Major recovery plans results results results hoover

Major Recovery Plans
Results Results Results
Hoover Responds to the Depression
P
resident Hoover tried to fix the economy by provid-
ing loans to banks and corporations and by starting
public works projects. Later, he reluctantly supported
direct aid to impoverished families. By the early 1930s,
more Americans were demanding the government‘s help.
Promoting Recovery
MAIN
Idea
Hoover encouraged businesses to stop laying off workers and
created public works projects.
HISTORY AND YOU
What efforts would you have taken to help the econ-
omy if you had been president? Read about the public works efforts of the
early 1930s.
On Friday, October 25, 1929, the day after Black Thursday,
President Herbert Hoover declared that “the fundamental business
of the country . . . is on a sound and prosperous basis.” On March 7,
1930, he told the press that “the worst effects of the crash upon
employment will have passed during the next sixty days.” Critics
derided his optimism as conditions worsened. Hoover, however,
hoped to downplay the public’s fears. He wanted to avoid more bank
runs and layoffs by urging consumers and business leaders to make
rational decisions. In the end, Hoover’s efforts failed to inspire the
public’s confidence, and the economy continued its downward slide.
President Hoover believed that the American system of “rugged
individualism” would keep the economy moving. He felt that the
government should not step in to help individuals out. After World
War I, many European countries had implemented a form of social-
ism, which Hoover felt contributed to their lack of economic recovery.
In 1922 Hoover had written a book, American Individualism, which
presented arguments for why the American system of individualism
was the best social, political, spiritual, and economic system in the
world. Thus, it was difficult for Hoover to propose policies that had
the government taking more control.
Despite his public statements that the economy was not in trouble,
Hoover was worried. To devise strategies for improving the economy,
he organized a series of conferences, bringing together the heads of
banks, railroads, and other big businesses, as well as labor leaders
and government officials.
Industry leaders pledged to keep factories open and to stop slash-
ing wages. By 1931, however, they had broken those pledges. Hoover
then increased the funding for public works, or government-
financed building projects. The resulting construction jobs were
intended to replace some of those lost in the private sector.

Chapter 18 The Great Depression Begins
641
Public works projects did create some jobs
but for only a small fraction of the millions
who were unemployed. The government could
create enough new jobs only by massively
increasing government spending, which
Hoover refused to do.
Someone had to pay for public works proj-
ects. If the government raised taxes to pay for
them, consumers would have less money to
spend, further hurting already struggling busi-
nesses. If the government kept taxes low and
ran a budget deficit instead—spending more
money than it collected in taxes—it would
have to borrow the money. Borrowing would