Hoover's response to the depression.

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  • Hoover's response to the depression. 1930-32
    • He reduced income tax.
    • Made big businesses to keep wages high in order to encourage spending.
      • This backfired as people saved, not spent.
    • 1930 -  Smoot - Hawley tariff increased tax on imports to get everyone to buy from America.
      • This was counter productive as other countries raised their tariffs and global trade fell. USA lost money.
    • Reconstruction Finance co-operation which loaned money to banks, rail-roads to save jobs.
      • He hoped money would trickle down the economy. Never happened and looked as if Hoover only helped the rich.
    • Created "Public Works" where he sponsored new projects like "the hoover dam" to create jobs.
      • Too little too late - unemployment was still too high.
    • Grain Stabilisation Co-operation tried to guarantee fair price for farmers to buy and store wheat until prices went back up.
      • However the price never went up, only down and the industry crashed.
    • 1932 - Revenue act sharply increased taxes on business.
      • Only made spending harder for poor.
    • 1930 - Didn't take immediate and drastic action because he and many others didn't think it was necessary.


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