HERBERT HOOVER AND THE GREAT DEPRESSION : THE TRAGIC PRESIDENCY The sh proscribed of Herbert vacuum has al delegacys been to America s large first wherein unity stub non be menti aned with egress noning the new(prenominal) 1 vacuum has been throw in backed as America s death chair at the eve of expectant belief It was an event that not mediocre Americans would al carriages remember but even the world away(p) the and so World s frugal Bull . For the Americans , clean was integrity chairperson who never cargond for any maven (Hughes , Patrick 1999 . For others , he was a salient channelise (Fau interchange , Martin I . 1985 . For those whom he had armed serviceed during the Belgian crisis , he was the deliveryman of Belgium (Nash , George 1988 hoover among other things was a founder of principle , a eccentric person he had lived the rest of his emotional state even during the course of the extensive Depression . This is angiotensin converting enzyme good reason to well(p)ify he was so at the even up place at the faulty time (McElvaine , Robert S . 1984In this , we give try to look into the principles that vacuum held in his heart and how those principles affected the national policies he tried to implement during his term especi ally during the course of the Great Depression . We ordain also navigate outlinely the earlier hearty and community services before his presidency because this writer finds it an crucial link to the superhero image he was tagged . This allow foring be modal(a) enough to examine the major policies utilise by vacuum and critically evaluate them whether as a victory or a disap guide onment . Although this causation believes that clean was star Great Man with reference to his principles and for his services he leng thened to the the great unwashed , this holds that vacuum-clean s presidency was a tragic oneBACKGROUND OF THE DEPRESSION there were smooth disagreements between frugalal analysts as to what caused the Great Depression although they all agree that were there was no single cause . There were those who attributed the crisis to the Treaty of Versailles subsequently WWI in 1919 . 1But many disregarded this contestation since most analysts say that the Treaty was insignificant relative to economic impacts . One of the agreed cause was the task on international monetary policies at the immediately before the ikon . in time , one economist explained one specific cause of the problem : the high percentage of parenthood mart values is let the cat out of the bag A range of evidence suggests that at the grocery store spinning top in September 1929 something like forty percent of blood tune market values were pure air prices above constitutional values for no reason other than that a ample cross-section of investors concept that the stock market would go up because it had gone up (De broad , J . Bradford , 1997 . It is to be noted that the stock market of the country is in microphone boom in 1920 , which Delong attributed to usual optimism . Businessmen and economists believed that the newly-born Federal Reserve would stabilize the economy , and that the dance step of technological progress guaranteed rapidly rising living standards and expanding marketsReports give tongue to that the stock market rose at or so 82 points higher in September compared to its aim in January of 1929 . This market height might fork out signaled a bad forecast , if anyone believes in such , for a disaster yet to come- an economic disaster that every American go forth forever remember . It was indeed a nightmare , which started on October 24 when wireless stocks dropped 40 of their value . That day was marked in the cal closingar of every American as Black Thursday On the 29th the stock market traded - a record - and 30 shootion dollars vanished into thin air (Norton , Richard Smith and Timothy Walch , 2004 . It was indeed price marking as a Black TuesdayIf soulfulness knows a little of economics , he knows what will come beside as implications of such marker plunge . Although not all Americans know what this actually direction during those days , they tangle how it is to be in a period of economic mental picture . Businessmen cut piling on investment subject their production and consequently would be force to cut pass costs like overhead a vast cleave of which is wages or salary expenses not including employee regular expediencys . The next item in the cycle would be un date and then families would of course cut mountain on their expenses because they soak up little or nothing more to spend . This cut down will then reduce the purchasing power of the consumers and so products in the market will no more be sold as more than as it was before The resultant will be overproduction and we know that this will cause a loss on the part of the producer . The cycle then continuesAs we can count , it is not directly clean who caused the depression if anyone should be blaming him . In fact , it was just now few months after he started in his office that the disaster happened . It was not vacuum-clean s nor any single person who caused the depression but it was the mute a combination of several economic problems which were complicated by the economists in any case such(prenominal) self-confidence on the stock market at the time of its peak and the fact that they too halt treated the event as a part of the usual economic cycle . It was indeed a result of a wrong economic speculation . Besides this , historians and economists fork up listed other 1causes of the Great Depression as follows (1 ) unequal distribution of wealthiness (2 ) overproduction and under consumption due to market color (3 ) buying on credit (4 ) weakness in the inelegant area and farm foreclosures (5 ) bank nonstarters (6 ) weakness in the sincere estate and construction vault of heaven since 1925 and (7 ) massive loans and investment in stock speculation and buying on marginHOOVER S ACTIONS TO THE GREAT DEPRESSIONAnalysts and historians who wrote about hoover s presidency seem to agree with each other by concluding that the President s actions to the Great Depression implied his life principles and in fact had rejected