Hoover Dbq

With the crash of the stock market, the booming times of the 1920s came to a sad end. The crash and its aftermath revealed major flaws in the American economy. These flaws helped transform a stock market crisis into the Great Depression. Herbert Hoover was the president of the United States at the time of this devastation. Hoover had served in the administrations of both Warren G. Harding and Calvin Coolidge. He shared many of their ideas concerning the proper relationship among government, business, and the people (Cutler). Basically, Herbert thought that a federal government that played as little role as possible in the affairs of business would be the best thing to happen to the United States. Hoover believed that unnecessary government

Hoover’s core beliefs shaped many of his early actions as president. Hoover believed that government should not provide direct aid. He wanted the government to be able find ways to help people help themselves. Hoover put these beliefs into practice before the stock market crash, when he looked for ways to help the nation’s struggling farmers. He pushed for a program of loans to create and strengthen farm cooperatives. The idea behind farmers’ cooperatives was that large groups of farmers could buy large amounts of materials at lower prices than individual farmers could. Cooperatives also could help farmers market crops in ways that would raise crop prices and increase farmers’ income (Fishback). The “Roaring 1920s” may not have been such good times for everyone. Most farmers, for instance, saw their incomes drop. But for the economy as a whole, the “roaring twenties” were a period of impressive and sustained growth. Between 1922 and 1928, the gross national product, the total value of goods and services produced in a nation during a specific period, rose by 30 percent (Facts about the Great

History). As corporate profits increased, companies hired additional factory workers to keep up with the demand of production. Unemployment at this time remained very low, averaging around 3 percent. In turn, low unemployment slowed the growth of organized labor. Union membership dropped as employers expanded to welfare capitalism programs. Such programs helped increase workers’ sense of prosperity and wellbeing in the 1920s. While Americans generally were feeling good about the economy, those who invested in the stock market were overjoyed. The American stock market was performing spectacularly. The general trend in stock prices were high, and the steep rise in stock prices changed the way many people thought about buying stocks. People had the mindset that since the market never seemed to go down in the 1920s, maybe it never would. Many ordinary Americans began to test their luck and invest in the stock market. The number of shares being traded in the United States increased. The number rose from 318 million in 1920 to more than 1 billion in 1929 (Facts about the Great