Herbert Hoover’s response to the Great Depression was shaped by his strong beliefs in self-reliance and American individualism. He believed that individuals were responsible for their own well-being and that government intervention should be minimal. Hoover maintained that hard work and initiative could enable anyone to succeed, as he had, and this belief made him hesitant to implement extensive government aid programs.

 

To address the crisis, Hoover took symbolic steps, such as cutting his own salary and those of state officials by 20%, to free up funds for recovery efforts. He worked long hours, often skipping meals, in his determination to address the economic challenges. However, his policies often fell short of providing meaningful relief.

One of Hoover’s early measures was the Agricultural Marketing Act of 1929, which created the Federal Farm Board with $500 million in funds to support farmers. The board aimed to stabilize crop prices by organizing cooperative groups known as “stabilization corporations.” Despite these efforts, falling crop prices overwhelmed the program, rendering it ineffective.

In 1930, Hoover encouraged voluntary cooperation between businesses and workers rather than mandating government action. During this time, he also signed the Hawley-Smoot Tariff, which raised tariffs by 40% on agricultural and industrial goods to protect American products. This policy backfired as other countries retaliated with their own tariffs, reducing international trade and worsening conditions for American farmers and industries.

As the crisis deepened in 1931, Hoover provided $49 million in loans to drought victims and announced an 18-month moratorium on collecting war debts from European nations. This was intended to ease international financial pressures, but domestic economic challenges continued to grow. Hoover also established the National Credit Corporation with $2 billion to stabilize banks and restore confidence in financial institutions.

In 1932, Hoover signed the Federal Home Loan Bank Act, which created federal banks to assist mortgage lenders and help homeowners avoid foreclosure. However, the program was largely ineffective because it only allowed loans to cover 50% of property values, leaving many people without sufficient support. The Reconstruction Finance Corporation (RFC) was another initiative, created with $2 billion to support struggling banks, railroads, and other financial institutions. The RFC was later authorized to provide $300 million to states for relief programs and $1.5 billion for public works projects, aiming to create jobs and stimulate the economy.

One of the most controversial moments of Hoover’s presidency occurred in 1932 when thousands of World War I veterans and their families, known as the “Bonus Army,” marched on Washington, D.C., to demand early payment of their promised military bonuses. When Congress rejected their demands, Hoover ordered their removal. The military used force, including tear gas and bayonets, to disperse the protesters. This harsh response severely damaged Hoover’s public image and further eroded public confidence in his leadership during the Great Depression.