Herbert Hoover was inaugurated as President on rainy 4 March 1929
and
that did not stop 50,000 people from attending.
Hoover spoke during rain from under an umbrella.
Sound was amplified and broadcast on the radio,
and for the first time they made talking newsreels.
Here is the entire address:
My Countrymen: This occasion is not alone the
administration of the most sacred oath which
can be assumed by an American citizen.
It is a dedication and consecration under God
to the highest office in service of our people.
I assume this trust in the humility of knowledge that
only through the guidance of Almighty Providence
can I hope to discharge its ever-increasing burdens.
It is in keeping with tradition throughout our history
that I should express simply and directly
the opinions which I hold concerning some
of the matters of present importance.OUR PROGRESS
If we survey the situation of our Nation both at home
and abroad, we find many satisfactions;
we find some causes for concern.
We have emerged from the losses of the Great War
and the reconstruction following it
with increased virility and strength.
From this strength we have contributed
to the recovery and progress of the world.
What America has done has given renewed hope and
courage to all who have faith in government by the people.
In the large view, we have reached a higher degree
of comfort and security than ever existed
before in the history of the world.
Through liberation from widespread poverty
we have reached a higher degree of
individual freedom than ever before.
The devotion to and concern for
our institutions are deep and sincere.
We are steadily building a new race—
a new civilization great in its own attainments.
The influence and high purposes of our Nation
are respected among the peoples of the world.
We aspire to distinction in the world,
but to a distinction based upon confidence in our
sense of justice as well as our accomplishments
within our own borders and in our own lives.
For wise guidance in this great period of recovery
the Nation is deeply indebted to Calvin Coolidge.
But all this majestic advance should not
obscure the constant dangers from which
self-government must be safeguarded.
The strong man must at all times be alert
to the attack of insidious disease.THE FAILURE OF OUR SYSTEM OF CRIMINAL JUSTICE
The most malign of all these dangers today
is disregard and disobedience of law.
Crime is increasing.
Confidence in rigid and speedy justice is decreasing.
I am not prepared to believe that this indicates
any decay in the moral fiber of the American people.
I am not prepared to believe that it indicates an
impotence of the Federal Government to enforce its laws.
It is only in part due to the additional burdens imposed
upon our judicial system by the eighteenth amendment.
The problem is much wider than that.
Many influences had increasingly complicated and
weakened our law enforcement organization
long before the adoption of the eighteenth amendment.
To reestablish the vigor and effectiveness of law
enforcement we must critically consider the entire
Federal machinery of justice, the redistribution of
its functions, the simplification of its procedure,
the provision of additional special tribunals,
the better selection of juries, and the more effective
organization of our agencies of investigation and prosecution
that justice may be sure and that it may be swift.
While the authority of the Federal Government
extends to but part of our vast system of national,
State, and local justice, yet the standards which
the Federal Government establishes have the
most profound influence upon the whole structure.
We are fortunate in the ability and integrity
of our Federal judges and attorneys.
But the system which these officers are
called upon to administer is in many respects
ill adapted to present-day conditions.
Its intricate and involved rules of procedure have
become the refuge of both big and little criminals.
There is a belief abroad that by invoking technicalities,
subterfuge, and delay, the ends of justice
may be thwarted by those who can pay the cost.
Reform, reorganization and strengthening of
our whole judicial and enforcement system,
both in civil and criminal sides, have been advocated
for years by statesmen, judges, and bar associations.
First steps toward that end should not longer be delayed.
Rigid and expeditious justice is the first safeguard
of freedom, the basis of all ordered liberty,
the vital force of progress.
It must not come to be in our Republic that it can be
defeated by the indifference of the citizen,
by exploitation of the delays and entanglements
of the law or by combinations of criminals.
Justice must not fail because the agencies of enforcement
are either delinquent or inefficiently organized.
To consider these evils, to find their remedy,
is the most sore necessity of our times.ENFORCEMENT OF THE EIGHTEENTH AMENDMENT
Of the undoubted abuses which have grown up under
the eighteenth amendment, part are due to the causes
I have just mentioned; but part are due to the failure
of some States to accept their share of responsibility
for concurrent enforcement and to the failure of many
State and local officials to accept the obligation under
their oath of office zealously to enforce the laws.
With the failures from these many causes has come a
dangerous expansion in the criminal elements who have
found enlarged opportunities in dealing in illegal liquor.
But a large responsibility rests directly upon our citizens.
There would be little traffic in illegal liquor
if only criminals patronized it.
We must awake to the fact that this patronage
from large numbers of law-abiding citizens
is supplying the rewards and stimulating crime.
I have been selected by you to execute
and enforce the laws of the country.
I propose to do so to the extent of my own abilities,
but the measure of success that the Government
shall attain will depend upon the moral support
which you, as citizens, extend.
The duty of citizens to support the laws of the land
is coequal with the duty of their Government
to enforce the laws which exist.
No greater national service can be given by men
and women of good will—who, I know, are not unmindful
of the responsibilities of citizenship—than that they should,
by their example, assist in stamping out crime and
outlawry by refusing participation in and
condemning all transactions with illegal liquor.
Our whole system of self-government will crumble
either if officials elect what laws they will enforce
or citizens elect what laws they will support.
The worst evil of disregard for some law
is that it destroys respect for all law.
For our citizens to patronize the violation of a particular law
on the ground that they are opposed to it is destructive of
the very basis of all that protection of life, of homes and
property which they rightly claim under other laws.
If citizens do not like a law, their duty as honest men and
women is to discourage its violation;
their right is openly to work for its repeal.
To those of criminal mind there can be no appeal
but vigorous enforcement of the law.
Fortunately they are but a small percentage of our people.
Their activities must be stopped.A NATIONAL INVESTIGATION
I propose to appoint a national commission for a searching
investigation of the whole structure of our Federal system of
jurisprudence, to include the method of enforcement of the
eighteenth amendment and the causes of abuse under it.
Its purpose will be to make such recommendations
for reorganization of the administration of Federal laws
and court procedure as may be found desirable.
In the meantime it is essential that a large part
of the enforcement activities be transferred from
the Treasury Department to the Department of Justice
as a beginning of more effective organization.THE RELATION OF GOVERNMENT TO BUSINESS
The election has again confirmed the determination
of the American people that regulation of private enterprise
and not Government ownership or operation is the course
rightly to be pursued in our relation to business.
In recent years we have established a differentiation
in the whole method of business regulation between
the industries which produce and distribute commodities
on the one hand and public utilities on the other.
In the former, our laws insist upon effective competition;
in the latter, because we substantially
confer a monopoly by limiting competition,
we must regulate their services and rates.
The rigid enforcement of the laws applicable to both groups
is the very base of equal opportunity and freedom from
domination for all our people, and it is just as essential
for the stability and prosperity of business itself as
for the protection of the public at large.
Such regulation should be extended by the Federal
Government within the limitations of the Constitution
and only when the individual States are without power
to protect their citizens through their own authority.
On the other hand, we should be fearless when
the authority rests only in the Federal Government.COOPERATION BY THE GOVERNMENT
The larger purpose of our economic thought should
be to establish more firmly stability and security of
business and employment and thereby remove
poverty still further from our borders.
Our people have in recent years developed a
new-found capacity for cooperation among
themselves to effect high purposes in public welfare.
It is an advance toward the highest
conception of self-government.
Self-government does not and should not imply
the use of political agencies alone.
Progress is born of cooperation in the community—
not from governmental restraints.
The Government should assist and encourage
these movements of collective self-help
by itself cooperating with them.
Business has by cooperation made great progress in
the advancement of service, in stability, in regularity of
employment and in the correction of its own abuses.
Such progress, however, can continue only
so long as business manifests its respect for law.
There is an equally important field of cooperation
by the Federal Government with the multitude of agencies,
State, municipal and private, in the systematic
development of those processes which directly affect
public health, recreation, education, and the home.
