The Great Depression

Chapter 17 Section 3
Hoover Responds

Hoover
The day after Black Tuesday,
President Hoover issued a statement
industry is on a sound & prosperous
basis.
He believed the economic crisis would
be over in 60 days, trying to downplay
public fears.

 Concerned about the economy, Hoover

met with industry leaders, heads of
banks, & labor & govt. officials.
Initially industry leaders pledged not to
cut wages & keep factories open.
Unable to, long term.
Hoovers next step was to increase
public works funding (stimulus).

Too Little Too Late

Hoovers efforts only made up a small % of
jobs lost in private sector.
Hoover refused to spend the massive
amounts of money necessary to provide the
number of jobs necessary to revive economy.
He did not want to raise taxes or resort to
deficit spending during economic downturn.

 Deficits take money away from private

sector lending.
Due to the declining economy,
Republicans lost their majority in the
1930 mid-term Congressional elections.
In order to ensure money was available
for for bank lending, Hoover set up
National Credit Corporation.

 NCC did not meet the nations needs &

by 1932, Hoover asked Congress to set
up Reconstruction Finance Corporation
(RFC).
RFC loans were intended for banks and
industry, but loans were insufficient,
Depression got worse.

 Hoover was opposed to the federal

govt.providing people with relief, or money that
went to families.
By 1931, the American people were becoming
discontented and acts of revolt began to occur.
American Communist Party began holding
Hunger Marches, some became violent.
Due to high rates of foreclosure, farmers
began to take drastic actions.

The Bonus March

WWI veterans had been promised a
$1,000 bonus for their service to be
paid in 1945.
The Bonus Army (15,000) came from all
across the nation to Washington D.C. to
lobby Congress for bonus.
The marchers built a Hooverville, &
marched on the capital daily.

 House and Senate voted the bonus

down, most veterans left, but many
stayed.
Hoover ordered police and the army to
remove them by force.
Douglas MacArthur had their camp
burned.

 Hoovers treatment of the veterans and

his overall poor handling of the
Depression hurt his image.
In the 1932 election the publics
negative perception of Hoover led to his
defeat in a landslide by FDR.