Hoover’s response to the depression The Great Depression: 1929-1932 Hoover’s response to the depression

Learning Goals Evaluate President Hoover’s attempts to revive the economy. Analyze the limitations of Hoover’s money plans.

Promoting Recovery In the early days of the Depression, Hoover publicly downplayed the economic crisis Wanted to avoid more bank runs and layoffs Privately, however, Hoover was seriously worried about the economy

Volunteer Efforts and Public Works Hoover increased public works: Government-financed building projects These construction jobs would replace some of the jobs lost in the private sector These jobs helped some, but still left millions of Americans unemployed

Paying for Public Works Who pays for public works projects? Higher taxes takes away more money from consumers and hurt businesses Lower taxes meant the govt would have to go into deficit spending and borrow money from banks This meant banks would have less money to lend to businesses that wanted to expand and for consumers who wanted loans Hoover feared that deficit spending would actually delay an economic recovery

Pumping Money into the Economy Hoover asked the Federal Reserve to put more money into circulation The Federal Reserve refused National Credit Corporation (NCC) Hoover set the NCC up to create a pool of money to enable banks to continue lending money in their communities Unfortunately did not meet the nation’s needs

Pumping Money into the Economy Hoover also requested Congress set up the Reconstruction Finance Corporation (RFC) Allowed the govt to make loans to banks, railroads, and agricultural institutions By 1932, the RFC had loaned $238 billion to banks, railroads and building-and-loan organizations Overly cautious, failed to increase its loans in sufficient amounts

Direct Help for Citizens Hoover strongly opposed the fed. govt’s participation in relief: Money that went directly to impoverished families Believed only the state and local govts should dole out relief

Emergency Relief and Construction Act Called for $1.5 billion for public works Also approved $300 billion in loans to states for direct relief

In an Angry Mood By 1931, Americans were growing increasingly angry People looted stores while others went on hunger marches Some farmers destroyed their crops in hopes of raising crop prices by reducing the supply

The Bonus Marchers WWI veterans were to receive a $1,000 bonus for their service to the US They wouldn’t receive the money until 1945, however Thousands of vets marched to Washington DC in hopes of influencing Congress to pass a law granting early payment of the bonus These vets became known as the Bonus Army

The Bonus Army The Bonus Army camped in Hoovervilles or unoccupied buildings in DC because they had nowhere else to stay The Senate voted down the bill (vets would not get their bonus early) Many vets stayed because they had nowhere else to go

Evacuating the Bonus Army Hoover ordered the unoccupied buildings to be cleared in July of 1932 He wanted the camps to be left alone, however Douglas MacArthur (Army Chief of Staff) sent in cavalry, infantry and tanks to clear the veterans from the city Coverage of this event damaged the US’ perception of Hoover and destroyed his chances of winning re-election in the 1932 presidential election