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Hoover Struggles with the Depression
Hoover tries to Reassure the Nation
• “Any lack of confidence in the economic future…is foolish”
• Americans should remain optimistic
• Go about business as usual
Hoover tries to Reassure the Nation
• Believed depression a part of the natural business cycle
• Periods of growth followed by periods of contraction
• Best course of action-do nothing
• allow economy to fix itself
Hoover tries to Reassure the Nation
• Andrew Mellon-Sec of Treasury: “Let the slump liquidate itself. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate…It will purge the rottenness out of the system.”
Hoover tries to Reassure the Nation
• Hoover disagreed with Mellon
• Hoover supported minimal government intervention in economy
• believed government could help solve economic problems
Hoover’s Philosophy of Government
• Government’s chief function- foster cooperation between competing groups and interests in society
• Cooperation should be voluntary rather than forced by governent
• Government should encourage and foster cooperation, not control it
• Believed in rugged individualism-people should succeed on their own
Hoover’s Philosophy of Government
• Believed that federal handouts would weaken people’s self-respect
• Hoover believed charities and local organizations should help the less fortunate
Hoover Takes Cautious Steps
• Called together leaders of business, banking, and labor
• Asked employers not to cut wages or lay off workers
• Asked labor leaders not to demand higher wages or strike
• Nothing worked• After a year-economy still
sinking• Unemployment still rising
Democrats win in 1930
• Political tide turns against Hoover and Republicans
• Democrats win more seats on Congress
Democrats win in 1930
• Republicans lose control of House of Representatives
• Majority in Senate down to 1 vote
Democrats win in 1930
• Americans grew more frustrated by Depression-expressed anger
• Farmers destroyed goods rather than sell it at a loss
Democrats win in 1930
• Many farmers refused to work their fields and blocked roads to markets-hoped food shortages
would raise crop prices
• Used force to prevent authorities from foreclosing farms
Democrats win in 1930
• Hoovervilles• Hooverblankets• Hooverflags
Hoover Takes Action
• Took active approach to economic troubles
• Directed federal funds into projects-Boulder Dam
• Hoped to jumpstart economy
Government Projects
• Built dams, roads, and other large projects
• Congress approved $800 million for these projects (that’s over 10 billion in today’s money)
Government Projects
• Created Federal Farm Board
• Supposed to help farmers by keeping crops temporarily off the market
Government Projects
• National Credit Corporation-give small banks loans-save from bankruptcy
• Glass-Steagall Banking Act- made loans easier to get
• Federal Home Loan Bank Act- helped farmers refinance their mortgages
Government Projects
• Reconstruction Finance Corporation- provide emergency financing to banks and other large businesses
• In first 5 months, agency loaned $805 million to large corporations
• Business continued to fail
Bonus Army
• WWI vets arrive in DC• Called themselves
Bonus Army• Came to support bill
authorizing govmt to pay WWI vets who had not been adequately compensated for wartime service
Bonus Army
• Supposed to be paid in 1945
• Wanted money immediately
• Hoover opposed legislation
• Respected vets right to peaceably assembly
Bonus Army
• B.A. built a shantytown in DC
• Senate votes down bill
• Hoover calls marchers to leave
• 2,000 refused to budge
Bonus Army
• President decided to disband B.A.
• Infantry gassed more than 1,000 people
• 2 people shot/many injured
• People outraged • Hurt Hoover’s image