hoover's response to the great depression
The new hardships that people faced were not always immediately apparent; many communities felt the changes but could not necessarily look out their windows and see anything different. Consumer investment and spending dropped forcing industries to halt production and fire workers. However, Hoover's response to the crisis was constrained by his conservative political philosophy. Between 1929 and 1933, industrial production fell 47%, GDP declined by 30% and unemployment skyrocketed to 20 percent. At least one death occurred as a direct result of these protests before they waned following the election of Franklin Roosevelt. The 1920s were a period of optimism and prosperity – for some Americans. morning, as investors tried to get out of the market and book profits. One week later, sixty thousand mourners attended the public funerals of the four victims of what many protesters labeled police brutality. Life for all rural Americans was difficult. Companies fired workers and tore down employee housing to avoid paying property taxes. Nevertheless, Hoover delivered a radio address on Friday in which he assured the American people, “The fundamental business of the country . The connection between the crash and the subsequent decade of hardship was complex, involving underlying weaknesses in the economy that many policymakers had long ignored. Banks, facing debt and seeking to protect their own assets, demanded payment for the loans they had provided to individual investors. As the depression worsened, he signed legislation for public works projects and increased government spending. What was President Herbert Hoover's response to the Great Depression? Firms were already hit domestically and saw their sales drop in international markets. Instead, the administration decided to leave the relief work to volunteer organizations and charities, the issue was that these charities also saw their donations dwindle. • American society during the Depression: unemployment; farmers; businessmen; Hoover’s responses and unpopularity; Roosevelt's election as president. When the Dow Jones Industrial Average lost another 13 percent of its value on Monday morning, many knew the end of stock market speculation was near. Banks faced huge losses with little in cash reserves, due to the lowering of the amount required by banks to be kept safe in vaults by the Federal Reserve. As the firemen turned hoses onto the protestors, the police and security guards opened fire. At the outset of World War I, he led the food relief effort in Europe, specifically helping millions of Belgians who faced German forces. Led by Milo Reno, this organization held significant sway among farmers in Iowa, Nebraska, Wisconsin, Minnesota, and the Dakotas. Among their demands, the association sought a federal government plan to set agricultural prices artificially high enough to cover the farmers’ costs, as well as a government commitment to sell any farm surpluses on the world market. Hoover’s campaign was based on continuing the policies and prosperity of the previous Republican administrations of Warren Harding and Calvin Coolidge that would, according to a GOP campaign circular, put a “chicken in every pot and a car in every garage”. One of the most notable protest movements occurred toward the end of Hoover’s presidency and centered on the Bonus Expeditionary Force, or Bonus Army, in the spring of 1932. But, during the Great Depression, laissez-faire economic policies weren't successful. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. U.S. History (Check, Please! Rumors spread of investors jumping from their office windows. As the effects of the crash continued, however, the results became more evident. Hoover's political and ideological philosophy was to remain true to the capitalist, traditional economic values held for years by Americans. Congress pushed for a more direct government response to the hardship. that drastic action was necessary if he had to save his presidency and the nation. Eventually, thousands of banks closed their doors after losing all of their assets, leaving their customers penniless. Families adapted by growing more in gardens, canning, and preserving, wasting little food if any. Moreover, the depression was, Consumer investment and spending dropped forcing industries to halt production and fire workers. To put this in context, a trading day of three million shares was considered a busy day on the stock market. Hoover was at the wrong place at the wrong time. Unemployment tripled, from 1.5 million at the end of 1929 to 4.5 million by the end of 1930, as shown in Figure 8-2. Poor income distribution among Americans compounded the problem. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment. Instead, it assisted state and private relief agencies, such as the Red Cross, Salvation Army, YMCA, and Community Chest. This scenario meant that there were no new buyers coming into the marketplace, and nowhere for sellers to unload their stock as the speculation came to a close. While factory workers may have lost their jobs and savings in the crash, many farmers also lost their homes, due to the thousands of farm foreclosures sought by desperate bankers. Anticipating a short downturn and living under an ethos of free enterprise and individualism, Americans suffered mightily in the first years of the Depression. “helped lay the groundwork for a broader restructuring of the government’s role in many sectors of American life, a restructuring known as the New Deal.”, Even Roosevelt’s advisors grudgingly acknowledge that most of the features