Hoover’s Policies Before The New Deal

The New Deal Programs: Hoover vastly increased spending on public-works projects. More money was spent on such projects in four years than in the previous thirty. He subsidized the shipbuilding industry at a time when shipping services were less in demand thanks to the shrinkage in international trade brought about by Smoot-Hawley. Hoover’s Reconstruction Finance Corporation (RFC) supplied failing businesses, mainly railroads and banks, with emergency low-interest loans. By the latter half of 1932, the RFC was no longer simply bailing out businesses in trouble but was also lending money to the states for unemployment relief and to fund public works projects.

The New Deal Programs

The president’s attempts to prop up failing businesses were of dubious effect. “The businesses he hoped to save,” writes one historian, “either went bankrupt in the end, after fearful agonies or were burdened throughout the 1930s by a crushing load of debt.”

The one area in which Hoover differed from FDR was that Hoover hesitated to provide direct federal relief, preferring instead to rely on voluntary organizations and, eventually, to make loans to states. He believed that voluntary organizations, as well as state and local government, were the appropriate institutions for giving aid.

Looking back upon his tenure, Hoover congratulated himself for his bold action. “We might have done nothing,” the president said in 1932. “That would have been utter ruin. Instead, we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic.” The result was an ongoing economic catastrophe.