Hoover Struggles with
Depression
Chapter 14,
sect 2
President Herbert Hoover tries to solve the economic
problems
1. Favors conservative philosophy:
– Believed in “rugged individualism = notion
that individuals could make a good life through perseverance
and hard work.
– Argued = federal aid to the needy
would alter the character of the
poor and create a population of listless (lazy) people living
on welfare.
– Solution = increase business
prosperity (wealth, success), which will create jobs
instead of govt interference in the economy.
2. Hoover’s Takes Action - to promote
business prosperity
–
Invited business leader to the White House = an attempt to gain voluntary
cooperation in stabilizing wages and maintaining jobs. But businesses
often forgot agreements when dealing with daily business decisions.
a.
Reconstruction Finance
Corporation (RFC) = provided loans
to key industries (banks, insurance, RR)
•
Result = RFC did support some businesses, but it did not
address the real problem = under-consumption
–
Under-consumption = Americans were unable to buy the
goods businesses produced.
b. Federal Home Loan Bank Act –
lowered mortgage rates for
homeowners and farmers to avoid
foreclosures.
c. Increased govt public works programs –
build roads, dams to create jobs for the unemployed
3.
Hoover strongly committed to
maintaining a balanced budget
–
Unwilling to spend too much federal money
–
Relief to the poor = should
come from private charities
and state and local agencies.
Result = by 1932, agencies
did not have enough money
to help all the needy.
–
4. The Patman Bill Denied
–
Bonus Army — WWI veterans go to
D.C. in 1932 to support Patman Bill – to
release bonus earlier.
Want payment of bonus
which was approved in 1924. Bonus was supposed to paid out in
1945
–
Hoover opposes bill; Senate votes bill
•
–
Most veterans leave Washington; about 2,000 stay to speak to
Hoover
Hoover disbands the Bonus Army with
force.
•
•
•
Hoover fears violence, calls on U.S. Army to disband Bonus
Army
Infantry tear gas over 1,000 people, including children; many
injured
Public is stunned, outraged by
government’s actions
Bonus Army
5. Hoover tries to encourage public
confidence
–
Blamed the “natural business
cycle” = economic problems were part of the
normal “ups and downs” of the business cycle and
that prosperity would soon return.
6. Election of 1932 = Franklin D.
Roosevelt wins
–
Hoover lost to Franklin D. Roosevelt who offered a
“New Deal” to Americans which offered a liberal
alternative to both Hoover’s conservative policies
and the radical approaches of socialism and
communism.
Hoover video = 5 min
What Should Be Done About
the Great Depression?
In this activity, you will assume the
role of an economist charged with
advising Congress to respond to
four key economic problems
(overproduction of goods, unequal
distribution of wealth, high
unemployment, and massive poverty)
LEFT-SIDE
What should be done about the Great Depression?
1.
Assume the role of an economist.
2. Read “Economic Briefing”
–
identify facts you believe to be important.
3. Read “Critical-Thinking Questions.”
–
–
Select one solution to the problem.
State Why? - using facts.
4. Find match (2-3) on your side of the class.
a)
b)
c)
Group must come to a consensus
Identify “letter” selected as a group
State why the group selected solution during presentation.
5. Share decision with the class.