a lot of times that is not to show the finished drawing. is to build -- it is to build a rapport with people. when you have a camera, it puts a difference -- a distance between you and the person. you are taking these images they cannot see. it is almost vampiric, even though you're producing beautiful things later. when you draw, it is vulnerable. vacancy weight are doing. if you suck, they can tell you so. most people have not been drawn before and most are delighted to be drawn. i like drawing people and talking to them when they do it. >> on "q&a" at 8:00 eastern and pacific tonight. next, flagler college professor steve voguit talks about the factors that led to the great depression and the actions president roosevelt took to help the american people and the economy during his terms in office. his classes about 45 minutes.

prof. voguit: good morning. we reached the point where we will see the story of two men that are going to run for president in 1932. herbert hoover is the last in a long series of republican presidents. since the civil war, there had only been to democrats. one was grover cleveland, the only president ever elected not consecutively twice where the terms are not consecutive, and woodrow wilson. in the 1920's, we had three consecutive republican presidents with warren harding calvin coolidge, and herbert hoover. i see him as being, at the least, one of the unluckiest residence in american history. he is elected in 1928, sworn in in march of 1929, and the stock market crashed in october. he gets blamed. people homeless live in hoover

bill, if you have no shoes, you have hoover shoes. if you had oatmeal breakfast lunch, and dinner, you had another hoover meal. it was lamenting the fact that the bottom had fallen out of your life. in your view and that you -- and the view of the american people it is your fault. he is a fiscal conservative. he has these beliefs about what the role of government is and what the role of government, especially in relation to the economy, is, and he will not waiver. he is committed to his belief. it is kind of commendable. find someone that does not change with the wind. but for the time, it was not right. i also view him, personally, as probably the wrong man in the wrong place at the wrong time.

this quote is as he was leaving office. the next president was coming in. he saw is going down the road of wasteful spending and debt. he said if we cannot escape of this, we are going to be wrecked, smashed by inflation. which, as you will see later, we are going to intentionally create inflation. he is going to lose this election in 1932 to franklin roosevelt. we have seen him before. he was the vice presidential candidate in 1924 the democrats. they lose to warren harding. that was after the monsters year of 1919 and american voters were voting for a republican matter who it was in a happened to be warren harding, who did win and chose his cabinet here in saint augustine, lord of, across --

saint augustine, florida. we come back at the end of this day today to the hotel's daily on -- hotel ponce de leon. this is franklin roosevelt probably most famous quote when he took office. the american people got scared. more than they had been before -- more than they had ever been before. they were in an emotional position of helplessness. he said to them, first of all the very first thing i want to say to you is we have nothing to fear but fear itself. boy, were they filled with fear. so he is the right guy at the right place at the right time. he is going to make a huge change in america. we make a fundamental shift away from the old form of government to a new form of government, which is going to be

characterized by big government, big spending, a national debt of immense proportions. he had to do something. i will have something to say about my view of him. but he is in a position where he had it come -- a country that was hurting. he saw a country 1/3 ill fed ill closed, and ill housed. the biggest fear during these years of the great depression is they did not want anyone to die from this. they did not want anyone to start or freeze to death. so let me take you through the build up to this election. to appreciate where we were as a nation, you have to go to the very end of the 1920's. 1928 in 1929. prosperity had blossomed in the 1920's. it showed signs of improvement when coolidge became president.

there was a constant upward trajectory. but when hoover is an office, it went crazy. the part of the economy that really got crazy was the stock market. here is what we know. in the last year and a half of the 1920's, from a february 1928 to september 1929, stock prices started to really go up. i do not mean the increased by 5% or 2% or 3%, the increase was staggering. it was startling. it was amazing. unlike anything anyone had ever seen before. in the last six months prior to the crash -- it is in october of 1929 -- so from may of 1928 to september of 1929, the average so some of these stocks increased by more than 40%, but the average increase in those six months for a share of stock, share of anything, forward or

general mortar -- ford ofr general motors, the average price increase of a share of stock went up 40% in six months. there were stories of kindergarten teachers who were making big money. they were accumulating small fortunes. cap drivers or elevator operators. it seemed to be almost like a fever going on. the amount of shares being sold, purchased, in a given day had been 2 million to 3 million shares through the 1920's, but when we get to the end here, the amazing, a ghost of 5 million shares. it never went below 5 million shares per day throughout that last year and a half. some days it got as high as 10 million shares or 12 million shares transacted in a single day. these are prices going up.

