Examine the claim that Hoover was responsible for the dramatic collapse of the economy after the Wall Street Crash.

The president’s strong principles of voluntarism were one of the main reasons why he did not help America more during the crisis. Hoover believed that citizens were responsible for their own welfare and the government was only responsible to encourage other organizations to provide aid. This attitude did not have any effective impact on large companies, and provided little result. Clements recognizes this as a fatal flaw and Hoover’s “biggest failing”. The historian argues further that Hoover’s “legislation was limited” as it lacked direct “government action”. In 1932 he attempted to solve the problems within the economy by introducing the Federal Home Loan Bank Act. This aimed to provide mortgages to people to help them with their credit; however the loans only covered up to 50% of the total cost. This demonstrates how ineffective his administration was and that the government did not involve itself enough. Hoover’s actions didn’t improve the situation, but exacerbated the problems further.  Hoover failed to address the problem of unemployment effectively and during his presidency the figures rose by a further 6.4 million. His launch of the biggest public work schemes was dependent on voluntary organization and not reliant on the federal government. He called on municipal and state governments to provide the aid and support. Since his policies were permissive rather than obligatory, they had no real effect. Hoover also recognized the issue within agricultural sector and its strong link with the failing economy. However, even despite that awareness he was not able to “show flexibility” in his principles.  The Congress proposed another bill to solve the issue of overproduction by subsidizing farmers to reduce production; however this undermined the principle of voluntarism and was vetoed by Hoover. Parrish also emphasies that the “economic crisis required maximum co-operation between President and Congress”. Roosevelt in his speech also recognizes that “the country needs” and “demands bold, persistent experimentation” in order to end the crisis. Hoover’s fixed ideals were the core problem of his lack of intervention and are recgonised by three interpretations as the most significant reason for the collapse of the economy.

Although Hoover was largely responsible for the collapse of the economy his attempts to save the situation have also been recognized by modern historians. His endeavours to improve the economy might not have always been successful, but at the same time improved it slightly. Hoover was prepared to cut his own and state officials’ pay by 20%, which enabled the government to receive further money to help the economy. In addition, he established the Reconstruction Finance Corporation, which was given $2 billion to public works and introduced the Emergency Relief and Construction Act to provide relief to individual states.  Although his polices were not always effective, he was more occupied with providing federal relief than any other president. As proposed by Clements Hoover “did involve the government in more areas of life that ever before”. Many of Hoover’s projects and policies were later carried on by Roosevelt himself, which suggests that in theory Hoover’s ideas were effective, but their application was not. Clements also highlights that Hoover’s policies “were wholly inadequate to meet the magnitude of the crisis and failed. The historian presents both negative as well as positive aspects of Hoover’s presidency. His extract comes from “Prosperity, Depression and the New Deal”, which an educational textbook, hence aims to be objective. At the same time Clements’ interpretation might be slightly simplified and not always explain the complexity of the situation.  

Despite what looked like a “booming” economy, the economic situation at the time was very fragile.  The attitude of the banking system and lack of governmental influence contributed heavily to the collapse of the market. Although Hoover was often blamed for not doing enough for the economy, in fact there were more obstacles in his way that initially thought. Before the crash people did not wish for their government to have too much influence over their private lives. This view was also shared by large organizations and private businesses. As demonstrated in Freeman’s interpretation, “businesses initially opposed any strong government response the crisis”. Hence, Hoover could not have completely enforced new laws if they were against population’s beliefs, and would have been criticized further by the Republicans. The president oragnised meetings with various corporations and encouraged them not to fire their workers and not to lower their wages, to ensure better money circulation. The reason why this failed was not completely due to Hoover. As Freeman emphasized further that even in 1930 unemployment was not recognized as a serious issue by businesses themselves and was “eighteenth on their list” of main problems. Freeman stresses the importance of banks’ faults in the crisis and does not focus on Hoover’s involvement at all. His criticism of business leaders is likely to be biased as he upholds left-wing ideas and is strongly against capitalism. Although it is true that banks did not want intervention in their regulations, it is important to recognize Hoover’s lack of more direct intervention as he responsible for arranging adequate laws to improve the situation.

Overall, Hoover attempted to improve the situation of the country. Most of his policies resulted in more disastrous effects than expected, such as the Hawley- Smoot Tariff, which damaged the economy further. However, he was the first president in American history to contribute in providing as much governmental relief for ordinary people. Historians recgonise his efforts to recover the market; however they also highlight his failures, which outweigh the positive aspects of his presidency. Despite his involvement his action was not sufficient enough to lift America out of the crisis. His main fault was his inability to detach himself from the principle of voluntarism and organize more direct governmental aid. Although some Hoover’s ideas were practical, he did not have the right approach and application of them. Hence Hoover should be credited for his attempts to help the American economy, but at the same time he was responsible for not doing enough and letting the situation exacerbate further.