Hoover’s Response to the Great Depression

Herbert Hoover  Took office in 1929  He was an engineer but was a good businessman, a self made millionaire, and a humanitarian  Known for leading relief efforts to aid starving Europeans after WWI and helping Europe economically

Hoover’s Plan to Fix the Economy  Changed view that government shouldn’t get directly involved with the economy Promoted programs that aided business and if they recovered the benefits would go down to workers and consumers (“trickle down”)  Reconstruction Finance Corporation lent money to railroads, mortgage and insurance companies, and banks about to go bankrupt  Used federal works projects to create jobs  Got voluntary promises from businesses not to lower prices or wages  Stop war debt payments from Europe

Hoover’s Failure  His refusal to give direct aid and insist the economy was improving hurt the opinion of him by the people

The Bonus Army  In 1932 thousands of unemployed WWI veterans set up camps in D.C.  Looking for early payment of a bonus they were owed for fighting in the war  When Congress wouldn’t give it to them they refused to leave so Hoover called out the army to break up the camps and get rid of the veterans  Photographs in the media of tanks and tear gas being used against the bonus army cost Hoover the last bit of confidence the people had in him

Hoover’s Costly Beliefs  Hoover tried using power of federal government to solve the economic problems of the depression but didn’t do enough  His beliefs limited what he tried to do to fix it Thought that America’s economic system and the market would fix itself Stood for Puritan Work Ethic meaning that hard work brings prosperity Felt voluntary action as opposed to government action would solve the problems Believed in self-help and though direct relief would ruin people’s “rugged individualism”