The Great Depression has become pretty fuzzy in the minds of the writers and columnists today. It is true the Smoot Hawley Bill did more harm to the economy then it helped. We had huge surpluses especially in farm products, it was believed that imports only made them worst. But while we had a surplus, and cheap food, there were many people who suffered from hunger because they could not afford to buy food.
The real problem was a shortage of money, or rather not enough money in circulation. Hoover believed it would soon work its way out. He cling to the Quaker beliefs that handouts to the poor destroyed their incentive to care for themselves. He believed people were hoarding money, he had made many appeals to the people to stop hoarding. People did not trust the banks, and were not even sure about our paper money. We still had gold coinage, people associate gold with wealth. Even the American Indian had insisted that he be paid in gold, even though paper money would buy just as much and last just as long.
When buying shut down factories and business shut down or closed then jobs were lost. Late in Hoovers administeration the National Finance Corporation was formed. It provided money to lend to big businesses and the railroads to keep them going. But money at the top did not neccessarly trickle down to the poor. A provision was added for a relief bill where money was loaned to states to provide public work to help the jobless. It had many provisions, limitations, and regulations, so was not very effective. It stipulated that the states would eventually pay these loans back. After Roosevelt became president he removed the provision that these loans must be paid back. It is interesting to note, that the National Finance Corporation remained in effect until 1951. It had a lot to do with building Defence Plants, Military Posts, and Navel Yards.