Hoover Struggles with the Depression. Hoover tries to Reassure the Nation “Any lack of confidence in the economic future…is foolish” Americans should.

Hoover Struggles with the Depression

Hoover tries to Reassure the Nation

• “Any lack of confidence in the economic future…is foolish”

• Americans should remain optimistic

• Go about business as usual

Hoover tries to Reassure the Nation

• Believed depression a part of the natural business cycle

• Periods of growth followed by periods of contraction

• Best course of action-do nothing

• allow economy to fix itself

Hoover tries to Reassure the Nation

• Andrew Mellon-Sec of Treasury: “Let the slump liquidate itself. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate…It will purge the rottenness out of the system.”

Hoover tries to Reassure the Nation

• Hoover disagreed with Mellon

• Hoover supported minimal government intervention in economy

• believed government could help solve economic problems

Hoover’s Philosophy of Government

• Government’s chief function- foster cooperation between competing groups and interests in society

• Cooperation should be voluntary rather than forced by governent

• Government should encourage and foster cooperation, not control it

• Believed in rugged individualism-people should succeed on their own

Hoover’s Philosophy of Government

• Believed that federal handouts would weaken people’s self-respect

• Hoover believed charities and local organizations should help the less fortunate

Hoover Takes Cautious Steps

• Called together leaders of business, banking, and labor

• Asked employers not to cut wages or lay off workers

• Asked labor leaders not to demand higher wages or strike

• Nothing worked• After a year-economy still

sinking• Unemployment still rising

Democrats win in 1930

• Political tide turns against Hoover and Republicans

• Democrats win more seats on Congress

Democrats win in 1930

• Republicans lose control of House of Representatives

• Majority in Senate down to 1 vote

Democrats win in 1930

• Americans grew more frustrated by Depression-expressed anger

• Farmers destroyed goods rather than sell it at a loss

Democrats win in 1930

• Many farmers refused to work their fields and blocked roads to markets-hoped food shortages

would raise crop prices

• Used force to prevent authorities from foreclosing farms

Democrats win in 1930

• Hoovervilles• Hooverblankets• Hooverflags

Hoover Takes Action

• Took active approach to economic troubles

• Directed federal funds into projects-Boulder Dam

• Hoped to jumpstart economy

Government Projects

• Built dams, roads, and other large projects

• Congress approved $800 million for these projects (that’s over 10 billion in today’s money)

Government Projects

• Created Federal Farm Board

• Supposed to help farmers by keeping crops temporarily off the market

Government Projects

• National Credit Corporation-give small banks loans-save from bankruptcy

• Glass-Steagall Banking Act- made loans easier to get

• Federal Home Loan Bank Act- helped farmers refinance their mortgages

Government Projects

• Reconstruction Finance Corporation- provide emergency financing to banks and other large businesses

• In first 5 months, agency loaned $805 million to large corporations

• Business continued to fail

Bonus Army

• WWI vets arrive in DC• Called themselves

Bonus Army• Came to support bill

authorizing govmt to pay WWI vets who had not been adequately compensated for wartime service

Bonus Army

• Supposed to be paid in 1945

• Wanted money immediately

• Hoover opposed legislation

• Respected vets right to peaceably assembly

Bonus Army

• B.A. built a shantytown in DC

• Senate votes down bill

• Hoover calls marchers to leave

• 2,000 refused to budge

Bonus Army

• President decided to disband B.A.

• Infantry gassed more than 1,000 people

• 2 people shot/many injured

• People outraged • Hurt Hoover’s image