|What was Herbert Hoover’s initial response to the Depression in 1929?
||He signed the Smoot Hawley Tariff Act that raised import taxes. It froze international trade; raised income taxes; called on business leaders urging them not to lay off workers.
|What was the Reconstruction Finance Corporation of 1932?
||Hoover’s attempt to deal with the Depression by propping up banks, life insurance companies, and railroads.
|What did railroads, life insurance companies, and banks have in common?
||All were reeling from Great Depression effects that was now over two years in duration.
|Why didn’t Hoover support direct aid to industries, businesses, and individuals?
||Hoover feared direct aid would destroy the idea of self-help (“rugged individualism”) and create a class of people who looked to the government for help.
|What did Hoover hope the RFC would accomplish?
||Emergency loans from the RFC would help stabilize key industries and their gains would tickle down to small businesses, and that would bring about an economic recovery.
|What criticism was raised by the Democrats in Congress about the RFC?
||The RFC would only help rich business owners, not those at the bottom of the ladder who were suffering the most.
|Was the RFC a success or failure?
||Failure: did not end the Depression; publishing names of banks that got loans caused further runs on the banks; no aid for those at bottom of the ladder.