SAT Subject US History Practice Question 877: Answer and Explanation

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Question: 877

48. Herbert Hoover reacted to the Depression of 1929 by

A. doing nothing.
B. encouraging unions to organize.
C. establishing extensive federal relief programs to meet the emergency.
D. building Hoovervilles to shelter the homeless in all the large cities.
E. providing loans to industry to restart production.

Correct Answer: E


Herbert Hoover and Congress established the Reconstruction Finance Corporation in 1932, which gave government loans to businesses and railroads, hoping that this would "prime the pump" of the economy. He did not do nothing (A), but he opposed extensive relief programs (C). Roosevelt, not Hoover, encouraged unions to organize (B) to raise wages and increase purchasing power. Hoovervilles (D) were collections of makeshift houses built by homeless families during the Depression. They mockingly named their "communities" after Hoover.

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