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The Wrong Man At The Wrong Time
For all his previous successes, President Herbert Hoover proved incapable of arresting the economic free fall of the Depression— or soothing the fears of a distressed nation
Summer 2009 | Volume 59, Issue 2
Besides wiring governors to encourage states and counties to accelerate construction, the president urged Congress to appropriate $150 million for public works and to approve a tax cut. He coaxed the Federal Reserve Board into expanding the money supply and making more credit available; for the first time in the history of the republic, discount rates fell to under 2 percent. He counted on the Federal Farm Board to sustain crop prices, and for months it did remarkably well, holding the price of U.S. wheat 25 cents or more a bushel above that in Europe.
Despite all the rockets being fired from the White House, though, Hoover intended to limit the role of government. The amount he requested from Congress for construction was modest, and he advised governors that the “pursuit of public works” by the states should be “energetic yet prudent.” Virtually all the responsibility for the nation’s economic health was left with the same old corporate boards, and it was not clear how much leadership would emerge from the private sector. The National Business Survey Conference contented itself with such actions as recommending that homeowners add on “the extra sunporch.” Moreover, if the system was “fundamentally sound,” there was no need to inquire why the crash had happened or whether reforms might be needed.
Hoover believed that the country was going through a short-term recession much like that of 1921, and hence that drastic remedies were not required. Businesses continued to report year-end profits; the stock market recovered by several points; and, in contrast to past panics, no large bank or corporation had collapsed. Hoover has been roundly criticized for not realizing that the stock market crash signaled the onset of the Great Depression, but no one else—including liberals—had any perception that the slump would last over a decade.
At the end of 1929 the New York Times judged the most important news story of the year to be not the Wall Street blowup but Admiral Byrd’s expedition to the South Pole.
Yet even before 1929 was over, cabinet officers were expressing concern about mounting unemployment, and by March 1930 breadlines were familiar sights on city sidewalks. That same month, Hoover claimed that “employment has been steadily increasing.” In April, after the Census Bureau reported more than 3 million Americans out of work (the figure was actually closer to 4 million), he shaved the total to below 2 million, which, he said, was normal.
Hoover never declared that prosperity was “just around the corner” (that fatuous statement came from his vice president, Charles Curtis), but he did refuse to face reality. In May 1930 he announced that a “great economic experiment” had “succeeded to a remarkable degree,” and told the U.S. Chamber of Commerce, “We have passed the worst, and with continued effort we shall rapidly recover.” When in June a delegation that included bankers as well as bishops visited the White House to alert him to the accelerating decline, Hoover, visibly annoyed, told them that the economy was on the upswing and the ranks of the unemployed were dwindling: “Gentlemen, you have come 60 days too late. The depression is over.”
Disappointment in the president deepened. Upon Hoover, troubles never descended singly, but in twos and threes. That summer, just as the silence of factory whistles was testing his mettle, a drought of historic proportions seared the heartland. As in 1927, he galvanized community leaders and turned to the Red Cross, though he believed that the reports of suffering were grossly exaggerated. So, too, did officials at the Red Cross—which, thinking that most of the starving supplicants were fakers, refused to spend much of what meager funds it had. State authorities placed the need in the range of $120 million (almost certainly an underestimate), but the administration restricted federal aid to $25 million and specified that none of it could go for food.
Hoover’s policies toward distress—in the drought-stricken counties or across the nation—reflected an aversion to the omnipotent state and a belief in “local government responsibilities.” Even more important was the tradition of private giving, especially understandable in one raised within the Quaker tradition of philanthropy. Grants from Washington, he contended, would impair the character of recipients and would deny benefactors the opportunity to sacrifice. The poor could always count on their neighbors.
By autumn 1930, cities were staggering under mounting unemployment, and the countryside was devastated. When the president of General Electric urged him to call a special session of Congress to “request it to issue a billion dollars of bonds to allay the tragic circumstances of unemployment,” He was incensed. Sometime later he received an accurate accounting of why federal relief was imperative: “Communities are impotent; state governments are shot through with politics . . . ; local charities are jaded, discouraged, bankrupt, disorganized, discredited. Their task is too great. Their support is gone.” Hoover could barely contain his response: “This nation did not grow great from feeding upon the malignant pessimist or calamity mongers or weeping men, and prosperity for all our people will not be restored by the voluble wailings of word-sobbers nor by any legislative legerdemain proposed by theorists.” He decided to abbreviate this note rather than give full throat to his fury.