other policies and programs proposed by his advisors . As one have noted It is impossible to understand Herbert Hoover and his reaction to the Depression without seeing that he was that rarest of politicians , a man of principle . He was an idealist who firmly (and rightly ) believed that means cannot be sepa cropd from ends (Hughes , Patrick 1999 . This principle however seemed to have been out of the context of the Great Depression as policies formulated and implement by Hoover based on his principles were proven to be harmsWhat Hoover and probably whoever was the President at that time did was to pee statement to the nation give them the assurance that everything will be fine , everything is normal and what happened was temporary and soon can be settled . But the superhero was indeed profligate . On the twenty-first of November , the President called for a agate line conference with leaders from the argument , labor and farm sectors to discuss the matter . Hoover desire the sectors help by making them promise to hold the line on wages on which Hoover initially succeedCollectively , the President on 1 .8 billion commitment for new constructions and repairs , which should check up on the country of more avail up to(p) or at to the lowest degree alternative sources of income for the raft should bank linees forced to lay off workers . What was worried in that meeting was the commitment of well-known patronageman , enthalpy Ford , who committed to the President an additional 1 .00 day by day pay for its workers from its usual 6 .00 . Those who were in the railroad application also do their pledges in cooperation with the President s plea . On the other sight , then organized labor sector did their part by withdrawing their latest wage demandsThe Confidence CampaignHoover thought that the economic panic was just a sort of psychological fears and this can only be pressed down through and through a confidence campaign For Hoover , confidence is the stand by a line (Sobel , Robert 1975 . In his statements speaked to the nation , Hoover was very convinced(p) that the crisis would end in sixty days . As long as Americans didn t let panic cause them to suffer gravid and unwarranted action , the country would witness a brief and limited recession and then resume its economic boom The consequence was that the nation s expectations of the President naturally crashed down too when the 60th day was over and nothing better happenedThe confidence campaign , when we are to evaluate the implications indeed plunged down the popularity of Hoover in the eyes of the tidy sum It actually brought the people an impression that the President did not really care that often for the people since he appeared to be thought process and believing that everything is fine . It appeared for the people that Hoover did not realize how poverty had swept out their resources and that the President cannot feel the hardships and the hunger they were then experiencing . In the end , the policy of confidence campaign was unsuccessful in addressing the Great Depression . The people did panic They held their remaining resources , cut down on their expenses for fear of losing everything else should the pip get worse . The investors were not encouraged to take the risk of releasing their resources to create employment . Businessmen were forced to lay off workers , shut down their machineries and cut down on production . Financial institutions squirrel away property , refused to lend more cash because of the fact that the people s savings in their banks were literally withdrawn to the ebb These reactions have actually worsened the situationThe Voluntarism PoliciesHoover believes that it is not the certificate of indebtedness of the government to calve the situation and that the best solution he knows was to implement unfluctuating cooperation of the nonpublic sector and the people themselves . This is one of the effects of his principles that for a government to directly answer the crisis through temperance will just demoralize the nation . The President insisted that the problem cannot be resolved by legislative action , instead stinting wounds must be healed by . the producers and consumers themselves (The Times , come forth 26 December 4 ,1929As part of the Voluntarism campaign , the President created the Federal Farm Board through the Agricultural merchandise Act in 1929 . Its purpose was to negotiate with farmers and market cooperatives , ply loans and to purchase surplus production . The result however was diametrical to Hoover s expectations . The purchasing power of the farmers continued to plunge , surpluses were not eliminated and overproduction even worsened (Schlesinger , Arhur Jr . 1957 ,.239Relative to unemployment , Hoover devised a same move out of voluntarism and cooperation and thus created the Emergency Committee on Employment . The purpose of the Committee was to gather data and selective information that can be used by states , topical anaestheticities , furrowes and private charities to help address the problem on unemployment Primarily , the committee was tasked to withdraw together all associateed agencies that will deal with the unemployment relief . Sad to say , the program failed as well . The plunging economic situation forced businesses to lay off workers resulting to a 3 .5 gazillion counts of unemployed Americans by October of 1930 (The New York Times , come out No .1 October 22 , 1930The Idea of ProgressivismFor Hoover , a industrial nation like America should not be handling unemployment relief . The President firmly believes that American government should hold up its intervention in the private at the stripped level and that the sector should be remaining handling its affairs . Hoover felt that the private sector in the modern industrial world should l garner to operate with the minimum supervision and intervention of its government . One writer regarded this principle as a Jeffersonian heritage in a highly grueling , urban industrial setting that Hoover was unable to effectively apply in the modern yet depressed situation of America (Hughes , Patrick 1999There were demands from the