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Great Depression: Herbert Hoover's Response

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Hoover
• He succeeded Coolidge in 1929
• Emphasized that the country's growth and need to continue laissez-faire Republican strategies that had led to the booming growth of the late 20s
• Hoover thought Americans should depend on what he called their "rugged individualism", depending upon themselves to get by and not by being bailed out by others
• He proposed cutting individual income taxes
• Proposed a program of public building project to jumpstart the economy and stalled businesses.
• Gave government aid to the railroads, banks, and rural credit associations to help stabilize the financial system and he hoped the benefits would tricked down to the average American
• He remained fearful that direct aid would destroy the idea of self-help and create a permanent class of people that looked for the government for help.
• Hoover deplored government handouts since he believed that industry would ultimately prevail
Mexican Repatriation (1929)
• Combat unemployment by reducing job competition
• Reduce the strain on municipal and other government services
• Strike at those seen as people who took American jobs from tax-paying Americans
• Major targets: Texas, California, Illinois, Michigan and Colorado.
"Pump priming"
• the spending/providing of money in a way that leads to projects that lead to the creation of jobs, which in turn boosts the economy.
Attempts to help Farmers
• The Agricultural Marketing Act of 1929
o Buy up surpluses, store them, dispose of them rather than see commodity prices shift dramatically
• Federal Farm Board
o Did not have the authority to order reductions in agricultural produce
• Grain Stabilization Corporation
o Bought up wheat for 80 cents per bushel, while the world price was only 60 cents.
Attempts to help Businesses
• Davis Bacon Act (1931): required local governments to pay wages no less than the union wages on building projects
• Norris- LaGuardia Act: prevented courts from issuing injunctions to end strikes
• Hawley- Smoot Tariff (1930): enacted on of American's highest rates at about 40%.
o This backfired since exports (66%) and imports decreased (61%)
"Little Bull Market"
• in December 1930, the markets did have a slight turn upwards
The Bonus Army
• The veterans wanted their money in early 1932 instead of 1944-45
• 20,000 camped outside the capital before the "march" was broken up by the US Army.
Reconstruction Finance Corporation
• $500 million was set aside for banks, life insurance companies, buildings and loans, farm mortgage associations and railroads
• states were allocated as much as $1.5 billion for public programs