Hoover

Question 1

Three of Hoovers beliefs?

Answer 1

1) ‘rugged individualism’
2) unemployment relief is a matter of private charity
3) A relief programme would imbalance his budget & create a permanent class of dependants.

Question 2

What was the RFC?

Answer 2

re constructive finance corp set up in 1932 to lend money ($2 billion) to ailing banks, rail roads, insurance companies and credit unions

In turn would be able to support businesses, who would then be able to employ more workers.

Question 3

What was the emergency relief and construction act?

& and its problems?

Answer 3

Empowered the RFC to lend state governments $1.5 billion for public works

Problems;

1) To be eligible states had to declare bank bankruptcy
2) Work undertaken ha to produce revenues that would eventually pay off the loans

Question 4

Why did the RFC fail?

Answer 4

1) $41 million was loaned to only three institutions
2) 7% of borrowers got over half the money in two years
3) Central republican national ban alone received $90 million

Question 5

What was balancing the budget?

Answer 5

The government had less money because it obtained less tax as a result of falling personal and corporate income. Therefore government increased taxes.

Question 6

Act that gave loans to building societies & its problems?

Answer 6

1) Home loan bank act

2) maximum loan was 50% of the value of the property and largely ineffective in the situation.

Question 7

What was the federal farm board?

Answer 7

Created to bolster grain, cotton and other farm prices.

Question 8

What was the act which raised import duties on industrial and agricultural goods?

Answer 8

1930 Hawley Smoot Tariff act

import duties 40%

Question 9

What was repudiating the war debts?

Answer 9

Germany for example suspended their reparation payments and were threatening to not pay the loans back.

USA proposed a moratorium if its debts for 18 months, if other countries would do the same.

Question 10

How did the Hawley Smoot Tariff act cause greater problems?

Answer 10

Foreign countries took the same action on imports from the USA.

Disastrous effect on world trade as few American goods were being exported.

From 1929-30 the value of international trade fell by $500 million, then fell to only $1.2 billion.

Led to repudiating of war debts.