there was such a demand for shares of stock, it was such a hunger for shares of stock, that the value of stock kept going up. it is a supply and demand thing. there were only so many shares of stock and everyone wanted to buy something. whatever you bought went up. the more people demanded shares of any company at all, the more value was being forced into those shares of stock. the perception of the stock market changes. the perception had been, prior to the boom, that the stock market was for certain types of investors. you had to have enough money when you play the stock market to know that you might lose. that loss, you have to be well off enough that you could absorb the loss. the perception had change from very risky -- yes, you could

make money but you may very well lose and very long term, you may have to hold onto the stock for years for a major portion of your life. it changed from that to a sure thing. it was a no-brainer. it was a sure thing. the payouts were immediate. what i buy in march will be worth more in april. is or sure. it is absolutely for sure. so you cannot lose. there was an article in "ladies home journal, was quote and it was called "everyone ought to be rich." the person they based the article on had been the chief financial officer of general motors. he basically said he did not see how anyone could lose on the stock market. everyone should buy stock. whatever you buy was going to become more valuable. what i like to see, this is my metaphor, is that it is as if they were inflating a balloon.

throughout the late 1920's, they are blowing more air into the balloon and the balloon is becoming bigger and bigger. overinflated. i am sure you have done this. i have. on purpose. they overinflated the balloon. the value of the stock had to come down, but they would not stop. they did not know it was going to crash. they did not know that in the aftermath of the crash, it would be the great depression. we know that but they did not. the sure thing was a sure thing. so they kept blowing in more air. and in october, it burst. the value of stocks collapsed. it came up a little in the days after, but then the economy -- it exposed real weaknesses in the economy. the economy was going to have to go through some sort of major adjustment and it would have to go down to be able to make this economic adjustment.

buying on margin is what fueled this whole thing. it is the installment plan applied to the stock market. it is how they were buying cars buying houses. you put so much down and paid the resting easy installments. you could do this with stocks. some brokerage firms were accepting as little as 10% down. most of them were accepting no more than 20% down. if you're rich on -- aunt died in peoria and that you $10,000 the smart thing to do was to run to a broker, tell him you inherited this money and want to put in the stock market, because it was absolutely a sure thing. you might be able to double the money. maybe over a couple of smart eyes and sells, you could triple it. and then maybe you not have to drive a cap anymore or -- cab or

operate an elevator anymore. it was an amazing moment. what happens as a result of the crash and the aftermath of it would be better to sit -- it would be better to say it occurs in the aftermath is we see the economy slide down. 1929 to 1933 are herbert hoover's years. this is what he is president. so the economy starts to crash and sink when he is president. with his fiscal conservatism, he simply is not the guy to be trying to save us from this. here's how bad it was. in that period of time from 1929 to 1933, 9000 tanks and the u.s. went out of business. he ought to sit down with a calculator and do that math. 9000 banks in four years. they either went bankrupt or close to avoid bankruptcy.

i got my calculator out the other day in my office. i came 50, 60 banks a day in the united states closing their doors. imagine what that date. imagine what that did to the emotional state of the country. how fearful they had to be. one of the effects of the loss of sound banking was the money supply started to reduce. they conservative estimate is the amount of money in circulation reduced by 33%. i have read historians who believe it is as high as 40% of the money disappeared. when the banks went out of business people panicked. they were scared. they were reluctant to spend. they started to hide money. under the floorboards. in the backyard. in milk cans. they were hoarding and hiding it because this was really bad.