federal government to institute relief or welfare payments for the conveyy which Hoover rejected . He stood with his opinion that the matter should be left in the hands of the forgiving institutions like Community Chest , United Way , the salvation Army churches , individual philanthropy and many others . In his go through , federal relief will be very monstrous-ticket(prenominal) on the part of the government . He feared that the massive expenses in relief would bring imbalance on the budget then deficit and then losing the confidence of businessmen and other investorsIn evaluating this policy , Hoover might have been right for employing his principle of maintaining the minimum government intervention on matters of employment relief . withal , this author believes that the time of the Great Depression was not the right time to employ such principle . Hoover may not be able to realize that the private sector naturally would protect themselves from losing much of their resources since there was no assurance on how long the crisis persist . Another thing is that the private sector had already lost much since they incurred costs on producing products that could not be sold since people held back their money . The massive unemployment should have been a bold evidence for Hoover that the business sector can no semipermanent take the risk of investing their resources since their products will just be foul-smelling in the market . Moreover the private sector can no longer contain their social responsibility of service of process relieve the problem . Still , Hoover s position was not moved . HE did however incr sculptural reliefd the government pass through public works as a way of relieving unemployment and yet the effort was not enough to significantly fall the 25 unemployment rate by 1931The Policy of Protective TariffsThere is one economic policy employed by Hoover during the Great Depression which I would say was an evidence that the President cared much for his people and his country . The protective tariffs was then strictly implemented wherein tariffs paid for imported products were increased for the purpose of protecting the local anaesthetic business sector Hoover may also have the policy implemented for the purpose of accumulating for revenues for the government . His confidence that the international investors would continue to trade with the country was however another failure since the high amount of tariffs discouraged foreign traders to do business with the American nationIn 1930 , President Hoover signed into the Congress bill and was called the Smoot-Hawley Tariff . History said that the said tariff rate was the highest in American history with ad valorem rate jumping from an already high 33 percent to more than 40 percent (Hughes 1999 . For the foreign traders to back out on their business relationship with America due to the high tariff rates is indeed justifiable on the part of those who have risked their money and other resources only to find out that they will suffer much from tariffs . It is another thing to consider that the American economic situation will not give them much benefit because the nation literally do not have that much money to buy their goods as compared before . To persist doing business with America therefore is a suicideThe Reconstruction Finance CorporationFor the fiscal institutions , Hoover created the Reconstruction Finance Corporation (RFC ) in January of 1932 as a response to the downfall of banks and lending institutions including cooperatives and insurance companies . In a report by the New York Times (Issue No .1 December 09 , 1931 , the President reportedly proposed that creation of the RFC during his State of the state of matter Address and that Hoover asked for a capital of 500 meg . The main targets of the RFC were the weak banks that should benefit from the loans RFC was offering . This might have raised the fear and panic of depositors thinking that when their banks availed of the loan offered , it then suggests that their banks might have a big problem .
The result was that the depositors withdrew their money from those banksThe events of massive withdrawals contributed to the failure of the RFC . Banks refused to avail of the loans offered in to turn away panic of their clients . Moreover it was reported that the RFC took only the soundest assets of a troubled institution as security , leaving banks less declaration and creating , rather than dispelling , public apprehension (Rosen , Elliot 1977 . Rosen also stressed that RFC develop and implemented severely strict policies as to the requirements for granting of loans and therefore only few qualified . The state governments on the other hand , were less benefited from the programs of the RFC . It is the same reason of strict requirements for granting loans that deprived states to cut back and be granted such loans . The result then was that RFC was able to lend only 35 million of its 300 million capitalIf we are to evaluate the program , we can immediately close that it was ineffective and that relative to addressing the economic crisis , it was indeed a failure . Instead of helping weak financial institutions and small local state governments , the program actually appeared to be biased in lending financial resources since only those who have sound assets could be granted the loan . In short , the weaker ones were deprived of availing the supposed(p) to be financial aid . The program was bias in the sense that it had helped those who obviously can afford to make it up through the course of the depression . It was bias because those , which badly need the help , were literally deprived . The strict requirements , to be fair with Hoover can be justified by thinking that those were part of ensuring that loaned amount will be repaid after the financial institution hopefully recovered . The strict requirements were merely part of an assurance that the government capital invested for the program will earn in the long runAgain , there was one thing Hoover overlooked and probably was not able to realize . What was just sad about it was that it was the same thing he overlooked when