Key Republican Party Policies during the 1920s
Laissez-faire- lack of involvement in the economy. Small state.
Deregulation of business and the stock markets
Hoover's Response to the Depression
At the start - very little. Believed that it was simply a temporary dip in the economy
Smoot Hawley Tariff Act, 1929 - raised import taxes - was meant to increase American trade but destroyed businesses relying on imports as well as leading to retaliatory taxes on American goods from other countries
He called business leaders to the White House to urge them not to lay off workers or cut wages
In 1931 he backed creation of the Reconstruction Finance Corporation (RFC, established 1932) to give loans to businesses etc.
Defenses of Hoover
1. Great Depression was unprecedented in size - effects could not be predicted and so Hoover was not to blame
2. Hoover firmly believed that it was simply an economic blip and would right itself
3. Hoover simply followed the laissez faire policies of the Republican party
4. Was not in charge during the whole of the 1920s and so was not responsible for the deregulation that caused the crash
5. Believed that the wealthy should be responsible for creating businesses and jobs
Criticisms of Hoover
1. The longevity of the Depression became clear by 1932 - Hoover should have began to create a solution
2. Hoover did nothing to help to solve the humanitarian issues raised by the Depression - in fact, the Bonus Marchers were treated like terrorists - this damaged public opinion of Hoover massively
3. Laissez faire was not aiding economic recovery yet Hoover did not attempt to alter these policies
4. Hoover only attempted to aid business through the RFC
5. Hoover opposed direct federal relief payments to individuals - opposite to the Keynesian policies followed by Hoover
Conservative Views on Hoover
Too much interference in the economy: RFC, tax increases.
Hoover stayed fairly distant from regulation, however
Marxist Views on Hoover
Hoover didn't do enough - policies were still markedly Republican and Conservative.