President Hoover’s Response Quiz

PDF page 690: President Hoover was unprepared for the scope of the depression crisis, and his limited response did not begin to help the millions of Americans in need. The steps he took were very much in keeping with his philosophy of limited government, a philosophy that many had shared with him until the upheavals of the Great Depression made it clear that a more direct government response was required. But Hoover was stubborn in his refusal to give “handouts,” as he saw direct government aid. He called for a spirit of volunteerism among America’s businesses, asking them to keep workers employed, and he exhorted the American people to tighten their belts and make do in the spirit of “rugged individualism.” While Hoover’s philosophy and his appeal to the country were very much in keeping with his character, it was not enough to keep the economy from plummeting further into economic chaos.

PDF page 690: President Hoover was unprepared for the scope of the depression crisis, and his limited response did not begin to help the millions of Americans in need. The steps he took were very much in keeping with his philosophy of limited government, a philosophy that many had shared with him until the upheavals of the Great Depression made it clear that a more direct government response was required. But Hoover was stubborn in his refusal to give “handouts,” as he saw direct government aid. He called for a spirit of volunteerism among America’s businesses, asking them to keep workers employed, and he exhorted the American people to tighten their belts and make do in the spirit of “rugged individualism.” While Hoover’s philosophy and his appeal to the country were very much in keeping with his character, it was not enough to keep the economy from plummeting further into economic chaos.

PDF page 690: In the immediate aftermath of Black Tuesday, Hoover sought to reassure Americans that all was well. Reading his words after the fact, it is easy to find fault. In 1929 he said, “Any lack of confidence in the economic future or the strength of business in the United States is foolish.” In 1930, he stated, “The worst is behind us.” In 1931, he pledged federal aid should he ever witness starvation in the country; but as of that date, he had yet to see such need in America, despite the very real evidence that children and the elderly were starving to death. Yet Hoover was neither intentionally blind nor unsympathetic. He simply held fast to a belief system that did not change as the realities of the Great Depression set in.

PDF page 690: Hoover believed strongly in the ethos of American individualism: that hard work brought its own rewards. His life story testified to that belief. Hoover was born into poverty, made his way through college at Stanford University, and eventually made his fortune as an engineer. This experience, as well as his extensive travels in China and throughout Europe, shaped his fundamental conviction that the very existence of American civilization depended upon the moral fiber of its citizens, as evidenced by their ability to overcome all hardships through individual effort and resolve. The idea of government handouts to Americans was repellant to him. Whereas Europeans might need assistance, such as his hunger relief work in Belgium during and after World War I, he believed the American character to be different. In a 1931 radio address, he said, “The spread

PDF page 691: of government destroys initiative and thus destroys character.” Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment. In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”

PDF page 691: of government destroys initiative and thus destroys character.” Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment. In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”

PDF page 691: of government destroys initiative and thus destroys character.” Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment. In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”

PDF page 691: of government destroys initiative and thus destroys character.” Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment. In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”

PDF page 691: However, the president’s adamant opposition to direct-relief federal government programs should not be viewed as one of indifference or uncaring toward the suffering American people. His personal sympathy for those in need was boundless. Hoover was one of only two presidents to reject his salary for the office he held. Throughout the Great Depression, he donated an average of $25,000 annually to various relief organizations to assist in their efforts. Furthermore, he helped to raise $500,000 in private funds to support the White House Conference on Child Health and Welfare in 1930. Rather than indifference or heartlessness, Hoover’s steadfast adherence to a philosophy of individualism as the path toward long-term American recovery explained many of his policy decisions. “A voluntary deed,” he repeatedly commented, “is infinitely more precious to our national ideal and spirit than a thousand-fold poured from the Treasury.”

