THE GREAT DEPRESSION ★^815with reality. About the unemployed men who appeared on city streets offering
apples at five cents apiece, Hoover would later write, “Many persons left their
jobs for the more profitable one of selling apples.”
The Worsening Economic Outlook
Some administration remedies, like the Smoot- Hawley Tariff, which Hoover
signed with some reluctance in 1930, made the economic situation worse.
Raising the already high taxes on imported goods, it inspired similar increases
abroad, further reducing international trade. A tax increase Hoover pushed
through Congress in 1932 in an attempt to balance the federal budget further
reduced Americans’ purchasing power. Other initiatives inspired ridicule.
When he approved funds to provide food for livestock, one observer remarked
that the president would feed “jackasses but... not starving babies.”
By 1932, Hoover had to admit that voluntary action had failed to stem the
Depression. He signed laws creating the Reconstruction Finance Corporation,
which loaned money to failing banks, railroads, and other businesses, and the
Federal Home Loan Bank System, which offered aid to homeowners threatened
with foreclosure. Having vetoed previous bills to create employment through
public- works projects like road and bridge construction, he now approved a
measure appropriating nearly $2 billion for such initiatives and helping to
fund local relief efforts. These were dramatic departures from previous federal
economic policy. But further than this, Hoover would not go. He adamantly
opposed offering direct relief to the unemployed— it would do them a “disser-
vice,” he told Congress.
Freedom in the Modern World
In 1927, the New School for Social Research in New York City organized a
series of lectures on the theme of Freedom in the Modern World. Founded eight
years earlier as a place where “free thought and intellectual integrity” could
flourish in the wake of wartime repression, the school’s distinguished faculty
included the philosopher John Dewey and historian Charles Beard (who had
resigned from Columbia University in 1917 to protest the dismissal of antiwar
professors). The lectures painted a depressing portrait of American freedom
on the eve of the Great Depression. “The idea of freedom,” declared economist
Walton H. Hamilton, had become “an intellectual instrument for looking back-
ward.... Liberty of contract has been made the be- all and end- all of personal
freedom;... the domain of business has been defended against control from
without in the name of freedom.” The free exchange of ideas, moreover, had not
recovered from the crisis of World War I. The “sacred dogmas of patriotism and
Big Business,” said the educator Horace Kallen, dominated teaching, the press,
What were the causes of the Great Depression, and how effective were
the government’s responses by 1932?