How did Hoover recover the economy?

Herbert Hoover was unable to improve the economy once the Great Depression began. President Hoover came into office while we were experiencing great economic growth. Everybody expected this to continue, but when the stock market crashed in October 1929, so did the economy. At first, President Hoover did very little to deal with the economy. He believed in a philosophy known as laissez-faire. This means the government tends to stay out of economic issues. Thus, when the economy collapsed, President Hoover took few actions. He believed things would work themselves out. However, when the economy got worse in 1930 and 1931, President Hoover reluctantly took action.

In 1931 and 1932, there were three significant things President Hoover did. In 1931, the National Credit Corporation was created. This program was designed to help banks that were struggling to be able to lend money to their communities. People believed that if there were significant investment in the economy, the economy would grow again. In 1932, the Reconstruction Finance Corporation was created. This program gave over $200 million in loans to banks, railroads, and farming institutions. Finally, in 1932, the Emergency Relief and Construction Act gave billions of dollars for public works programs and millions of dollars in loans.

Unfortunately, the economy had slipped into a severe depression, and these programs were not successful in ending it. The economy was a big factor in President Hoover’s defeat in 1932. When President Roosevelt took office, he launched the New Deal. These New Deal programs heavily involved the government into the economy to work to end the depression. These programs had some success dealing with the depression, but it was really the arrival of World War II that got us out of the Great Depression.