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When confronted by the crisis of the Great Depression, the American president knew that doing null was not an selection. "That would have been utter ruin," he recalled. "Instead nosotros met the situation with proposals to individual concern and to the Congress of the virtually gigantic program of economic defence force and counterattack ever evolved in the history of the Democracy."

The words may have sounded similar Franklin D. Roosevelt touting his New Deal, but they were really uttered by his predecessor, Herbert Hoover, on the entrada trail in 1932.

Herbert Hoover riding with Franklin Delano Roosevelt on the 24-hour interval of FDR's presidential inauguration, 1933.

Bettmann Annal/Getty Images

Although sometimes portrayed as a president stubbornly unwilling to intervene in the marketplace during the Bang-up Low, Hoover was never a proponent of laissez-faire economics, says Kenneth Whyte, author of Hoover: An Extraordinary Life in Boggling Times. "Hoover entered public life during the Great War as Woodrow Wilson's head of the United States Food Administration and in that position oversaw an unprecedented intervention in the American economy to ensure that the United States and its allies were sufficiently provisioned to win the war," he says. "And equally president he put the government to work in ways that were inconceivable to any of his predecessors."

When he campaigned for the presidency amid a flourishing economic system in 1928, Hoover pledged, "We shall presently, with the help of God, exist in sight of the day when poverty will be banished from this nation." However, just seven months into Hoover's presidency, the Stock Market Crash of 1929 marked the start of a long economic implosion that grew into the Great Depression.

READ MORE: Here Are Warning Signs Investors Missed Before the 1929 Crash

Whyte says that Hoover rapidly showed a willingness to tap the resources of the federal government to address the fiscal crisis. "He immediately cut taxes and introduced a counter-cyclical programme of public works spending, the offset of its kind, to stimulate employment and recovery. He bullied the nation's largest employers into property off on layoffs—their usual reaction to a downturn—to stabilize the economy and aid recovery, and to proceed investing in new plants and equipment."

When it became clear in 1931 that the financial tailspin was not abating, Hoover convinced Congress to accept a moratorium on the payment of international debt and enacted a series of federal policies to stimulate the economy that some historians have referred to equally the "Hoover New Deal." The new Reconstruction Finance Corporation, established in January 1932, lent tax dollars to bail out American banks and businesses. The Emergency Relief and Structure Act, enacted in July 1932, broadened the agency's lending power to include financing state and local public works projects.

Hoover also approved substantial farm subsidy increases, eased requirements for the issuing of Federal Reserve notes and established the Federal Home Loan Bank Lath to back up mortgages. In an attempt to pay for the new programs, Hoover signed the Revenue Human action of 1932, which doubled the estate tax, hiked corporate tax rates and increased the summit personal tax rate from 25 to 63 percent.

READ More: How Economic Turmoil After WWI Contributed to the Great Depression

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Although Roosevelt would oversee a dramatic expansion of the federal regime himself, he attacked Hoover during the 1932 presidential entrada for engaging in "reckless and extravagant" spending and ran on a Autonomous platform calling for "an immediate and drastic reduction of governmental expenditures" by at to the lowest degree 25 percent. Roosevelt'south running mate, John Nance Garner, went so far as to accuse Hoover of "leading the country downwardly the path of socialism."

"This idea that Hoover was a laissez-faire president who didn't want to do anything really wasn't the case," says Dartmouth College economic science professor Douglas Irwin, author of Peddling Protectionism: Smoot-Hawley and the Dandy Depression. "He tried a lot of things, though non many worked."

A 1932 presidential election push button pivot for Herbert Hoover.

Independent Picture Service/UIG/Getty Images

While real federal spending rose by 48 percent during Hoover'due south presidency, unemployment also soared from 3 pct to an all-time high of 25 percent. More than 5,000 banks had failed by the time he left function in 1933.

Ane of Hoover'southward actions that had a particularly negative issue on the economic system was his signing of the Smoot-Hawley Tariff, which raised prices on thousands of imported appurtenances, confronting the advice of more than one,000 economists. "In terms of the economical impact, it had a big shock effect on trade," Irwin says. "It led to retaliation that hit foreign exports and the wrinkle of both imports and exports. It certainly didn't cause the Cracking Depression, but it was a contributing gene."

"Hoover'southward laissez-faire reputation is owed nearly entirely to 1930s Autonomous campaign rhetoric and New Deal school of historiography," Whyte says, "both of which were adamant to arraign Hoover for the Depression and present Franklin Roosevelt as sui generis, entirely distinct from his benighted Republican predecessors, and responsible for all of the meaningful policy innovation that emerged from the Depression."

READ MORE: Did New Deal Programs Help End the Great Depression?

After leaving the White Business firm, Hoover became a vociferous critic of Roosevelt's economic policies. He warned that the New Deal had a "pronounced odor of totalitarian government" and attacked Roosevelt'southward agricultural policies equally "goosestepping the people nether this pinkish banner of Planned Economy."

In the eyes of some, however, Hoover had laid the foundation for the subsequent economic policies he and so detested.

"I in one case made a list of New Bargain ventures begun during Hoover'due south years every bit Secretary of Commerce and then every bit president," Roosevelt counselor Rexford G. Tugwell wrote. "I had to conclude that his policies were substantially correct. The New Deal owed much to what he had begun."

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Source: https://www.history.com/news/great-depression-herbert-hoover-new-deal

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