1. The Great Depression
Hoover as President

2. 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?

3. 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

4. “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

5. Voluntary partnership between business associations and government
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

6. 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
Dam would harness the Colorado river to provide electricity and a safe, reliable water supply to a vast area that included parts of seven states

7. 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
Hoover pushed for a program of loans that would create and strengthen farm cooperatives
People would work together for a common goal (in this case, farmers)

8. 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
But in the face of economic disaster, people weren’t concerned about others. They were concerned only for themselves. Businesses cut wages and jobs. State and local governments stopped their building programs, leaving more people out of work. Economy only got worse. As a result, Hoover had to break his beliefs sometimes.

9. Smoot-Hawley Tariff Act
1930 – signed the Smooth-Hawley Tariff Act
Raised cost of imported goods
Hoped they would buy cheaper American goods
Europeans responded by placing tariffs on U.S. goods and trade plunged
Dropped ¾ between 1929 and 1934
TOTALLY BACKFIRED
American’s couldn’t sell goods overseas either
By 1934 global trade was down ¾ since 1929

10. Smoot-Hawley Tariff

11. Smoot-Hawley Tariff

12. 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
Early on he claimed that the basic economic foundation of the nation was sound. He said, “I am convinced that we have passed the worst.” When the worst had not happened yet.
He also overestimated the attempts that the government had made in dealing with the Depression – “Industry and business have recognized their social obligaction.” “Never before in a great depression has there been so systematic a protection against distress.”

13. 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

14. Bonus March

15. 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
Photos of armed soldiers fighting unarmed, unemployed veterans enraged many people

16. 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

17. For next class…
Vocabulary Quiz