invested in the stock market. While only 10 percent of households had investments, over 90 percent of all banks had invested in the stock market.

Many banks failed due to their dwindling cash reserves. This was in part due to the Federal Reserve lowering the limits of cash reserves that banks were traditionally required to hold in their vaults, as well as the fact that many banks invested in the stock market themselves. Eventually, thousands of banks closed their doors after losing all of their assets, leaving their customers penniless. While a few savvy investors got out at the right time and eventually made fortunes buying up discarded stock, those success stories were rare.

Housewives who speculated with grocery money, bookkeepers who embezzled company funds hoping to strike it rich and pay the funds back before getting caught, and bankers who used customer deposits to follow speculative trends all lost. While the stock market crash was the trigger, the lack of appropriate economic and banking safeguards, along with a public psyche that pursued wealth and prosperity at all costs, allowed this event to spiral downward into a depression.

The crash of did not occur in a vacuum, nor did it cause the Great Depression. It also represented both the end of an era characterized by blind faith in American exceptionalism and the beginning of one in which citizens began increasingly to question some long-held American values. A number of factors played a role in bringing the stock market to this point and contributed to the downward trend in the market, which continued well into the s.

The Allies owed large amounts of money to U. Unable to repay these debts, the Allies looked to reparations from Germany and Austria to help. The economies of those countries, however, were struggling badly, and they could not pay their reparations, despite the loans that the U.

The U. When other countries began to default on this second wave of private bank loans, still more strain was placed on U. Poor income distribution among Americans compounded the problem. In the s, this was not the case. Eighty percent of American families had virtually no savings, and only one-half to 1 percent of Americans controlled over a third of the wealth.

This scenario meant that there were no new buyers coming into the marketplace, and nowhere for sellers to unload their stock as the speculation came to a close. In addition, the vast majority of Americans with limited savings lost their accounts as local banks closed, and likewise lost their jobs as investment in business and industry came to a screeching halt.

Finally, one of the most important factors in the crash was the contagion effect of panic. For much of the s, the public felt confident that prosperity would continue forever, and therefore, in a self-fulfilling cycle, the market continued to grow.

But once the panic began, it spread quickly and with the same cyclical results; people were worried that the market was going down, they sold their stock, and the market continued to drop. Historically, markets cycled up and down, and periods of growth were often followed by downturns that corrected themselves.

But this time, there was no market correction; rather, the abrupt shock of the crash was followed by an even more devastating depression. Investors, along with the general public, withdrew their money from banks by the thousands, fearing the banks would go under. The more people pulled out their money in bank runs, the closer the banks came to insolvency.

As the financial markets collapsed, hurting the banks that had gambled with their holdings, people began to fear that the money they had in the bank would be lost. This began bank runs across the country, a period of still more panic, where people pulled their money out of banks to keep it hidden at home. The contagion effect of the crash grew quickly. With investors losing billions of dollars, they invested very little in new or expanded businesses. After the crash, both were hit hard.

In November , fewer cars were built than in any other month since November Even before the crash, widespread saturation of the market meant that few Americans bought them, leading to a slowdown. Afterward, very few could afford them. By , Stutz, Locomobile, Durant, Franklin, Deusenberg, and Pierce-Arrow automobiles, all luxury models, were largely unavailable; production had ground to a halt.

They would not be made again until In construction, the drop-off was even more dramatic. It would be another thirty years before a new hotel or theater was built in New York City. The Empire State Building itself stood half empty for years after being completed in The damage to major industries led to, and reflected, limited purchasing by both consumers and businesses. Even those Americans who continued to make a modest income during the Great Depression lost the drive for conspicuous consumption that they exhibited in the s.

People with less money to buy goods could not help businesses grow; in turn, businesses with no market for their products could not hire workers or purchase raw materials. Employers began to lay off workers. Unemployment tripled, from 1.

By mid, the slide into economic chaos had begun but was nowhere near complete. For most Americans, the crash affected daily life in myriad ways.

In the immediate aftermath, there was a run on the banks, where citizens took their money out, if they could get it, and hid their savings under mattresses, in bookshelves, or anywhere else they felt was safe. Some went so far as to exchange their dollars for gold and ship it out of the country.

A number of banks failed outright, and others, in their attempts to stay solvent, called in loans that people could not afford to repay. Working-class Americans saw their wages drop: Even Henry Ford, the champion of a high minimum wage, began lowering wages by as much as a dollar a day.

His aggressive methods targeting Calvin Coolidge , the 30th U. He took office on August 3, , following the sudden death of President Warren G. The 29th U. Grover Cleveland , who served as the 22nd and 24th U. He is the only president to date who served two nonconsecutive terms, and also the only Democratic president to win election during the period of Republican Live TV.

This Day In History. History Vault. Recommended for you. Herbert Hoover. Herbert Hoover Campaigns for Reeelection. Hoover on Unemployment Relief. Hoover Dam Dedication. Hoover Dam In the early 20th century, the U. Edgar Hoover J. Calvin Coolidge Calvin Coolidge , the 30th U. Warren G. It would impair the very basis of liberty and freedom Let us first see the effect on self-government. When the Federal Government undertakes to go into commercial business it must at once set up the organization and administration of that business, and it immediately finds itself in a labyrinth Commercial business requires a concentration of responsibility.

Our government to succeed in business would need to become in effect a despotism. There at once begins the destruction of self-government It is a false liberalism that interprets itself into the government operation of commercial business. It is not the road to more liberty, but to less liberty.

Liberalism should not be striving to spread bureaucracy but striving to set bounds to it Liberalism is a force truly of the spirit, a force proceeding from the deep realization that economic freedom cannot be sacrificed if political freedom is to be preserved.

It would extinguish equality and opportunity. It would dry up the spirit of liberty and progress For a hundred and fifty years liberalism has found its true spirit in the American system, not in the European systems.

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