of Roosevelt’s rescue package for the economy, popularly called the, “Hoover was the wrong man for the job, at the. President Hoover was elected in 1928 at the height of the U.S economy. In 1931, Hoover formed the President’s Organisation of Unemployment Relief (POUR) which assisted state and private charities such as the Red Cross and Salvation Army in coordinating relief programs and forming employment councils which tied the unemployed to job opportunities. And yet, for many children living in rural areas where the affluence of the previous decade was not fully developed, the Depression was not viewed as a great challenge. Hoover was born into poverty, made his way through college at Stanford University, and eventually made his fortune as an engineer. He left office with one of the lowest approval ratings of any president in history. is on a sound and prosperous basis.”. Hoover was a conservative Republican who believed in limited Government intervention and letting the natural process of supply and demand ensure in the market. The situation was exacerbated by the inability of borrowers to pay back the investment loans. Subsistence farming allowed many African Americans who lost either their land or jobs working for white landholders to survive, but their hardships increased. answer choices . Since no safety provisions existed at that time that guaranteed the safety of deposits, millions saw their life savings disappear. The stock market had kept rising as more and more people piled the acquired money into stocks, buying into the rampant belief that the market would only go up. The Great Depression 1. On December 8, he addressed Congress and proposed multiple programs to aid the economy which Historian David Kennedy has referred to as Hoover’s second program or as others called it Hoover’s New Deal. As the 1932 election rolled in it was evident that Hoover was going to lose the election, running against Democrat Nominee. The crash of 1929 did not occur in a vacuum, nor did it cause the Great Depression. By 1932, unemployment among African Americans reached near 50 percent. https://www.encyclopedia.com/economics/encyclopedias-almanacs-transcripts-and-maps/glass-steagall-act-1932, https://www.austincc.edu/lpatrick/his2341/tragic.html, https://www.federalreservehistory.org/essays/glass_steagall_act, https://www.britannica.com/story/causes-of-the-great-depression, https://www.britannica.com/biography/Franklin-D-Roosevelt/The-first-term#ref23944, httphttps://onlinelibrary.wiley.com/doi/full/10.1111/jhis.12003s://millercenter.org/president/hoover/campaigns-and-elections, https://www.theatlantic.com/politics/archive/2011/08/happy-birthday-herbert-hoover-the-lost-legacy-of-a-hated-president, Analyzing President Hoover’s Response to the Great Depression, that would, according to a GOP campaign circular, put a “, “The fundamental business of the country is on a sound and prosperous basis.”, Before the crash on Black Thursday, the value of the US stock market had nearly doubled over the course of 18 months. This act authorized the RFC to expand beyond loans to financial institutions and allotted $1.5 billion to states to fund local public works projects. . In the first three minutes alone, nearly three million shares of stock, accounting for $2 million of wealth, changed hands. But Hoover was stubborn in his refusal to give “handouts,” as he saw direct government aid. “A voluntary deed,” he repeatedly commented, “is infinitely more precious to our national ideal and spirit than a thousand-fold poured from the Treasury.”. Finally, one of the most important factors in the crash was the contagion effect of panic. 1. While well intended, these programs maintained the status quo, and there was still no direct federal relief to the individuals who so desperately needed it. As the effects of the Great Depression worsened, wealthier Americans had particular concern for “the deserving poor”—those who had lost all of their money due to no fault of their own. How did religion play a part in the 1928 presidential election? As Americans bore witness to photographs and newsreels of the U.S. Army forcibly removing veterans, Hoover’s popularity plummeted even further. In the 1920s, this was not the case. For most Americans, the crash affected daily life in myriad ways. The Empire State Building itself stood half empty for years after being completed in 1931. Farmers largely did not experience the widespread prosperity of the 1920s. Throughout the Great Depression, he donated an average of $25,000 annually to various relief organizations to assist in their efforts. But once the panic began, it spread quickly and with the same cyclical results; people were worried that the market was going down, they sold their stock, and the market continued to drop. Mar 27, 1929. Hoover, despite being cast as uncaring was the only President besides John F. Kennedy refused his salary as President, and annually contributed $25,000 to private charities. Historically, markets cycled up and down, and periods of growth were often followed by downturns that corrected themselves. The recession that started the Great Depression began in August 1929. President Woodrow Wilson subsequently appointed him head of the U.S. Food Administration to coordinate rationing efforts in America as well as to secure essential food items for the Allied forces and citizens in Europe. Historian David Kennedy wrote that Hoover’s 1932 Second Program. Moreover, the depression was prolonged by the passing of the Smoot - Hawley Tariff Act (1930) by Congress. Smoote Hawley Tariff Act This Act raised import taxes, which