Hoover's response to the Depression, 1929-33 (T2)

Question 1

What was the issue with Hoover?

Answer 1

He could not shift from his fundamental beliefs, that he never altered.

Question 2

What were Hoover’s beliefs?

Answer 2

Believed people should be responsible for their own welfare.

Question 3

How did Hoover’s beliefs impact his approach to the Depression?

Answer 3

He simply did not believe the government should try to solve people’s problems.

Question 4

What did Hoover believe the government’s job was?

Answer 4

It was the government’s job simply to help people solve their problems by themselves.

Question 5

Who was Hoover as a person?

Answer 5

He believed above all in equality of opportunity, he was a self-made man and felt everyone else could be too.

Question 6

What did Hoover do to help combat the Depression?

Answer 6

He gave generously to charities, he cut his own and state official’s salaries by 20%.

Question 7

Why did Hoover cut state official’s salaries?

Answer 7

To help provide revenues for his recovery measures.

Question 8

Why do many argue that Hoover had lost touch with reality?

Answer 8

He well understood the seriousness of the Depression, but in public he had to be optimistic.

Question 9

What did the Depression lead to the growth of?

Answer 9

‘Hoovervilles’

Question 10

What were Hoovervilles?

Answer 10

The name given to the shanty towns that grew in open spaces on the edge of almost every town and city.

Question 11

Who lived in Hoovervilles?

Answer 11

They were peopled by the homeless and hoboes seeking work.

Question 12

What were the conditions of Hoovervilles?

Answer 12

People lived in squalid conditions with shelters made from any available materials.

Question 13

What was hygiene like in Hoovervilles?

Answer 13

No sanitation and often inadequate water supplies.

Question 14

What was the largest Hooverville?

Answer 14

At St Louis, Missouri, and was financed by private donations and had an unofficial mayor and church.

Question 15

What happened to Hoovervilles?

Answer 15

Some became semi-permanent and well organised.

Question 16

What was the most famous Hooverville?

Answer 16

That of the ‘Bonus Army’.

Question 17

What could Hoover not accept?

Answer 17

Direct government relief.

Question 18

What did Hoover continue to believe?

Answer 18

That the economy had to right itself.

Question 19

What did Hoover try to persuade?

Answer 19

Tried to persuade businessmen and state governments to combat the Depression through their own voluntary efforts.

Question 20

What did Hoover encourage businessmen to do?

Answer 20

He implored them not to reduce their workforce or cut wages, but to maintain output and urge people to buy.

Question 21

What did Hoover encourage state leaders to do?

Answer 21

To begin new programmes of public works as well as continuing with the old.

Question 22

What happened to businesses as the Depression worsened?

Answer 22

Had little choice but to cut back, workers were laid off, investment was postponed and wages were reduced.

Question 23

What did states have to do as the Depression worsened?

Answer 23

Reduce their spending.

Question 24

What was the extent of the problems of the Depression?

Answer 24

Were simply too great for voluntarism to work, particularly when it went against customary business practice.

Question 25

What did Bankers set up in October 1931?

Answer 25

The National Credit Corporation, with the task of helping failing banks survive.

Question 26

What did the National Credit Corporation do?

Answer 26

It began with a capital fund of $500 million donated by the major financial institutions.

Question 27

Did the National Credit Corporation work?

Answer 27

With banks continuing to fail at unprecedented rates, the Corporation had spent only $10 million by the end of 1931.

Question 28

What happened to the Corporation?

Answer 28

Faded away.

Question 29

What was the rate of unemployment in 1929?

Answer 29

3.2%

Question 30

What was the GDP in 1929?

Answer 30

$103.6 billion

Question 31

What was the GNP in 1929?

Answer 31

$203.6 billion

Question 32

What was the growth rate in 1929?

Answer 32

6.7%

Question 33

What happened in October 1929?

Answer 33

Price of shares fell by $14 billion.

Question 34

What government action was taken in 1929?

Answer 34

Agricultural Marketing Act

Question 35

What was the rate of unemployment in 1930?

Answer 35

8.9%

Question 36

What was the GDP in 1930?

Answer 36

$91.2 billion

Question 37

What was the GNP in 1930?

Answer 37

$183.5 billion

Question 38

What was the growth rate in 1930?

Answer 38

9.6%

Question 39

What big event happened in 1930?

Answer 39

Serious drought southeast of the Rockies.

Question 40

What government action was taken in 1930?

Answer 40

- Smoot-Hawley Tariff - $49 million in loans to drought victims

Question 41

What was the rate of unemployment in 1931?

Answer 41

16.3%

Question 42

What was the GDP in 1931?

Answer 42

$76.5 billion

Question 43

What was the GNP in 1931?

Answer 43

$169.5 billion

Question 44

What was the growth rate in 1931?

Answer 44

7.6%

Question 45

What government action was taken in 1931?

Answer 45

- Moratorium for 18 months on collection of war debts. - National Credit Corporation set up with funds of $500 million.

Question 46

What was the unemployment rate in 1932?

Answer 46

24.1%

Question 47

What was the GDP in 1932?

Answer 47

$58.7 billion

Question 48

What was the GNP in 1932?

Answer 48

$144.2 billion

Question 49

What was the growth rate in 1932?

