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 actiondo 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 selfrespect
• 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
Depressionexpressed 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 loanssave 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 Corporationprovide 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