NatureandEfficacyofthesolutionsofHerbertHooverand

FranklinRoosevelt

HerbertHoover

FranklinRoosevelt

Nature

Thestockmarketcrashedon
Thursday,October24,1929,less
thaneightmonthsintoHerbert
Hooverspresidency.Hoover
thoughtthecrashwaspartofa
recessionbutlateronitbecame
cleartohimthatexcessive
speculationandaworldwide
economicslowdownhadplunged
AmericaintothemidstofaGreat
Depression.

1) AstheU.Seconomy
continuedtodecline,calls
forgreatergovernment
assistanceincreased.But
Hooverfearedthattoo
muchinterventionor
coercionbythe
governmentwoulddestroy
individualityand
self-reliance,aconcepthe
referredtoasrugged
individualism.Becauseof
PresidentHooversbelief
inruggedindividualism,
hethoughttheFederal
governmentdidnothavea
righttoforcepeopletodo
anything.Hebelievethat
peopleshouldforce
themselvestosolve
problems.Hetherefore
reliedonpeoplesgood
willtodothingsfor
others.Forexample,when
theDepressionfirstcame

Thewitheredleavesof
industrialenterpriselieon
everyside;farmersfindno
marketsfortheirproduce;
thesavingsofmanyyearsin
thousandsoffamiliesare
gone.Moreimportant,ahost
ofunemployedcitizensface
thegrimproblemof
existence,andanequally
greatnumbertoilwithlittle
return.PresidentFranklin.
DRooseveltwasassessing
thedamageoftheGreat
Depressionwhenhesaidthis
inhisfirstinauguraladdress.
FDRsNewDealprogram
wouldeventuallyreshapethe
economyandstructureof
theUnitedStates.

1) TheNewDealwas
implementedby
PresidentFranklin
DelanoRoosevelt.
Duringhis1932
campaignhe
promisedAnewdeal
fortheAmerican
people.Soonafter
hisinaugurationin
1933,workbeganon
thisnewdeal.This
planbelievedthatthe
powerofthefederal
governmentwas
neededtosavethe

about,Hoovercontacted
businessleaderstomeet
himandheaskedthemto
keepupproductionand
nottolayoffworkersor
cutwages.Also,heasked
neighbourstohelpone
anotherandnotreplyon
governmentaid.He
thoughtthatpeoplewould
actontheirownina
consideratewaytoendthe
GreatDepression.He
believedthatpeoples
volunteerism
and
generositywouldshow
duringtheDepression,
andthatwouldbethe
solutiontosolvingthe
GreatDepression.Healso
believedthatbeing
optimistic
willmake
everythingfallintoplace.
Hethoughttherewas
nothingwrongwiththe
Americaneconomyandall
thatwasneededwasto
restorepeople's
confidenceinthe
Americaneconomy.
2) Hooveralsopursuedmany
policiesinanattemptto
pullthecountryoutof
depression.In1929,he
authorizedthe
Mexican
Repatriationprogram
to
fightrampant,reducethe
burdenonmunicipalaid
services,andremove
peoplewhowere
perceivedasusurpersof
Americanjobs.The
programcontinueduntil
1937andforcedmigration

depression.Thefirst
newdeal
concentratedon
rebuildingthe
economyfromtop
down.TheNewDeal
consistedofmany,
manyactswhich
reallyhelpedthe
Americanpeopleget
outofthehorrible
recessiontheywere
facing.The
Agriculture
AdjustmentAct(AAA)
paidfarmersto
produceless.Its
purposewastohelp
farmersbyreducing
productionofstaple
crops,thusraising
farmpricesand
encouragingmore
diversifiesfarming.It
raisedthevalueof
crops.Healsosigned
theTennesseeValley
AuthorityActinto
law,enablingfederal
governmenttobuild
damsalongthe
TennesseeRiverthat
controlledand
generated
inexpensive
hydroelectricpower
forthepeopleinthat
region.
2) TheNational
RecoveryAct(NRA)
setupaframeforthe
newdeal.TheNRA
guaranteedthat
workerswouldhave