Answer 49

14.7%

Question 50

What government action was taken in 1932?

Answer 50

- Federal Home Loan Bank Act - Reconstruction Finance Corporation set up with funds of $2 billion. - Emergency Relief and Construction Act - Dispersal by force of 'Bonus Army'.

Question 51

What was the Agricultural Marketing Act 1929?

Answer 51

Established a Federal Farm Board with funds of $500 million to create 'stabilisation corporations'.

Question 52

What was the task for these stabilisation corporations?

Answer 52

Had the task of buying, storing and eventually disposing of farm surpluses in an orderly way.

Question 53

What was the problems agriculture faced in 1931 and 1932?

Answer 53

Huge surpluses both at home and abroad saw prices fall and the corporations paying above-market values for produce.

Question 54

How much had the price of wheat fallen by?

Answer 54

World price of wheat had fallen to 60 cents a bushel.

Question 55

How did the agricultural policy fail?

Answer 55

- It was paying American farmers artificially high prices and this could not continue in the long term. - Treated agriculture as a domestic issue, and failed to take into account of foreign considerations.

Question 56

What was the Tariff that came into force in June 1930?

Answer 56

The Smoot-Hawley Tariff

Question 57

What was the Smoot-Hawley Tariff?

Answer 57

Highest tariff in American history with average duties of 40% on both agricultural and industrial items.

Question 58

What was the impact of the Smoot-Hawley Tariff?

Answer 58

It led to most European nations abandoning free trade and to even fewer American goods being exported.

Question 59

How much did international trade fall by between 1929 and 1930?

Answer 59

Value of international trade fell by $500 million.

Question 60

How much did international trade fall by in 1931?

Answer 60

$1.2 billion

Question 61

How much did US imports fall by?

Answer 61

From $1,334 million in 1929 to $390 million in 1932.

Question 62

How much did US exports fall by?

Answer 62

From $2,341 million in 1929 to $784 million in 1932.

Question 63

What did European countries do after the Smoot-Hawley Tariff?

Answer 63

Repudiated their war debts in the early 1930s.

Question 64

What did Hoover announce on June 21st 1931?

Answer 64

That the USA would postpone the collection of its debts for 18 months if other countries did the same.

Question 65

What did Hoover hope this delay in war debts would do?

Answer 65

He hoped it would release monies for investment.

Question 66

What was the impact of the delay of war debts?

Answer 66

Little too late to stop the collapse of European economies.

Question 67

What did Hoover do to try fix soaring unemployment rates?

Answer 67

- Secured additional amounts from Congress of $500 million. - To help the various agencies provide relief.

Question 68

How did Hoover's actions impact unemployment rates?

Answer 68

Was wholly inadequate to meet the scale of the problem.

Question 69

What did Hoover refuse to do for unemployment?

Answer 69

He would not countenance direct federal relief.

Question 70

How much did Congress allocate for unemployment in the end?

Answer 70

$47 million, but even that was to be offered as loans that must later be repaid.

Question 71

What was passed in July 1932?

Answer 71

The Federal Home Loan Bank Act

Question 72

What was the aim of the Federal Home Loan Bank Act?

Answer 72

Intended to save mortgages by making credit easier.

Question 73

What did the Federal Home Loan Bank Act do?

Answer 73

Federal Home Loan Banks were set up to help loan associations to provide mortgages.

Question 74

What was the issue with the Federal Home Loan Bank Act?

Answer 74

As the maximum loan was only 50% of the value of the property, it was largely ineffective.

Question 75

What was established in Jan 1932?

Answer 75

The Reconstruction Finance Corporation.

Question 76

What was the aim of the RFC?

Answer 76

To lend up to $2 billion to rescue banks and other financial institutions in distress.

Question 77

How much of the RFC loans went to small and medium banks?

Answer 77

90%

Question 78

How much of the RFC loans went to banks in towns with a pop. of less than 5,000?

Answer 78

70%

Question 79

How much of individual loans went to the big banks?

Answer 79

50% of loans went to the 7% of borrowers who happened to be the biggest banks.

Question 80

How much money was given by the RFC?

Answer 80

Of the first $61 million committed, $41 million was loaned to no more than three institutions.

Question 81

What had Congress promised veterans in 1925?

Answer 81

Had agreed a veteran's 'bonus'.

Question 82

When was this veteran's bonus meant to be paid?

Answer 82

Based on the number of years of service, it was to be paid in full by 1945.

Question 83

What did many veteran's demand?

Answer 83

Due to the impact of the Depression, they said they needed it immediately.

Question 84

What did veteran's do to fight this cause?

Answer 84

A march on Washington was organised to publicise their cause.

Question 85

How many marched on Washington?

Answer 85

By 15 June 1932, 20,000 people were camped in the capital.

Question 86

What did Hoover offer the veteran's?

Answer 86

Insistent nothing could be done for them, $100,000 to pay for their transportation home, many refused to budge.

Question 87

What did the Secretary of War do?

Answer 87

Called in troops under General Douglas MacArthur.

Question 88

What did the troops do?

Answer 88

Used tear gas to disperse the squatters, the camp was destroyed, many marchers were injured and two babies died from the tear gas.

Question 89

What was the impact of the Bonus March on Hoover?

Answer 89

Hoover was blamed, major political blunder.