ABSTRACT
The United States had entered an economic recession in August 1929. In the next three years, recession became a full-fledged depression. Both monetary and legislative policies failed to prevent economic decline, largely because officials lacked a consensus about appropriate changes. Federal reserve officials were divided over the wisdom of expanding reserves of member banks before June 1931. The system’s united effort to protect the gold dollar in the autumn of 1931 damaged the domestic economy. The 71st Congress (March 1929 to March 1931) did nothing substantial to influence monetary policy or to end massive bank failures, although hearings in 1930 and 1931 set the stage for later legislation. President Herbert Hoover attempted to halt the recession through voluntarism and optimistic statements, an unsuccessful combination. Not until reserve officials, members of Congress, and the president began to work together in 1932 did the government make progress in countering the depression.