ofapproximately500,00
MexicansandMexican
AmericanstoMexico.He
alsosignedintothe
Smoot-HawleyTariff
Act,
whichraisedtariffsona
hugenumberofimported
items.Theincentiveofthe
actwastoencouragethe
purchaseof
American-madeproducts
byincreasingthecostof
importedgoodwhile
raisingrevenueforthe
federalgovernmentand
protectingfarmers.
Anothersolutionhehad
wasthe
Hoover
Moratorium
issuedin
1931.Itcalledfora
one-yearhalfinboth
reparationpaymentsmade
byGermanytoFranceas
wellaspaymentsofAllied
wardebtstotheUnited
States.Hooveralso
advocatedthemajorbanks
inthecountrytoforma
consortiumknownasthe
NationalCredit
Corporation(NCC).
HooverencouragedNCC
memberbankstoprovide
loanstosmallerbanksin
ordertopreventthem
fromcollapsing.

therighttounionize
andbargain
collectivelyforhigher
wagesandbetter
workingconditions.
Inadditiontothe
AAA,theTVAandthe
NRA,Roosevelthad
wonpassageof12
otherimportantlaws,
includingthe
Glass-Steagall
BankingBillandthe
HomeownersLoan
Actinhisfirst100
daysofoffice.FDR
wastakingthe
direct,vigorous
actionthathed
promisedinhis
inauguraladdress.

Efficacy

1) Volunteerismand
optimismfailedtoprevent
thetideofbusiness
collapse.Hooversbeliefif
ruggedindividualismwas
justnotworkingasa
solutionfortheGreat
Depression.Becausethe
situationoftheAmerican
economywasalreadybad,
peoplewerenotwillingto
shareanythingorbe
generous.Theywere
tryingtoprotectwhat
theyhadandtakecareof
themselves,noonehad
thetimetohelpothers.
2) WiththeSmoot-Hawley
TariffAct,theincentives
ofHooverwereall
reasonable,butbythat
timeinAmerican,
economicdepressionhad
spreadthroughoutmuch
oftheworld,spurring
othernationstorespond
byincreasingtariffson
American-madegoods.
Thisreducedinternational
trade,whichinturn
worsenedtheDepression.
TheHooverMoratorium
didlittletoeaseeconomic
depressionbecauseit
neveractuallywentinto
effect.AndwiththeNCC,
thebankswerereluctant
toprovideloanstosmaller
banksbecausetheywere
tryingtositup
themselves.TheNCCwas
incapabletofixthe
problemsitwasdesigned
tosolve.

1) Despitethebest
effortsofPresident
Rooseveltandhis
cabinet,the
Depressioncontinued
andthe
unemployment
persisted.People
grewmoredesperate
forasolutionfor
endingthe
Depressiononceand
forall.Sointhe
springof1935,
Rooseveltlauncheda
second,more
aggressiveseriesof
federalprograms.
Theseprogramsare
sometimescalledthe
SecondNewDeal.But
evendespitethe
SecondNewDeal,the
GreatDepression
draggedon.No
matterhowmany
actswerepassed,and
nomatterhowmany
peopletheseacts
benefited,the
Depressionkept
going.
2) TheNewDealwas
facedwithone
politicalsetbackafter
another.The
SupremeCourthad
declaredinitiatives
liketheNRAandthe
AAA
unconstitutional,
arguingthatthey
representedan
unconstitutional

extensionoffederal
authority.Inorderto
protecthisother
programsfrom
failing,in1937FDR
announcedaplanto
addenoughliberal
justicestotheCourt
toneutralizethe
obstructionist
conservatives.This
soonturnedouttobe
unnecessaryanddid
damagetotheNew
Dealprogram.
Anti-Roosevelt
sentimentwas
increasingandthe
economystartedto
slipbackintoa
recession.Roosevelt
wasnotabletoenact
anynewprograms
becausetherewere
somanypeoplewho
opposedhim.