How did President Hoover's philosophy of government guide his response to the depression?
President Hoover’s philosophy of government had a direct impact on his response to the Great Depression. President Hoover was the third Republican president of the 1920s. These presidents followed a philosophy known as the laissez-faire philosophy. This philosophy emphasizes a hands-off philosophy by the government. It also emphasizes getting out of the way of businesses and letting businesses take actions to run the economy. This philosophy stresses that government should have a very limited role in economic and in business matters.
When the Great Depression began, President Hoover believed the government should have a very limited role in trying to end the Great Depression. His initial reaction was to work with businesses on voluntary agreements where businesses would agree to keep their companies open and agree to not cut wages. This reflects Hoover’s philosophy of letting businesses try to work our way out of the Great Depression. It wasn’t until 1931, when the Great Depression got worse, that President Hoover got the government involved in trying to deal with the Great Depression.
President Hoover had three programs to try to deal with the Great Depression. The first program, called the National Credit Corporation, gave money to banks that were in distress so those banks could continue to make loans in their communities. The Reconstruction Finance Corporation was created to give loans to different groups including farmers, railroad companies, and banks. The Emergency Relief and Construction Act provided direct government aid to individuals in the form of loans and employment. However, none of these programs were able to get us out of the Great Depression.
In the election of 1932, Franklin D. Roosevelt promised a lot of government action to try to end the Great Depression. The American people wanted a new philosophy, and they elected Franklin D. Roosevelt to the presidency. His New Deal programs to try to end the Great Depression would be the opposite of President Hoover’s laissez-faire approach to try to end the Great Depression.