was intended to increase American trade. Herbert Hoover was sworn in as the President of the United States on March 4, 1928, after defeating Democrat nominee Al Smith in a landslide election. In 1900, he coordinated relief efforts for foreign nationals trapped in China during the Boxer Rebellion. Some wives and mothers sought employment to make ends meet, an undertaking that was often met with strong resistance from husbands and potential employers. This measure led to retaliation from foreign countries especially from Europe and they rose their own tariffs on their American imports, the American economy was hit back and it explains why Hoover's policy failed. Even for those who managed to keep their farms, there was little market for their crops. He increased infrastructure to create jobs. Hoover, like many others at the time, thought and hoped that the country would right itself with limited government intervention. For much of the 1920s, the public felt confident that prosperity would continue forever, and therefore, in a self-fulfilling cycle, the market continued to grow. and charities, the issue was that these charities also saw their donations dwindle. First, the program only lent money to banks with sufficient collateral, which meant that most of the aid went to large banks. Also, Hoover's take on the issues at hand were passive, and as a result, many people blamed Hoover for the increasing depression. In 1929 he said, “Any lack of confidence in the economic future or the strength of business in the United States is foolish.” In 1930, he stated, “The worst is behind us.” In 1931, he pledged federal aid should he ever witness starvation in the country; but as of that date, he had yet to see such need in America, despite the very real evidence that children and the elderly were starving to death. His economic policies would have been great if they would have happened earlier in our history. Roosevelt compared Hoover’s Presidency to the Four Horsemen of Apocalypse: Destruction, Delay, Despair, and Doubt and charged that the Federal Government was directly responsible for ensuring the welfare of the American people. In keeping with Hoover’s distaste of what he viewed as handouts, this organization did not provide direct federal relief to people in need. Several banks, including deposit institutions that originally avoided investment loans, began to offer easy credit, allowing people to invest, even when they lacked the money to do so. A brief downturn in the market on September 18, 1929, raised questions among more-seasoned investment bankers, leading some to predict an end to high stock values, but did little to stem the tide of investment. A: Religion played a massive part in the 1928 presidential election. View The Great Depression _ Hoover's Response.docx from ENGLISH 7781 at Felix Varela Senior High School. Whereas Europeans might need assistance, such as his hunger relief work in Belgium during and after World War I, he believed the American character to be different. These policies reformed the way in which the Federal Government responds to an economic crisis, but besides the Public Works Administration, none of the policies improved the condition of American workers. As the financial markets collapsed, hurting the banks that had gambled with their holdings, people began to fear that the money they had in the bank would be lost. In 1932, New York City schoolteachers also joined forces to try to help; they contributed as much as $250,000 per month from their own salaries to help needy children. Automobile factories that employed most of the workers in urban areas laid off thousands and were forced to close. An executive order was signed that temporarily halted immigration and created a Public Works Administration to coordinate and expand infrastructure projects. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”. Discuss how Hoover's initial conservative response to the depression failed 2. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. Parents often sent children out to beg for food at restaurants and stores to save themselves from the disgrace of begging. Unable to repay these debts, the Allies looked to reparations from Germany and Austria to help. He created programs for putting people back to work and helping beleaguered local and state charities with aid. It is bright with hope.” Most Americans shared his optimism. As the summer of 1929 came to a close, Hoover remained a popular successor to Calvin “Silent Cal” Coolidge, and all signs pointed to a highly successful administration. that a President had ever undertaken in response to a recession. Herbert Hoover and The Great Depression Herbert Hoover was the United States 31st president and after months of him being head in office, the stock market crashed and the nation fell into “The Great Depression”.Hoover’s intentions were good because he tried to do all he could to recover the economy from it’s downfall, but he failed. The nation’s 31st president became the patron saint of failure in office after his inept response to the Great Depression led to his landslide defeat in 1932, shattered the power of the era’s conservative ideology, and made him a political whipping boy for decades to come. People with less money to buy goods could not help businesses grow; in turn, businesses with no market for their products could not hire workers or purchase raw materials. Many men derided and criticized women who worked, feeling that jobs should go to unemployed men. Several women found employment in the emerging pink collar occupations, viewed as traditional women’s work, including