1. Hoover’s response to the depression
The Great Depression:
Hoover’s response to the depression

2. Learning Goals
Evaluate President Hoover’s attempts to revive the economy.
Analyze the limitations of Hoover’s money plans.

3. Promoting Recovery
In the early days of the Depression, Hoover publicly downplayed the economic crisis
Wanted to avoid more bank runs and layoffs
Privately, however, Hoover was seriously worried about the economy

4. Volunteer Efforts and Public Works
Hoover increased public works:
Government-financed building projects
These construction jobs would replace some of the jobs lost in the private sector
These jobs helped some, but still left millions of Americans unemployed

5. Paying for Public Works
Who pays for public works projects?
Higher taxes takes away more money from consumers and hurt businesses
Lower taxes meant the govt would have to go into deficit spending and borrow money from banks
This meant banks would have less money to lend to businesses that wanted to expand and for consumers who wanted loans
Hoover feared that deficit spending would actually delay an economic recovery

6. Pumping Money into the Economy
Hoover asked the Federal Reserve to put more money into circulation
The Federal Reserve refused
National Credit Corporation (NCC)
Hoover set the NCC up to create a pool of money to enable banks to continue lending money in their communities
Unfortunately did not meet the nation’s needs

7. Pumping Money into the Economy
Hoover also requested Congress set up the Reconstruction Finance Corporation (RFC)
Allowed the govt to make loans to banks, railroads, and agricultural institutions
By 1932, the RFC had loaned $238 billion to banks, railroads and building-and-loan organizations
Overly cautious, failed to increase its loans in sufficient amounts

8. Direct Help for Citizens
Hoover strongly opposed the fed. govt’s participation in relief:
Money that went directly to impoverished families
Believed only the state and local govts should dole out relief

9. Emergency Relief and Construction Act
Called for $1.5 billion for public works
Also approved $300 billion in loans to states for direct relief

10. In an Angry Mood By 1931, Americans were growing increasingly angry
People looted stores while others went on hunger marches
Some farmers destroyed their crops in hopes of raising crop prices by reducing the supply

11. The Bonus Marchers
WWI veterans were to receive a $1,000 bonus for their service to the US
They wouldn’t receive the money until 1945, however
Thousands of vets marched to Washington DC in hopes of influencing Congress to pass a law granting early payment of the bonus
These vets became known as the Bonus Army

12. The Bonus Army
The Bonus Army camped in Hoovervilles or unoccupied buildings in DC because they had nowhere else to stay
The Senate voted down the bill (vets would not get their bonus early)
Many vets stayed because they had nowhere else to go

16. Evacuating the Bonus Army
Hoover ordered the unoccupied buildings to be cleared in July of 1932
He wanted the camps to be left alone, however
Douglas MacArthur (Army Chief of Staff) sent in cavalry, infantry and tanks to clear the veterans from the city
Coverage of this event damaged the US’ perception of Hoover and destroyed his chances of winning re-election in the 1932 presidential election