Hoover's Response to the Great Depression: Economic Measures and Social Impact
During the early years of the Great Depression, President Hoover implemented several economic measures that proved largely ineffective at combating the crisis. The government made 300millionavailabletostatesforunemploymentrelief,butonly30 million was actually distributed due to strict requirements and bureaucratic obstacles. The Reconstruction Finance Corporation (RFC), established in 1932, provided loans to rescue struggling businesses, banks, and insurance companies, though these efforts fell short as over 5,000 businesses still went bankrupt.
Definition: The Reconstruction Finance Corporation (RFC) was a government corporation that provided financial support to state and local governments and made loans to banks, railroads, mortgage associations and other businesses during the Great Depression.
Hoover's approach to taxation underwent significant changes. Initially, his administration cut taxes by $130 million to stimulate business investment. However, as the crisis deepened, the government shifted to increasing business taxes to balance the federal budget. The Hawley-Smoot Tariff Act of 1930 raised import tariffs by 50% in an attempt to protect American products, but this backfired when foreign countries retaliated with their own tariffs on US goods, making the economic situation worse.
The wealth disparity became increasingly apparent during this period. While millions suffered from unemployment and poverty, the very wealthy remained relatively prosperous. Multi-millionaires protected their wealth by investing in stable assets like gold and property, allowing them to weather bank failures better than average citizens. This economic inequality led to social tensions and protests, most notably the Bonus Army March of 1932.