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

1
Q

What was the issue with Hoover?

A

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

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2
Q

What were Hoover’s beliefs?

A

Believed people should be responsible for their own welfare.

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3
Q

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

A

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

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4
Q

What did Hoover believe the government’s job was?

A

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

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5
Q

Who was Hoover as a person?

A

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

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6
Q

What did Hoover do to help combat the Depression?

A

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

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7
Q

Why did Hoover cut state official’s salaries?

A

To help provide revenues for his recovery measures.

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8
Q

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

A

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

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9
Q

What did the Depression lead to the growth of?

A

‘Hoovervilles’

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10
Q

What were Hoovervilles?

A

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

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11
Q

Who lived in Hoovervilles?

A

They were peopled by the homeless and hoboes seeking work.

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12
Q

What were the conditions of Hoovervilles?

A

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

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13
Q

What was hygiene like in Hoovervilles?

A

No sanitation and often inadequate water supplies.

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14
Q

What was the largest Hooverville?

A

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

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15
Q

What happened to Hoovervilles?

A

Some became semi-permanent and well organised.

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16
Q

What was the most famous Hooverville?

A

That of the ‘Bonus Army’.

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17
Q

What could Hoover not accept?

A

Direct government relief.

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18
Q

What did Hoover continue to believe?

A

That the economy had to right itself.

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19
Q

What did Hoover try to persuade?

A

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

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20
Q

What did Hoover encourage businessmen to do?

A

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

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21
Q

What did Hoover encourage state leaders to do?

A

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

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22
Q

What happened to businesses as the Depression worsened?

A

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

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23
Q

What did states have to do as the Depression worsened?

A

Reduce their spending.

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24
Q

What was the extent of the problems of the Depression?

A

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

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25
Q

What did Bankers set up in October 1931?

A

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

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26
Q

What did the National Credit Corporation do?

A

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

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27
Q

Did the National Credit Corporation work?

A

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

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28
Q

What happened to the Corporation?

A

Faded away.

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29
Q

What was the rate of unemployment in 1929?

A

3.2%

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30
Q

What was the GDP in 1929?

A

$103.6 billion

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31
Q

What was the GNP in 1929?

A

$203.6 billion

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32
Q

What was the growth rate in 1929?

A

6.7%

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33
Q

What happened in October 1929?

A

Price of shares fell by $14 billion.

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34
Q

What government action was taken in 1929?

A

Agricultural Marketing Act

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35
Q

What was the rate of unemployment in 1930?

A

8.9%

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36
Q

What was the GDP in 1930?

A

$91.2 billion

37
Q

What was the GNP in 1930?

A

$183.5 billion

38
Q

What was the growth rate in 1930?

A

9.6%

39
Q

What big event happened in 1930?

A

Serious drought southeast of the Rockies.

40
Q

What government action was taken in 1930?

A
  • Smoot-Hawley Tariff
  • $49 million in loans to drought victims
41
Q

What was the rate of unemployment in 1931?

A

16.3%

42
Q

What was the GDP in 1931?

A

$76.5 billion

43
Q

What was the GNP in 1931?

A

$169.5 billion

44
Q

What was the growth rate in 1931?

A

7.6%

45
Q

What government action was taken in 1931?

A
  • Moratorium for 18 months on collection of war debts.
  • National Credit Corporation set up with funds of $500 million.
46
Q

What was the unemployment rate in 1932?

A

24.1%

47
Q

What was the GDP in 1932?

A

$58.7 billion

48
Q

What was the GNP in 1932?

A

$144.2 billion

49
Q

What was the growth rate in 1932?

A

14.7%

50
Q

What government action was taken in 1932?

A
  • 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’.
51
Q

What was the Agricultural Marketing Act 1929?

A

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

52
Q

What was the task for these stabilisation corporations?

A

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

53
Q

What was the problems agriculture faced in 1931 and 1932?

A

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

54
Q

How much had the price of wheat fallen by?

A

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

55
Q

How did the agricultural policy fail?

A
  • 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.
56
Q

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

A

The Smoot-Hawley Tariff

57
Q

What was the Smoot-Hawley Tariff?

A

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

58
Q

What was the impact of the Smoot-Hawley Tariff?

A

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

59
Q

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

A

Value of international trade fell by $500 million.

60
Q

How much did international trade fall by in 1931?

A

$1.2 billion

61
Q

How much did US imports fall by?

A

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

62
Q

How much did US exports fall by?

A

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

63
Q

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

A

Repudiated their war debts in the early 1930s.

64
Q

What did Hoover announce on June 21st 1931?

A

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

65
Q

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

A

He hoped it would release monies for investment.

66
Q

What was the impact of the delay of war debts?

A

Little too late to stop the collapse of European economies.

67
Q

What did Hoover do to try fix soaring unemployment rates?

A
  • Secured additional amounts from Congress of $500 million.
  • To help the various agencies provide relief.
68
Q

How did Hoover’s actions impact unemployment rates?

A

Was wholly inadequate to meet the scale of the problem.

69
Q

What did Hoover refuse to do for unemployment?

A

He would not countenance direct federal relief.

70
Q

How much did Congress allocate for unemployment in the end?

A

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

71
Q

What was passed in July 1932?

A

The Federal Home Loan Bank Act

72
Q

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

A

Intended to save mortgages by making credit easier.

73
Q

What did the Federal Home Loan Bank Act do?

A

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

74
Q

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

A

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

75
Q

What was established in Jan 1932?

A

The Reconstruction Finance Corporation.

76
Q

What was the aim of the RFC?

A

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

77
Q

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

A

90%

78
Q

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

A

70%

79
Q

How much of individual loans went to the big banks?

A

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

80
Q

How much money was given by the RFC?

A

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

81
Q

What had Congress promised veterans in 1925?

A

Had agreed a veteran’s ‘bonus’.

82
Q

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

A

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

83
Q

What did many veteran’s demand?

A

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

84
Q

What did veteran’s do to fight this cause?

A

A march on Washington was organised to publicise their cause.

85
Q

How many marched on Washington?

A

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

86
Q

What did Hoover offer the veteran’s?

A

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

87
Q

What did the Secretary of War do?

A

Called in troops under General Douglas MacArthur.

88
Q

What did the troops do?

A

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

89
Q

What was the impact of the Bonus March on Hoover?

A

Hoover was blamed, major political blunder.