We have need further to perfect the means by which
Government can be adapted to human service.EDUCATION
Although education is primarily a responsibility
of the States and local communities, and rightly so,
yet the Nation as a whole is vitally concerned
in its development everywhere to the highest
standards and to complete universality.
Self-government can succeed only
through an instructed electorate.
Our objective is not simply to overcome illiteracy.
The Nation has marched far beyond that.
The more complex the problems of the Nation become, the
greater is the need for more and more advanced instruction.
Moreover, as our numbers increase and as our life
expands with science and invention, we must discover
more and more leaders for every walk of life.
We cannot hope to succeed in directing this
increasingly complex civilization unless we can draw
all the talent of leadership from the whole people.
One civilization after another has been wrecked
upon the attempt to secure sufficient leadership
from a single group or class.
If we would prevent the growth of class distinctions
and would constantly refresh our leadership with
the ideals of our people, we must draw
constantly from the general mass.
The full opportunity for every boy and girl
to rise through the selective processes of
education can alone secure to us this leadership.PUBLIC HEALTH
In public health the discoveries of science
have opened a new era.
Many sections of our country and many groups of our
citizens suffer from diseases the eradication of which are
mere matters of administration and moderate expenditure.
Public health service should be as fully organized
and as universally incorporated into our
governmental system as is public education.
The returns are a thousand fold in economic benefits,
and infinitely more in reduction of suffering
and promotion of human happiness.WORLD PEACE
The United States fully accepts the profound truth that
our own progress, prosperity, and peace are interlocked
with the progress, prosperity, and peace of all humanity.
The whole world is at peace.
The dangers to a continuation of this peace to-day are
largely the fear and suspicion which still haunt the world.
No suspicion or fear can be rightly
directed toward our country.
Those who have a true understanding of America
know that we have no desire for territorial expansion,
for economic or other domination of other peoples.
Such purposes are repugnant to
our ideals of human freedom.
Our form of government is ill adapted to the
responsibilities which inevitably follow permanent
limitation of the independence of other peoples.
Superficial observers seem to find no destiny
for our abounding increase in population,
in wealth and power except that of imperialism.
They fail to see that the American people are engrossed
in the building for themselves of a new economic system,
a new social system, a new political system all of which
are characterized by aspirations of freedom of opportunity
and thereby are the negation of imperialism.
They fail to realize that because of our abounding prosperity
our youth are pressing more and more into our institutions
of learning; that our people are seeking a larger vision
through art, literature, science, and travel;
that they are moving toward stronger moral and
spiritual life—that from these things our sympathies are
broadening beyond the bounds of our Nation and race
toward their true expression in a real brotherhood of man.
They fail to see that the idealism of America will lead it
to no narrow or selfish channel, but inspire it to do its full
share as a nation toward the advancement of civilization.
It will do that not by mere declaration but
by taking a practical part in supporting
all useful international undertakings.
We not only desire peace with the world,
but to see peace maintained throughout the world.
We wish to advance the reign of justice and reason
toward the extinction of force.
The recent treaty for the renunciation of war as an
instrument of national policy sets an advanced standard
in our conception of the relations of nations.
Its acceptance should pave the way to greater
limitation of armament, the offer of which
we sincerely extend to the world.
But its full realization also implies a greater
and greater perfection in the instrumentalities
for pacific settlement of controversies between nations.
In the creation and use of these instrumentalities
we should support every sound method of
conciliation, arbitration, and judicial settlement.
American statesmen were among the first to propose
and they have constantly urged upon the world,
the establishment of a tribunal for the settlement
of controversies of a justiciable character.
The Permanent Court of International Justice in its
major purpose is thus peculiarly identified with
American ideals and with American statesmanship.
No more potent instrumentality for this purpose has ever
been conceived and no other is practicable of establishment.
The reservations placed upon our adherence
should not be misinterpreted.
The United States seeks by these reservations no special
privilege or advantage but only to clarify our relation to
advisory opinions and other matters which are
subsidiary to the major purpose of the court.
The way should, and I believe will, be found by which
we may take our proper place in a movement
so fundamental to the progress of peace.
Our people have determined that we should make
no political engagements such as membership in the
League of Nations, which may commit us in advance
as a nation to become involved in the settlements
of controversies between other countries.
They adhere to the belief that the independence
of America from such obligations increases its ability and
availability for service in all fields of human progress.
I have lately returned from a journey among
our sister Republics of the Western Hemisphere.
I have received unbounded hospitality and courtesy
as their expression of friendliness to our country.
We are held by particular bonds of sympathy
and common interest with them.
They are each of them building a racial character
and a culture which is an impressive
contribution to human progress.
We wish only for the maintenance of their independence,
the growth of their stability, and their prosperity.
While we have had wars in the Western Hemisphere,
yet on the whole the record is in encouraging
contrast with that of other parts of the world.
Fortunately the New World is largely free
from the inheritances of fear and distrust
which have so troubled the Old World.
We should keep it so.
It is impossible, my countrymen,
to speak of peace without profound emotion.
In thousands of homes in America, in millions of homes
around the world, there are vacant chairs.
It would be a shameful confession of our unworthiness
if it should develop that we have abandoned
the hope for which all these men died.
Surely civilization is old enough, surely mankind is
mature enough so that we ought in our own lifetime
to find a way to permanent peace.
Abroad, to west and east, are nations whose sons mingled
their blood with the blood of our sons on the battlefields.
Most of these nations have contributed to our race,
to our culture, our knowledge, and our progress.
From one of them we derive our very language and
from many of them much of the genius of our institutions.
Their desire for peace is as deep and sincere as our own.
Peace can be contributed to by respect
for our ability in defense.
Peace can be promoted by the limitation of arms
and by the creation of the instrumentalities
for peaceful settlement of controversies.
But it will become a reality only through self-restraint
and active effort in friendliness and helpfulness.
I covet for this administration a record of having
further contributed to advance the cause of peace.PARTY RESPONSIBILITIES
In our form of democracy the expression of
the popular will can be effected only through
the instrumentality of political parties.
We maintain party government not to promote
intolerant partisanship but because opportunity must
be given for expression of the popular will, and
organization provided for the execution of its mandates
and for accountability of government to the people.
It follows that the government both in the executive
and the legislative branches must carry out in good faith the
platforms upon which the party was entrusted with power.
But the government is that of the whole people;
the party is the instrument through which policies are
determined and men chosen to bring them into being.
The animosities of elections should have no place
in our Government, for government must
concern itself alone with the common weal.SPECIAL SESSION OF THE CONGRESS
Action upon some of the proposals upon which the
Republican Party was returned to power, particularly
further agricultural relief and limited changes in the tariff,
cannot in justice to our farmers, our labor,
and our manufacturers be postponed.
I shall therefore request a special session of Congress
for the consideration of these two questions.
I shall deal with each of them
upon the assembly of the Congress.OTHER MANDATES FROM THE ELECTION
It appears to me that the more important further
mandates from the recent election were the maintenance
of the integrity of the Constitution;
the vigorous enforcement of the laws;
the continuance of economy in public expenditure;
the continued regulation of business to
prevent domination in the community;
the denial of ownership or operation of business
by the Government in competition with its citizens;
the avoidance of policies which would involve
us in the controversies of foreign nations;
the more effective reorganization of the
departments of the Federal Government;
the expansion of public works; and
the promotion of welfare activities
affecting education and the home.
These were the more tangible determinations
of the election, but beyond them was the confidence
and belief of the people that we would not neglect the
support of the embedded ideals and aspirations of America.
These ideals and aspirations are the touchstones
upon which the day-to-day administration
and legislative acts of government must be tested.
More than this, the Government must, so far as lies
within its proper powers, give leadership to the realization
of these ideals and to the fruition of these aspirations.
