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Ch 14-3. Hoover’s response to the depression. Hoover’s philosophy. When the stock market crashed, Hoover tried to caution the nation by telling them the nation was on sound footing.
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Ch 14-3 Hoover’s response to the depression
Hoover’s philosophy • When the stock market crashed, Hoover tried to caution the nation by telling them the nation was on sound footing. • Hoover’s advisor Andrew Mellon-advised Hoover not to do anything and let the economy fix itself. “let the system purge itself of the rottenness” Mellon
Hoover’s philosophy • Hoover disagreed with Mellon and his approach to no action. • He believed the role of government was to foster cooperation between competing groups and interests. (business and consumers, banks) • Rugged individualism- Hoover’s belief that people should succeed through their own efforts. Discussion Was Hoover correct? Should government have been more involved?
Steps taken by Hoover • Hoover called for a meeting of key business leaders, banks and labor union leaders. • He urged organizations to work together to not increase the problem. • Hoover created an organization to help private charities in assisting those in need
The election of 1930 • Was a midterm election ( a report card for the president in office) • American voters reacted strongly against Hoover by giving control of the house of representatives and a decrease in senate seats.
Hoover’s changing approach • Hoover realized that he was in danger of not being reelected given the current crisis so he became more aggressive in his approach. • He began projects such as the Boulder Dam construction, the Federal Farm Board, the National Credit Corporation, the federal Home Loan Bank Act and the Reconstruction Finance corporation.
The Boulder Dam • A dam built on the Colorado River dividing Arizona and Nevada. • It created jobs for hundreds as well as creating a public works project.
The Federal Home Loan Bank Act • A plan to lower mortgage rates for homeowners. • This plan also allowed farmers to refinance their farms and avoid foreclosure.
Reconstruction Finance Corporation Act • Hoover’s most ambitious act that authorized emergency funding to banks. • Life insurance companies, railroads and other businesses also received government aid. • In total over 2 Billion dollars went out to businesses with the intent of promoting expansion. Sound famiilar??????
Hoover’s downfall -Hoover’s critics claimed he was too slow in responding to the Depression. -The Bonus Army- In 1932, Congressmen Wright Pattman advocated that WWI veterans receive the $500.00 bonus they were promised. -The veterans gathered in Washington while congress debated the issue it failed and 2,000 of the veterans refused to leave the city. (tents)
The Bonus Army • When the veterans refused to leave, Hoover summoned Douglas Macarthur to to remove them. • Violence broke out and the nation was horrified that veterans would be treated so poorly. “I’ll hardly have any trouble getting elected now” Franklin D. Roosevelt