2.  Immediately after the Stock Market Crash Pres. Hoover tried to assure the people that the economy would recover and that this was a temporary bump in the road  Hoover called together business leaders and got them to pledge that they would not cut employees or slash wages too much  hopes were that this would encourage spending  Hoover next called for governors and mayors to increase public works projects hoping to create jobs and spending for the economy  jobs were created but not enough to fix the economy

3.  Hoover’s major problem was money  He asked businesses and state and local govt to spend money that they did not really have  He did not offer federal money to help these groups out  After Democrats gained a lot of power in 1930 Congressional elections Pres. Hoover decided it was time to spend more money to get the economy on its feet  1931 Hoover set up National Credit Corporation to help lend money to troubled banks  1932 Hoover pushed for Reconstruction Finance Corporation to provide loans to banks, and businesses  RFC did provided loans but not enough to solve the spending crisis

4.  Summer 1932 farmers who were hit hard by Depression began destroying crops and livestock to try to drive prices up  May 1932 Bonus Army sets off for Washington to collect their WWI bonus  they were promised the $1000 bonus in 1945 but they wanted it early  they marched to D.C. to try to get their money early  Hoover said no  July 1932 Bonus Army camp was attacked (against Hoover’s orders) by Gen. MacArthur and 3 were killed (2 by police 1 by tear gas)  Hoover was blamed for this mess

5.  1932 Herbert Hoover ran for re-election against Franklin D. Roosevelt (gov of NY)  FDR and many Americans blamed Hoover for inaction  FDR promised to lower taxes, reduce spending and balance the budget to stimulate the economy  FDR won and then refused to work with Hoover during the Lame Duck session  FDR’s inaction created uncertainty and the economy got worse

6.  FDR approach was to “do something”  FDR wanted to use the gov’t to fix the economy ( very Progressive approach ) 1. provide relief programs 2. create regulation to make sure that this did not happen again 3. use gov’t to punish those responsible for the problem 4. use gov’t to create “equality” in society

7.  FDR and advisors blamed big business for the economic collapse (Underconsumption Theory believers)  the greedy rich held their profits and this took money out of the economy  FDR called for fixes to Big Business  pay more taxes  more gov’t regulations

8.  FDR created a series of programs to help the American people and the economy that became known as the NEW DEAL  The New Deal focused on The 3 R’s: Relief, Recovery, and Reform  New Deal created new government agencies and new government controls on business  these programs and agencies were known by their initials (TVA, NRA, CCC, AAA, WPA) and became known as the alphabet soup agencies

9.  The jobs programs (Civilian Conservation Corps, Works Progress Adminstration) were meant to create temporary jobs only  these could not support a family long term  The goal was to get people back to work and when the economy recovered they would go find a real job on the private sector

10.  The NRA (National Recovery Administration) was meant to regulate business by controlling things like wages, hours worked, production, prices  some business leaders in a specific field (ie tire maker) were allowed to create the standards/ regulations for the entire industry  if somebody did not follow the “codes” (standards/rules) for the industry they could be fined or imprisoned

11.  The AAA (Agricultural Adjustment Administration) attempted to regulate farming  idea was to control what was grown to ensure that there was not overproduction  farmers were paid to stop growing crops  gov’t paid farmers to kill livestock to cut down on supply (kill and get rid of – do not sell)  during the 30’s US actually had to start importing produce to feed its people

12.  FDR would go after anyone who was critical of his programs  he used the IRS to attack celebrities and newspaper editors who criticized the New Deal (Jesse Owens, Joe Lewis)  Some of the New Deal programs were used to help the Dem. Party in elections  money was spent near election time in districts to help Dem. Congressmen  in some places WPA jobs were given to Dem. supporters only and one would need to “donate” money to the Dem. Party to keep the job