1. Hoover’s Response Fails
The Great Depression
Hoover’s Response Fails

2. Cautious Response Americans look to Hoover to solve the “crisis”
Hoover seen as intelligent
He was familiar with business methods & economic theory
Americans felt they could trust
Hoover
Efforts he took:
Labored long hours
Consulted many experts
Tried to marshal resources from the country
Hoover tried many approaches. Ultimately, none of them would work

3. Volunteerism Hoover’s initial approach was “hands-off”
Viewed upswing & downswings as natural
Depressions like storms, could not be avoided but strong business could weather them with support of govt.
Resorted to previous tactics
1920s; businessmen & laborers to
voluntarily work together
1930s; business & industrial leaders to keep employment, wages, & prices at current levels
Called for reduction of taxes, lower interest rates, & creation of public works programs

4. Volunteerism Contd.
This plan would put more money in the hands of businesses & individuals
Designed to encourage more production AND consumption
Hoover believed this would reverse the cycle that led to the depression
Hoover asked the rich to give more money to charities
Americans gave money, clothing, & food to people who needed it
Idea was for all Americans to voluntarily join forces to combat the depression

5. Volunteerism Fails Biggest problems with theory:
Relied on voluntary cooperation
Relied on Americans to act in someone else’s best interests
Businesses & farmers acted in
their own interests
Cut wages
Laid of workers
Boosted production
Americans followed individual, not cooperative courses

6. Localism
Hoover asked state & local govt. to provide more jobs & relief efforts
Localism: Policy whereby problems could best be solved at local & state levels
Problems:
Towns & states did not have resources to help
Hoover resisted using fed resources
Using fed resources was unconstitutional
Favored “rugged individualism”
People could better help themselves
Nothing changed
Unemployment rose
Charities ran low on money
Local & state govt. could not help

7. Impact of Failures Americans have very little faith in their leader
“Hoover Wagons”- trucks pulled by horse/mule
“Hoover Heaters”- campfires
“Hoover Houses”- cardboard boxes

8. New Approach Hoover desperately needed new policies
1932: Reconstruction Finance Corporation (RFC)
More than 1 billion dollars of govt. loans to railroads & large businesses
Lent $$ to banks to extend more loans to businesses
If govt. lent money to banks, they would lend money to businesses.
Businessmen would hire workers
Production would increase
Consumption would increase
Depression would end

9. Trickle-Down Economics
Money poured into the top of the economic pyramid will trickle down to the base
RFC policies did not work under
Hoover
Lent billions to banks
Banks did not lend to businesses
Businesses did not use the loans they received to hire workers
$$ did not “trickle-down” as intended

10. Famous Trickle-Down “Economist”

11. One Success
1920s: As Secretary of Commerce, Hoover called to dam Colorado River
1929: Congress approved the project
1930: Construction of Boulder Dam (Hoover) began
Construction created much needed jobs in the SW

12. American Protests Hoover became symbol of failure to many
Many Americans thought communism or socialism were the answer
Argued that capitalism created inequities of wealth
Felt that a state-run economy was the only answer
“American Dream” still proved stronger than threats of communist revolutions
Fascism rises in Europe:
Benito Mussolini in Italy
Adolf Hitler in Germany
No fascist movement in U.S. despite American unhappiness with the leadership.

13. Bonus Army
Most Americans did not want revolution, but many wanted change
1932: Bonus Army marched on Washington
1924, Congress passed Adjusted Compensation Act
Act Provided lump-sum payment to veterans in 1945
1931, vets began to call for early payment
Out of work vets needed $$ to support themselves
Congress agreed and passed a bill approving payment
Hoover vetoed bill
Group marched on Washington in Protest
1932, 20,000 vets occupied Washington
July, 1932 riot broke out when police tried to evict protesters

14. Bonus Army

15. Moving the Bonus Army Out
General Douglas MacArthur & federal troops ordered to clear the area
“surround affected area & clear it without delay”
Exceeded his order
Moved marchers out of city altogether
Troops ordered to ready tear gas & bayonets
Dwight Eisenhower & George Patton among military
Eisenhower against using troops
Patton used force
Over 1,000 marchers were tear-gassed, & many were injured

16. Dwight Eisenhower
George Patton

17. Aftermath & Hoover Hoover did not order the use of force
Photos of troops marching, fixed bayonets shocked the nation
These images all but ruined Hoover’s hopes for re-election
Hoover’s “failures”
Unemployment hovering at 25%
Starving Americans
Homeless numbers increasing every day
Americans were now ready for a change