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Hoover's response - Hoovers response to the Great...

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Hoover’s response to the Great Depression
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Realizing that people’s faith in the plummeting economy might hinder the chances of recovery, Hoover claimed that the economic downswing would soon pass. Following his faith in voluntary action, Hoover asked business leaders to pledge not to cut wages or production. He urged city and state governments to stimulate local economies through building projects. Hoover’s Response
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Hoover’s Response (cont.) Despite Hoover’s efforts, business conditions worsened. The early 1930s saw declining incomes, rising unemployment, and mounting business failures. With the number of unemployed growing every month, charity funds soon proved inadequate. The Federal Reserve compounded the problem by squandering chances to rescue the collapsing banking system.
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Too Little Too Late Hoover finally bowed to pressure and responded to the deepening economic crisis by asking Congress to approve the Reconstruction Finance Corporation (RFC). The RFC was authorized to dispense $2 billion in loans–more in federal aid than ever requested by a President–to faltering banks, insurance companies, and railroads.
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Too Little Too Late (cont.) When the trickle-down approach failed, Congress passed the Emergency Relief Act, which approved additional loans to state governments for unemployment relief. However, state governments did not qualify for the loans unless they were on the verge of bankruptcy.
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With wages dropping, unemployment growing, and so little money trickling down from relief measures, resentment grew among those hardest hit by the Depression. Economic suffering led veterans from World War I to organize a protest aimed at winning early payment of a bonus due to them in 1945.
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