Hoover saw the presidency as a vehicle for improving the conditions of all Americans by encouraging public-private cooperation—what he termed "volunteerism". He tended to oppose governmental coercion or intervention, as he thought they infringed on American ideals of individualism and self-reliance. Hoover did, however, advocate government-funded pensions for those over the age of 65, although this proposal was not acted on during his presidency. The first major bill that he signed, the
Agricultural Marketing Act of 1929, established the
Federal Farm Board in order to stabilize farm prices. Hoover made extensive use of commissions to study issues and propose solutions, and many of those commissions were sponsored by private donors rather than by the government. One of the commissions started by Hoover, the Research Committee on Social Trends, was tasked with surveying the entirety of American society. He appointed a Cabinet consisting largely of wealthy, business-oriented conservatives, including Secretary of the Treasury
Andrew Mellon.
Lou Henry Hoover was an activist First Lady. She typified the
new woman of the
post–World War I era: intelligent, robust, and aware of multiple female possibilities.
Domestic policy Great Depression On taking office, Hoover said that "given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation". Having seen the fruits of prosperity brought by technological progress, many shared Hoover's optimism, and the already bullish stock market climbed even higher on Hoover's accession. This optimism concealed several threats to sustained U.S. economic growth, including a persistent
farm crisis, a saturation of
consumer goods like
automobiles, and growing
income inequality. Most dangerous of all to the economy was excessive speculation that had raised
stock prices far beyond their value. Some regulators and bankers had warned Coolidge and Hoover that a failure to curb speculation would lead to "one of the greatest financial catastrophes that this country has ever seen," but both presidents were reluctant to become involved with the workings of the
Federal Reserve System, which regulated banks. In late October 1929, the
stock market crashed, and the worldwide economy began to spiral downward into the
Great Depression. The
causes of the Great Depression remain a matter of debate, but Hoover viewed a lack of confidence in the financial system as the fundamental economic problem facing the nation. He sought to avoid federal intervention, believing that the best way to bolster the economy was through the strengthening of businesses such as banks and railroads. He also feared that allowing individuals on the "
dole" would permanently weaken the country, and believed that "relief to individuals from the federal government would bring an inevitable train of corruption and waste such as our nation had never witnessed." Instead, Hoover strongly believed that local governments and private giving should address the needs of individuals.
Early policies Though he attempted to put a positive spin on
Black Tuesday, Hoover moved quickly to address the
stock market collapse. In the days following Black Tuesday, Hoover gathered business and labor leaders, asking them to avoid wage cuts and work stoppages while the country faced what he believed would be a short recession similar to the Depression of 1920–21. Hoover also convinced railroads and public utilities to increase spending on construction and maintenance, and the
Federal Reserve announced that it would cut interest rates. In early 1930, Hoover acquired from Congress an additional $100 million to continue the
Federal Farm Board lending and purchasing policies. These actions were collectively designed to prevent a cycle of
deflation and provide a
fiscal stimulus. At the same time, Hoover opposed congressional proposals to provide federal relief to the unemployed, as he believed that such programs were the responsibility of state and local governments and philanthropic organizations. Hoover had taken office hoping to raise agricultural tariffs in order to help farmers reeling from the farm crisis of the 1920s, but his attempt to raise agricultural tariffs became connected with a bill that broadly raised tariffs. Hoover refused to become closely involved in the congressional debate over the tariff, and Congress produced a tariff bill that raised rates for many goods. Despite the widespread unpopularity of the bill, Hoover felt that he could not reject the main legislative accomplishment of the Republican-controlled
71st Congress. Over the objection of many economists, Hoover signed the
Smoot–Hawley Tariff Act into law in June 1930. Canada, France, and other nations retaliated by raising tariffs, resulting in a contraction of
international trade and a worsening of the economy. Progressive Republicans such as Senator
William E. Borah of Idaho were outraged when Hoover signed the tariff act, and Hoover's relations with that wing of the party never recovered.
