On 1 January 1932 unemployment in the United States was over 20%.
On January 4 President Hoover sent another message to Congress
urging them to support his constructive actions for economic recovery.
His eight points were for the Federal Land Bank System to help farmers,
the Reconstruction Finance Corporation (RFC), the Home Loan Discount Banks,
“discount facilities of our Federal Reserve Banks,”
distributing money from closed banks to small depositors and businesses,
revising transportation laws recommended by the Interstate Commerce Commission,
revising bank laws to protect depositors,
and increasing taxes and restricting the issuing of Federal securities.
He also invited fifty businessmen and labor leaders to the White House
and announced the forming of the Citizens Reconstruction Organization.
He told them, “Credit is the blood stream of our economic life.
Every dollar returned from hoarding to circulation means putting men to work.”1
On January 7 the Secretary of State Stimson sent a note to Japan,
and it was published the next day.
Denying diplomatic recognition to any territory taken over by force
become known as the “Stimson Doctrine.”
On February 1 the world learned that the Japanese army had invaded Shanghai.
The British and some other nations sent troops to defend China.
Hoover declined to send troops to fight in a war in the Far East.
On January 9 Germany announced that they
could not make their reparations payment.
On January 19 France withdrew $125 million in gold from the United States.
Hoover with some federal officials in a conference with savings banks,
loan associations, and insurance companies took up the issue of hoarding.
Some believed that discussing it would encourage the practice.
Col. Frank Knox of Chicago agreed to lead the campaign,
and they met at the White House on February 6.
A long list of leaders attended including RFC president Dawes,
Commerce Secretary Thomas Lamont, Treasury Secretary Ogden Mills,
and Federal Reserve Governor Eugene Meyer.
They estimated that the currency being hoarded was between $1.25 million
and $1.5 million, and they aimed to get that money working.
The RFC began making loans on February 8.
On the 18th the Stock Exchange adopted a rule they hoped
would reduce bear raids, and the next day
Hoover held a press conference and said,
There have been discussions, as is reported,
between myself and other officials of the Administration
with officials of the New York Stock Exchange
on the question of bear raids.
Stock Exchange officials have, during the past eight months,
from time to time taken steps to restrain bear raiding
with a degree of success,
but during the latter part of January,
despite these steps, there was a large increase
in the short account which
unquestionably affected the price of securities
and brought discouragement to the country as a whole.
I, and other administration officials, again expressed
our views to the managers of the Exchange
that they should take adequate measures
to protect investors from artificial depression
of the price of securities for speculative profit.
Individuals who use the facilities of the Exchange
for such purposes are not contributing
to recovery of the United States.2
On February 26 Hoover asked Senators Peter Norbeck of South Dakota
and Frederic Walcott of Connecticut on the Banking and Currency Committee
to begin an investigation of practices that are against the public interest.
Justice Oliver Wendell Holmes had retired from the US Supreme Court
on January 12, and Hoover nominated the appellate judge
Benjamin Nathan Cardozo to replace him.
Two conservative justices objected to a second Jew on the court.
Hoover refused to withdraw the nomination, and Cardoza was easily
confirmed on February 24 and joined the Supreme Court on March 14.
The House of Representatives approved the
Reconstruction Finance Corporation (RFC) 335-55;
the Senate passed it 63-8, and on January 22 President Hoover signed it into law
with $500 million of funding and authority to borrow an additional $2 billion.
This would more than double the federal budget to make loans
to state-charted banks and to rural banks
that were not covered by the Federal Reserve.
Hoover had promoted this bill by meeting with over 150 Congressmen.
The Congress also appropriated $125 million for federal land banks,
and Hoover signed that on January 23.
On February 2 he made Chairman Eugene Meyer of the Federal Reserve
also to be the Chairman of the RFC.
Charles Dawes became the president briefly
until he resigned to run his bank in Chicago.
On February 3 the RFC bailed out the Bank of America with a $15 million loan.
On February 27 Hoover approved the Banking Act of 1932.
By the end of the month the RFC had given $45 million in emergency loans
to banks and $25 million to railroad companies.
Secretary of Agriculture Arthur Hyde provided $40 million in RFC funds
to help 200,000 farmers with spring planting.
The Democratic Senator Carter Glass of Virginia had become chairman
of the Senate Banking and Currency Committee on 31 December 1931,
and he had a plan for restrictive bank reform.
Hoover had asked Congress to “investigate the need
for separation between different kinds of banking.”
There had been over 700 bank closings in December and in January.
Democrats had made John Nance Garner of Texas
the Speaker of the House of Representatives,
and he was willing to help Hoover with his program.
Democrats in 1932 would agree with most of Hoover’s programs.
On February 10 Hoover met with Glass, five other senators,
and with Eugene Meyer, Ogden Mills, and Charles Dawes.
