Custom research paper on Herbert Hoover: Bad President or Bad Timing

The crisis of 1929-1933 outwardly manifested in the overproduction of products – in an excessive amount of goods entering the market. Abundance was only apparent. Overproduction had not arisen as a result of security requirements, but as a result of low purchasing power.
Warehouses were bursting with an abundance of unsold products. In their attempts to contain the fall in prices and reduce inventories – they burnt wheat, poured tanks of milk.
Crisis mainly affected small and medium-sized firms. As for monopolies, they were able to withstand and deal with those difficulties. With large capital and reserves, corporations cut on production to adjust to the market, and to slow the fall of prices down.
Thus, taking advantage of the situation of their competitors, they were able to absorb them and reach the end of the crisis with even more enlarged opportunities.
For example, earlier self-metallurgical company “Youngstown” was captured by the “Bethlehem Steel”, automotive firm “Studebaker” – by concern “General Motors”.
Government of Herbert Hoover tried to weaken the effect of the crisis by providing financial assistance to bankers and industrialists. “Reconstruction Finance Corporation” was created to credit the companies and, thus, to save them from bankruptcy. It tried for nothing to withdraw from the market surplus agricultural products formed by a governmental “Federal Farm Bureau”, which actually gave practical help only to large farmers. The high customs tariffs were adopted in 1930, which have contributed to a sharp reduction in U.S. imports of goods from abroad. All of these activities, however, could not halt the continuing spontaneously developing economic crisis (Siracusa J.M., Coleman D.G.).
There appeared a situation, in which during a year more capital was consumed than it was produced. In these conditions, net investments have a minus sign, and there is a process of re invest in the economy, ie disinvestment. The United States had more production capacity than it used in current production. As a result, incentives for the replacement of worn-out capital, and especially to the creation of additional capital were very small, or did not exist at all. custom research paper
Without going into details and discuss the different assessment of the situation in detail, let’s try to reproduce the picture of what actually happened. On the one hand it was fairly obvious that by the beginning of 1928 the economy closer to a normal cyclical drop of business conditions. But the trouble was that until 1928 almost no one watched economic indicators, and already since 1926 housing construction started to decline, car sales were falling, business investment started declining. All eyes were glued to the stock market, on which, contrary to the general economic downturn, with the second half of 1928 started a real boom. But the main explanation of that situation is still an unreasonable economic activities of the government.
First, the Federal Reserve System, responsible for overseeing the growth of money and credit, in 1927 took measures to increase the monetary and credit issue exactly at a time when economic indicators were about having recession. This was the first attempt to confront the economic cycle for all 30 years of the FRS. At first it seemed that with a help of a credit issue (volume of lending increased in several times) succeed to avoid recession. And, despite a brief revival at the beginning of the 1929, the bulk of all loans went to the Securities Market: left for speculation.
Thus, it can be said that the economic growth of 20-ies was accompanied by a number of negative social consequences. The growth of the nation’s wealth was not accompanied by any significant change in the traditional forms of distribution. As a result, almost all the advantages of economic growth were mostly seen by upper class, first of all by monopolies, and the middle and lower classes found themselves in the role of economic losers (Holford D.M.).
As a result, the country was plunged into a whirlpool of the world economic crisis. It came together with the avalanche of bankruptcies and the decline in production (the lowest point – in 1932.) Strong army of the unemployed people exposed deep social inequalities. Government policy in social insurance for decades was expressed by the formula of “hard individualism”, which meant that care about the millions of victims of the crisis was their private affair, or, in extreme cases, the business of local governments and private foundations.
And although the previous Conservative doctrine of state interference into the market processes and social relations was the official creed of the U.S. government and both major parties – Republican and Democratic, the difficult economic situation demanded the revision of these views.
Hoover’s Foreign Policy was also influenced greatly by the global economic crisis and deteriorating of international position of the United States. Even before the crisis in June 1929 a plan of Yang, with the active participation of the U.S. undertook a review of the German reparation payments. Payment of reparations and war debts were thwarted by the crisis. With a help of Moratorium, which later received his name, Hoover in June 1931 attempted to restrain the collapse of the government suspended all international debts for one year. In fact, suspended payment of reparations and war debts were stopped for a rather longer period of time.
Hoover essentially continued the foreign policy of his two predecessors. He also firmly adhered to the non-participation in the League of Nations and non-recognition of the USSR. In his world outlook there were joined nationalist identity, a sense of international responsibility, belief in the superiority of “white peoples” and the desire to protect the country from a new war. Hoover believed in international cooperation without coercion, in a peaceful international system based on the power of public opinion. He had a deep aversion to war and the ruinous arms race.
Hoover tried to improve relations with Latin America, to destroy the distrust to “the colossus on the north”, to throw away the claims of intervention and imperialist gestures, and develop economic and cultural cooperation. The crisis reversed, however, these intentions, but by the end of his presidency American troops were sent back home from Nicaragua, and withdrawal from Haiti was prepare. In the matter of disarmament Hoover reached a compromise together with Britain and France at the London Conference in 1930, that provided an upper limit to the tonnage of cruisers, destroyers and submarines, but it did not last long.
Hoover’s broad proposal on Disarmament at Geneva Conference of 1932, which would have completely banned assault weapons and reduce the national armed forces to the third, remained in the area of good intentions. On the breach of contract by the Japanese during the “Manchurian crisis”, 1931 – 1932 years Hoover and Stimson responded on the 7th of January 1932 with a doctrine (that later took his name), which affirmed the denial of Japanese conquest or transactions in China, achieved by violence by the United States.
By the economic actions against Japan, on which Stimson insisted, Hoover gained nothing.
In comparison with the challenges posed by Hoover his foreign policy in the crisis years despite all his efforts remained ineffective. Just as little it could prevent further deterioration of the international position of the country on the world stage.
In the autumn of 1932 before the forthcoming presidential elections Hoover’s authority reached a lowest point. However, the Republicans nominated him as their candidate, because they had no alternative to Hoover. Democrats put up a new candidate, a reformer governor of New York Franklin D. Roosevelt. Because of the changed by the crisis situation in political forces and his ineffectiveness anti-crisis measures, Hoover suffered a heavy personal electoral defeat. Congress had again been in the hands of Democrats.