Later policies , 1932 By the end of 1930, the
national unemployment rate had reached 11.9 percent, but it was not yet clear to most Americans that the economic downturn would be worse than the
Depression of 1920–21. A series of
bank failures in late 1930 heralded a larger
collapse of the economy in 1931. While other countries left the
gold standard, Hoover refused to abandon it; he derided any other
monetary system as "
collectivism". Hoover viewed the weak
European economy as a major cause of economic troubles in the United States. In response to the collapse of the
German economy, Hoover marshaled congressional support behind a one-year moratorium on European war debts. The
Hoover Moratorium was warmly received in Europe and the United States, but Germany remained on the brink of
defaulting on its loans. As the worldwide economy worsened, democratic governments fell; in Germany,
Nazi Party leader
Adolf Hitler assumed power and dismantled the
Weimar Republic. By mid-1931, the unemployment rate had reached 15 percent, giving rise to growing fears that the country was experiencing a depression far worse than recent economic downturns. A reserved man with a fear of public speaking, Hoover allowed his opponents in the Democratic Party to define him as cold, incompetent, reactionary, and out-of-touch. Hoover's opponents developed defamatory
epithets to discredit him, such as "
Hooverville" (the shanty towns and homeless encampments), "Hoover leather" (cardboard used to cover holes in the soles of shoes), and "Hoover blanket" (old newspaper used to cover oneself from the cold). While Hoover continued to resist federal relief efforts, Governor
Franklin D. Roosevelt of New York launched the
Temporary Emergency Relief Administration to provide aid to the unemployed. Democrats positioned the program as a kinder alternative to Hoover's alleged apathy towards the unemployed, despite Hoover's belief that such programs were the responsibility of state and local governments. The economy continued to worsen, with unemployment rates nearing 23 percent in early 1932, and Hoover finally heeded calls for more federal intervention. In January 1932, he convinced Congress to authorize the establishment of the
Reconstruction Finance Corporation (RFC), which would provide government-secured loans to financial institutions, railroads, and local governments. The RFC saved numerous businesses from failure, but it failed to stimulate commercial lending as much as Hoover had hoped, partly because it was run by conservative bankers unwilling to make riskier loans. The same month the RFC was established, Hoover signed the
Federal Home Loan Bank Act, establishing 12 district banks overseen by a Federal Home Loan Bank Board in a manner similar to the Federal Reserve System. He also helped arrange passage of the
Glass–Steagall Act of 1932, emergency banking legislation designed to expand banking credit by expanding the collateral on which Federal Reserve banks were authorized to lend. As these measures failed to stem the economic crisis, Hoover signed the
Emergency Relief and Construction Act, a $2 billion public works bill, in July 1932.
Budget policy After a decade of
budget surpluses, the federal government experienced a
budget deficit in 1931. Though some economists, like
William Trufant Foster, favored
deficit spending to address the Great Depression, most politicians and economists believed in the necessity of keeping a
balanced budget. In late 1931, Hoover proposed a tax plan to increase
tax revenue by 30 percent, resulting in the passage of the
Revenue Act of 1932. The act increased taxes across the board, rolling back much of the
tax cut reduction program Mellon had presided over during the 1920s. Top earners were taxed at 63 percent on their net income, the highest rate since the early 1920s. The act also doubled the top
estate tax rate, cut
personal income tax exemptions, eliminated the
corporate income tax exemption, and raised corporate tax rates. Prior to its passage, the legislation included a sales tax, but this part of the bill was defeated in the House of Representatives by 211 to 178 votes. Despite the passage of the Revenue Act, the federal government continued to run a budget deficit.
Civil rights and Mexican Repatriation aboard a train in Illinois Hoover seldom mentioned
civil rights while he was president. He believed that African Americans and other races could improve themselves with education and individual initiative. Hoover appointed more African Americans to federal positions than Harding and Coolidge combined, but many African American leaders condemned various aspects of the Hoover administration, including Hoover's unwillingness to push for a federal
anti-lynching law. Hoover also continued to pursue the lily-white strategy, removing African Americans from positions of leadership in the Republican Party in an attempt to end the Democratic Party's
dominance in the South. Though
Robert Moton and some other black leaders accepted the lily-white strategy as a temporary measure, most African American leaders were outraged. Hoover further alienated black leaders by nominating conservative Southern judge
John J. Parker to the
Supreme Court; Parker's nomination ultimately failed in the Senate due to opposition from the
NAACP and organized labor. Many black voters switched to the Democratic Party in the 1932 election, and African Americans would later become an important part of Franklin Roosevelt's
New Deal coalition. As part of his efforts to limit unemployment, Hoover sought to cut
immigration to the United States, and in 1930 he promulgated an executive order requiring individuals to have employment before migrating to the United States. The Hoover Administration began a campaign to prosecute
illegal immigrants in the United States, which most strongly affected
Mexican Americans, especially those living in
Southern California. The federal government also supported the Mexican repatriation which saw anywhere from 300,000 to two million Mexicans and Mexican Americans repatriated, deported, or expelled to Mexico during the 1930s primarily during Hoover's term. Forty to sixty percent of them were
American citizens. While the federal government encouraged repatriations, they were largely organized by state and local authorities with support from private entities. The Hoover administration deported 34,000 people to Mexico between 1930 to 1933. It was however more common for people to repatriate voluntarily.
