2. 1. Hoover: Attitude at the start of Great Dep: The economy will fix itself  Recession was a natural part of the boom / bust business cycle. Hoover believed the best course: do nothing and let the economy fix itself  The government’s role in business was to encourage cooperation between business and labor, not control it  Influence of Social Darwinism: government hand-outs make people weak  Hoover (and most Americans) believed people would succeed through their own hard work / talent  Leave help for the poor up to the charities and philanthropists

3. Hoover’s Plan: (to never be elected again)  Hoover declared, "Nobody is actually starving. The hoboes are better fed than they have ever been." But in New York City in 1931, there were 20 known cases of starvation; in 1934, there were 110 deaths caused by hunger. http://www.digitalhistory.uh.edu/learning_history/children_depres sion/depression_children_menu.cfm

4. 2: Cautious Steps (do not work)  After the stock market crash, he called key leaders in business, banking, and labor together.  He suggested that employers not cut wages and unions not go on strike - this ignored the influence of factors such as supply and demand

5. 3: One Large Construction Project: build a dam and maybe people will name it after you  Large construction project meant to increase employment  Paid for by the profits from the sales of the electricity the dam would generate  Building of the Boulder Dam (Hoover Dam) begins in fall 1929. World’s second largest.  Thousands were hired, but millions were unemployed  It provided electricity, flood control, controlled water supply (agriculture), and jobs = VEGAS!

6. Hoover Dam (Cont.)

7. 4. Hoover’s TAX POLICY made it worse:  In December 1929, to show “faith” in the economy, Hoover reduced income tax rates BUT by 1930 the government was running a deficit.  Then in 1932 Hoover and Congress approved a huge tax increase to balance to government’s budget  The lowest rate rose from 1.2% percent to 4%,  The top rate rose from 25 % to 63 %  Reducing households’ income led to a reduction in spending and further hurt the economy

8. 5: Public Outcry (farmers dump milk in the streets)  Despite the anger and criticism directed at him, Hoover refused to give direct relief to people  Farmers (remember Mary Elizabeth Lease?)  Burned their corn and wheat and dumped their milk rather than sell at a loss  Declared a “farm holiday” and refused to farm their field  Blocked roads to prevent food from getting to markets  Used force to prevent the foreclosure of farms  Hoover seen as at fault for not helping out:  Shantytowns: Hoovervilles  Newspaper blankets: Hoover Blankets  Empty pockets turned inside out: Hoover flags

9. 6: Small steps are unsuccessful (but do help big business while citizens starve)  1931: Hoover tried to pass banking reform, mortgage assistance, and invest in business  Reconstruction Finance Corporation (RFC)  Authorized up to $2 billion for emergency financing for banks, life insurance companies, railroads, and other large businesses  Criticized for helping only the corporations, Hoover argued that that the money would trickle down to the average citizen

10. Help for business  Despite more than $805 million to large corporations, businesses continued to fail  As historian McElvaine points out - “… businesses were not interested in obtaining loans. Expansion was the last thing on the minds of most businessmen"  Businesses didn't borrow to expand and workers weren't rehired.  Federal Home Loan Bank Act  Lowered mortgage rates for homeowners / Allowed farmers to refinance to avoid foreclosure = too little too late

11. 7: Maintain Protective tariffs that stop trade  In 1930 the United States Congress passed and President Hoover signed into law the Smoot-Hawley Tariff – one of the highest in American history  Instead of helping, it led Other nations to retaliate and the world depression grew worse.  U.S. imports from Europe declined from a 1929 high of $1.3 billion to just $390 million in 1932  U.S. exports to Europe fell from $2.3 billion in 1929 to $784 million in 1932.  World trade declined by some 66% (1929-1934).  Not until the 1934 Reciprocal Trade Agreements Act did America begin focusing on creating open trade  (Smoot-Hawley)

12. 8: Gas WW1 veterans and deny them early payment of their bonus  World War I veterans were to get a “bonus” in 1945  In spring-summer 1932 20,000 World War I veterans and their families demonstrated in D.C. in support of the Patman Bill that would have paid the bonuses immediately  Congress refused to pass the bill and President Hoover called the veterans “communists and persons with criminal records” (there were communist marches and some riots in the US in 1931-1932)  He sent 1,000 soldiers in with rifles and tear gas to remove the veterans  Hundreds of veterans were injured and several were killed  Americans were outraged by Hoover and the governments treatment of these veterans

13. Bonus Army

19. Analysis:  Hoover has gone down in history as an uncaring chief executive who cared little about his fellow citizens, accepted the Great Depression as inevitable, and who refused to do anything to alleviate the suffering  While this image was particularly widespread during the 1930s and persists even to this day, can he be blamed?

20.  “Smoot-Hawley Tariff.“ US State Department, http://future.state.gov/when/timeline/192 1_timeline/smoot_tariff.html http://future.state.gov/when/timeline/192 1_timeline/smoot_tariff.html  McElvaine, Robert S. The Great Depression: America, 1929-1941, Time Books (New York, 1984).