Name__Jesus Anaya____

Hoover’s Response Fails

President Hoover did not cause the Great Depression, but he struggled to
create a plan to end it. He felt that there were natural highs and lows in the
business cycle and the government shouldn’t interfere. Hoover eventually
recognized that doing nothing was not a plan and began to try and fix the
problems. One plan he tried was called Volunteerism. He asked business leaders
to voluntarily keep prices and wages at current levels. He called for the
government to simultaneously reduce taxes, lower interest rates, and create
public-works programs. The plan would help businesses have more funds to hire
workers and create products. Workers would then have money to buy products.
Hoover’s plan also asked the wealthy to give to charity. The idea was for
Americans to voluntarily join forces to fight the Depression. Finally, Hoover called
for a policy of localism. This policy asked local governments to provide more jobs
and relief measures. However, businesses cut wages and laid off workers. They
did what was best for their interests and not did not follow Hoover’s ideas. Local
governments did not have enough resources to combat the depression, and
charities ran low on money. Hoover’s economic plans failed to help Americans.
Next, Hoover decided to get the government involved and urged Congress
to create the Reconstruction Finance Corporation (RFC) in 1932. The RFC gave
loans to large businesses and banks and so they could lend money to other
businesses as well. Businesses could then hire workers and workers would then
consume more goods. This policy is know as trickle-down economics by giving
money to those at the top of the economic pyramid. However, loans to banks and
businesses were not always used as the RFC wished. They did what was best for
themselves and did not hire more workers, so this plan also failed.
The Bonus Army was a group of World War I veterans who were scheduled
to receive a payment in 1945. They asked Congress for early payment of their
bonus. Congress agreed, but Hoover vetoed the plan. He didn’t think they
needed the early payment. The Veterans then marched on Washington and
protested by setting up camps in Washington D.C. In July 1932, they rioted and
Hoover called in the troops. General Douglas MacArthur led army troops against
the veterans. Force was used and many of the veterans were hurt, some badly.
One Hoover success was the building of the Hoover Dam. Constructed on
the Colorado River, it brought jobs to the Southwest in the early 1930s. Still,
Americans were appalled at Hoover’s treatment of the veterans and handling of
the depression. He had little hope of reelection.

1. What was President Hoover’s first response to the depression?

He recognized that doing nothing was not a plan and began to try and fix
the problems. His one plan was called Volunteerism and asked business leaders to
voluntarily keep prices and wages at current levels

2. Why did the policy of localism fail?

This policy asked local governments to provide more jobs and relief measures. But
businesses cut wages and laid off workers. and this made the policy go down

3. What was the goal of the Reconstruction Finance Corporation? Did it

achieve this goal? The RFC gave loans to large businesses and banks and so
they could lend money to other businesses as well. businesses could then
hire workers and workers would then consume more goods. however, loans
to banks and businesses were not always used as the RFC wished. They did
what was best for themselves and did not hire more workers, so this plan

4. What was the Bonus Army? What did they want?

The Bonus Army was a group of world war I veterans who were scehduled to
receive payment in 1945. They wanted congress to do early payment of their
bonus, to which congress agreed.

5. What were two major reasons Hoover was unlikely to win reelection?
The first one for vetoing the plan of early payment and the building of the
Hoover Dam.