Prohibition On taking office, Hoover urged Americans to obey the
Eighteenth Amendment and the
Volstead Act, which had established
Prohibition across the United States. To make public policy recommendations regarding Prohibition, he created the
Wickersham Commission. Hoover had hoped that the commission's public report would buttress his stance in favor of Prohibition, but the report criticized the enforcement of the Volstead Act and noted the growing public opposition to Prohibition. After the Wickersham Report was published in 1931, Hoover rejected the advice of some of his closest allies and refused to endorse any revision of the Volstead Act or the Eighteenth Amendment, as he feared doing so would undermine his support among Prohibition advocates. As public opinion increasingly turned against Prohibition, more and more people flouted the law, and a grassroots movement began working in earnest for Prohibition's repeal. In January 1933, a constitutional amendment repealing the Eighteenth Amendment was approved by Congress and submitted to the states for ratification. By December 1933, it had been ratified by the requisite number of states to become the
Twenty-first Amendment to the United States Constitution.
Bonus Army protest Thousands of World War I veterans and their families demonstrated and camped out in Washington, DC, during June 1932, calling for immediate payment of bonuses that had been promised by the
World War Adjusted Compensation Act in 1924; the terms of the act called for payment of the bonuses in 1945. Although offered money by
Congress to return home, some members of the "Bonus Army" remained. Washington police attempted to disperse the demonstrators, but they were outnumbered and unsuccessful. Shots were fired by the police in a futile attempt to attain order, and two protesters were killed while many officers were injured. Hoover sent U.S. Army forces led by General
Douglas MacArthur to the protests. MacArthur, believing he was fighting a
Communist revolution, chose to clear out the camp with military force. Though Hoover had not ordered MacArthur's clearing out of the protesters, he endorsed it after the fact. The incident proved embarrassing for the Hoover administration and hurt his bid for re-election.
Foreign policy According to Leuchtenburg, Hoover was "the last American president to take office with no conspicuous need to pay attention to the rest of the world". Nevertheless, during Hoover's term, the world order established in the immediate aftermath of World War I began to crumble. As president, Hoover largely made good on his pledge made prior to assuming office not to interfere in Latin America's internal affairs. In 1930, he released the
Clark Memorandum, a rejection of the
Roosevelt Corollary and a move towards non-interventionism in Latin America. Hoover did not completely refrain from the use of the military in
Latin American affairs; he thrice threatened intervention in the
Dominican Republic, and he sent warships to
El Salvador to support the government against a left-wing revolution. Notwithstanding those actions, he wound down the
Banana Wars, ending the
occupation of Nicaragua and nearly bringing an end to the
occupation of Haiti. Hoover placed a priority on
disarmament, which he hoped would allow the United States to shift money from the military to domestic needs. Hoover and Secretary of State
Henry L. Stimson focused on extending the 1922
Washington Naval Treaty, which sought to prevent a naval
arms race. As a result of Hoover's efforts, the United States and other major naval powers signed the 1930
London Naval Treaty. The treaty represented the first time that the naval powers had agreed to cap their tonnage of
auxiliary vessels, as previous agreements had only affected
capital ships. At the 1932
World Disarmament Conference, Hoover urged further cutbacks in armaments and the outlawing of
tanks and
bombers, but his proposals were not adopted. In 1931, Japan
invaded Manchuria, defeating the
Republic of China's
National Revolutionary Army and establishing
Manchukuo, a puppet state. The Hoover administration deplored the invasion, but also sought to avoid antagonizing the Japanese, fearing that taking too strong a stand would weaken the moderate forces in the Japanese government and alienate a potential ally against the
Soviet Union, which he saw as a much greater threat. In response to the Japanese invasion, Hoover and Secretary of State Stimson outlined the
Stimson Doctrine, which held that the United States would not recognize territories gained by force. ==1932 re-election campaign==