The Great Depression: President Hoover’s Policies

Hoover’s Policies At the time of the crash, no one could predict how long the Depression would last Hoover urged businesses not to cut wages, unions not to strike, and charities to increase their efforts Hesitated until Summer 1930 to ask Congress for legislative action on the economy Afraid government assistance would destroy individuals’ self-reliance As far as relief goes, Hoover believed it should come from the state and local governments Not the federal govt.

The Hawley-Smooth Tariff (1930) European prosperity closely tied to that of the U.S. The Hawley-Smooth Tariff (1930) was one of Hoover’s worst mistakes of his presidency Enacted tariffs rates that were the highest in history- 31-49% on foreign imports European nations enacted higher tariffs of their own on U.S. imports This caused reduced trade for all nations Global economy sank deeper into the Depression

Debt Moratorium 1931- Conditions were so bad in the U.S. that the Dawes Plan could no longer continue Hoover proposed a moratorium (suspension) on payment of international debts International economy suffered massive loan defaults Banks on both sides of the Atlantic lost money or closed altogether

Domestic Programs: Too Little, Too Late 1931- Hoover finally convinced some govt. action need to help the economy Federal Farm Board was created in 1929, but its powers were expanded to deal with the economic crisis Helped stabilize prices by holding surplus grains and cotton in storage until demand rose again Program was too modest to handled the amount of overproduction of crops

Domestic Programs: Too Little, Too Late Reconstruction Finance Corporation (RFC) was a federally funded, government-owned corporation Helped finance faltering railroads, banks, life insurance companies, and other financial institutions Emergency loans would help stabilize these “key businesses” Benefits would “trickle down” to other smaller businesses and bring total recovery

Unrest on the Farms Farmers banded together to stop banks from foreclosing on farms and evicting people Midwest farmers formed the Farm Holiday Association Tried to stop the entire grain harvest in 1932 from reaching the market in order to stabilize prices The effort collapsed after some violence

Bonus March Summer 1932- thousands of unemployed WWI veterans marched to D.C. Demanded immediate payment of bonuses promised to them later (1945) Thousands of veterans and their families camped out in shacks and tents near Congress Congress failed to pass the bonus bill they sought by the deadline

Bonus March After the bill failed to pass, two veterans were killed in a clash with police Hoover ordered the army, under the command of Gen. Douglas MacArthur, to break up the encampment The army used tanks and tear gas to destroy the shantytown and drive away the veterans Caused many Americans to regard Hoover as heartless

The Election of 1932 The worst year of the Depression also happened to be an election year Republicans re-nominated Hoover Warned a Democrat in the White House would only make things worse Democrats nominated N.Y. Governor Franklin D. Roosevelt Pledged a “new deal” for the American people, repeal of prohibition, aid for the unemployed, cuts in government spending

The Election of 1932 The only real issue that mattered to voters was the economy 60% of voters thought it was time for a change Roosevelt carried all but six states Traditional Republican states in the Northeast Democrats now also controlled both houses of Congress

The “Lame-Duck” Amendment After the election, Hoover still had four months left in office Roosevelt wouldn’t be inaugurated until March 1933 As a “lame-duck” president, Hoover was powerless to do anything about the worsening economy in those months Roosevelt refused to work with him- didn’t want to be associated with his policies To avoid this being a potential problem again in the future, Congress passed the 20th Amendment in February 1933 Shortened the period between the election and inauguration of the new president to January 20th

? What were two major mistakes Hoover made in regards to his international economic policies? What two domestic efforts by Hoover were “too little, too late?” Give a brief summary of what occurred at the Bonus March in D.C. in 1932. Who won the election of 1932? What did the “Lame-Duck” Amendment do? Why was it put into place?