Topic 5, Lesson 8: Why did Hoover fail to solve the Great Depression?

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover’s Beliefs

Hoover’s response to the Great Depression aligned with the consensus at the time

1. Hoover believed the economy would fix itself

2. Volunteerism - the idea that businesses and people would do what was right for the economy on their own

He called businesses, labour union leaders and bankers to the White House to talk.

Asked businesses not to sack employers or cut wages

Asked labour union leaders not to take strike action

3. Hoover eventually realised that volunteerism was not working

By this point, Hoover’s response was too little, too late.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoovervilles

By 1932, Hoover was being ridiculed across the United States.

His name became a term of abuse.

‘Hoovervilles’ - shanty towns set up on the edge of the cities

‘Hoover blankets’ - newspapers that homeless people used to cover themselves

‘Hoover shoes’ - newspapers used to plug holes in the soles of shoes

A British historian, Paul Johnson, has suggested that Hoover should not have done more, but rather less, and that the economy would have righted itself.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover and Rugged Individualism

Hoover wrote about his belief in ‘Rugged Individualism’ in his book “American Individualism” (published in 1922)

Hoover himself was a self-made man and believed everyone could achieve what he had through hard work.

“A voluntary deed is infinitely more precious to our national ideal and spirit than a thousand deeds poured from the Treasury”

Hoover believed individual states should sort the depression not the federal government.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover and Volunteerism

Hoover initially relied on “volunteerism” to solve the Great Depression.

He invited business leaders to the White House and asked them not to sack workers or cut wages.

He asked Labour Unions not to strike.

Hoover asked charities and governors of the states to provide relief at a local state level.

Hoover’s greatest challenge was that he could never abandon his fundamental beliefs (in volunteerism, rugged individualism and laissez faire) and accept a greater role for the federal government.

Convinced the economy would right itself.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover and Agricultural Policy

Agricultural Marketing Act (1930) - enabled the government to lend money to farmers

Grain Stabilisation Corporation (introduced in 1930) - bought wheat so that it could be stored until the price went back up - In practise, prices continued to plunge

Hawley-Smoot Tariff Act (1930) - increased import duties on foreign goods - In practise, other countries retaliated by raising their own tariffs and refusing to trade with the US.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover and Industrial Policy

Hoover tried to balance the budget by reducing federal spending and opposing relief schemes that were suggested by Congress.

Instead, he relied on voluntary action.

Volunteerism - In 1932, Hoover gave an additional $500 million to help various agencies to provide relief.

Reconstruction Finance Corporation - Set up in January 1932. Lent up to $2 billion to rescue banks, insurance companies, railroad companies and construction companies.

The Home Loan Bank Act (1932) - stimulated home building and ownership. 12 regional banks were set up with a fund of $12 million.

Topic 5, Lesson 7: Why did Hoover fail to solve the Great Depression?

Hoover Histiography

Traditional View:

Hoover’s response to the Great Depression was too little, too late.

Recent Historians:

Have been more sympathetic toward Hoover, believing he was a victim of his own beliefs and of a terrible crisis.

Hoover’s achievements were reassessed in the 1980s, during the presidency of Ronald Reagan (and the premiership of Margaret Thatcher), who followed similar conservative policies.