it was scary. our gross national product the value of all the goods and services produced in an economy in the course of 12 months, was at $104 billion in 1929. we want to see the gross national product increase. it is a number we still keep. today, the more commonly used one is gross domestic product. and gross domestic product is favored in these days because it includes exports, the value of exports. the belief is that is a much better snapshot of the economy. but it went down to $76.4 billion by 1932. that is a 25% increase. if the gdp or gnp goes up 4/10 of 1%, that is great news. great economic news. because the economy is

expanding. if it goes down a fraction of a percent, i am a little worried about the economy. if it drops by 25%, that is catastrophic. that is a catastrophic drop in the gross national product. companies are closing. people are losing their jobs. there is no demand, no one is buying the products, and there is no perp is continuing to operate. by 1932, the election year the national unemployment rate was 25%. if that is the average, in places like detroit where the automobile industry was, it could be 50%. a good be even -- it could even be above that. if you average it out, it was at 20% in the 19 30's. a lot of unemployed people. those who remained employed experienced pay cuts and set of

pay increases. the conditions were frightening and they got worse as the years went on. how bad was it? here is my absolute favorite way to describe how bad it was. in 1933, 1930 four, and 1935, those consecutive years, are the only three years in american history where more people moved out of the united states then moved in. there was still immigration and those three years. still people coming to america. but there were lots of people leaving. the economy was crashing collapsing. it is the only time effort, where we had more people leave then came in. i do not think there is anything more you have to say to understand how dismal and bad and frightening that period of time was. so what is hoover's problem?

in our textbook, alan brinkley uses this phrase. it was an "ordeal" for herbert hoover. his presidency was a war year ordeal. to give you -- was a four-year ordeal. to give you a sense of what was going on for him, he remained committed to the principles he always believed in throughout his public life, which was fiscal conservatism. he believed the government need to be small. it needed to do what it was originally planned to do by the constitution of the united states. it was not supposed to interfere much in the lives of the american people. but it especially was not supposed to their -- to interfere with the conduct of this mess -- business. business should be untouchable for the federal government. we have only written to records were lost by this point in history.

one is for farmers, the interstate commerce act to regulate railroads, and the great progressive law woodrow wilson, a democrat, which was the federal trade act to police corporations. here are two things he did to give you some idea of his conservatism. instead of coming up with some sort of major government program to try to save the country, cure us of this depression that was coming out us, he held meetings in the white house of business leaders and labor union leaders and farmer association leaders and basically said to them, c ome up with something. some sort of recovery program some sort of idea that would improve the economy. he was appealing to them to do it voluntarily. he was not legislating this. he was not using the power of government to do it. he was making an appeal to these

groups to try to save us from this. to the american people, he said it to talk about "rugged individualism." he was saying that these are tough times and people are losing their jobs and their homes, and yes, we do not have enough to eat, and yes, our homes are cold because we cannot afford coal, so we all have to be rugged individuals. we have to hang in there. we have to survive this. he was an independently wealthy millionaire. he was a very successful civil engineer. i am not trying to say that he was a bad guy or he was condescending in any way. i am just saying it is a little easier to preach rugged individualism if you have a couple million in the tank than if you have lost your job, house, and have for mouths to feed. he did ask commerce for $423

million for federal works programs. let's take this pile of money and hire people unemployed to do things. but he wanted to do things that would pay back the money. like held a toll road. like the florida turnpike. let's build a turnpike because then over the history of that road, the tolls collected will pay back the $420 million we asked congress to spend on this. it was the right idea but it was not a big enough band-aid. it was a little band-aid for a great take wound -- big wound. as time marched on, there was a need of more of this, more action to put people back to work. when that became obvious, he just could not do it. he was committed to a balanced budget. he believed the government should only spend what it has taken in. as the conditions worsens, he

