9 hist1302 chapter 8 conclusion by the end of his

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HIST1302---Chapter 8
Conclusion
By the end of his term, Hoover was at a loss. Perhaps he was waiting for another Hoover to come
along, the way he had at the end of the WWI. However, charities and the private sector produced
no such white knights, and the scale of the problem far outstripped the capacity of charities to
offer adequate resources. With people going hungry, and Ford workers singing “Internationale,”
capitalism seemed on the brink – as close as it’s come to being fundamentally questioned in
American history. One primary problem, it seemed, was the connection of cyclical markets and
investment banks to commercial banks, where regular people kept their money instead of
stashing it under the mattress where it could be stolen or burned. For some unlucky Americans, it
was just as good as stolen or burned after they’d entrusted it to banks connected to the stock
market.
While slavery was the underlying cause of the Civil War, the immediate cause was
secession. Likewise, the industrial slowdown, installment buying, Stock Market Crash, and
trade protectionism (Smoot-Hawley) were underlying causes of America’s second-biggest
crisis, the Depression. But its most immediate causes were the drying up of credit and
subsequent bank failures. The Fed's unwillingness to inject cash into the system
exacerbated the problem, as they were instead restricting cash supply to return to the gold
standard. Similar problems were happening in other countries, especially Germany but also
Brazil, Poland, Canada, Argentina and across Southeast Asia. In May 1931, a run on a major
Austrian bank, the Creditanstalt , triggered panic across Europe and in England. In America,
Andrew Mellon’s idea of letting things run their course wasn’t going to cut it, regardless of its
actual merit (we don’t have proof, after all, that the economy wouldn’t have turned around just as
quickly by doing nothing). Hoover tried some solutions, but it’s unclear whether they helped or
just complicated things and, in any event, Congress blocked his major stimulus packages. By
1932, many people were in desperate straits and demanding a dramatic change in government
strategy – starting with some food.
Crash & Great Depression
1. Identify Andrew Mellon and the concept of laissez faire . How did Mellon influence
economic policy in the 1920s?
2. Summarize some of the primary causes of the Stock Market Crash of 1929, according to
our textbook.
3. Discuss the connection between the stock market and general economy.
4. Identify protectionism and evaluate the Smoot-Hawley Tariff. What motivated the tariff
and how did it impact the economy?
5.Explain what Herbert Hoover tried to accomplish with the Reconstruction Finance
Corporation.
6. Explain the causes behind the Dust Bowl. How did technology and nature intersect in an
unfortunate way for Plains farmers?
7. Explain why people suffered more in the Depression of the 1930s than the unemployed
do today.
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