Hoover's Policies & The Depression Flashcards
Date : Agricultural Credit Act
What did it set up?
1929
Farm Labour Board
How much funding did Agricultural Credit Act receive?
What was its major limitation
$0.5billion
no export subsidies or direct aid
Successfulness of Agricultural Credit Act
Farm prices down 50% 1929-32
77% of farms making losses
When was the Wheat and Cotton Stabilisation Corporation set up?
Action
Limitations
1930
bought and stored farm surplus (e.g 3million cotton bales)
didn’t solve overproduction - if anything stimulated
too fiscally conservative to continue
Date: Dust Bowl Rain Loan
1930-31
Fiscal provisions of Dust Bowl Rain Loan
Why was this harmful?
$49million
Increased farm debt since prices remained low
Date of H-S Tariff
% tariff
Consequence
1930
42% (up from 38% F-M)
couldn’t export way out of the Depression
decline in world trade by 2/3 by 1932
Decline in world trade due to Britain leaving gold standard and H-S Tariff
Trade in 1932 was 1/3 of 1929 value
Date of introduction of war debt moratorium
How long did it last?
What was this in response to?
June 1931
18months
Hoover’s perception of the ‘international’ crisis
Hoover’s role in H-S Tariff
Not solely responsible
Led a deeply protectionist Republican congress
Unemployment;
1929
1930
1931
1933
1929 - 3%
1930 - 8.5%
1931 - 16%
1933 - 25%
Peak year for banking closures, how many?
1931
2,300 bank closures
When did Britain leave the gold standard?
Why did Britain leave the gold standard?
September 1931
To protect the value of the pound
When did USA increase the rediscount rate?
What was this change?
What type of measure was this?
October 1931
1.5% –> 3%
deflationary measure
What was the change in rediscount rate a reaction to?
Britain leaving the gold standard
wanted to stem flow of gold out of the US
What did the change in rediscount rate in October 1931 result in?
exacerbated liquidity crisis
made in increasing difficult to access credit
When was the Davis Bacon Act introduced?
1931
What did the Davis Bacon Act mandate?
What did this do for the composition of the workforce?
federally funded construction projects to pay prevailing wage
shut out migrants / non-whites
summoned business leaders to agree not to decrease wages (VOLUNTARISM)
Why was voluntarism inherently bad?
maintaining wages meant decreasing the number of people employed
When was the national credit corporation set up?
What was it financed? What was it assigned to do?
1931
$0.5billion to purchase dubious assets from banks
How much of its budget did the National Credit Corporation use?
Why was this?
What did this lead to?
only $10million of $0.5billion
inherent attitudes of fiscal conservatism
banks continue to collapse
When was the RFC set up?
How much was it financed?
Jan 1932
$2billion
Was the RFC financed more than the National Credit Corporation? What were they both funded?
RFC > NCC
RFC = $2billion
NCC = $0.5billion
Funded for each agency;
RFC :
NCC :
ACA :
ERAC Act : (construction and relief separate)
RFC : $2billion
NCC : $0.5billion
ACA : $0.5billion
ERAC Act : $1.5billion for construction
$300million for relief
Criticism of the spending done by the RFC X2
2/3 of the first $60million goes to only 3 banks
90% goes to small / medium banks
Why was it a problem that 90% of the RFCs funded went to small / medium banks?
no reform
banks should not have been reopened
Why was the spending by the RFC largely ineffective?
banks saw it as a means of preserving their own capital
not for purpose of loaning to increase purchasing power of consumers
When was the Bonus Marchers march?
How did Hoover react?
1932
General MacArthur sent to forcibly remove veterans
How many Veterans at 1932’s Bonus Marchers march?
20,000
When was the Revenue Act which was the largest peacetime tax rise?
What had Hoover done which contradicted this?
June 1932
Had decreased taxes in 1929
What did 1932’s revenue act involve?
increase in number of people paying taxes
increase in lowest rate
(from 1% –> 4%)
increase in top rate
(from 25% –> 63%)
Why was the 1932 Revenue Act counterproductive?
Was limiting people’s purchasing power more
Why could the government do little in the way of taxation?
Mellon had reduced taxes so drastically during the 1920s - so would have been of little stimulation
What did the RFC and Emergency Relief and Construction Act show?
The limits of Hoover’s willingness utilise the fiscal resources of the government to target the depression
both proved hopelessly inadequate for the scale of the situation
When was the Federal Home Loan Banking Act?
What did this provide?
1932
provided credit up to 50% of home value
Was the Federal Home Loan Banking Act successful?
decrease the number of foreclosures
but too late for thousands of families
some stimulation of construction industry
When was the Emergency Relief and Construction Act?
1932
Who was pressuring Hoover to provide some form of relief and employment provision?
La Follette
Who was La Follette
leader of the left’s progressive party
was pressuring Hoover to adopt some form of relief and employment provision
How much was funded into the Emergency Relief and Construction Act for construction purposes?
For relief purposes?
$1.5billion for construction
$300million for relief
What was the Emergency Relief and Construction Act allowed to do in terms of employment?
fund local public works
The relief part of the emergency relief and construction act was distributed via…
via states discretion
not directly from central government
What did Hoover do in terms of federal spending that suggests he was not a ‘do nothing’ president?
X2 federal spending in 3years
spent X4 as much on public works than any of the previous 40 Presidents
The Emergency Relief and Construction Act in 1932 acknowledged what?
that voluntarism had been unsuccessful
Example of project conducted by Emergency Relief and Construction Act funding
Hoover Dam
Was the RFC funded more than the ERCA’s construction budget?
No
RFC : $2billion
ERCA : $1.5billion
When did Hoover experience some recovery in the economy?
final 6 months
What was the Morris La Guardia Act? When was it passed?
Act on labour relations
1932
What did the Morris La Guardia Act ban and permit?
- yellow dog clauses
- federal courts issuing injunctions
- permitted unions to form without employer interference
What was Hoover’s final legacy?
Emergency Banking Act passed in 5 days
cooperation with Roosevelt’s administration
When was Hoover vs FDR election? What was FDR’s % of the vote?
November 1932
57% of the vote
By 1932 what was it clear about Hoover’s policies?
he was now, 3 years after the Depression’s beginning, willing to do some form of direct government action - just not on the scale required
What was the job of the RFC?
rescue and bail out banks and companies in trouble via providing loans
When and how did Hoover introduce stricter immigration laws?
September 1930
via Executive Order
When did wages as part of the voluntarism campaign begin to decline?
Example of cuts corporations made
endemic wage cuts in 1931
GM and US Steel between 10-20%
Why can Hoover’s policies on immigration not be considered vastly effective?
Immigration had drastically slowed during depression - so number it effected was small despite White House claims
Farm foreclosure rates :
1931 :
1933 :
What does this show?
19 per 1,000
39 per 1,000
Shoes ineffectiveness of Agricultural Marketing Act & Stabilisation Corporations
Good production values;
1929:
1932:
What did this prove?
1929 : $104billion
1932 : $59billion
proved voluntarism was not working
businesses still cutting production
Figures on the number of countries on the gold standard;
What does this suggest about Hoover?
originally over 40
but by 1932 only 6 major economies remained
Hoover was part of the minority who sought to retain the gold standard
