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Examples are the pump priming and the Grain and cotton stabilization act (but i could not find what these things are)

2007-03-18 07:42:08 · 2 answers · asked by Whats the Scoop? 2 in Arts & Humanities History

2 answers

President Herbert Hoover began using the policy of economic pump-priming in 1932, when he passed a bill creating the RECONSTRUCTION FINANCE CORPORATION to make loans to banks, railroads, and other industries.

Herbert Hoover strongly supported federal farm intervention. In his speech accepting the presidential nomination in 1928, Hoover promised to create a farm board to “establish for our farmers an income equal to those of other occupations.” He signed legislation to create the Federal Farm Board and, on July 15, 1929, he told the new board, “I invest you with responsibilities and resources such as have never before been conferred by our government in assistance to any industry.” The Farm Board’s $500 million budget was larger than any ever authorized for a nondefense expenditure.
Immediately after its creation, the Farm Board decided to boost the income of American farmers by cornering the world grain market and driving up prices. In August 1929, the Farm Board pressured the federal credit banks to liberalize their loans to agricultural cooperatives to help them make more generous loans to farmers, so that farmers could hold their crops off the market.
In November 1929, the chairman of the Farm Board declared, “Anyone selling wheat or cotton at the present market price is foolish.” Prices subsequently plunged. By December 1929, Farm Board officials were preaching to farmers to reduce production and abandon exports so that the government could drive their prices up for them.
The Farm Board set up the Grain Stabilization Corporation, which began desperately buying up wheat. The board managed to boost U.S. prices to 18 cents a bushel above world wheat prices, which led to the collapse of U.S. wheat exports. The Farm Board was certain that a world shortage of wheat was imminent and that importing nations would soon come begging to America. Instead, Canadian and Argentinean farmers reaped windfall profits because of the Farm Board’s action. Its massive cache of wheat further depressed world prices, since every grain dealer in the world knew that the United States would eventually dump its surplus on the market.

2007-03-18 09:05:59 · answer #1 · answered by Randy 7 · 0 0

Bla Bla this question is a boring peace of crap.

2007-03-18 07:45:53 · answer #2 · answered by A Journey 5 · 0 2

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