After the crash of the stock market in 1929, the US faced its largest economic crisis, which was aptly named the Great Depression. Due to the economic and social harm that the depression inflicted on Americans, the national spirit was characterized by frustration. As the depression unfolded, a large number of American workers lost their jobs while others received sharply cut wages (Rappleye, 2017). President Herbert Hoover was at the time responsible for establishing policies that would help the country stand on its feet again. By the end of the depression, the president had become unpopular due to his resistance to government intervention. Hoover's view of American individualism, which he held on to despite the crisis that the country faced, affected his ability to effectively handle the depression.
President Hoover was not well-prepared for the impact that the crisis would have, and his restricted response meant that millions of Americans that required assistance did not receive it. The decisions that he made were in line with his views of limited intervention, a philosophy that a large number of people agreed with until the impact of the crisis emphasized the need for a response by the government. Hoover stubbornly refused to provide direct government aid, which he referred to as 'handouts' (Horwitz, 2011). He established the need for increased volunteering by America’s organizations, requesting for the continued employment of workers. He also emphasized to the American people the need to work harder. This philosophy was not sufficient in preventing the fall of the economy into further chaos.
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Hoover had a strong belief in American individualism, which is the philosophy that presented its rewards. While addressing the nation in 1931, the president asserted his view that direct intervention by the government would have an adverse impact on the character of American citizens and their ability to provide for themselves (Horwitz, 2011). Despite the knowledge that he had, he did not make any serious steps towards establishing government control of the stock market. In line with his philosophy, the steps that Hoover took to address the crash was founded on two traditions; he requested Americans to work hard while asking businesses to take up a role in sustaining the community. He immediately called for a meeting of leading businessmen, where he asked them to protect these existing wages, while America went through this short economic panic (Rappleye, 2017). However, the economic panic turned out not to be short but to last for two years.
When it became clear that the economy would not become better without the interference of the government, Hoover identified that the government needed to intervene. Hoover established the President’s Emergency Committee for Employment (PECE) (Rose, 2010). The organization did not present direct federal aid to those who required assistance. The committee provided assistance to several relief agencies. Hoover also greatly urged individuals of means to make fund donations to assist those in need, and he also handed out considerable private donations to firms that would help others. However, these efforts did not mitigate the extensive impact of the economic downfall.
Congress called for a greater level of response or aid from the government in the crisis. In 1930 and 1931, Congress made several attempts to increase the relief that was available to the mass public. Congress made an attempt to pass a bill of 60 million dollars to present relief to victims of the crisis by increasing the accessibility to food and animal feed (Rose, 2010). However, the president declined the bill and displayed resistance to any form of direct relief. The bill, which was decreased to 47 million dollars, provided for all things apart from food and did not sufficiently address the crisis (Rappleye, 2017). There was a further proposal of the Federal Emergency Relief, which would present 375 million dollars to states to assist in the provision of necessities to those that had lost their homes (Horwitz, 2011). Hoover also showed opposition to this bill. His opposition was based on the belief or opinion that it would ruin the equilibrium of power between different levels of government.
With the worsening of conditions, Hoover finally relaxed his resistance to the provision of relief and established an organization known as the Reconstruction Finance Corporation (RFC) in 1932 (Rappleye, 2017). While it was not direct relief, the RFC was wider in scope in comparison to efforts that had been conducted before. The objective was to enhance the confidence of the American people in the financial institution of the nation by establishing a solid base. This model was limited as it only provided money to financial institutions that have enough collateral, which means that the aid was only received by large banks. Hoover’s resistance to providing aid adversely affected his reelection, with many protests and strikes characterizing the great depression.
Hoover's American individualism was not appropriate in dealing with the economic crisis that the nation faced. Due to his resistance to government intervention, most Americans in an impoverished state were not able to receive the aid that they needed. The decisions that Hoover ultimately engaged in were not sufficient to support the needs of the American people. He established programs for placing people back in employment and providing aid to local and state charities. However, these programs were small in scale and highly particular to the populations that would benefit, as they only impacted a lower percentage of the population in need.
References
Horwitz, S. (2011). Herbert Hoover: Father of the New Deal. Cato Institute Briefing Paper , (122).
Rappleye, C. (2017). Herbert Hoover in the White House: The Ordeal of the Presidency . Simon and Schuster.
Rose, J. D. (2010). Hoover's truce: wage rigidity in the onset of the Great Depression. The Journal of Economic History , 843-870.