No one can adequately reduce these things
of the spirit to phrases or to a catalogue of definitions.
We do know what the attainments of these ideals should be:
The preservation of self-government
and its full foundations in local government;
the perfection of justice whether in
economic or in social fields;
the maintenance of ordered liberty;
the denial of domination by any group or class;
the building up and preservation of equality of opportunity;
the stimulation of initiative and individuality;
absolute integrity in public affairs;
the choice of officials for fitness to office;
the direction of economic progress toward prosperity
for the further lessening of poverty;
the freedom of public opinion;
the sustaining of education and
of the advancement of knowledge;
the growth of religious spirit and the tolerance of all faiths;
the strengthening of the home;
the advancement of peace.
There is no short road to
the realization of these aspirations.
Ours is a progressive people, but with a determination that
progress must be based upon the foundation of experience.
Ill-considered remedies for our faults
bring only penalties after them.
But if we hold the faith of the men in our mighty past
who created these ideals, we shall leave them
heightened and strengthened for our children.
CONCLUSION
This is not the time and place for extended discussion.
The questions before our country are
problems of progress to higher standards;
they are not the problems of degeneration.
They demand thought, and they serve to
quicken the conscience and enlist our
sense of responsibility for their settlement.
And that responsibility rests upon you,
my countrymen, as much as upon those of us
who have been selected for office.
Ours is a land rich in resources;
stimulating in its glorious beauty;
filled with millions of happy homes;
blessed with comfort and opportunity.
In no nation are the institutions of progress more advanced.
In no nation are the fruits of accomplishment more secure.
In no nation is the government more worthy of respect.
No country is more loved by its people.
I have an abiding faith in their capacity,
integrity and high purpose.
I have no fears for the future of our country.
It is bright with hope.
In the presence of my countrymen, mindful of the
solemnity of this occasion, knowing what the task means
and the responsibility which it involves,
I beg your tolerance, your aid, and your cooperation.
I ask the help of Almighty God in this service
to my country to which you have called me.1
About 200,000 people celebrated in Washington while
Hoover avoided all but the most important receptions.
On March 5 President Hoover announced his Cabinet.
He asserted executive privilege to keep without confirmation
Andrew Mellon as Treasury Secretary to please Republicans and Wall Street,
and to retain Coolidge’s Secretary of Labor James Davis.
To counter Mellon the President chose Ogden Mills as Undersecretary
for his advice on fiscal and monetary issues.
James Good was one of Hoover’s campaign managers,
and he was chairman of the House Appropriations Committee.
He became Secretary of War.
Walter Brown had worked in Commerce and on the campaign,
and he got the patronage job as Postmaster General.
Hoover’s friend Ray Lyman Wilbur left being president of
Stanford University to be Interior Secretary.
Hoover selected the Democrat William D. Mitchell,
who had been Solicitor General, to be Attorney General.
Arthur M. Hyde had been Governor of Missouri,
and Hoover made his old friend Secretary of Agriculture.
Hyde disappointed him because he knew so little about agriculture.
Hoover selected the engineer Robert P. Lamont to be Commerce Secretary.
Charles Francis Adams III had been a Navy officer and an officer
in at least 43 corporations, and he served as Navy Secretary
for four years and advocated disarmament.
Senator Borah of Idaho, Charles Evans Hughes, Frank Kellogg, and the
Supreme Court Justice Harlan Fiske Stone declined to be Secretary of State.
Hoover then chose Henry Stimson who was governing the Philippines
and left there on February 23.
Stimson had been to Harvard and was a Wall Street lawyer.
In 1911-13 as Secretary of War he continued the
work of Elihu Root reorganizing the Army.
He had volunteered to fight for Theodore Roosevelt in 1917,
though President Wilson rejected that.
Stimson then fought in France as an Artillery officer,
and he became a brigadier general in 1922.
President Coolidge sent him to Nicaragua in 1927,
and Stimson successfully helped negotiate an end
to the Nicaraguan Civil War at Tipitapa on May 4.
He served as Governor-General of the Philippines
from December 1917 to February 1929.
Stimson was sworn in as Secretary of State on March 28, and he began
by working to make the Kellogg-Briand Pact outlawing war more effective.
He helped the Hoover Administration make 25 new arbitration treaties
and 17 new conciliation treaties,
though there would be no adjudication by those treaties.
Another task was to collect the debts and reparations
from the Allies and the Germans.
He suggested writing them off, and Hoover
refused to do that without public approval.
The Time magazine cover on March 9 had
a picture of Stimson rather than Hoover.
Hoover before meeting with his Cabinet held a press conference,
and he ended Coolidge’s rule against quoting.
He liked to talk to reporters when he was
Commerce Secretary and even provided leaks.
As President he had to be more careful, and his relations with them
deteriorated especially with those who criticized his policies.
In the US Senate 14 of the Republicans were progressive,
and they formed “the coalition” and were called “insurgents”
with the 39 Democrats that gave them a 53-42 majority.
Senator Borah of Idaho told President Hoover that he would not
support him unless he called a special session to work on agriculture.
On March 7 Hoover announced that the
special session of Congress would meet on April 15.
Farm foreclosures had reached 15% in 1926-29, and 20% became bankrupt.
Farmers then increased planting, and that caused prices to fall even lower.
The House Committee on Agriculture began holding hearings in late March.
When House Republicans called on Hoover for advice,
a “friend of the President” said that he would not impose bills on the Congress.
Hoover’s days usually began about 6 a.m. with physical exercise
with his friends followed by breakfast with them at 8.
The White House physician Joel Boone worked at getting
Hoover to exercise and lose some weight.
Hoover went on a diet of fruit and nuts, and he lost ten pounds.
The Hoover family usually had breakfast with Boone, Justice Stone,
Secretary Wilbur, Secretary Stimson, and the journalist Mark Sullivan
after their exercise with a medicine ball.
Hoover worked every day including Sundays and holidays,
and he smoked about ten cigars a day.
He used the telephone that was connected by the
White House switchboard to the administration’s leaders.
From 8:30 to 11 he worked on speeches,
read newspapers, and conferred with his staff.
He would see a series of visitors for one hour
at mid-day giving each one 8 minutes.
Cabinet sessions were 90 minutes on Tuesday and Friday mornings.
Afternoons were for various administration work, and
he had dinner at 8 usually with guests on current issues.
He often worked after midnight in the Lincoln study.
Hoover’s motto was “Work is Life,” and he has been called
the hardest working President with the possible exception
of John Quincy Adams (1825-29).
On March 8 President Hoover explained,
The purpose and scope of the Law Enforcement
Commission, as stated in my inaugural address,
is to critically consider the entire Federal machinery
of justice, the redistribution of its functions,
the simplification of its procedure,
the provision of additional special tribunals,
the better selection of juries, the more effective organization
of our agencies of investigation and prosecution….
It will also naturally include consideration of the method
of enforcement of the 18th Amendment and abuses which
have grown up together with the enforcement of the laws
in respect to narcotics, to immigration,
to trade restraint and every other branch
of Federal Government law enforcement.2
On that day Hoover told the press that because of 820,000 people
on the Federal payroll, he would not be recruiting new personnel.
On March 12 he announced there would be
“no leases or disposal of Government oil lands.”
On March 14 he published an executive order
that decisions of the Commissioner of Internal Revenue
allowing a refund, credit, or abatement of income,
war-profits, excess-profits, or gift taxes,
in excess of $20,000, shall be open to inspection
in accordance, and upon compliance, with the regulations
prescribed by the Secretary of the Treasury
and approved by me.3
Also on the 14th Hoover’s executive order directed the
Internal Revenue Service (IRS) to announce any refund or abatement
of income taxes which Mellon and others had been resisting.
Hoover said, “Excessive fortunes area a menace to true liberty
by the accumulation and inheritance of economic power.”4
The next day he persuaded Mellon to make a statement urging investors
to buy bonds because their price was lower than stocks.
