What did Herbert Hoover do in response to the Great Depression?

Answer 1

The very first thing Hoover did in response to the 1929 crash was call business leaders to Washington to pressure them into keeping wages high, instead of cutting wages as economic conditions required. Lee E. Ohanian of UCLA calculates that this was the cause of about 2/3 of the unemployment in the first years of the Great Depression.

While not believing in charity by the government, Hoover did try and help the economic mess that began during his administration. He gave much of his money to charity and encouraged Americans to do the same. He broke with Republicans and did away with the taxes that had been placed on citizens during the Coolidge administration. He thought that would allow for more income being spent to help the economy rebound. He spent $500 million a year on public works and government programs to build or improve government properties. The most famous was the Hoover (Boulder) Dam. Congress established the Reconstruction Finance Corporation (continued by FDR) which created an agency to help banks, railroads, and other key businesses to stay in business thus helping the economy. All of these things could not stem the tide of the economic collapse. Hoover believed in a balanced budget and not pumping government money into the economy. He believed in "rugged individualism" and relied on the individual, the churches and private charities, and the local and state governments to handle most of the economic help that was needed.

Hebert Hoover was blamed for the great depression because of his lack of involvement and issue with the Stock Market. He took out his money from the stocks which feared Americans currently invested in the stock market, so they pulled their money out as well, this decreased the value of stocks greatly. Also, when the great depression struck, Hoover decided not to give government aid to the people believing that it would inflate the Federal government budget. Later on though, Hoover decided to take action and try to get America out of this depression.

Herbert Hoover broke with the previous laissez-faire policy for dealing with recessions and depressions. Long before the 1929 crash, in the early 1920's, he wrote that he believed that public works projects were a means for government to fight recessions and depressions. In the last week of October 1929, he urged the Fed to extend $300 million in quantitative easing. Right after the '29 crash, he called business leaders to Washington to keep them from lowering wages as market conditions demanded. He used a technique called "voluntarism", but which was as voluntary as a mobster's calls for "cooperation". He strong armed them by threatening them with pro-union legislation. UCLA professor Lee E. Ohanian calculates that this caused as much as two thirds of the increase in unemployment in the early years of the Great Depression. Read his article "What or Who Started the Great Depression". Hoover's public works projects include the Hoover Dam. Total spending on public works in 1930 exceeded $4 billion.

Hoover tried to help by pressuring business leaders to keep wages high when economic conditions dictated that they fall. Professor Lee E. Ohanian calculates that this accounts for as much as 2/3 of the unemployment in the first years of the Great Depression. Liberals claim that Hoover's laissez-faire caused the Great Depression, but the opposite is true. His interventions caused it.

While not believing in charity by the government, Hoover did try and help the economic mess that began during his administration. He gave much of his money to charity and encouraged Americans to do the same. He broke with Republicans and did away with the taxes that had been placed on citizens during the Coolidge administration. He thought that would allow for more income being spent to help the economy rebound. He spent $500 million a year on public works and government programs to build or improve government properties. The most famous was the Hoover (Boulder) Dam. Congress established the Reconstruction Finance Corporation (continued by FDR) which created an agency to help banks, railroads, and other key businesses to stay in business thus helping the economy.

Hoover blamed the Depression on foreign economic collapse over which he had no control. Major European banks went bankrupt, causing alarm in other foreign banks. While not believing in charity by the government, Hoover did try and help the economic mess that began during his administration. He gave much of his money to charity and encouraged Americans to do the same. He broke with Republicans and did away with the taxes that had been placed on citizens during the Coolidge administration. He thought that would allow for more income being spent to help the economy rebound. He spent $500 million a year on public works and government programs to build or improve government properties. The most famous was the Hoover (Boulder) Dam. Congress established the Reconstruction Finance Corporation (continued by FDR) which created an agency to help banks, railroads, and other key businesses to stay in business thus helping the economy.

Although it was not Hoovers fault that the Great Depression took place and that the Stock Market crashed Hoover was widely blamed and was strongly disliked by the American people, due to his lack of involvement. As the U.S failed, American people looked to Hoover for leadership, many were starving, homeless and dying but Hoover refused to believe or give any government assistance to those who needed it. He believed that the people could help themselves and he also referred to the Great Depression as "a temporary halt in the prosperity of a great people." He also feared that by giving American people assistance it would inflate the federal budget and reduce the self-respect of the Americans receiving the aid.