The+Hoover+Administration+pts.+1+&+2

= The Hoover Administration =

The Lead Up
In the Presidential race of 1928, the clear choice for the Republican Party was the very popular politician Herbert Hoover. He was a progressive republican, a self made man born in a rural area but sophisticated nonetheless. His main rival in the race was Alfred E. Smith, a Catholic Irish American from New York that was a fiery speaker and was anti- prohibition. However, he was no match for the popular Coolidge who won by a landslide. He was especially dominant with electoral votes, winning 444 electoral votes to Smith's measly 87.

Even before Herbert Hoover took office he saw the stock market getting out of control. But Calvin Coolidge was not worried, in fact, he said "No Congress...ever assembled has met with a more pleasing prospect than that which appears at the present time"... "In the domestic field there is tranquility and contentment...and the highest record of prosperity in years." Even before he was inaugurated he advised the Federal Reserve to put the brakes on "crazy and dangerous gambling" on Wall Street. He began by hiking the discount rate the the Fed charged banks for speculative loans. He was so worried, in fact, that he tried to get newspapers to run stories pointing out the dangers of the rampant speculation on Wall Street. All he got in return was ridiculed. He was made fun of by Americans that thought that the prosperity would never end.

By September of 1929 the stocks were higher than ever, with General Electric topping out the charts. At this point President Coolidge looked like a fool when he criticized the stock market, so he mostly kept his mouth shut.

On the day of the crash, Black Tuesday, a record 30 billion dollars vanished into thin air. Many famous people such as Jack Dempsey tons of money. People were in a panic. Hoover, contrary to what many people think, did act immediately.



Hoover's Action
“Refusing to accept the "natural" economic cycle in which a market crash was followed by cuts in business investment, production and wages, Hoover summoned industrialists to the White House on November 21, part of a round robin of conferences with business, labor, and farm leaders, and secured a promise to hold the line on wages. Henry Ford even agreed to increase workers' daily pay from six to seven dollars. From the nation's utilities, Hoover won commitments of $1.8 billion in new construction and repairs for 1930. Railroad executives made a similar pledge. Organized labor agreed to withdraw its latest wage demands.”

Hoover ordered the construction of many different projects, in all of the 48 states of the country. He also approached Congress with a 160 million dollar tax cut and a newly placed significance on public works. This action restored a small bull market on Wall Street that restored confidence in americans. Praise for the President was widespread. The New York Times wrote "No one in his place could have done more." However, Americans didn't realize what kind of a decade they were in for.

What President Hoover didn't realize was that no matter how much that he got businesses and employers to spend, if the general public didn't buy things, the economy was doomed. By 1929 production was outstripping the demand, and the depression was further lessening buying power. President Hoover did not realize how much government action would be required to get the Americans out of the Depression.