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