On the 16th the Federal Reserve Board Governor Roy A. Young
asked
banks to cooperate with the Board by restricting credit used for speculation.
On March 22 President Hoover proclaimed new immigration quotas
based on national origins for 68 countries.
Only 15 nations were allowed more than 100 immigrants, and those limited to
only 100 included large nations such as China, India, Japan, Australia, Egypt,
Ethiopia, Iraq, Persia, Siam, and the Union of South Africa.
His Proclamation also clarified, “The immigration quotas assigned
to the various countries and quota-areas are not to be regarded as
having any political significance whatever.”5
The Presidential yacht the Mayflower was costing $300,000 a year,
and Hoover had it decommissioned on March 22.
He also got rid of the stables because of his dislike of horses.
Yet he acquired twenty automobiles that the manufacturers usually donated.
Hoover loved children.
On March 25 he proclaimed May 1 National Child Health Day,
and he urged a major effort to make children healthier.
The White House Conference on Child Health
and Protection met in July with 2,500 delegates.
On April 1 President Hoover released his message of
“Obedience to Law the First Lesson of Self-Government”
while announcing that the 33rd Convention of the
National Congress
of Parents and Teachers would meet in Washington D.C. in May.
In a letter on 9 April 1929 to Yale News he asked
that the Yale Daily News publish this:
The need for college graduates in State and National
politics is simply the need for trained minds and formed
characters that exists in all departments of modern life.
The increasingly complex structure of society requires
more and more of the technical skill and of the cultural
background that the colleges undertake to provide.
As politics is but one aspect of the social order,
its need of men of special educational equipment
is as obvious as this need is now
in business or the professtions.6
The industrialist John J. Raskob ran finance for Du Pont and General Motors.
He had supported Al Smith and became chairman
of the Democratic National Committee.
He broke tradition by donating $1 million to the party after the election.
He hired the publisher Jouett Shouse as executive chairman,
and he made the journalist Charley Michelson director of publicity.
He gave out statements and speeches from and to
Democratic congressmen and other critics of the President.
Hoover declined to respond to these, and in April he bought
164 acres in the Blue Ridge Mountains for a fishing retreat.
He also leased 2,000 acres and got fishing rights for 10,000 acres.
On April 13 Hoover gave a speech to the Friends of the Gridiron Club.
He thanked them for educating him politically over 17 years.
In regard to a fear in the press on Latin-American policy, he said,
That is, fear of an era of the
mistakenly called dollar diplomacy.
The implications that have been colored by that expression
are not a part of my conception of international relations.
I can say at once that it never has been and ought not to be
the policy of the United States to intervene by force
to secure or maintain contracts between our citizens
and foreign States of their citizens.
Confidence in that attitude is the only basis upon which
the economic cooperation of our citizens
can be welcomed abroad.
It is the only basis that prevents
cupidity encroaching upon the weakness of nations—
but, far more than this, it is the true expression
of the moral rectitude of the United States….
And the essence of accomplishment in government
lies in that threadbare expression—cooperation.
I wish sometimes our language afforded us
a few more synonyms for that word,
because we sometimes become so weary of repetition
of phrases that we would defeat great purposes and
abandon great ideas because of our annoyance with words.
Our form of government can succeed only by cooperation—
not only cooperation within the administrative arm
of the Government and cooperation with Congress,
but also by cooperation with the press,
cooperation with business,
and the cooperation with social leadership.7
On 16 April 1929 Hoover presented his message to the
first session of the 71st Congress which was a Special Session
for Farm Relief and Limited Changes in the Tariff.
He described agricultural problems and suggested
solutions including adjustments on the tariffs.
A heavy indebtedness was inherited by the industry
from the deflation processes of 1920.
Disorderly and wasteful methods
of marketing have developed.
The growing specialization in the industry has for years
been increasing the proportion of products that now
leave the farm and, in consequence, prices have been
unduly depressed by congested marketing at the harvest
or by the occasional climatic surpluses.
Railway rates have necessarily increased.
There has been a growth in the competition
in the world markets from countries
that enjoy cheaper labor or more nearly virgin soils.
There was a great expansion of production
from our marginal lands during the war,
and upon these profitable enterprise
under normal conditions can not be maintained.
Meanwhile their continued output
tends to aggravate the situation.
Local taxes have doubled and in some cases trebled.
Work animals have been steadily replaced
by mechanical appliances,
thereby decreasing the consumption of farm products….
An effective tariff upon agricultural products,
that will compensate the farmer’s higher costs
and higher standards of living, has a dual purpose.
Such a tariff not only protects the farmer
in our domestic market but it also stimulates him
to diversify his crops and to grow products
that he could not otherwise produce,
and thus lessens his dependence abroad
upon exports to foreign markets….
The pledged purpose of such a Federal farm board
is the reorganization of the marketing system
on sounder and more stable and more economic lines.
To do this the board will require funds to assist
in creating and sustaining farmer-owned
and farmer-controlled agencies for a variety of purposes,
such as the acquisition of adequate warehousing
and other facilities for marketing;
adequate working capital to be advanced
against commodities lodged for storage;
necessary and prudent advances to corporations
created and owned by farmers’ marketing organizations….
The most progressive movement in all agriculture
has been the upbuilding of the farmer’s
own marketing organizations, which now embrace nearly
two million farmers in membership and annually distribute
$2,500,000,000 worth of farm products.
These organizations have acquired experience
in virtually every branch of their industry
and furnish a substantial basis
upon which to build further organization….
In considering the tariff for other industries
than agriculture, we find that there have been
economic shifts necessitating a readjustment
of some of the tariff schedules….
In determining changes in our tariff
we must not fail to take into account the broad interests
of the country as a whole, and such interests include
our trade relations with other countries.
It is obviously unwise protection which sacrifices
a greater amount of employment in exports
to gain a less amount of employment from imports.8
Willis C. Hawley (1864-1941) earned bachelor degrees in
Science and Law at Willamette University in Salem, Oregon.
He taught economics and history there for 16 years and was president 1893-1902.
He served in the US Congress from 1907 to 1933.
He became chairman of the House Committee on Ways and Means in 1927.
On 7 May 1929 he introduced a tariff bill in 85,000 words.
He raised rates more than Hoover wanted affecting nearly a third
of the 2,683 items in the 1922 Fordney-McCumber Tariff Act.
Hoover wanted agriculture rates raised, and
Hawley raised even more rates in manufacturing.
Congressmen wanted rates raised for products in their districts.
On May 29 the House of Representatives passed the Hawley bill 264-147.
The House of Representatives had voted to
increase tariffs on 845 classes of material by May.
Senator Borah in June began cutting these back to what Hoover wanted,
and his resolution lost by one vote.
The US Congress approved the Federal Farm Board with eight members
and Alexander Legge as chairman, and it was revived on June 15 with
a revolving fund of $500 million for loans to farmer-owned cooperatives.
Hoover signed the Agricultural Marketing Act on June 16.
Congress went on a summer vacation while the Senate Finance Committee
led by Republican Reed Smoot of Utah interviewed
a thousand witnesses, and most of them wanted to raise tariffs.
Because of those hearings Hoover felt he could not leave Washington to go fishing.
In August that Senate committee revised the Hawley bill
by increasing farm rates and lowering some industrial rates.
Hoover accepted that, but Borah and Democratic Senators
wanted more increases for manufacturing.
On September 24 Hoover made a speech asking for a Flexible Tariff
that would let the Executive (him) adjust tariffs as much as 50%.
He concluded his speech saying,
The flexible provision is one of the most progressive steps
taken in tariff making in all our history.
It is entirely wrong that there shall be no remedy
to isolated cases of injustice that may arise through
the failure to adequately protect certain industries,
or to destroy the opportunity to revise duties which
may prove higher than necessary to protect some industries
and, therefore, become onerous upon the public.
