The Great Depression
HOOVER AS PRESIDENT
QUESTIONS OF THE DAY
•
•
•
•
•
•
•
What are the two key features of President Hoover’s main
beliefs about government?
How was the associative state supposed to work?
What do you think Hoover meant by “rugged individualism”?
What actions did Hoover take in response to the Great
Depression?
How were cooperatives supposed to help farmers and why
did they backfire in the face of economic disaster?
Why did Hoover have a problem with credibility?
Do you think that Hoover should have been more concerned
about a balanced federal budget or about overspending and
expanding government to help people?
HERBERT HOOVER


Entered the presidency
knowing how he wanted
to run the country
His core beliefs guided
his action when the
crisis of the Great
Depression hit
“RUGGED INDIVIDUALISM”
The philosophy that people can make it on their own and that
government shouldn’t help



Served under Harding and
Coolidge
Shared their pro-business,
limited government belief
Thought too much
government threatened
prosperity and American
people’s belief in their own
power and responsibility
THE ASSOCIATIVE STATE
Voluntary partnership between business associations and
government



Hoover believed businesses should form voluntary
associations
Associations would then work w/ government
experts to accomplish public initiatives
Hoover called meetings of business leaders and
government experts to figure out how to achieve
public goals
THE HOOVER DAM




One main project of Hoover’s
associative state was the
construction of the Hoover
Dam
Gov. funded the project and six
companies worked together to
design and build it
GOAL: harness Colorado river,
provide electricity and water to
7 states
Dam showed success of
partnerships between
business and government
HOOVER’S RESPONDS TO THE DEPRESSION
Cooperative: an organization that is owned and controlled by its
members, who work together for a common goal



Believed government
should NOT provide
direct aid to people
Wanted to help
struggling farmers
Pushed for loans to
create and strengthen
farm cooperatives


Farmer cooperatives
(large group of farmers)
could buy materials (like
seeds) at lower prices
than individual farmers
Hoover thought this would
help farmers market crops
and prices might rise

Increasing farmers income
DIRECT ACTION


Worsening economy led
Hoover to alter his
beliefs
1932 – Hoover urged
Congress to create
Reconstruction Finance
Corporation (RFC)

Gave $2 billion in direct
government loans to
failing banks, insurance
companies, etc.

Also created Federal
Home Loan Bank




Encouraged home
building
Reduced number of
home foreclosures
Huge increase in
governments role
But the help came
too late
SMOOT-HAWLEY TARIFF ACT

1930 – signed the Smoot-Hawley Tariff Act



Europeans responded by placing tariffs on U.S.
goods and trade plunged


Raised cost of imported goods
Hoped they would buy cheaper American goods
Dropped ¾ between 1929 and 1934
TOTALLY BACKFIRED
SMOOT-HAWLEY TARIFF
SMOOT-HAWLEY TARIFF
HOOVER UNDER ATTACK



Claimed the economy was
better than it was
Overestimated efforts
being made to deal with
the Depression
As things got worse, people
couldn’t understand why
Hoover:


Didn’t offer them direct relief
Gave banks and businesses
billions and zero to
individuals
BONUS MARCH


May 1932 – 15,000 WWI
Veterans set up camp near
the nation’s capital
Trying to pressure the
federal government to pay
them a veteran’s bonus


Cash promised to them for
their service in WWI
Money not supposed to be
paid to them until 1945



Congress denied
their demands
Many left, others
remained leading
to violence
between police and
Bonus Marchers
Camps were
burned, two killed,
hundreds injured
BONUS MARCH
BONUS MARCH

Hoover’s opposition to the Bonus March
worsened his reputation
 Reason
for his opposition was he wanted a
balanced budget
 Gov. didn’t have money to pay out the bonuses

To achieve a balanced budget, Hoover pushed
for a large tax increase in 1932
 Larger
tax burden = highly unpopular when people
are struggling
THE ELECTION OF 1932
1930 – Democrats won majority in U.S.
House of Representatives – nearly
even in Senate
 By 1932, Hoover’s ability to influence
the public had disappeared – didn’t
even campaign
