Government reaction to the depression The USA 1929 to 1932

Aims of the lesson By the end of this lesson you will Understand how the Republican government reacted to the economic problems that faced them between 1929 and 1931 Evaluate the influence of Hoover on these policies

Background 1929 – Wall Street Crash The USA went into a huge depression at the start of the 1930s The Republican government believed in laisses-faire and refused in interfere 1928 – Hoover elected promising more prosperity His dreams lay in ruins

The influence of Hoover Hoover believed that government made people weak and dependant Rugged individualism Had set up the Federal Farm Board in 1928 to help farmers – special case Cut taxes in 1930 – in order to give people more money to spend Put money into building public building to lower unemployment

PECE and POUR Set up a group called the President Emergency Committee (PECE) for employment to help business Renamed the Presidents Organisation for Unemployment Relief (POUR) in 1931 In 1932 started to get backsides into gear It was election year and the Republicans faced defeat if they did not do something

What they did July 1929 – Federal farm Board - $500m dollars on farm relief – destroyed the food it bought as opposed to giving it to the poor June 1930 – Smoot-Hawley Relief – increased tariffs in order to persuade people to buy American goods. As a result it made things worse as opposed to better

What they did (2) 1931 – National Credit Corporation – funded by banks and businesses to save smaller businesses had lent only $10m in its first year – replaced by …… January 1932 – Reconstruction Finance Corporation – govt controlled replacement for the NCC

What they did (3) July 1932 – Emergency Relief and Construction Act – promoted public works – gave $300m for states to provide relief to the unemployed July 1932 – Federal Home Loan Act – had a fund to help people in trouble with loans. Out of applications three were accepted Too much, too little, too late