14.3

Federal Home Loan Bank Act

1933, lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure

Why do you think people blamed Hoover for the nation's difficulties?

Americans look to their leaders for results, and Hoover wasn't getting results

What did the Bonus Army want?

As veterans of World War I, they had been promised a cash bonus

What were some of Hoover's key convictions about government?

He believed that reason could solve problems, that government should foster cooperation between competing groups, and that individuals, charities, and private organizations should help care for the less fortunate

Summarize the actions Hoover took to help the economy and the hardship suffered by Americans.

He created direct relief plans, as well as the National Credit Corporation, and the Reconstruction Finance Corporation.

In what ways did Hoover try to use the government to relieve the Depression?

He started public-works programs and backed the Federal Farm Board, the Federal Home Loan Bank Act, and the RFC.

When Franklin Delano Roosevelt heard about the attack on the Bonus Army, why was he so certain that he would defeat Hoover? Think about: the American public's impression of Hoover, Hoover's actions to alleviate the Great Depression, and how people judged Hoover after the attack.

He was so certain because the public's reaction to the attack was striking and labeled Hoover as cruel. The public also already blamed Hoover for their suffering and the attack just escalated the feud.

How did Hoover's belief in "rugged individualism" shape his policies during the Great Depression? Think about: what his belief implies about his view of people, how that translates into the role of government, and Hoover's policies.

His belief in "rugged individualism" implies his cautious approach to government intervention and basically tells people to fend for themselves.

Explain Hoover's initial response to the Depression.

Hoover believed that the federal government could not give direct aid to individuals. He believed in free market capitalism and did not think the constitution gave the federal government the power to set prices. He urged people to work together to find solutions to the nation's economic woes and to act in ways that would not make a bad situation worse. For example, he asked employers not to cut wages or lay off workers, and he asked labor leaders not to demand higher wages or go on strike. He also created a special organization to help private charities. However, these initiatives did too little, too late.

What were some of the projects proposed by Hoover, and how effective were they?

Federal Farm board; National Credit Corporation; Federal Home Loan Bank Act; Reconstruction Finance Corporation. These projects and measures were not able to turn the economy around.

How did Hoover's treatment of the Bonus Army affect his standing with the public?

The harshness of the attack on the veterans and their families damaged Hoover's reputation.

Herbert Hoover

The president of the United States from 1929 to 1932. He was a republican who ran on a campaign of prohibition and prosperity. The early years of his presidency brought about a great deal of prosperity for the United States. Many people blamed him for the stock market crash, people were angry with him over his stringent beliefs of limited federal government aid, and his inability to deal effectively with the depression plummeted his popularity.

Boulder Dam

a dam on the Colorado River- now called Hoover Dam- that was built during the Great Depression as part of a public-works program intended to stimulate business and provide jobs

Bonus Army

a group of World War I veterans and their families who marched on Washington, D.C., in 1932 to demand the immediate payment of a bonus they had been promised for military service

Reconstruction Finance Corporation (RFC)

an agency established in 1932 to provide emergency financing to banks, life insurance companies, railroads, and other large businesses. Hoover believed that the money would trickle down to the average citizen through job growth and higher wages. Many critics argued that the program would benefit only corporations and that the poor still needed direct relief. In its first five months of operation, the RFC loaned more than $805 million to large corporations, but businesses failures continued. The RFC was an unprecedented example of federal involvement in a peacetime economy, but in the end it was too little, too late.