To force such a situation upon the public
for such long periods is, in my view,
economically wrong and is prejudicial to public interest.
I am informed the principle is supported
by the most important of the farm organizations.
It is supported by our leading manufacturing organizations.
It is supported by labor and consumers’ organizations.
It has never hitherto been made a political issue.
In the last campaign some important Democratic leaders
even advocated the increase of powers
to the Tariff Commission so as
to practically extinguish Congressional action.
I do not support such a plan.
I have no hesitation in saying that I regard it
as of the utmost importance in justice to the public;
as a protection for the sound progress
in our economic system, and for the future protection
of our farmers and our industries and consumers,
that the flexible tariff, through recommendation of the Tariff
Commission to the Executive, should be maintained.9
Senator Borah accused Hoover of interfering in congressional business.
Hoover made no reply, and on October 2 the Senate would vote 47-42
to remove the presidential flexible tariff provision.
To improve enforcement of Prohibition Hoover transferred it
from the Treasury Department to the Justice Department.
He advised agents not to use guns so that innocent bystanders would not be hurt.
He was concerned about crime and the rising number of felonies
with about 9,000 murders per year which was twenty times what Britain had.
George Wickersham had been Attorney General for Taft.
Hoover appointed him to be chairman of the National Committee
on Law Observance and Enforcement, and they met on May 20.
Hoover wanted to see if Prohibition would work.
He told the Associated Press, “If a law is wrong,
its rigid enforcement is the surest guarantee of its repeal.”10
On June 6 Hoover in a special message to Congress on
“Reorganization of Federal Bureaus Connected with Prohibition Enforcement” said,
In order to secure the utmost expedition
in the reorganization and concentration of responsibility
in administration of the Federal bureaus
connected with prohibition enforcement,
so greatly needed to improve their effectiveness,
I recommend that the Congress appoint
a joint select committee to make an immediate study
of these matters and to formulate recommendations
for consideration at the next regular session….
As the question embraces numerous laws and regulations
in several bureaus, it will require extensive consideration
which if given jointly by such committees of the Congress
and the Departments prior to the regular session
will save many months of delay.11
Hoover worked on improving waterways and irrigation for farmers.
He wanted the federal government to build hydro-electric dams,
and several were planned and initiated in the 1920s.
The dam at Black Canyon and Boulder Canyon in Colorado was approved
by the seven states of Colorado, New Mexico, Utah, Wyoming, Nevada,
Arizona, and California that agreed to the
Colorado River Compact on 24 November 1922.
The Boulder Canyon Project Act passed in December 1928,
and Hoover said, “All this [power] will belong to the people,
developed by them, owned by them, and for their benefit.”12
Construction of what was to be called
“Hoover Dam” took place from 1931 to 1936.
In 1934 the Interior Secretary Harold L. Ickes, against the advice of the U.S.
Board on Geographic Names and Rand McNally, insisted the name be changed
back to Boulder Dam, and he was backed by the Democratic Congress.
The name change was never official, and it lasted until the US Congress
restored the name “Hoover Dam” with a resolution on 4 March 1947.
On June 25 Hoover held a press conference on the
Colorado River Basin project and said,
I signed this morning the Colorado River proclamation,
making effective the compact between
six of the seven states in the Colorado River Basin.
I have a particular interest in its consummation
not only because of its great intrinsic importance
but because I was the Chairman of the Colorado River
Commission that formulated the Compact.
The Compact itself relates entirely to the distribution
of water rights between the states in the Basin….
It is the final settlement of disputes that
have extended over 25 years
and which have stopped the development of the river….
The Compact was originally signed five years ago by the
seven states subject to ratification by their legislatures.
It has a similarity to matters in international negotiation
in the difficulties that it has to pursue
in the path of ultimate consummation,
but for the first time in history a Compact
involving so many interests has been made effective.13
Hoover planned a campaign to reduce speculation on stocks which
were going up because people expected his administration would be prosperous.
Again he asked Treasury Secretary Mellon to advise people
to buy undervalued bonds instead of overpriced stocks.
Before the Congress adjourned on July 3 they authorized $145 million
for improving rivers and harbors, $530 million for public buildings,
$75 million to subsidize public roads, and
$165 million to start work on the Colorado River Dam.
Hoover would organize 62 fact-finding programs without legislation.
Will Rogers quipped, “I only claim one distinction, and that is that I am
the only person that I know of that is not on one of his commissions.”14
That summer Hoover named a commission to reduce military personnel,
and he shut down Navy construction projects.
The British Prime Minister J. Ramsay MacDonald of the Labor Party
came to the United States to study how to downsize the Navy.
Hoover wanted to make income taxes more progressive
to help the poor and middle classes.
On August 6 he appointed the prison reformer Sanford Bates to be
Superintendent of the Bureau of Prisons 1930-37,
and he asked for $5 million to correct overcrowding
and to build a new prison in Lewisburg, Pennsylvania.
Meanwhile he used crowded military prisons in Leavenworth and Atlanta.
Many people were imprisoned for violating the Volstead Act
(Prohibition) and the 1915 Anti-Narcotics Act.
Bates also got seven other bills passed to train prison guards,
improve health, provide education, and reform parole.
More people got probation, and the number on parole increased.
Hoover expanded the national parks and monuments by
3 million acres and the national forests by two million acres.
In June he asked for a law to establish an effective Federal Power Commission
to regulate interstate transmission and rates of electricity.
Hoover invited Tuskegee Institute’s principal Robert Russa Moton to lunch,
and he increased funding for Howard University.
Hoover ordered an end to the segregation of colored clerks
in the Census Bureau and other agencies.
Because he worked with Tuskegee’s Moton,
W. E. B. Du Bois and the NAACP criticized Hoover.
As President he increased the number of African Americans
in his administration to 54,684.
Charles J. Rhoads was a Quaker and had been president
of the Indian Rights Association, and Hoover appointed him
Commissioner of Indian Affairs.
Having known and played with Indians as a child,
Hoover wanted to help preserve their culture.
They abolished the segregated Indian boarding schools and improved medical care.
The budget for clothing native American students was doubled,
and spending for Indian Affairs increased from
$16 million in 1929 to $25 million in 1932.
Modern hospitals were built, and the trachoma
eye disease cases were reduced by half.
Hoover signed a bill that reimbursed Utes for
forest lands taken by President Theodore Roosevelt.
Donald Swain studied federal conservation policies, and he considered
Hoover “the first conservationist President since Theodore Roosevelt.”
The Commission on the Conservation and Administration
of the Public Domain was established in April.
Hoover made the conservationist Horace Albright
the Director of the National Park Service,
and he began serving on 12 January 1929.
Hoover backed his policies with executive orders.
When the Hoovers bought a house in Washington, they refused to sign
a covenant promising not to sell it to Jews or African-Americans.
Walter Newton had been a Congressman for ten years,
and he became Hoover’s secretary on July 1 and was put in charge of
reorganizing the federal bureaucracy so that it could be preserved by legislation.
On that day Treasury Secretary Mellon announced that in the fiscal year
just ended the government’s finances received more money
than was spent, yielding a surplus of $252,540,283.
On July 2 President Hoover announced at a press conference,
I have decided to call a White House conference
on the health and protection of children.
This conference will be composed of representatives
of the great voluntary associations,
together with the Federal and State and municipal
authorities interested in these questions….
The conference will not be assembled
for another nine months or a year in order that
there may be time for complete and exhaustive
advance study of the facts and forces in progress,
of the experience with the different measures and the work
of the organizations both in voluntary and official fields.
In order that these determinations may be effectively
made and intelligent presentation given at the conference,
a series of committees will be appointed from the leaders
in different national organizations
and will be assisted by experts.
