Lesson 2: Hoover's Policies

Lesson Focus

Facing the Great Depression, President Hoover attempted new economic remedies. When these domestic policies failed to bring recovery, he shifted his administration's focus to foreign policy, seeking to promote peace and stability abroad.

People to Know

Herbert Hoover

Learning Objectives

• Identify President Hoover's domestic policies and actions aimed at combating the Great Depression.
• Describe how U.S. policy toward Latin America shifted under Hoover, laying groundwork for the Good Neighbor policy.
• Explain the Hoover-Stimson Doctrine and assess its effectiveness as a response to international aggression.

To protect American farmers and industries, Congress passed a new tariff.

Despite warnings from over a thousand economists, President Hoover signed the Hawley-Smoot Tariff in 1930 to maintain Republican party unity.

This act backfired when 25 nations retaliated, causing a steep drop in foreign trade. Pay special attention to how this tariff, meant to help the economy, actually worsened the Great Depression by harming farmers and businesses that relied on exports.

President Hoover believed direct government aid would destroy personal initiative, so he favored helping businesses first.

In 1932, his administration created the Reconstruction Finance Corporation (RFC) to provide federal loans to banks, railroads, and large corporations, hoping prosperity would “trickle down.”

However, Hoover vetoed bills offering direct relief to the unemployed. This approach failed to provide immediate help to millions of suffering Americans, and the economy continued to decline.

Hoover recognized that past U.S. actions had created distrust in Latin America, hurting diplomatic and trade relations.

He took a goodwill tour and endorsed the Clark Memorandum, which rejected the Roosevelt Corollary's justification for U.S. intervention. He also withdrew troops from Nicaragua.

Note that while these actions laid the foundation for the “Good Neighbor” policy, the economic damage from the Hawley-Smoot Tariff limited the immediate improvement in relations.

As a Quaker pacifist, Hoover sought to prevent future wars and reduce costly military spending during the Depression.
He led the London Naval Conference of 1930 to limit warship construction and, in 1931, proposed a one-year moratorium on war debt payments to ease Germany’s economic crisis.
These efforts saw limited success, as key nations like France and Italy did not fully cooperate on disarmament, highlighting the growing international instability.

In 1931, Japan violated international treaties by invading Manchuria, a resource-rich province of China.

Unwilling to risk war or use economic sanctions, Hoover responded with the Hoover-Stimson Doctrine in 1932. This doctrine stated the U.S. would not recognize any territory seized by force.

This was merely a moral protest. It did nothing to stop Japan and signaled to aggressor nations that Western democracies were unwilling to enforce international law.