The Hoover Response

Responding to a Worldwide Depression

• President Hover believed that prosperity would return

• Advised voluntary action and restraint

• Urged businesses to keep wages high, unions not to strike, and charities to increase efforts

• Didn’t ask for legislative action

Responding to a Worldwide Depression

• Hawley-Smoot Tariff (1930) – Highest tariff in history (31-49%)

• Satisfied business leaders, Europe retaliated• Deepened depression

Responding to a Worldwide Depression

• Dawes Plan couldn’t continue• Hoover proposes debt moratorium• Britain and Germany accept, France doesn’t

Responding to a Worldwide Depression

• Most programs too little, too late

• Federal Farm Board – created before crash– Powers enlarged– Helped stabilize

prices– Too modest to deal

with continued overproduction

Responding to a Worldwide Depression

• Reconstruction Finance Corporation (RFC) – 1932 to prop up railroads, banks, life insurance companies, other financial institutions

• Benefits would “trickle down”• Democrats said it would only help

the rich

Responding to a Worldwide Depression• 1932 - Millions of unemployed workers and farmers decided to

take direct action– Farm unrest – farmers banded together to stop foreclosures and

evictions• Tried to stop all grain shipments, got violent

– Bonus Army – WWI vets wanted their bonuses early. • Went to DC, camped out at the capitol• Congress didn’t pass the bill• 2 vets killed by police• Gen. MacArthur sent out with tanks and teargas