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Hoover’s first months in office hinted at the reformist, humanitarian spirit that he had displayed throughout his career. He continued the civil service reform of the early twentieth century by expanding opportunities for employment throughout the federal government. In response to the Teapot Dome Affair, which had occurred during the Harding administration, he invalidated several private oil leases on public lands. He directed the Department of Justice, through its Bureau of Investigation, to crack down on organized crime, resulting in the arrest and imprisonment of Al Capone. By the summer of 1929, he had signed into law the creation of a Federal Farm Board to help farmers with government price supports, expanded tax cuts across all income classes, and set aside federal funds to clean up slums in major American cities. To directly assist several overlooked populations, he created the Veterans Administration and expanded veterans’ hospitals, established the Federal Bureau of Prisons to oversee incarceration conditions nationwide, and reorganized the Bureau of Indian Affairs to further protect Native Americans. Just prior to the stock market crash, he even proposed the creation of an old-age pension program, promising fifty dollars monthly to all Americans over the age of sixty-five—a proposal remarkably similar to the social security benefit that would become a hallmark of Roosevelt’s subsequent New Deal programs. As the summer of 1929 came to a close, Hoover remained a popular successor to Calvin “Silent Cal” Coolidge, and all signs pointed to a highly successful administration.

The great crash

The promise of the Hoover administration was cut short when the stock market lost almost one-half its value in the fall of 1929, plunging many Americans into financial ruin. However, as a singular event, the stock market crash itself did not cause the Great Depression that followed. In fact, only approximately 10 percent of American households held stock investments and speculated in the market; yet nearly a third would lose their lifelong savings and jobs in the ensuing depression. The connection between the crash and the subsequent decade of hardship was complex, involving underlying weaknesses in the economy that many policymakers had long ignored.

What was the crash?

To understand the crash, it is useful to address the decade that preceded it. The prosperous 1920s ushered in a feeling of euphoria among middle-class and wealthy Americans, and people began to speculate on wilder investments. The government was a willing partner in this endeavor: The Federal Reserve followed a brief postwar recession in 1920–1921 with a policy of setting interest rates artificially low, as well as easing the reserve requirements on the nation’s largest banks. As a result, the money supply in the U.S. increased by nearly 60 percent, which convinced even more Americans of the safety of investing in questionable schemes. They felt that prosperity was boundless and that extreme risks were likely tickets to wealth. Named for Charles Ponzi, the original “Ponzi schemes” emerged early in the 1920s to encourage novice investors to divert funds to unfounded ventures, which in reality simply used new investors’ funds to pay off older investors as the schemes grew in size. Speculation , where investors purchased into high-risk schemes that they hoped would pay off quickly, became the norm. Several banks, including deposit institutions that originally avoided investment loans, began to offer easy credit, allowing people to invest, even when they lacked the money to do so. An example of this mindset was the Florida land boom of the 1920s: Real estate developers touted Florida as a tropical paradise and investors went all in, buying land they had never seen with money they didn’t have and selling it for even higher prices.

Questions & Answers

who organized the most massive attack in American History, which caused the Germans to begin to retreat in September 1918?
Jmora Reply
Is there answers anywhere to all of the critical thinking questions?
Heather Reply
What were the direct causes of the civil war
Trinity Reply
How did slavery issues effect the war
Trinity
How were politics involved
Trinity
north wanted to unify the south
Maleek
south wanted independence
Maleek
freeing slaves was just a way to recruit black soldiers to fight for north
Maleek
Lincoln couldn't let the south separate from the union , agriculture was way to valuable
Maleek
progressive reforms under Theodore Roosevelt
Karpi Reply
what was the main thing suposed to happen when the tea party
Gavin Reply
Which plan resolved the issue of representation for the U.S. Constitution?
Nichole Reply
The plan which became known as the seventeenth amendmet.
WIlliam
amendmet because not an article of bill of rights.
WIlliam
Which of the primary features of grassroots Progressivism was the most essential to the continued growth
Ren Reply
The institution of a steady currency.
WIlliam
who invented the comedy movie without soun
Sami Reply
Comedy in film ad early as 1895 in film by Louis Lumier. Utilized slapstick.
Victor
Louis Lumier
WIlliam
Comedy in film as early as late 1895, there were no film adds because pictures could not be paired or arranged with words, quotes, or small phrases. Utilized slapstick.
WIlliam
which of the following is not one of the tasks women performed during the revolution?
Donna Reply
Women were gen not involved in politics or combat
Victor
Women were generally not involved in combat, but went inside the lines however and worked as nurses
WIlliam
Which country etablished the first colonies in the americas
Alex Reply
which part of the America's? what year?
Kyle
Jamestown = England. if I had to guess that's the one you are looking for
Kyle
Spain. area of new Mexico I think.
Christie
the first encounter with Americans in this te Indian was Christopher Columbus from spain bt he not establish a colony and the first colony was Britain in Jamestown I think
Bernard
Spain, first settlement was La Navidad est on Columbus' first voyage and which was destroyed by natives by 1493. on subsequent voyages of Columbus and others, Spain colonized Carribean islands such as Cuba.
Victor
Spain its colonies would become known as new-spain.
WIlliam
in what ways did westward expansion provide new opportunities for women and african americans?\
cavausier Reply
Women were involved in establishing communities. They did a lot of work in turning roughboomtowns into more civilized places that had all the benefits of such. The West was characterized by greater freedom for women e.g. women were first granted suffrage in Wyoming and other Western states.
Victor
Women were involved in establishing new communities within the States'. They helped men turn rough boomtown into a more modern version of civilization for the westerners moving the expansion forward. These communities later provided jobs for Afro-Americans after the civil war.
WIlliam
[.../e.g Suffrage for women was first was granted in The West in Wyoming and other Western states]
WIlliam
It was not a lot of work for them their forefathers all the work actually
WIlliam
What source did the Roman Catholic church have
robbie Reply
Please clarify: do you mean what sources do they made their authority on?
Victor
They established their authority in administering their mission in a last ditch effort to convert native Americans to christianity
WIlliam
yes, what sources? sources of domesticating the Native Americans.
WIlliam
part 1 and part 2 in 2 segments
WIlliam
impact of coming of Portuguese in kenya
Brian Reply
impact of coming of portuguese
Brian
impact of coming of portuguese
Brian
introduced new crops, disrupted local trade and communication, introduced Christianity but had limited success converting locals
Victor
The coming of the Portuguese impacted farming, farmbills caused non-levys in trade, miscommunication in the two governments and our United States Enviormental Protection Agency (USEPA).
WIlliam
What was the first problem that Franklin Roosevelt dealt with during his "First Hundred Days"?
Bryan Reply
The Great Depression
wy
worst cover up! they should feel dumb! they we're trapped in, on both sides of the East and West borders of the Islamic forces, Columbus was desperate and started voyage due to the events of his time!
Abdul
The Banking Crisis
Victor
a better word for Columbus is "determined" not "desperate."
Victor
Which of the following protests was directly related to federal policies, and thus had the biggest impact in creating a negative public perception of Hoover presidency
Steven Reply
the Bonus Army
Victor
The Bonus Army.
WIlliam

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Source:  OpenStax, U.s. history. OpenStax CNX. Jan 12, 2015 Download for free at http://legacy.cnx.org/content/col11740/1.3
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