The subjects to be covered embrace
problems of dependent children;
regular medical examination;
school or public clinics for children; hospitalization;
adequate milk supplies; community nurses;
maternity instruction and nurses;
teaching of health in the schools;
facilities for playgrounds and recreation;
voluntary organization of children;
child labor and scores of allied subjects….
We as a nation are fundamentally concerned with
reinforcement of the equality of opportunity to every child,
and the first necessity for equal opportunity
is health and protection.
The work of the conference will be under the direction
of the Secretary of the Interior, Dr. Ray Lyman Wilbur,
with the cooperation
of the Secretary of Labor, James J. Davis.15
On July 24 Hoover at the White House gave an address to proclaim
the General Pact for the Renunciation of War, saying,
In April 1928, as a result of discussions between
the Secretary of State of the United States
and the Minister of Foreign Affairs of France,
the President directed Secretary Kellogg to propose
to the nations of the world that
they should enter into a binding agreement as follows:Article 1.—The High Contracting Parties solemnly declare
in the names of their respective peoples
that they condemn recourse to war
for the solution of international controversies,
and renounce it as an instrument of national policy
in their relations with one another.
Article 2—The High Contracting Parties agree
That the settlement or solution of all disputes or conflicts
of whatever nature or of whatever origin they may be,
which may arise among them,
shall never be sought except by pacific means.That was a proposal to the conscience
and idealism of civilized nations.
It suggested a new step in international law,
rich with meaning.
It represented a platform from which there is instant appeal
to the public opinion of the world
as to specific acts and deeds.
The magnificent response of the world to these proposals
is well indicated by those now signatory to its provisions.
Under the terms of the treaty there have been deposited
in Washington the ratifications
of the fifteen signatory nations—that is, Australia, Belgium,
Canada, Czechoslovakia, France, Germany, Great Britain,
India, Irish Free State, Italy, Japan, New Zealand, Poland,
Union of South Africa, and the United States of America.
Beyond this the Treaty has today become effective also
with respect to thirty-one other countries,
the Governments of which have deposited with
the Government of the United States instruments evidencing
their definitive adherence to the Treaty.
These countries are: Afghanistan, Albania, Austria,
Bulgaria, China, Cuba, Denmark, Dominican Republic,
Egypt, Estonia, Ethiopia, Finland, Guatemala, Hungary,
Iceland, Latvia, Liberia, Lithuania, the Netherlands,
Nicaragua, Norway, Panama, Portugal, Peru,
Rumania, Russia, Kingdom of the Serbs, Croats and
Slovenes, Siam, Spain, Sweden, and Turkey….
Moreover, according to information received through
diplomatic channels, the instruments of definitive adherence
of Greece, Honduras, Persia, Switzerland, Venezuela, Chile,
Costa Rica, and Haiti have been fully completed
according to their constitutional methods
and are now on the way to Washington for deposit….
Now, therefore, be it known that I, Herbert Hoover,
President of the United States of America, have caused
the Treaty to be made public to the end that the same
and every article and clause thereof may be observed
and fulfilled with good faith by the United States
and the citizens thereof.16
President Hoover, Joseph P. Kennedy, and
Bernard Baruch began selling stocks in July.
On August 21 Hoover sent a letter to Joseph M. Dixon
directing him to deliver it to the Governors of the Public Land States
meeting at Salt Lake City on August 26 and 27.
The letter describes the issues of public lands,
reclamation service, and mineral resources.
Hoover concluded by writing that he wanted to work out conservation
issues including grazing lands and water storage as well as checking
the growth of Federal Bureaucracy, Federal interference in local affairs,
and to obtain better government.
During the summer many people were ignoring Mellon’s advice
to buy bonds, and speculation on stocks continued.
Hoover managed to persuade the Federal Reserve and
New York banks to stop financing brokers’ loans.
Other companies did not, and they charged 20% interest.
From August to October real business output
in the United States fell by nearly 2%.
On September 3 the Dow Jones Industrial Average reached its peak at 386,
and it would be 25 years before it came back to that point.
On September 18 in a radio address Hoover discussed the problems
of military preparations and the solution of peace, and he concluded,
And there are other assurances of peace
which have been devised in this room, advanced and
supported by our Presidents over the past half century.
Great aid has been given by them to the advance
of conciliation, arbitration and judicial determination
for settlement of international disputes.
These are the steps which prevent war.
Lately we and other nations have pledged ourselves
never to use war as an instrument of national policy.
And there is another such step
which follows with impelling logic from those advances.
That is the reduction of arms.
Some months ago I proposed to the world that
we should further reduce and limit naval arms.
Today we are engaged in a most hopeful discussion
with other governments leading to this end.
These are proposals which would preserve
our national defenses and yet would relieve the backs
of those who toil from gigantic expenditures
and the world from the hate and fear
which flow from the rivalry in building war ships.
And daily in this room do I receive evidence of almost
universal prayer that this negotiation shall succeed.
For confidence that there will be peace
is the first necessity of human progress.17
In the morning on September 26 a letter by President Hoover was read
to the Annual Convention of National Association of Life Underwriters.
He wrote,
No one interested in the progress of the American people
could fail to be impressed with the significant achievement
which is marked by the distribution of one hundred billions
of life insurance amongst them.
There is no single device in our whole economic system
which is greater in its importance in safeguarding
the welfare of our women and children than is this….
You, the men and women who have helped to build
and now carry forward this great structure,
have performed a great service and one which
the whole country acknowledges with pride.18
On that day Hoover met with social scientists in the White House,
and they planned to research economic and social life
in order to maintain the current prosperity, peace, and contentment.
Their Recent Social Trends in the United States
would be published in 1,500 pages in 1933.
On September 28 he met with life insurance executives in the
White House to discuss old-age pensions for retired Americans.
They proposed providing $500 a year from birth.
The wealthy were to be excluded, and the rest would receive
the same amount with $50 a month at the age of 65.
The financial panic would cause them to
postpone this to a possible second term.
Hoover also planned a public and private partnership
with states to insure workers in case of unemployment.
On October 10 President Hoover and British Prime Minister
MacDonald in Washington issued a Joint Statement saying,
During the last few days we have had an opportunity,
in the informal talks in which we have engaged,
not only to review the conversations on a naval agreement
which have been carried on during this summer between us,
but also to discuss some of the more important means
by which the moral force of our countries
can be exerted for peace….
The part of each of our governments in the promotion
of world peace will be different, as one will never consent
to become entangled in European diplomacy
and the other is resolved to pursue a policy
of active cooperation with its European neighbours;
but each of our governments will direct
its thoughts and influence towards
securing and maintaining the peace of the world….
We approach old historical problems
from a new angle and in a new atmosphere.
On the assumption that war between us is banished,
and that conflicts between our military
or naval forces cannot take place,
these problems have changed their meaning and character;
and their solution, in ways satisfactory to both countries,
has become possible.19
In 1952 Herbert Hoover published The Memoirs of Herbert Hoover:He went on to write that the recession which began in October 1929
The Great Depression, 1929-1941 that begins this way:
In the large sense the primary cause of the Great
Depression was the war of 1914-1918.
Without the war there would have been
no depression of such dimensions.
There might have been a normal cyclical recession;
but, with the usual timing, even that readjustment
probably would not have taken place at that particular
period, nor would it have been a “Great Depression.20
This unsatisfactory price level is chiefly due to the rapid
or disorderly movement which is putting a large part
of the year’s supply on the market within a short time….
The unprecedented liquidation of industrial stocks
and shrinkage in values within the last few days
has also had an effect on wheat values
which is entirely unwarranted,
and wheat producers should not be forced
to sell on a market affected by these conditions.22
About half the annual harvest had been sold in the previous week.
The Farm Board had $100 million it could use to stabilize prices and more if needed.
Agriculture’s problem was that they had too much supply for the demand.
Hoover attempted to help farmers by urging cooperation.
Then on the 29th called “Black Tuesday” 23.5 million shares were sold.
