Hoover Struggles with the Great Depression

Hoover’s Philosophies Depression were a natural part of the business cycle Laissez-faire (government should play a limited role in economic affairs “Rugged individualism”= people should success through their OWN efforts, not depend on the government

Primary Response to the Great Depression At first, Hoover: – Asked for voluntary cooperation from business, banking, labor leaders (“please don’t lay people off”, “please don’t go on strike”, etc.) – Opposed direct federal government relief Too expensive, could lead to dependence on government Encouraged local governments and charities to provide relief

Boulder Dam (now the Hoover Dam) Example of big federal government project ($700 million!) – Proposed before stock market crash – Employed thousands of workers – Brought electricity, flood control, water to millions

Criticisms of Hoover (a Republican) Democrats win control of the House of Representatives in 1930 Farmers hurting – Low crop prices – Farm foreclosures

More Criticism “Hoovervilles”=homeless camps in parks “Hoover blankets” and “Hoover flags”

Secondary Response to the Depression By late 1931, Hoover asks Congress to reform banking, provide mortgage relief, government help to business Federal Home Loan Bank Act – Lowered mortgage interest rates, allowed for refinancing

Reconstruction Finance Corporation $2 billion for emergency financing to banks, life insurance companies, railroads, large businesses Hoped money would “trickle down”