Hoover's actions

• Problem: Banks

  Actions:

  • Set up the National Credit Corporation (1931):

  $500 million was raised to help failing banks.

  • Established the Reconstruction Finance Corporation (1932)

  $2 billion was provided by the government to rescue banks and other key organisations.

  Limitations:

  • The NCC's investors were afraid to lose money and spent very little of it
  • The RFC was criticised for spending government money to help banks rather than people.
• Problem: Farms

  Actions:

  • Agricultural Marketing Act (1929)

  Set up the Federal Farm Board to buy up crops from farmers

  • Hawley-smooth Triff

  Raised important duties on foreign food by 40% to force Americans to buy their own goods

  • Federal Farm Loan Act (amended 1932)

  $125 million given to Federal Land Banks to provide farm mortgages.

  Limitations:

  • The Farm board built up huge amounts of extra goods and could not stop the fall in prices
  • Higher tariffs led other nations to do the same, reducing international trade
  • The Federal Land Banks did not help farmers repay the mortgages.
• Problem: Industries

  Actions:

  • National Business Survey Conference (1929)
  • 400 business executives - made promises about production, expansion and wages.
  • Moratorium on First World War debts (1931)

  USA: stop collecting debts for 18 months - give Europe time to recover

  • Reconstruction Finance Corporation (1932)

  Made money available for banks to loan to industries.

  Limitations:

  • Promises made in 1929 by major employers were broken
  • The moratorium did not help enough to prevent the collapse of the international economy
  • Most of money loaned by RFC went to the largest banks/companies.
• Problem: Unemployment

  Hoover's actions...

  • Encouraged donations for relief, replaced by POUR
  • Public works: government doubled its spending on federal government projects over 3 years, e.g. the Grand Coulee Dam project.
  • Reconstruction Finance Corporation - 1932; federal government loan $300 million to states for relief

  However:

  • ECE and POUR could not raise enough to help all unemployed
  • spending on public works was low - $210 million in 1930, states spent around $2 billion
  • States had to meet tough requirements in order to borrow money, only $30 million had be loaned by 1932 end.
• POUR stands for President's Organisation for Unemployment Relief