defended the concept of a balanced budget. and as these years went by, the money coming into the federal government started to shrink. companies go out of business so they are not paying corporate income tax. americans lose their job, so if you want to tax their income how much do you collect on 0 -- zero. it was a constant reduction in the amount of money coming in. june 6, 1932, he signed into law the highest tax increase in american history in peacetime. he raised taxes because the amount of money coming in had been reduced and if there was still the spending taking place and to balance the budget, he had the tax more. he started to tax company still in business. started to tax inheritances. it was the worst possible economic approach at that point

in time. so where does this take us? this takes us to the great depression. alan brinkley, who we are using as our basic text, believes there were five reasons for the great depression. this is the perfect time to take a look at them. the fifth one is probably the one that is going to cause franklin roosevelt to get elected, overwhelmingly. first, the economy we had as a result of the prosperity of the 1920's was not like the economy we have today. it was not as diversified. today, our economy is huge. today, it is there is a bad year in automobile sales, we keep going. our economy is diverse enough that there will be good years and all the other sectors of the economy. we had wealth, but the wealth was, as always in america in the

years prior to this, in the hands of a few. the rockefellers, the carnegie's, henry flagler. they were very wealthy people. 40% of the american people in the beginning of the 1920's are at or below the poverty line. 60% are making about $2000 a year, which is more than they ever dreamed they would be making. but it does not mean that they are fabulously wealthy or even middle-class and able to keep spending. they will get frightened easily by the way the economy is moving. the other problem with diversification is so much of what we were doing economically is based on the automobile industry. it was clearly the backbone of the economy. if the car industry goes back, and it will in the 1930's, there is not as much demand for steel. there is or to be very few

people buying automobiles. it is going to cause the whole economy to go down. it is a downward spiral. there is going to be less purchases, which will create less production, which is going to create losses of jobs, which is going to create more fear and it will constantly spiral downward. the second thing brinkley refers to is we were not able to spend our way out of this. yes, we were better off inwe were better off in the 20's than ever before, that the 20's weren't like now. today, we have this amazing spending power, and no matter what the conditions are we are able to keep spending. we did after september 11, anytime there is an economic bump in the road, we keep going. big-screen tvs, new cars vacations. we are affluent.

as a country, as a people, and that is an economic plus. because the spending keeps the economy moving. we invented the installment plan. you don't need the $800 for the car, you can give me money down and pay the rest off in installments. you can buy stocks on margins. we have borrowed -- we had borrowed way too much money. we started to catch that disease that some of us have with credit cards. yeah, i don't have the money for this, but i have a credit card. will you take a credit card? this sofa is just so lovely, i will buy it anyway. i don't have the money for it, but you will take a credit card? that destabilized the stock market, it was simply inflated. and the fourth one, the problem

of international trade. this was herbert hoover's favored cause of the great depression. hoover lived a long time. in the later years, when he looked back on all of this, this was pretty much his favorite way to explain the great depression. it was kind of like a global pandemic. it started in europe because of world war i. the first world war damage the european economy. remember the -- treaty put the huge reparation payment on germany and the economy collapsed? a lot of european economies struggle to get back on their feet. that was good for us, we had a market for our goods. but it was an economic condition that manage to make its way across the atlantic ocean and in fact our shores. and the fifth and final one good old-fashioned fear and

panic. panic used to be the old word for depression. to go back in history to the 1800s and look at the history of economic depressions, you will see that there is panic. it is usually written about and referred about the panic of 1893. it is because one of the important ingredients in depression, the american people have to become frightened terrified, panic stricken. unable to spend anything. and they were. they were frightened. so now you take this mess and you take it to the election of 1932. in the election of 1932, we have the republican party nominating herbert hoover. you might wonder, if everything was so bad, and he had been president for four years as all of this bad stuff emerged, why would they let him run again?

