Chapter 11 Section 3 Hoover Responds to the Depression and the Election of 1928.

Hoover Publically Publicly, President Hoover declared on October 25, 1929 (the day after Black Thursday) that “the fundamental business of the country…is on a sound and prosperous basis”. He tried to reassure the American people that the U.S. economy was still strong, despite the Stock Market Crash.

Hoover Privately Privately, he was worried. To improve the economy, he brought together business, as well as government and labor leaders. Industry leaders promised not to cut factories or cut wages. By 1931, they had broken these promises.

Increasing Jobs Hoover increased public works, or government-financed building projects, to create jobs. It wasn’t enough. For public works to make a dent, Hoover needed to massively increase government spending.

Deficit Spending Hoover would have to either raise taxes or run a deficit. Either way, Hoover’s fear of deficit spending would only delay economic recovery.

NCC & RFC Hoover set up the National Credit Corporation (NCC). The purpose of the NCC was to help the money shortage by creating a pool of money that banks could loan out. Hoover also set up the Reconstruction Finance Corporation (RFC) but the it failed because the RFC did not increase loans in order to meet the need for them.

Direct Relief Hoover opposed relief, money given directly to poor families because he believed only state and local governments should give money directly. However, by the spring of 1932, local and state governments were running out of money.

Not Enough Relief Congress passed the Emergency Relief and Construction Act, which gave money for public works and loans but the act was not enough.

Expecting More After the stock market crash in 1929, people were prepared to accept bad times. By 1931, people wanted more government help. The suffering nation grew restless and people began to revolt.

Farmers Farms were heavily mortgaged to pay for supplies. Nearly one million farmers lost their farms between 1930 and 1934 to creditors, foreclosing on their farms and taking ownership.

Destroying Crops Some farmers tried to raise crops by destroying crops. By destroying crops, farmers hoped the lack of supply would raise prices. Some even blocked food deliveries or dumped milk into ditches.

WWI Army Bonus Congress had scheduled bonus payments of $1,000 to World War I veterans for 1945. In 1931, a congressman introduced a bill to distribute the bonuses early. A group of veterans—dubbed the Bonus Army by the press—marched to the Capitol to lobby for early bonuses.

The Bill is Voted Down The Senate voted down the bill. Many veterans went home. Some stayed on, squatting in vacant buildings or in camps. Hoover ordered the buildings cleared but the camps left alone.

General Douglas MacArthur When police killed two veterans, the army was called in. General Douglas MacArthur ignored Hoover’s orders and attempted to remove all the veterans—including those in the camps.

Media Covering the Event Newsreel images of troops assaulting veterans further damaged Hoover’s reputation and haunted him throughout the 1932 campaign.

Hoover’s Role During the Depression Although Hoover failed to end the Depression, he expanded the role of the federal government’s role in the economy, more than any president before him.

Candidates of the Election of 1928 The Republicans nominated Herbert Hoover to run for a second term. The Democrats choose the popular New York Governor Franklin D. Roosevelt.

Franklin D. Roosevelt (FDR) FDR’s Idea Background He pledged himself “to a new deal for the American people.” The New Deal became the name for his policies to end the Depression. Roosevelt was a distant cousin of President Theodore Roosevelt. He was born into a wealthy New York family and attended Harvard and Columbia Law School.

FDR Political Background He served in the New York legislature. Under President Wilson, he was Assistant Secretary of the Navy. Roosevelt ran as the vice-presidential candidate in the 1920 election. He lost.

Polio and Eleanor Roosevelt A year later, Roosevelt came down with polio, a paralyzing disease. Eleanor Roosevelt, his wife, kept his political career alive through public speeches while he recovered.

Results of the election By 1928, Roosevelt was active again in politics. As governor of New York, Roosevelt oversaw the creation of a relief agency to help the unemployed. His popularity paved the way for his presidential nomination.

Result of the 1932 Election In November 1932, he won the election by a landslide.