Hoover was president during one of the worst economic disasters in America's history. He had only been president for seven months when Black Thursday hit. On Thursday, October 24, 1929, stock prices began falling sharply. Some tried to halt the freefall by buying up large amounts of stock, but this only stopped the drop for a couple of days. On Tuesday, October 29, 1929, the stock market crashed, beginning the Great Depression. The crash meant that thousands of people lost all of their money. During the market's prosperous times, many individuals had taken advantage of the widespread amount of borrowing that was being allowed to purchase stocks. Because there was little regulation at the time, brokerages were lending money to speculators with very little collateral. The goal of the speculator was that they would borrow money to purchase stock, wait until the stock went up, sell it, and then pay back their loan keeping all the profit. When the crash came, however, those investors were unable to pay back their debts. Most of these speculators were ruined and bankrupt, and the suicide rate among them at the time was tremendous.
The Great Depression was much more than just a stock market crash and its aftermath. It was a nationwide event.
Hoover's name was used to describe many of the deplorable situations during the Great Depression. For example, “Hoovervilles” were groups of shanties where many were forced to reside, “Hoover Blankets” was a nickname given to newspapers that many used for covers in the cold, and “Hoover Leather” was the cardboard that individuals used to replace worn-out soles in their shoes.
During the Depression, unemployment rose to 25 percent and approximately 25 percent of all banks failed. President Hoover did not see the enormity of the problem soon enough, and instead of providing direct relief to the unemployed, he felt that helping businesses would trickle down to help the people. However, the Depression was too widespread for this to have much of an effect. Hoover did, however, refuse to accept any pay for his time in office because of the plight of the poor. Instead, he donated his pay to charity.
In 1930, an attempt was made to help protect farmers and others from foreign competition. The idea was that by taxing foreign imports, American farmers and manufacturers would be able to make and keep more money. Unfortunately, this had the opposite effect as other nations enacted their own tariffs, which hurt American exporters. In the end, trade around the world slowed down.
Due to their economic situation, veterans who had been awarded bonus insurance over President Coolidge's veto demanded immediate payment instead of waiting the full twenty years. In May 1932, approximately 15,000 veterans marched on Washington, D.C., to issue their demands in what became known as the Bonus March. When Congress did not answer their demands, marchers who had no homes to return to stayed and lived in makeshift homes and shantytowns. President Hoover sent in General Douglas MacArthur to move the veterans out. He and his troops used tear gas and tanks to make them leave, setting fire to their tents and shacks upon their retreat.
The twentieth amendment was passed during Hoover's time in office, decreasing the time that an outgoing president would be in office after the November election by moving the date of inauguration up from March 4th to January 20th. It was called the “lame duck amendment” because a president who was leaving office did not have much power and was therefore considered a “lame duck.”