he represents the political party that is like-minded. the people in the republican party think the way he is. they believe that the role of government is to stay out of the affairs of business. so he is kind of their man. plus he is the incumbent, and the incumbent is the person holding the office at the time of the election. so if he wants to run, and he does, because what he has been telling the american people is that this will correct itself. the economy is going through a reorganization, and capitalism and free enterprise is going to go through peaks and valleys. but we will come out of this. so he wanted four more years so that he could oversee the correction. and be in office as the good times came back. and be able to smile and tell

everyone, i told you so. so he gets the nomination. the democrats find this amazing guy, franklin roosevelt, who became the election of 1920 and 1932, contracted polio and overcame it. and i think it is pretty obvious that i overcoming this paralysis and being able to resume his political career and being a force, a political force, was the connection between what he achieved personally and where the country was. so he is telling everyone, vote for me and i will give you a new deal. this term, the new deal, it it has three usages in this. . -- in this period. vote for me and get a new deal.

everyone loved the sound of that. the old one isn't working, i lost my job, house, so give me a new deal. and then it became the nickname of the new administration. presidents don't do this anymore, but they did. woodrow wilson had the square deal. it sounds like cowboy talk. harry truman had the fair deal. kennedy was the new frontier, and lyndon johnson the great society. they would say that these administrations had names. today we would call that branding. the third thing the new deal becomes is the plan for ending the great depression. but we are not at the plan. all we are looking at is the campaign promise. you also had the campaign song. it was, happy days are here

again. in 1932. it is lively bouncy, and audit. here is this polio victim, who hid that he tried to hide his disability, he is telling everybody to vote for him for a new deal, and he had everyone singing, happy days are here again. but if you looked around america, it wasn't a happy picture. he is one of the first presidents to understand the power of film. the power of the filmed image. he is going to be a great speaker. he is an amazing or tour. he utilized every little thing he could think of to promote his ideas. he used his grandchildren to promote his ideas.

one of the film clips is of the grandchildren assembled, they were singing happy days is here again. they were screaming it. and he was, in the film clip, he takes the one grandchild orn his lap, and he asks if they know the theme song. and they all sing it again. it was way different than herbert hoover's fiscal conservatism. so the issue is simple. it is the depression. by this point, we are in a depression. the issue is how we will bring it to an end. how are we going to get out of this. herbert hoover tells us to be rugged individuals and franklin roosevelt's saying that we will get a new deal. labor, business, everyone will

get a new deal. that sounded so much better than just, why don't you be a rugged individual? so the options are one-sided. he is the people's choice. they didn't know what the new deal was going to be. it emerged in the first 100 days of the presidency, but it sounded so good, we are all going to have this amazing man who is going to lead us out of this. the democrats get 22 million votes. look how many more people are voting now. 472 electoral votes. you need one more thing have to be the president. so how did hoover do? there were 15 million republicans in america. they stayed in the camp. they didn't wander off.

almost 16 million of them vote for him. but the person who wins the state wins the vote. so herbert gets 59. the people wanted roosevelt's they wanted a new deal. so he gets elected in 1932. i have put this collage together. there is one of his campaign buttons for a new deal. in the first 100 days, he is going to put together a group of advisers. he reads the faculties of ivy league schools. by the way, one of the most interesting things about him is that he was a harvard educated new yorker, with an affected way of speaking, who connected with poor people. he connected with people who were now and out, the people who

were struggling and suffering and they believed in him. the other pictures are from the campaign. the bottom right is a color photo. it is so easy to look at history from the 1920's and 1930's and think everything happened in lack and white. but obviously they had colors. across the street from the hotel, we had a lot of famous guests in the history of the hotel, and there was a famous guests at the time of the election. he summed it up perfectly. but first here is the map. this is the election map of 1932. the blue states are the ones that voted for roosevelt. the other color voted for hoover . and here is my home state of

pennsylvania they voted from hoover. 36 of the 59 electoral votes came from the state of pennsylvania. the part of pennsylvania i am from actually, during the 1930's, elected socialist mayors. there was a socialist political party, and the new deal that franklin roosevelt was going to give us was going to be very liberal and it was going to be way more similar to socialism then fiscal conservatism. but they were voting republican. you can see the rest of the votes came out of delaware and a couple of new england states. the guy saying across the street was an american humorist named will rogers. this is a -- he didn't tell jokes.