jobs as telephone operators, social workers, and secretaries. This was partly due to Americans’ inability to weather market volatility, given the limited cash surpluses they had on hand, as well as their psychological concern that economic recovery might never happen. But Hoover’s moderate policies, based upon a strongly held belief in the spirit of American individualism, were not enough to stem the ever-growing problems, and the economy slipped further and further into the Great Depression. This was in part due to the Federal Reserve lowering the limits of cash reserves that banks were traditionally required to hold in their vaults, as well as the fact that many banks invested in the stock market themselves. Hoover's Response to the Great Depression Hoover's Legacy The country’s gross national product declined by over 25 percent within a year, and wages and salaries declined by $4 billion. We want to see more and more of them insured against death and accident, unemployment and old age,” he declared. Hoover's image suffered when he ordered the forced removal of 2, 000 members of the Bonus Army who had built a shantytown within sight of the Capitol building. Some campaigned to keep companies from hiring married women, and an increasing number of school districts expanded the long-held practice of banning the hiring of married female teachers. The Allies owed large amounts of money to U.S. banks, which had advanced them money during the war effort. This was largely due to the Federal Reserve keeping interest rates low throughout the 1920s. In response to the Teapot Dome Affair, which had occurred during the Harding administration, he invalidated several private oil leases on public lands. A “Hoover flag” was a pants pocket—empty of all money—turned inside out. The crash, which took place less than a year after Hoover was inaugurated, was the most extreme sign of the economy’s weakness. Farmers also organized and protested, often violently. Sell!” drowned it out. Governor Franklin D. Roosevelt was the first to institute a Department of Welfare in New York in 1929. The event set the tone for worsening labor relations in the U.S. In New York City in 1932, family allowances were $2.39 per week, and only one-half of the families who qualified actually received them. Women’s lives, too, were profoundly affected. 412 Chapter 11 The Great Depression Begins Section 3 Guide to Reading Big Ideas Government and Society President Hoover’s ideas about government shaped his response to the Great Depression, making the government slow to respond. Keynes's theory argues markets are unstable and the government can stabilize it through intervention in the form of creating demand for goods and services. In an effort to forestall a much-feared panic, leading banks, including Chase National, National City, J.P. Morgan, and others, conspired to purchase large amounts of blue chip stocks (including U.S. Steel) in order to keep the prices artificially high. The ensuing raid proved catastrophic, as the military burned down the shantytown and injured dozens of people, including a twelve-week-old infant who was killed when accidentally struck by a tear gas canister (see Figure 8-6). Cities struggled to collect property taxes and subsequently laid off teachers and police. Unfortunately, the, The move by leading banks on Black Thursday, only worsened the condition, panic ensued on. He came into office having won a landslide victory and believing the boom of the 1920s would continue. While accepting the Republican Party’s presidential nomination in 1928, Hoover commented, “Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God be in sight of the day when poverty will be banished from this nation forever.” In the spirit of normalcy that defined the Republican ascendancy of the 1920s, Hoover planned to immediately overhaul federal regulations with the intention of allowing the nation’s economy to grow unfettered by any controls. Hoover simply did NOTHING to help solve the depression. But not Herbert Hoover. Housewives who speculated with grocery money, bookkeepers who embezzled company funds hoping to strike it rich and pay the funds back before getting caught, and bankers who used customer deposits to follow speculative trends all lost. The hardships of the Great Depression threw family life into disarray. Small town and rural banks got almost nothing. In 1930–1931, it attempted to pass a $60 million bill to provide relief to drought victims by allowing them access to food, fertilizer, and animal feed. In most cases, relief was only in the form of food and fuel; organizations provided nothing in the way of rent, shelter, medical care, clothing, or other necessities. When they finally reached the gates of the plant, protestors faced more police and firemen, as well as private security guards. Stock trades happened at such a furious pace that runners had nowhere to store the trade slips, and so they resorted to stuffing them into trash cans. Working-class Americans saw their wages drop: Even Henry Ford, the champion of a high minimum wage, began lowering wages by as much as a dollar a day. After World War I, both America’s allies and the defeated nations of Germany and Austria contended with disastrous economies. Reading his words after the fact, it is easy to find fault. Just prior to the stock market crash, he even proposed the creation of an old-age pension program, promising fifty dollars monthly to all Americans over the age of sixty-five—a proposal remarkably similar to the social security benefit that would become a hallmark of Roosevelt’s subsequent New Deal programs.