Republicans attempt to deal with the crisis

• What was a republican policy that allowed the US economy to grow (before 1921)?

  They would not interfere with businesses
• When did Herbert Hoover become president?

  In 1929 - to deal with the problems of the Great Depression
• What did Hoover promise to do after being brought in as President?

  He promised to bring prosperity to everyone in America with the slogan “a chicken for every pot” - However, he thought that charities should look after the poor instead of the government
• What was laissez faire?

  When a government doesn't believe in interfering in the lives of individuals and businesses. Freedom to live your life was one of the most important roles of governement
• What was rugged individualism?

  People should be self reliant and responsible for themselves
• To begin with, Hoover's policies were not very effective. Eventually he tried to take action to help people but he did too little too late
• What was Hoover's 1929 Agricultural Marketing Act?

  This Act set up the Federal Farm Board in 1929. It was intended to help keep prices for farm produce high by buying anything farmers could not sell at market - It was not effective as it encourage farmers to overproduce , so the price of farm produce kept falling
• What was the Hawley Smoot Tariff Act?

  Passed in March 1930, this set a tariff (tax) on goods imported into the USA from other countries in order to make foreign goods more expensive than American made ones - other countries responded by taxing American goods on sale in their countries which made it harder American companies to make money
• What was the 1932 Emergency Relief Act (ERA)?

  Passed in July 1932 , this gave US states a total of $ 300 million in order to support the unemployed - few states took advantage of this as they did not want to get into debt that they could not pay off
• What relief agency did Hoover set up in October 1930, what was its role and why was it unsuccessful?

  The President's Emergency Committee for Employment (PECE) -It aimed to support state programmes for assisting the unemployed, and help businesses employ more people  - It was unsuccessful as there was no government money to help as Hoover was reluctant to raise taxes for it
• What relief agency replaced the PECE in 1931 and what was its role?

  The President's Organisation on Unemployment Relief (POUR) - this aimed to help charities raise more money to help the poor - this was not enough to meet the increasing demand for their services
• Hoover realised the US government needed to provide financial aid to those who were struggling and hoped it would allow them to start spending money again
• What were some things that Hoover did that made the financial situation worse?

  When he restricted the supply of banknotes to stop the value of money held by banks from falling, people had less money to spend . When he increased interest rates to make borrowing more expensive, it was more difficult for companies to get loans to help them through the Great Depression.
• Why did Hoover ask for a $160 million cut in income taxes in October 1929?

  He believed that lower taxes would help struggling businesses make more money - This left the US government with less money to use to deal with the crisis
• How did Hoover reverse the tax cut he made in October 1929?

  He passed the 1932 Revenue Act that raised taxes for everyone - It increased the top level of income tax from 25 % to 63 %
• Hoover realised he needed to give more money to banks so that people could access money and start spending again
• The Reconstruction Finance Corporation Act was passed on the 22nd of January 1932 and this created The Reconstruction Finance Corporation. What did this do?


  It allowed banks to provide $2 billion of government money in emergency loans to help struggling banks and insurance companies, as well as businesses and railroads that were in danger of going bankrupt - The RFC had made a difference by the 1932 Presidential election and the idea was continued by FDR's New Deal
• What was the Federal Home Loan Bank Act?

  Passed in July 1932 , 12 banks were set up across the USA - They would provide loans to allow construction companies to build houses , as well as mortgages for people who wanted to buy houses