How Did Hoover Cause The Great Depression

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half of its value in a month (Oakes 719). During the 1920s, the shift from an agricultural economy to a consumer goods based economy was taking place (Oakes 719). The shift caused crops to be valued very low, causing many people being to be unemployed, spending of what little savings they had, and then relying on “rickety credit and financial systems” (Oakes 719-720). Something very similar can be observed between the cause of the great depression and the most recent economic disaster. In both disasters, banks made risky investments or gave out risky loans, which lead to a much more disastrous financial meltdown (Oakes 720). The federal government also helped cause the Great Depression. According to Oakes, “The Republican administrations …show more content…

President Herbert Hoover was a republican. The republican policies did nothing to stabilize, let alone fix the Great Depression. They refused to expand the currency to promote growth because they favored a strong dollar, so they cut spending and money supply (Oakes 720). The philosophy that Hoover brought to the white house was that of mostly hands off when it comes to businesses (Oakes 723). In 1929, Hoover had enacted the Agricultural Marketing Act which gave loans to farmers, but did not regulate any production or prices (Oakes 724). After the crash, Hoover wanted to create the National Credit Corporation, where banks would choose to keep people employed, and banks would donate money to charities; it did not work. (Oakes 724). After his policies had failed, he decided the government would take a slightly increased role in mitigating the Great Depression. He created the Reconstruction Finance Corporation help big businesses back on their feet (Oakes 724). He also increased government income and he distributed crops to those in need; this too, did not work (Oakes 725). According to Oakes, “Hoover’s policies increased the Depression’s severity.” (725). He signed bills that would deepen the depression, while shooting down bills and initiatives that would give some relief, such as large public works (Oakes 725). In the end, he became bitter and said that he would ignore all, “futile attempts to cure poverty by the enactment of law.” (Oakes

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