he was a humorist. he observes the affairs of the day and was able to put things in perspective. he was able to put them in perspective in a folksy, humorous way. in his one-man show, he would take the stage as a cowboy with a rope. he would tell you about what he read in the paper. and this is what he said about franklin roosevelt. someone asked him if he thought he was going to do a good job. he said that if he burned down the capitol, we would cheer and say at least you got a fire started. that is how desperate they were for someone to do something to help them. because it was a bad time. herbert hoover, as my mom would say, was simply preaching rugged individualism and practicing fiscal conservatism.

he is kind of like the wrong man at the wrong time. so this takes us to the new deal. it takes us to the plan to end the great depression. and i can't, this is where i want to add -- this is a fundamental shift in our nation's history. prior to this, we were a nation with a small government. the presidents that we had all saw the government in the same perspective. it had a certain duties to fulfill. it had certain responsibilities that it was empowered with. but it wasn't supposed to go much beyond that. there were boundary lines. the government had to stay inside the boundary lines. i'm talking about the national government.

roosevelt came into a terrible moment in our history. one third of the population didn't have anything to eat. my mom was eating oatmeal for breakfast, lunch and dinner. she used to say, she was really glad to have the oatmeal. my mother lived in a shock. i visited where she lived. she lived with her mom and four siblings. it was a chicken coop over which they had placed asbestos shingles. they had no heat, plumbing, and they barely survived the great depression. when i was a boy, she took me to see where she lived. she was born in 1926. so when the great depression hit and the market crashed, she was three. she was a kid. she was a 10-year-old during the 19 30's.

the government started to give out food, and she had to pull her wagon. she has story upon story. she pulled her wagon over a bridge and go to a building where the government was handing out flour, sugar, or whatever it was. then she would come back with her wagon. it was a terrible moment for her. it was completely -- she lived into the 1990's. it completely formed how she was and what she did. she wouldn't throw anything away. she would get everything fixed. if you peel a tomato for a salad, she would try to get every little scrap of tomato she could. she wouldn't cut the end off and put it in the trash. she would carve away all the edible pieces.

she never wasted a thing because they never had anything. so what franken roosevelt does is comes into america and peas as the suffering. he says we have to do something extraordinary. we are in an extraordinary moment and we have to do something extraordinary. he is going to take the government in a different direction. he is going to create big government with a huge buff as it a huge budget. his name was franklin delano roosevelt. the republicans started to refer to him as franklin deficit roosevelt. when you spend more than you take in, and he is going to take the point of view that the government should do for the people what the people cannot do for themselves. feed them? yes, feed them. close them? yes.

at whatever the cost. it is a turning point in american history. the days of fiscal conservatism, the defined role of government it is ending with herbert hoover. with franklin roosevelt there is another way. you can look back on this, especially us from 2015, and say, yeah, but government has now gotten so big and spending is so huge. maybe that is the problem. but instead of looking at that, i am asking you to think about 1932. and 19 33, 1934, and 1935. and he had to do something. he had to help the people who had nothing but oatmeal to eat. he had to lift their sport -- their spirits and convince them that they were going to get a new deal.

that he was there to save them and help them. and as will rogers said, i don't know what he is going to do, but if he burns the building down at least we got a fire started. so when we comeback, we will look at the new deal. it ended up being a really simplistic plan. there were three goals, a couple of immediate actions to save banks and print more money. things did improve through the 1930's, but it was an uphill battle. the country was broken in the 1930's. thanks. >> this weekend, the c-span city tour travels across the country with time warner. to learn more about the history of lexington, kentucky.