(2c) The Presidency of Herbert Hoover and his response to the Depression (1929-1933)

Question 1

What were hoovers beliefs?

Answer 1

Hoover was a self-made man.

He believed in humanitarian aid & charity, but stuck to traditional conservative view of limited government intervention.

Although he did intervene more than any previous President, the measures he took were inadequate to deal with the scale of the Depression, and in some cases made things worse.

Question 2

What was Voluntarism?

Answer 2

the role of charities, states and people to help each other - not the role of direct government relief.

Question 3

What did hoover believe about the American Individualism?

Answer 3

Everyone with the right opportunities could become successful if they worked hard enough. He believed in the ideal of self help.

Question 4

What did Hoover do to combat the depression?

Answer 4

He worked tirelessly. Publicly he remained optimistic for public morale, but this was interpreted as him being out of touch with reality.

Question 5

What did Hoover blame for the depression?

How did tis inform his polices?

Answer 5

He blamed world economic conditions, such as European countries not being able to repay their debts from WW1, as the cause of the Depression in USA.

This informed his policies, which were often designed to protect the USA from international problems.

Question 6

When was the The Smoot-Hawley Tariff:

Answer 6

july 1930

Question 7

What was the The Smoot-Hawley Tariff:

Answer 7

highest tariff in US history. 40% tax on both industrial and agricultural imports. Led to a devastating fall in international trade, harming industry and agriculture further.

Question 8

What did Hoover do in june 1931 to do with War debts?

Answer 8

In an attempt to help European countries also going through economic depression, Hoover announced the suspension of paying war debts in June 1931. This did little to solve problems.

Question 9

When was unemployment relief?

Answer 9

1932

Question 10

What did the unemployment relief 1932 do?

Answer 10

secured $500,000 from Congress to help charities and relief agencies. Insufficient. Refused to give direct government aid, even in severe droughts and the Dust Bowl in South 1930-31.

Question 11

When was the Federal Home Loan Act?

Answer 11

june 1932

Question 12

What was the Federal Home Loan Act:

Answer 12

an attempt to save mortgages and stop evictions, but loans were insufficient.

Question 13

WHen was the The Reconstruction Finance Corporation (RFC)?

Answer 13

1932

Question 14

What was the The Reconstruction Finance Corporation (RFC)?

Answer 14

set up to lend up to $2 billion to banks and financial institutions. In reality, the RFC helped the largest institutions: 50% of loans went to the 7 largest banks.

Question 15

When was the Emergency Relief Construction Act?

Answer 15

1932

Question 16

What was the Emergency Relief Construction Act?

Answer 16

Set up to authorise the RFC to lend up to $1.5 billion to states to finance public works, which would provide employment. But states had to be bankrupt to qualify.

Question 17

What was the Bonus Army?

Answer 17

WW1 veterans descended on Washington to demand their war pensions early, but were moved on from their Hooverville forcibly. Hoover was blamed, and the event destroyed what was left of his public opinion.

Question 18

When was the Agricultural marketing act?

Answer 18

1929

Question 19

What did the Agricultural marketing act do?

Answer 19

Set up the Federal farm board with $500 million to deal with overproduction. They were to buy, store and eventually dispose of farm surpluses.

There would be different stabilisation boards for different produce e.g. the Grain Stabilization Corporation.

Question 20

What was the impact of the Agricultural marketing act?

Answer 20

Huge surpluses in the USA and abroad in 1931 and 1932 saw prices fall again, meaning the Board was praying above market price for the produce, therefore wasting taxpayers’ money. E.g. the Grain Stabilization Corporation bought wheat in Chicago for 80 cents a bushel, whilst the market price was 40 cents. These artificially high prices could not be sustained in the long turn,

This in turn encouraged farmers to keep producing as the Board would buy their produce, so Overproduction still happened.

Failure to account for foreign considerations.

Question 21

Why was the Agricultural marketing act needed?

Answer 21

Agriculture had not experienced the boom of the 1920s, and rural poverty was amongst the worst in the USA

Due to drop in demand after WW1, overproduction and reduction in prices led to huge wastage and 66% of farmers operating at a loss long before the financial crisis. By 1926, 17.4 farms per 1,000 were foreclosed. These problems were only exacerbated after 1929.

In addition the Dust Bowl natural disaster further damaged agricultural income and production.

Question 22

What was the impact of the Smoot-Hawley tariff?

Answer 22

Most European countries abandoned free trade - even fewer American goods were then exported (No potential to get rid of surpluses)

In 1931, the value of international trade fell by $1.2 billion. The value of US exports fell to $784 million

Question 23

What was the context around the Hawley-smoot tariff?

Answer 23

Context: Fordney-McCumber Tariff had already raised tariffs to protect American interests - European countries then raised tariffs further. Trade was already limited to due the cycle of international debt during the 1920s.

Smoot-Hawley aimed to further try and protect American interests and consumer spending