THEME 2: b - Hoover

Question 1

When was Herbert Hoover president?

Answer 1

1929 - 33

Question 2

Key points about Hoover’s backround

Answer 2

• self-made engineer & involved in high profile activities
• seen as one of the key architects of the 20s prosperity
• traditional conservative - little gov intervention
• came into office with high expectations from the people

Question 3

What were Hoover’s key beliefs?

Answer 3

• Voluntarism

* Individualism: self-help

Question 4

How did Hoover’s belief in voluntarism affect his presidency?

Answer 4

• gov did not have a direct role in people’s lives
• The role of charities, states and people to help each other was emphasised
• He encouraged businesses to follow this idea (not to cut wages or workforce) but the Depression stopped this

Question 5

How did Hoover’s belief in individualism affect his presidency?

Answer 5

• no direct relief was offered because he believed:
  - everyone has the right to opportunities
  - this means they could become successful if they worked hard enough

^ Idea of self-help

Question 6

What was the Agricultural Marketing Act (1929)?

Answer 6

• Establish Federal Farm Boards
• funds of $500 mil
• to establish ‘stabilising corporations’ which would buy, store & dispose of farm surpluses

Question 7

Why was Agricultural Marketing Act (1929) a failure?

Answer 7

1. Huge surpluses meant prices fell & corps were paying above market value for products - consequently, they were criticised for wasting taxpayer money
2. The legislation treated agriculture as a domestic issue - consequently, didn’t consider foreign affairs (without high tariffs no point American prices being high)

Question 8

What was the Smoot-Hawley tariff (1930)?

Answer 8

• Raised tariffs on agricultural & industrial item to 40%
• This was the highest tariff in American history & had no benefit to farmers
• Farming interests in congress fought hard against the measure & the only reason Hoover was reluctant to veto it is because of the interests in his party
• stifled international trade by $500 mil 1929 - 30 & a further $1.2 bil in 1931
• European countries abandoned free trade

Question 9

What were the consequences of the Smoot-Hawley tariff (1930)?

Answer 9

• 1929-30 the value of international trade fell by $500 mil (total)
• US imports fell from $1, 334 (1929) to $390 mil (1932)
• led to European countries abandoning free trade - so fewer American goods were exported

Question 10

What was the Moratorium (1930-31)?

Answer 10

• European countries reputed war debts
• so, the USA postponed the collection of debts for 18 months IF other countries would do the same
• Hoover hoped this would release monies for investment however, it didn’t stop economic collapse
• When it came up for renewal it was during Hoover’s ‘lame duck’ presidency & advised FDR to continue the moratorium

Question 11

What did the Emergency Committee for Employment do (1932)?

Answer 11

• was NOT direct relief
• helped charities/ relief agencies organise their efforts & gave then $500 mil to help them provide relief
• Later, after the severe drought (1930-31) Hoover offered them $47 mil as LOANS

Question 12

What were the issues with Emergency Committee for Employment (1932)?

Answer 12

• the money given was an inadequate amount
• The charities/ relief agencies could no longer cope with the demand for relief as the Depression progresses
• 1923: unemployment = 24.1%

Question 13

What did the Federal Home Loan Bank Act do (1932)?

Answer 13

• intended to save mortgages by making credit easier
• Federal Home Loan Banks set up
  
  • helped loan associations provide mortgages
  • max loan = 50% of property value
• Insufficient to deal with the seriousness of the situation - led to homes being repossessed

Question 14

What did the Reconstruction Finance Corporation (1932) do?

Answer 14

• given authority to lend up to $2 bil to rescue banks & other financial institutions
• designed to restore confidence in the banks
• 50% of loans went to 7% of borrowers who were the biggest banks (of the first $61 mil, $41 mil was loaned to 3 institutions) INEFFECTIVE
• clamour for direct relief became so great the Emergency Relief & Construction Act was set up

Question 15

What did the Emergency Relief & Construction Act (1932) do?

Answer 15

• authorised the RFC to lend up to $1.5 bil to states (they had to use this for public work scheme to make the money to pay off the loans)
• States had to declare bankruptcy to be eligible
• created temporary employment in local areas
• first major relief legislation

Question 16

What is the story of the Bonus Army (1932)?

Answer 16

• Following the gov promising a bonus for vet’s in 1945 - the impact of the Depression meant they urgently needed the money. They were denied this.
• A march to Washington was organised & soon 20,000 people were camped in the capital
• Hoover sympathised with them & offered then $100,000 for transport home BUT, many didn’t budge
• The Secretary of War called out troops & tanks to move the bonus army
• They chased them all the way back to their Hoovervilles & tear gas was ever used on them

Question 17

What was the impact of the Bonus Amry?

Answer 17

• Hoovervilles were destroyed
• many marchers were injured
• 2 babies died from the gas
• Americans were horrified at the scenes & the way the ex-soldiers were treated by the army/ gov
• Hoover was blamed

Question 18

Why was Hoover such a failure?

Answer 18

• His beliefs stopped him from providing direct relief - which was necessary for recovery
• Many of the measures were inadequate or made the situation worse (e.g the Smoot-Hawley Tarriff)