Since September 1 the value of shares declined by $18 billion.
Stocks kept going down for the next two weeks bringing the losses to $29 billion.
Just prior to this fall the stock prices had doubled since 1928.
The Treasury Department found that in 1929 there were 1,548,707 stock customers.
The 1930 Census would find that the population
of the United States was 122,775,046.
The Assistant Secretary of Commerce Julius Klein noted
that only 4% of the families “were affected by the break.”
For a week after Black Tuesday Hoover declined to talk to reporters
at his regular press conferences, and on November 5
he spoke for only ten minutes on the “business situation.”
The Hawley-Smoot Tariff was going to increase nationalist protection,
and some advised Hoover to veto the bill including
the J. P. Morgan partner Thomas Lamont.
Hoover said that commodity prices were steady, and labor costs were rising.
Hoover’s friend Julius Klein, the Assistant Secretary of Commerce,
announced that there was no change in the situation of the vast majority of Americans,
and he expressed “a profound confidence in the general economic future of the country.”
Treasury Secretary Mellon advised Hoover to liquidate labor, stocks,
farmers, and real estate to “purge the rottenness out of the system.”
Treasury Undersecretary Ogden Mills was more helpful
and better at putting Hoover’s points across.
Hoover noted that presidents Van Buren (1837), Grant (1873), Cleveland (1893),
and Theodore Roosevelt (1907) had maintained the government during financial panics.
In his Armistice Day address on November 11
Hoover in Washington Auditorium said,
I have said that recently we have covenanted
with other civilized nations not only to renounce war
as an instrument of national policy
but also we have agreed that we shall
settle all controversies by pacific means.
But the machinery for pacific settlement of disputes
among nations is, as yet, inadequate.
We need to strengthen our own provisions for it.
Our State Department is the first of these means.
It must be strengthened and supported as the great arm
of our Government, dedicated to the organization of peace.
We need further to extend our treaties with other countries
providing methods for reference of controversies
to conference, to inquiry as to fact,
or to arbitration, or to judicial determination.
We have need to define the rules of conduct of nations and
to formulate an authoritative system of international law.
We have need under proper reservations to support
the World Court in order that we may secure
judicial determination of certain types of controversies
and build up precedents
which add to the body of international law.
By these agencies we relegate a thousand frictions
to orderly processes of settlement
and by deliberation in action
we prevent their development into national inflammation….
The European nations have,
by the covenant of the League of Nations, agreed that
if nations fail to settle their differences peaceably
then force should be applied by other nations
to compel them to be reasonable.
We have refused to travel this road.
We are confident that at least in the Western Hemisphere
public opinion will suffice to check violence.
This is the road we propose to travel.
What we urgently need in this direction
is a further development of methods for reference
of unsettled controversies to joint inquiry by the parties
assisted by friendly nations, in order that action
may be stayed and that the aggressor
may be subjected to the searchlight of public opinion.23
On November 15 Hoover sent a telegram to Julius Barnes saying,
Now that the various steps which have been in negotiation
during the past few days for strengthening
the security market have made good progress
I feel that we should consider the next
and most important step in business stabilization….
With view to bringing about such coordination
I would be glad if you could suggest to me the names
of a few leaders in the business world who would confer
with Secretary Lamont and myself,
together with representatives from other sections
of the community whom I will invite,
the purpose of this consultation being
to formulate preliminary plans for such an organization.24
Hoover on that day announced for the Conferences on Business and
Governmental Agencies on Maintaining Business Progress this plan of action:
I have during the past week engaged in
numerous conferences with important business leaders
and public officials with a view to the coordination
of business and governmental agencies
in concerted action for continued business progress.
I am calling for the middle of next week
a small preliminary conference of representatives
of industry, agriculture, and labor to meet with
the Secretaries of the Treasury, Agriculture, Commerce,
and Labor, together with the Chairman
of the Federal Farm Board to develop certain definite steps.
For instance, one of the results of the speculative period
through which we have passed in recent months
has been the diversion of capital into the security market,
with consequent lagging
of the construction work in the country.
The postponement of construction during the past months,
including not only buildings, railways, merchant marine,
and public utilities, but also Federal, State, and municipal
public works, provides a substantial reserve
for prompt expanded action.
The situation is further assured
by the exceptionally strong cash position
of the large manufacturing industries of the country.
The magnificent working of the Federal Reserve System
and the inherently sound condition of the banks
have already brought about a decrease in interest rates
and an assurance of abundant capital—
the first time such a result has been
so speedily achieved under similar circumstances.
In market booms we develop over-optimism
with a corresponding reverse into over-pessimism.
They are equally unjustified, but the sad thing is that
many unfortunate people are drawn into the vortex of
these movements with tragic loss of savings and reserves.
Any lack of confidence in the economic future or
the basic strength of business in the United States is foolish.
Our national capacity for hard work,
and intelligent cooperation is ample guaranty of the future.
My own experience has been, however,
that words are not of any great importance
in times of economic disturbance.
It is action that counts.
The establishment of credit stability and ample capital
through the Federal Reserve System and
the demonstration of the confidence of the administration
by undertaking tax reduction with the cooperation
of both political parties, speak more than words.
The next practical step is the organizing and coordinating
of a forward movement of business through the revival
of construction activities, the stimulation of exports
and of other legitimate business expansion,
especially to take such action in concert with
the use of our new powers to assist agriculture.
Fortunately, the sound sense, the capacity
and readiness for cooperation of our business leaders
and governmental agencies give assurance of action.25
Hoover’s plan was praised by the financial experts at Dunn and Bradstreet
as well as by Roger Babson, Irving Fisher, John J. Raskob,
W. C. Mitchell, Charles M. Schwab, and Julius Klein.
They considered the conferences “prosperity insurance,”
and the White House received 5,000 telegrams.
Several labor leaders also approved of the conferences,
though socialists were critical.
On November 19 Hoover met with leaders in banking, railroads,
manufacturing, and public utilities, and he asked them to act.
The Federal Reserve System announced that they were easing credit
and refusing to give discounts to banks making stock market call loans.
Industrialists came to the White House and agreed
to maintain wages to help stabilize workers.
Hoover urged executives to expand building and maintenance.
On the 20th at a meeting with businessmen, which included Ford,
Pierre S. du Pont, Julius Rosenwald of Sears Roebuck,
Walter Teagle of Standard Oil, Owen D. Young of General Electric,
and Alfred P. Sloan of General Motors, he assured them
that government would not interfere with business.
On November 21 Hoover held a conference
with industrialist diplomat Walter Gifford, President of the
Chamber of Commerce Julius Barnes, Du Pont, and Henry Ford.
Hoover began with his honest assessment of the crisis and warned
it could be a long and difficult period of liquidating values, debts, and prices.
He was concerned about the human problem of unemployment,
and he asked that wages only be reduced as a last resort.
What they needed was what Ford had offered—
high wages and low prices to increase consumption.
Ford said he would raise his wage level from $5 to $7 for 150,000 employees.
That afternoon Hoover met with the labor leaders John L. Lewis of the
United Mine Workers and William Green of the American Federation of Labor.
They appreciated high wages, and Hoover asked them
to keep the peace by not seeking raises during the crisis.
On the 22nd he met with leaders in the construction industry.
On November 23 the New York Times explained
how well Hoover was dealing with the crisis:
It is little to say that no President but Mr. Hoover would
have gone about the business in the way chosen by him.
No other President would have had the necessary
knowledge or aptitude, born of practice,
even if he possessed the inclination.
With the extraordinary promptness and skill
President Hoover made up lists of railroad men, bankers,
captains of industry, representatives of organized labor,
whom he brought together at the White House
day after day, not to lecture them, or impose his will
upon them, but to elicit from them in friendly conference
opinions and judgments which could be given out
in summary to the whole country.