PDF page 692: As conditions worsened, however, Hoover eventually relaxed his opposition to federal relief and formed the Reconstruction Finance Corporation (RFC) in 1932, in part because it was an election year and Hoover hoped to keep his office. Although not a form of direct relief to the American people in greatest need, the RFC was much larger in scope than any preceding effort, setting aside $2 billion in taxpayer money to rescue banks, credit unions, and insurance companies. The goal was to boost confidence in the nation’s financial institutions by ensuring that they were on solid footing. This model was flawed on a number of levels. First, the program only lent money to banks with sufficient collateral, which meant that most of the aid went to large banks. In fact, of the first $61 million loaned, $41 million went to just three banks. Small town and rural banks got almost nothing. Furthermore, at this time, confidence in financial institutions was not the primary concern of most Americans. They needed food and jobs. Many had no money to put into the banks, no matter how confident they were that the banks were safe. Hoover’s other attempt at federal assistance also occurred in 1932, when he endorsed a bill by Senator Robert Wagner of New York. This was the Emergency Relief and Construction Act. This act authorized the RFC to expand beyond loans to financial institutions and allotted $1.5 billion to states to fund local public works projects. This program failed to deliver the kind of help needed, however, as Hoover severely limited the types of projects it could fund to those that were ultimately self-paying (such as toll bridges and public housing) and those that required skilled workers. While well intended, these programs maintained the status quo, and there was still no direct federal relief to the individuals who so desperately needed it.

PDF page 692: Hoover’s steadfast resistance to government aid cost him the reelection and has placed him squarely at the forefront of the most unpopular presidents, according to public opinion, in modern American history. His name became synonymous with the poverty of the era: “Hoovervilles” became the common name for homeless shantytowns (Figure 25.9) and “Hoover blankets” for the newspapers that the homeless used to keep warm. A “Hoover flag” was a pants pocket—empty of all money—turned inside out. By the 1932 election, hitchhikers held up signs reading: “If you don’t give me a ride, I’ll vote for Hoover.” Americans did not necessarily believe that Hoover caused the Great Depression. Their anger stemmed instead from what appeared to be a willful refusal to help regular citizens with direct aid that might allow them to recover from the crisis.

PDF page 692: Hoover’s steadfast resistance to government aid cost him the reelection and has placed him squarely at the forefront of the most unpopular presidents, according to public opinion, in modern American history. His name became synonymous with the poverty of the era: “Hoovervilles” became the common name for homeless shantytowns (Figure 25.9) and “Hoover blankets” for the newspapers that the homeless used to keep warm. A “Hoover flag” was a pants pocket—empty of all money—turned inside out. By the 1932 election, hitchhikers held up signs reading: “If you don’t give me a ride, I’ll vote for Hoover.” Americans did not necessarily believe that Hoover caused the Great Depression. Their anger stemmed instead from what appeared to be a willful refusal to help regular citizens with direct aid that might allow them to recover from the crisis.

PDF page 693: Farmers also organized and protested, often violently. The most notable example was the Farm Holiday Association. Led by Milo Reno, this organization held significant sway among farmers in Iowa, Nebraska, Wisconsin, Minnesota, and the Dakotas. Although they never comprised a majority of farmers in any of these states, their public actions drew press attention nationwide. Among their demands, the association sought a federal government plan to set agricultural prices artificially high enough to cover the farmers’ costs, as well as a government commitment to sell any farm surpluses on the world market. To achieve their goals, the group called for farm holidays, during which farmers would neither sell their produce nor purchase any other goods until the government met their demands. However, the greatest strength of the association came from the unexpected and seldom-planned actions of its members, which included barricading roads into markets, attacking nonmember farmers, and destroying their produce. Some members even raided small town stores, destroying produce on the shelves. Members also engaged in “penny auctions,” bidding pennies on foreclosed farm land and threatening any potential buyers with bodily harm if they competed in the sale. Once they won the auction, the association returned the land to the original owner. In Iowa, farmers threatened to hang a local judge if he signed any more farm foreclosures. At least one death occurred as a direct result of these protests before they waned following the election of Franklin Roosevelt.