1. Hoover Responds to the Depression

2. Promoting Recovery
President Hoover tried to fix the economy by giving loans to banks and corporations and by starting public works projects. Later he reluctantly supported direct aid to people.
March 7, Hoover stated that the worst effects of the crash would pass in 60 days.
Hoover wanted to downplay the public's fears to avoid more layoffs & bank runs.
The economy continued to get worse & the public lost faith in the Government.
“Rugged Individualism”- idea that individuals—not the government should control their own success in life—Hoover and many Americans believed in this idea.
Actions by the Hoover Administration
Hoover met with bankers & business leaders; the business leaders pledged to stop cutting wages & keep factories open—eventually they broke the pledge as economy got worse.
Hoover increased Federal government spending on “public works”– government financed building projects= created some jobs but fell short of employing millions of unemployed.
Hoover refused to massively increase government funded public works.
** 1930 Congressional Elections– Republicans (Hoover’s Party) lost 49 seats in Congress!

3. Hoover Tried to Increase the Money Supply
Hoover focused on expanding the money supply to get the economy going.
National Credit Corporation (NCC)- to make loans to banks so they could continue to loan to communities.
Not enough money was invested in the program to help very many banks or people.
Reconstruction Finance Corporation (RFC)- government money set aside to loan to businesses, banks, railroads to keep them open.
By 1932, it had loaned $238 million to 160 banks, 60 railroads, and 18 other businesses.
Not enough was being lent to make a big difference in the economy.
By the spring of 1932, state & local governments were running out of money to give direct relief to individual Americans.
3. Emergency Relief and Construction Act- passed by Congress; provide $1.5 billion in public works & $300 million in emergency loans.
** 1st time in US History US government had given direct relief funds.
** Too little too late to help the economy or Hoover!

4. Americans in an Angry Mood
After the Stock crash and by 1931, the economy got worse and Americans became more angry & scared.
Jan. 1931– an Oklahoma grocery store was looted by 500 people.
Dec. 5, 1932– The American Communist Party conducted “hunger marches” on Washington DC chanting “Feed the hungry, tax the rich.”
US Farmers suffered greatly from oversupply of farm products and lower demand.
Banks foreclosed on farms & land for unpaid loans ( million farms were seized)
Farmers destroyed crops burned fields, poured milk in gutters to try and get prices raise.
In Georgia—dairy farmers held up highway traffic to stop milk trucks, dumping milk in ditches.

5. The Bonus Army Marchers
After WWI, the US Congress enacted a $1000 bonus for each veteran to be paid out in 1945.
In 1931, some members of Congress wanted to give the bonus to veterans EARLIER than 1945.
As Congress considered the bill to pay the bonus early early, veterans marched to urge early payment.
The Bonus Army (1932)
May 1932– a Veteran group from Oregon began to march to Washington DC
Other veterans joined them as they moved across the country.
In Washington, 15,000 veterans & families set up shantytowns (Hoovervilles).
Hoover refused to meet with the veterans and the Senate voted the bill down —NO EARLY BONUS.
Many marchers went home—others stayed.
July, Hoover ordered the police to have buildings cleared– two veterans killed.
Hoover called out the US Army (led by Gen. Douglas MacArthur) to clear buildings but leave camps alone.
Gen. MacArthur sent the Calvary, infantry, and tanks to clear the camps.
Effect: The national news media covered the event= damaged Hoover’s popularity even more.