1930s herbert hoover lecture 4
TRANSCRIPT
The Great Depression
• 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?
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
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
The philosophy that people can make it on their own and that government shouldn’t help
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
Voluntary partnership between business associations and government
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
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
Cooperative: an organization that is owned and controlled by its members, who work together for a common goal
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
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
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
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
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
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
Vocabulary Quiz