Glass agreed to support Hoover’s bill to rehabilitate assets of closed banks.
The first Glass-Steagall bill known as the “Bank Relief Bill”
was introduced in Congress that week.
Glass and Hoover agreed that stable currency based on gold was essential.
The Glass-Steagall Act, was renamed “An Act to Improve the Facilities
of the Federal Reserve System for the Service of Commerce, Industry, &
Agriculture, to Provide Means for Meeting the Needs of Member Banks
in Exceptional Circumstances, & for Other Purposes.”
After passage by Congress Hoover signed the bill on February 27,
and it increased the authority of the Federal Reserve
to make more loans to strengthen the economy.
Hoover described its two major purposes and why it was needed.
First. In a sense this bill is a national defense measure.
By freeing the vast amounts of gold in our
Federal Reserve System (in excess of the gold reserve law),
it so increases the already large available resources
of the Federal Reserve Banks as to enable them
beyond question to meet any conceivable demands
that might be made on them at home or from abroad.
Second. It liberalizes existing provisions with regard to
eligibility of collateral, and thereby enables
the Federal Reserve Banks to furnish accommodations
to many banks on sound assets
heretofore unavailable for rediscount purposes.
The gradual credit contraction
during the last eight months, arising indirectly from causes
originating in foreign countries
and continued domestic inflation, but more directly
from hoarding, has been unquestionably the major factor
in depressing prices and delaying business recovery.
The measure I am signing today,
together with the additional capital
provided for the Federal Land Banks and the creation
of the Reconstruction Finance Corporation,
will so strengthen our whole credit structure
and open the channels of credit as now
to permit our banks more adequately to serve
the needs of agriculture, industry and commerce.3
The second Glass-Steagall Act would be part of the Banking Act of 1933
which would be enacted in June 1933.
The gold standard was under stress.
Hoover followed the law and had the Treasury pay gold for currency
even though that allowed foreign creditors and Americans to hoard gold.
Legislation allowed the Federal Reserve to use
Federal Reserve notes to increase the supply of gold.
Hoover wanted home loan discount banks to prevent home foreclosures
and for federal land banks to give farmers low-interest loans.
The President also approved public works
projects in areas with much unemployment.
He submitted 63 bills to Congress for their consideration,
and he asked again for a Public Works Department.
The 72nd Congress was not as divided as before.
That cooperation began on 4 March 1931 and continued
for the last two years of Hoover’s term.
New York’s Senator Fiorella La Guardia called
the loans to banks the “millionaire’s dole.”
Hoover replied that he was saving depositors not banks.
He agreed to an amendment to the Reconstruction Finance Corporation (RFC)
that allowed loaning up to $50 million to farmers.
Congress authorized $2 billion in money and bonds to the RFC,
and in eight years it would loan $50 billion.
By the end of March the RFC had provided 974 loans
to banks, insurance companies, and mortgage lenders.
There had been 346 banks closed in January, and in April only 46 failed.
Of the banks getting RFC loans 140 would close in 1932.
The Detroit Unemployed Council and the Auto, Aircraft
and Vehicle Workers of America organized a march on March 7
from Detroit to the Ford complex in Dearborn.
The march was supported by the Unemployed Councils and the
Communist Party USA whose leader William Z. Foster of the
Trade Union Unity League gave a speech the day before.
About 4,000 people marched on a very cold day
with 14 demands for Henry Ford.
The Dearborn police tried to stop the march with tear gas and clubs.
When a police officer fired a gun, the unarmed marchers dispersed.
Some threw rocks at the police.
Others joined together to continue the march for a mile to the plant.
Ford’s security chief Harry Bennett fired a pistol
into the crowd from his car which was then hit by rocks.
He got out of the car and continued shooting.
Other security and police with machine guns fired at the retreating marchers.
Police arrested all the marchers that were seriously wounded,
and they chained them to their hospital beds.
Four marchers were killed, and no security officer was arrested.
This incident became known as the
“Ford Hunger March” and “Bloody Monday.”
Also on 7 March 1932 Hoover signed a bill that provided
the Farm Board with 40,000 bushels of wheat for relief
that the Red Cross would distribute.
This was equal to about 10 million barrels of flour.
On March 8 he reminded the press that the budget he submitted
to the Congress included a $365 million reduction in expenditures.
On March 23 he signed the Norris-LaGuardia Act that made it
illegal for judges to use injunctions to end nonviolent strikes.
It also made illegal “yellow dog” contracts that
stopped employees from joining a union.
The House Judiciary Committee charged Treasury Secretary Mellon
with running a family business while he was responsible for the Treasury.
Hoover sent Mellon to be the ambassador in Britain,
and that enabled Dawes to come home.
Hoover was glad to promote the Undersecretary Ogden Mills
as the new Treasury Secretary because he preferred his advice.
