Do Now. Brainstorm some possible solutions to the problems that existed during the Great Depression Brainstorm some possible solutions to the problems that existed during the Great Depression

Hoover’s Reaction to the Great Depression Chapter 21 Section 3

Hoover reacts to the Great Depression

Herbert Hoover ( ) Hoover had been a skillful businessman— people were confident in him Hoover had been a skillful businessman— people were confident in him –Optimistic view Believed that America should recover through individual effort Believed that America should recover through individual effort NOT through government assistance NOT through government assistance –What did Hoover mean by this? What is the difference?

Hoover Opposes Direct Relief People see a clear need for direct government assistance—money, food, or resources given directly from the government to the needy People see a clear need for direct government assistance—money, food, or resources given directly from the government to the needy Hoover opposes this Hoover opposes this –“The people support the Government the Government should not support the people”  What does this mean?  Why do you think Hoover felt so strongly about this even though people were starving? –Believes in Rugged Individualism

Rugged Individualism

Voluntarism Belief the volunteer efforts were a better choice than government aid Belief the volunteer efforts were a better choice than government aid Many Americans agree, but it quickly becomes obvious that more help is needed Many Americans agree, but it quickly becomes obvious that more help is needed –Hoover still firmly sticks by his philosophies/policies

Asked businesses to keep wages, employment, and prices at current levels Called for tax cuts, lower interest rates, and public works Asked wealthy to donate more money to charity Hoover saw that he must do something.

But volunteerism failed. Towns and states didn’t have the necessary resources to deal with the depression. Hoover did not support direct federal aid to individuals. Hoover put his faith in localism, a policy whereby problems are best solved at the local and state levels.

Economy Hoover’s advisors want total a laissez- faire approach Hoover’s advisors want total a laissez- faire approach –Let businesses recover on their own Hoover actually intervenes Hoover actually intervenes –Urges business to maintain pre-depression levels of production and employment—hoping to stimulate the economy Supports many government public works projects—Hoover Dam (Boulder Dam) Supports many government public works projects—Hoover Dam (Boulder Dam)

One policy that did succeed was the construction of Boulder Dam, (later renamed Hoover Dam) across the Colorado River. Started in 1930, the huge dam provided power for more than a million people and irrigation for farm land, and brought needed jobs to the Southwest.

Hoover Dam

Other Government Assistance Federal Farm Board (FFB) (loans to farms) Federal Farm Board (FFB) (loans to farms) Reconstruction Finance Corporation (RFC) (loans to businesses) Reconstruction Finance Corporation (RFC) (loans to businesses) –Preview a major shift in government policy, even though Hoover administration fails to end depression

The RFC gave billions of dollars to banks and large businesses. The idea was that they would lend to, and invest in, struggling businesses who would hire workers and thus end the depression. The RFC failed when businesses did not hire more workers. In 1932, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). The RFC employed a policy known as trickle-down economics.

America is ready for a change Hoover is hated in 1932 Hoover is hated in 1932 Increased radicalism—communism, socialism Increased radicalism—communism, socialism Increasing activism against the administration Increasing activism against the administration

Some blamed Hoover and some blamed capitalism. Some were World War I veterans who wanted a bonus that was promised to them. In 1932, those veterans formed the Bonus Army and marched on Washington. Many grew disillusioned during the Great Depression.

In the summer of 1932, almost 20,000 veterans set up camps and occupied vacant buildings. In July, police tried to evict them and riots erupted.

The eviction of the Bonus Army doomed Hoover’s bid for re-election. Americans were ready for new leadership and a greater role for the government in solving problems. Hoover ordered General Douglas MacArthur to remove the veterans. He used tear gas, cavalry, tanks, and troops with fixed bayonets. Press photos of troops using excessive force angered the American public.