It has been a fine piece of work, and there can be no doubt
that a helpful spirit of reassurance has gone out
from the White House to permeate the whole land.26
On December 4 President Hoover transmitted to the United States Congress
the budget for the fiscal year ending on 30 June 1931
listing appropriations in 1930 and estimates for 1931.
He also included the largest items of increase and decrease.
The largest increase was $11,500,000 for reduction in the principal
of the public debt, and the largest decrease was $37,000,000
for decreasing the interest on the public debt.
His first annual message to Congress also included sections on
“Rivers and Harbors, Flood Relief, and Boulder Dam,” “Indians,”
“Forest Protection,” “Buildings,” “National Defense,” “The French Debt,”
“Receipts and Expenditures,” and this “Conclusion:”
Our finances are in sound condition.
The public debt which at its peak in August, 1919,
amounted to $26,596,000,000,
stood at $16,931,000,000 on June 30, 1929.
We are wisely committed to a policy which
insures the further progressive reduction of the debt.
We will reach in 1931 for the first time the period
when the annual reduction required by law
in the principal of the debt will be greater
than the annual interest charges on the debt.
We are also committed to the annual amortization
of our other long term commitments—
such as the adjusted service certificate
of the Veterans of the World War and our liability
under the retirement laws affecting civilian personnel.
Our estimated expenditures for this and the next year
are well within our expected receipts.
With the recommended reduction in taxes
the margin between the two will be considerably lessened,
but to what extent we do not definitely know to-day.
This situation emphasizes the necessity for a careful scrutiny
of any proposed additional activities which would involve
a material increase in expenditures in order that
we may not jeopardize either
the balanced condition of the Budget or
the continuation of the benefits of reduced taxation.27
His budget included for Indians the following:
As wards of the Nation the Government
has an obligation to the Indians which concerns
not alone their present but their future welfare.
To raise the standard of their living,
to adequately provide for their health and education,
and to advance their opportunity for profitable employment
are the concern of the Government.
In order that we may meet more fully
our obligations to the Indians,
I am asking for an increase of something more than
$3,100,000 over the appropriations for the current year.
This increase is requested so that we may more adequately
meet the need for educational and health work among the
Indians and for their industrial assistance and advancement.
I do not feel, however, that we should wait
until the next fiscal year to make
a general improvement in our Indian affairs.
Rather do I feel that we should commence this now.
This will require additional funds for the current fiscal year
for which an estimate will be presented to the Congress.28
Hoover at a Conference of Business Leaders at the Chamber of Commerce
of the United States on December 5 released the detailed budgets
planned by the Federal Government for 1930 and 1931.
More than 400 business leaders attended.
He advised them to avoid pessimism, uncertainty, and hesitation in their businesses,
and he suggested voluntary organizations to expand construction and maintenance.
The Federal Reserve System aimed to prevent deflation by lowering the discount rate
to member banks while rejecting them to banks using loans for financial speculation.
These efforts could improve employment.
Railroads increased their spending on construction by $345 million
over 1928, and gas companies did so by $428 million.
Hoover said,
All of these efforts have one end to assure employment,
and to relieve the fear of unemployment.
The very fact that you gentlemen have come together
for these broad purposes represents an advance
in the whole conception of the relationship
of business to the public welfare.
You represent the business of the United States,
undertaking through your own voluntary action
to contribute something very definite to the advancement
of stability and progress in our economic life.
This is a far cry from the arbitrary and dog-eat-dog attitude
of the business world of some thirty or forty years ago.
And this is not dictation or interference
by the Government with business.
It is a request from the Government that you cooperate
in prudent measures to solve a national problem.
A great responsibility and a great opportunity rest upon
the business and economic organization of the country.
The task is one fitted to its fine initiative and courage.
Beyond this, a great responsibility for stability
and prosperity rests with the whole people.
I have no desire to preach.
I may, however, mention one good word—work.29
The conference appointed Julius Barnes the chairman of a
continuing economic committee, and the Commerce Department
planned
to organize and coordinate the public works by local and state governments.
The New York Times praised, “The great machine which grew out of
President Hoover’s business stimulation conferences.”30
Columbia University’s Wesley Mitchell, who was an expert on business cycles,
commended the significant experiment on economic balance.
William Foster and Waddill Catchings, who wrote
about “countercyclical interventions” said,
Now, for the first time in our history, we have a president
who, by technical training, engineering achievement,
Cabinet experience, and grasp of fundamentals,
is qualified for business leadership.
And for the first time in our history the heads
of our largest business enterprises
are prepared to follow such leadership.31
In 1929 federal expenditures were only about 3%
of the Gross National Product (GNP).
Public officials increased their budgets for public works in 1930.
The Census Bureau attempted to measure unemployment in April.
By then the stock market had regained 20% of what it had lost.
U.S. Steel launched a three-year expansion with a $250 million budget.
Electric utilities planned new construction spending $1.4 billion.
The Socialist Norman Thomas suggested that it was unfair to blame
the Crash and Depression on President Hoover because
no man was big enough to cause them.
Thomas blamed capitalism.
On 31 December 1929 the New York Herald-Tribune
summarized what Hoover did to handle this crisis.
President Hoover’s prompt action to prevent the depression
extending to business and industry saved the situation.
The “panic” was checked in a few days.
Wages were left unaffected; stabilization was insured;
production was encouraged to continue as usual.
This leadership was all the more notable,
since it was practically the first of the sort
ever to originate in the White House.32
Ten years later the economic historians Charles A.
and Mary R. Beard looked back and wrote,
Hoover invoked intelligence and took action
in conquering the periodical “black death”
which had so often disrupted industrial processes.
In so doing he drew upon himself the easy criticism
of those who said that he did not do enough
or did the wrong thing, but such strictures
in no way obscured the fact that he broke from precedents
and made precedents in the discharge of his duties
as Chief Executive of the United States.33
Notes
1. The State Papers and Other Public Writings of Herbert Hoover, Volume One:
March 4, 1929, to October 1, 1931 ed. William Starr Myers, p. 4-12.
2. Ibid., p. 14.
3. Ibid., p. 16.
4. Hoover: An Extraordinary Life in Extraordinary Times by Kenneth Whyte, p. 377.
5. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 20.
6. Ibid., p. 26-27.
7. Ibid., p. 30.
8. Ibid., p. 32-36.
9. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 103-104.
10. Herbert Hoover: A Public Life by David Burner, p. 219.
11. Herbert Hoover: A Public Life by David Burner, p. 180.
12. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 67-68.
13. Ibid., p. 71-72.
14. Herbert Hoover by William E. Leuchtenburg, p. 84.
15. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 73-74.
16. Ibid., p. 78-80.
17. Ibid., p. 101-102.
18. Ibid., p. 104-105.
19. Herbert Hoover: A Public Life by David Burner, p. 247.
20. The Memoirs of Herbert Hoover: The Great Depression, 1929-1941, p. 2.
21. Freedom from Fear: The American People in Depression and War, 1929-1945
by David M. Kennedy, p. 39.
22. Herbert Hoover in the White House: The Ordeal of the Presidency by Charles Rappleye, p. 119.
23. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 127-128.
24. Herbert Hoover: President of the United States by Edgar Eugene Robinson and
Vaughn Davis Bornet, p. 129-130.
25. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 133-134.
26. Hoover: An Extraordinary Life in Extraordinary Times by Kenneth Whyte, p. 412.
27. The State Papers and Other Public Writings of Herbert Hoover, Volume One, p. 179.
28. Ibid. p. 171-172.
29. Ibid. p. 183-184.
30. Herbert Hoover in the White House: The Ordeal of the Presidency by Charles Rappleye, p. 113.
31. Ibid. p. 114.
32. Hoover: An Extraordinary Life in Extraordinary Times by Kenneth Whyte, p. 411.
33. Herbert Hoover: President of the United States by Edgar Eugene Robinson and Vaughn Davis Bornet, p. 132.
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