[153] Some regulators and bankers had warned Coolidge and Hoover that a failure to curb speculation would lead to "one of the greatest financial catastrophes that this country has ever seen," but both presidents were reluctant to become involved with the workings of the Federal Reserve System, which regulated banks.[154]
In late October 1929, the Stock Market Crash of 1929 occurred, and the worldwide economy began to spiral downward into the Great Depression.[155] The causes of the Great Depression remain a matter of debate,[156] but Hoover viewed a lack of confidence in the financial system as the fundamental economic problem facing the nation.[157] He sought to avoid direct federal intervention, believing that the best way to bolster the economy was through the strengthening of businesses such as banks and railroads. He also feared that allowing individuals on the "dole" would permanently weaken the country.[158] Instead, Hoover strongly believed that local governments and private giving should address the needs of individuals.[159]

Early policies
Hoover congratulates the Cleveland Chamber of Commerce on the completion of Cleveland Union Terminal, June 14, 1930.
