Chapter 12 Section 5 Mr. Smith.  Individuals were responsible to get out of or stay out of Depression by self monitoring  Laissez-faire economics required.

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Presentation transcript:

Chapter 12 Section 5 Mr. Smith

 Individuals were responsible to get out of or stay out of Depression by self monitoring  Laissez-faire economics required government to remain out of economic matters  History had shown that economy would self- correct as it had done after the depressions of 1873 and 1893  These depressions were limited to United States primarily while current depression is worldwide.  President Hoover is not forceful enough as a speaker to move the people of America so he and the Republicans get blamed for the Depression.

 Laissez-faire economics was starting to crumble  Local relief was emphasized but local relief lacked funds  Started with voluntary wage controls—White House conference of business leaders promised to keep wages up (by end of 1931, companies are breaking their promises)  Government spent some $: Boulder Dam began in 1930, local relief programs encouraged  Home Loan Bank Act—lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure  Reconstruction Finance Corporation — authorized to provide emergency financing to banks, life insurance companies, railroads, and other large businesses…fuel business expansion and “trickle-down” benefits..  Summer 1932: States get money from RFC for relief. Successful, but too little too late

 Hawley-Smoot Tariff  Trying to protect domestic industries from foreign competition.  Highest import tax in history.  Backfires since foreign countries raise import taxes on American goods thus stopping the flow of trade worldwide.  Bonus Army  World War I veterans were guaranteed a bonus in 1945 (Patman Bill)  In 1932, many want their bonuses early  Veterans set up a tent city on the outskirts of Washington  House: OK, Senate will not agree to that demand in June 1932  Hoover calls on Bonus Army to leave and dismantle their “shantytown”  Most leave and go home  2,000 Refuse to budge  July 1932: 12th Infantry, General Douglas MacArthur and his aide Dwight D. Eisenhower, attack the amp and use tear gas.