America is Ready for a Change

Journal # 106

• How did President Hoover respond to the Great Depression?

Hoover’s Strategy

• • • After market crash, insisted confidence was needed to fix market.

Blamed it on world-wide economic problems and beyond anyone’s control.

Always insisted conditions would improve…

Voluntary Action Fails

• • 1929 ( before the crash) Congress passed the Agricultural Marketing Act.

– Goal was to establish a Federal Farm Board to stabilize the crop prices – Huge failure Government began spending more on public works ( Hoover Dam)

Hawley-Smoot Tariff

• • • • 1930 Highest import tax in history European nations too raised their tariffs – slowdown in int’l trade.

Hoover suspended the Allies’ loan payments – Too late

Reconstruction Finance Corporation • • • • Gave gov’t credit to a number of institutions – Large industries (R.R. and insurance companies) Lent $$ to banks so they could extend loans Funded through the United States Treasury During its years of existence, the RFC borrowed $51.3 billion from the Treasury, and $3.1 billion from the public.

– *existed through WWII*

Home Loan Bank Act

• • • Discounted mortgage rates Goal= prosperity at the top would help the economy as a whole Angered people b/c they believed the gov’t was helping bankers, not people

Hoover’s Support Declines Further

• • As the nation slipped deeper into the Depression, Hoover stood by his belief in private enterprise He was against public welfare and relief programs at the federal level  should be up to states.

John Maynard Keynes

• • • British economist Massive gov’t spending would help a collapsing economy & encourage private spending and production.

General Theory of Employment Interest and Money

The Bonus Army

• • • • Summer of 1932, 40,000 jobless WWI vets and their families marched on D.C.

Wanted immediate payment of a pension bonus promised to them for payment in 1945 House of Reps agreed; Senate said no Few thousand stayed living in shacks

Bonus Army attacked by US Army

• • • • Hoover called in federal troops Gen. Douglas McArthur used force to drive marchers out of D.C.

Veterans faced their own country’s army – Attacked with guns, tanks & tear gas.

Hoover was horrified and accepted responsibility

20

th

Amendment

• • • Called the Lame Duck Amendment Shortened the time between the day a president was elected and the day he took office.

Moved from March 4 th to January 20 th

Election of 1932

• • • Franklin Delano Roosevelt vs. Herbert Hoover Battle btwn one man who did not think the federal gov’t should try to fix people’s problems and one who felt the people needed the help of the gov’t FDR Won Election by 7 million pop. votes – 88.9% of electoral vote

Famous Inaugural Address

• “So first of all let me assert my firm belief that the only thing we have to fear is fear itself.” » Franklin D. Roosevelt, 1933