What did president Hoover do to try to help the economy after the stock market crash?
What did president Hoover do to try to help the economy after the stock market crash
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The stock market crash of October 24, 1929 (called Black Thursday) marked the beginning of the worst depression in American history, from which the country didn't really begin to rebound until the start of World War II. By 1933, more than 13 million Americans were out of work, tens of thousands of businesses had failed, and the number of farm foreclosures grew.
Direct federal relief to the unemployed ran counter to President Herbert Hoover's strong beliefs about the limited role of government. As a result, he responded to the economic crisis with a goal of getting people back to work rather than directly granting relief. In October 1930, he established the President's Emergency Committee for Employment (later renamed the President's Organization for Unemployment Relief) to coordinate the efforts of local welfare agencies.
As the Great Depression worsened, however, charitable organizations were simply overwhelmed by the magnitude of the problem, and Hoover tried new ideas to stimulate the economy:
- The Reconstruction Finance Corporation (RFC) (1932) provided railroads, banks, and other financial institutions with money for loans.
- The Glass-Steagall Act (1932) made getting commercial credit easier and released $750 million in gold reserves for additional business loans.
- The Emergency Relief and Construction Act (1932) provided funds to the RFC to make loans for relief to the states and included additional money for local, state, and federal public works projects.
Despite Hoover's efforts to revitalize the economy, the public blamed him for the Great Depression — and the Republicans lost control of both Congress and the White House for almost two decades.
The above answer is definitely correct in its details. I'd just like to emphasize a couple of important ideas about Hoover's response.
- He tried to do more to fix the economy than any president had ever done before. The government had been very hands-off up to that point.
- He believed the government should not go in debt no matter what. This limited what he was willing to do. Please note that economists back then agreed with this idea so it's not like Hoover was just being mean. In fact, FDR believed the same thing and it's often said that he undermined the New Deal by trying to balance the budget too soon.
So, overall what I want to point out is that Hoover did more than anyone else, and he did what most economists of the time would have said was the right thing to do. But it didn't work and so he's seen as one of the worst presidents ever, which seems a bit unfair.
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