Chapter 24.3 Hoovers Policies Objectives Discuss how Hoovers initial conservativeresponse to the depression failed. Explain the changes in the Presidentspolicies as the crisis continued. Describe how Americans reacted toHoovers relief programs. Essential Question: Why did Herbert Hoovers policies fail to solve the countrys economic crisis? As the Great Depression spread misery acrossAmerica, Herbert Hoover struggled unsuccessfullyto respond to the nations problems. As a result of Hoovers failed response, in Americans would turn to a new leader andincreased government intervention to stop thedepression. Herbert Hoover did not cause the Great Depression, but Americans looked to him to solve the crisis.
He tried a number of different approaches, but in the end he failed to discover the right formula for stopping the crisis. Like most economists of the day, he believed that up and down swings in the economy were a natural part of the business cycle. It was thought that strong businesseswould weather storms without the supportof the government. At the start of the economic downturn, Hoover took a hands-off approach. 5 Hoover saw that he must do something:
Called for tax cuts, lower interest rates, and public works Asked businesses to keep wages, employment, and prices at current levels Asked wealthy to donate more money to charity 6 But volunteerism failed:
Towns and states didnt have the necessary resources to deal with the depression. Hoover did not support direct federal aid to individuals. Hoover put his faith in localism, a policy whereby problems are best solved at the local and state levels. 7 The RFC gave billions of dollars to banks and large businesses.
The idea was that theywould lend to, andinvest in, strugglingbusinesses who wouldhire workers and thusend the depression. The RFC failed whenbusinesses did not hire more workers. In 1932, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). The RFC employed a policy known astrickle down economics. 8 One policy that didsucceed was theconstruction ofBoulder Dam (laterrenamed HooverDam) across theColorado River. Started in 1930, thehuge dam providedpower for millionsand irrigation forfarm land, and putthousands to work. Many grew disillusioned during the Great Depression.
Some blamed Hoover and some blamedcapitalism. Some were World War I veterans who wanted abonus that was promised to them. In 1932, those veterans formed the Bonus Armyand marched on Washington. Hoover ordered General Douglas MacArthur to remove the veterans
Hoover orderedGeneral DouglasMacArthur toremove the veterans.He used tear gas,cavalry, tanks, andtroops with fixed bayonets. Press photos oftroops usingexcessive forceangered theAmerican public. 20,000 veterans set up camps and occupied vacant buildings. In July, police tried to evict them and riots erupted. The eviction of theBonus Armydoomed Hooversbid for re-election.
Americans wereready for newleadership and agreater role for thegovernment insolving problems.