he implemented the voluntarism and cooperation policies The whole nation is in great distress and that all sectors of the country were holding on to what was left of them hoping that such would keep them going until the depression ends . No one was to be blamed for hesitating to take another progress risks since even the government did not give any clear time of ending the crisis . We cannot blame the banks and other financial institutions for hoard money because theirs are business and business means investors are necessarily expecting income . It is a different thing to conduct business and to be in a charitable institutionIt is also worth evaluating the purpose of the RFC to encourage the business sector for expanding in to ease the problem of unemployment . This was however the last thing on the thought of every investor during that time . Simple analysis of the situation will give us the conclusion that the investors were right in their last to freeze their resources . Again , the purchasing power of the people shrunk to the point that they can no longer buy the products they produce . So why would one businessman increase his production when he knows that more than a quarter of the population can no longer afford to buy his products . In fact , he had already laid-off employees because he can no longer afford to pay for their wages and their benefits ? What then Hoover made think that expansion was possible during that timeIn short , RFC was a big failure . Businesses did not expand , workers were not rehired , unemployment rate was not improved , people did increased their spending and consumption and so the economic crisis was not successfully relieved . There is one sound analysis made by one author relative to RFC : While the RFC was an innovative step , note that it was in line with Hoover s conservative business-oriented philosophy and approach . The loans went to banks and big businesses not to the unemployed , homeless , or needy (McElvaine , Robert S . 1984CONCLUSIONPresident Herbert Hoover was one great man in the American history if we are to consider his accomplishments during his service in the console table prior to his presidency . For the Belgians , Hoover was a hero and a savior . For others , Hoover was a Great Engineer and still others consider him a superhero . His popularity and well-established good reputation indeed helped him in his presidential campaign . However this superhero image brought too much expectation from the American nation during his term as a President . The same high expectations pulled him down to the ebb of fumbling image when he failed to efficiently address the economic crisis during the Great DepressionAlthough Hoover was admirable for his principles , his refusal to compromise these principles brought distrust from the Americans as to his concern for the people . These same principles guided him in devising plans and programs meant to address the problems during the depression but sad to say , all of them literally failed . Upon evaluation of the specific programs Hoover implemented , we were able to see the President indeed stood to its belief that it was the not the primary responsibility of the government to relieve the problem of unemployment rather he had the responsibility passed to the private sector . His policies of cooperation and voluntarism failed along with his confidence campaign . His ideas of progressivism and of insistence balance in the federal budget were proven to be ineffective in alleviating the economic crisis . In the same way , the policy of protective tariffs failed to serve its purpose along with the government-created part , RFC . It is therefore safe to conclude that Hoover s presidency was indeed a tragic one . He will unceasingly be remembered for his humanitarian deeds , his being a savior for the Belgians , his being a Great Engineer in his archaeozoic years in government service and he will probably retain his superhero image However it is more apparent that most people , especially the Americans will remember him for his failure to solve the problem of the Great Depression WORKS CITEDDeLong , Bradford J (1997 . Slouching Towards Utopia : The Economic History of the Twentieth Century The Great wreck and the Great Slump February 03 , 1997 . Retrieved on November 14 , 2007 from HYPERLINK hypertext transfer protocol /econ161 .berkeley .edu /TCEH /Slouch_Crash14 .html http /econ161 .berkeley .edu /TCEH /Slouch_Crash14 .htmlFausold , Martin I (1985 . The Presidency of Herbert Hoover University Press of Kansas Lawrence , Kan , 1985Hughes , Patrick (1999 Herbert Hoover s sad Presidency Retrieved on November 14 , 2007 from HYPERLINK http / web .austincc .edu /lpatrick /his2341 /tragic .html http /www .austincc .edu /lpatrick /his2341 /tragic .htmlMcElvaine , Robert S (1984 . The Great Depression : America 1929-1941 . Time Books . New York , 1984Nash , George . The Life of Herbert Hoover . Vol . 2 : The Humanitarian , 1914-1917 . New York : W .W . Norton , 1988Press Statement . Rpt . as text edition of President s Message Emphasizing Soundness of Nation s Economic Position New York Times 4 Dec . 1929 26Rosen , Elliot . Hoover , Roosevelt , and the Brains Trust . New York Columbia University Press , 1977Schlesinger , Arthur Jr . The Crisis of the Old . capital of Massachusetts Houghton Mifflin , 1957Smith , Richard Norton and Timothy Walch (2004 . The Ordeal of Herbert Hoover The Prologue Magazine . Summer 2004 , Vol . 36 , No . 2 . Retrieved on November 14 , 2007 from HYPERLINK http /www .archives .gov /publications /prologue /2004 /summer /hoover-1 .html br http /www .archives .gov /publications /prologue /2004 /summer /hoover-1 .htmlSobel , Robert . Herbert Hoover at the Onset of the Great Depression Edited by Harold M . Hyman . Philadelphia : J .B . Lippincott , 19751 The Origins of The Great Depression and President Herbert Hoover Retrieved on November 14 , 2007 from HYPERLINK http /www-rohan .sdsu .edu revans /origins_gd .htm http /www-rohan .sdsu .edu revans /origins_gd .htm ...If you want to get a full essay, order it on our website:
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