Dawes again became the head of the RFC.
On March 29 Hoover explained why he
opposed another bonus bill for veterans.
Informal polls of the House of Representatives
have created apprehension in the country that
a further bonus bill of $2 billion or thereabouts
for World War veterans will be passed.
I wish to state again that
I am absolutely opposed to any such legislation.
I made this position clear at the meeting
of the American Legion in Detroit last September 21,
and the Legion has consistently supported that position.
I do not believe any such legislation can become law.
Such action would undo every effort that is being made
to reduce Government expenditures and balance the budget.
The first duty of every citizen of the United States
is to build up and sustain
the credit of the United States Government.
Such an action would irretrievably undermine it.4
The long-time White House usher Ike Hoover, who was no relation,
said that Herbert Hoover worked harder than any
other president Ike had worked for since 1909.
Hoover got up every day at 6 a.m. and exercised with friends before breakfast.
He worked every day including Sundays and holidays,
and he often worked past midnight.
In the first five weeks of 1932 Hoover managed to see 20,000 individuals.
The budget for the fiscal year 1932 allotted $4.7 billion
for expenditures, and estimated a 43.3% deficit.
On April 7 New York Gov. Franklin D. Roosevelt made a broadcast
for the Democratic National Committee in which he
criticized Hoover for neglecting the “forgotten man,” saying,
These unhappy times call for the building of plans
that rest upon the forgotten, the unorganized
but the indispensable units of economic power
for plans like those of 1917 that
build from the bottom up and not from the top down,
that put their faith once more in the forgotten man
at the bottom of the economic pyramid.5
On April 12 the Federal Reserve began purchasing government securities,
and in the next four months they bought securities worth $1 billion.
Unfortunately business did not increase much, and bank failures were
high again in June especially in Chicago where the utility tycoon
Samuel Insull’s bankruptcy affected thousands of stockholders.
The Central Republic National Bank of Dawes
in Chicago was losing $2 million a day, and he resigned
as president of the Reconstruction Finance Corporation (RFC) on June 6.
The fixer economist Edwin Kemmerer of Princeton
began advising Hoover in late December 1931.
He warned the President that radical monetary plans could drive
the nation off the gold standard, and that would cause deflation.
Yet reinflation could endanger the gold standard.
Hoover and Glass decided that modifying Federal Reserve
requirements could allow monetary easing.
On April 27 Hoover spoke to a Conference of Governors in
Richmond, Virginia, and he talked mostly about taxes.
Here are the first and last paragraphs:
I am glad to accept your invitation
to meet with the chief executives of the States.
We are alike facing great emergency
problems of government.
We are confronted with maintaining the financial integrity
of the government, Federal, state, county, and municipal.
We, all of us, are struggling
to reduce the cost of government.
We are struggling to avoid national,
state, and municipal borrowings.
Our tax revenues have all greatly diminished.
We must find new tax revenues to supplement those
sources which have been dried up by the depression,
so far as our deficits cannot be made up
by drastic reductions in expenditures.
We must resolutely balance our budgets….
Especially do I take this occasion to pay tribute
to the courage shown by our public officials,
both executive and legislative, in these problems.
Their task is no light responsibility.
This duty offers no rosy path to popularity.
Rather, it is one to invite the anger of established interests.
With the utmost care that can be exercised
by the executive officers and the legislators
throughout the Nation, and with the utmost goodwill,
it is bound to cause individual hardship
and to grieve the friends of many worthy causes.
Nevertheless, the duty is inexorable,
and its discharge rests inescapably upon all public officers.
Its final results will redound to the general public benefit.
Therefore, I say to the public: Be patient, be helpful,
recognize the complexity and the difficulty of the problem
before these servants of your combined public interest.
Support them in their task,
for upon its successful conclusion depends
a most momentous contribution to our united security,
our hope of an early return to stability,
and the common welfare of every
man, woman, and child in our Nation.6
The theme of the Conference was George Washington, and
Franklin Roosevelt talked about Washington as a liberal in his time.
The next day Hoover hosted the governors for a dinner at the White House.
On May 5 President Hoover sent a message to Congress explaining
why and how they need to balance the government’s budget.
He expressed concern that events in Washington
were disturbing the public mind.
On May 11 Hoover vetoed a tariff bill
because he found its purpose was unclear.
It removed the flexible provisions of the 1930 Tariff Act.
He believed US tariffs should continue as a domestic issue without
bringing in international opinions, and he refused to negotiate
reciprocal trade agreements with other nations.
Also on May 11 the Democrats’ leader in US Senate Joseph Robinson
proposed a relief bill providing $300 million in loans
to states and $2 billion for infrastructure projects.
Hoover vetoed it because he was trying to balance the budget.
To accommodate this they would have to cut back
projects and raise taxes or create new taxes.
He considered it unwise and unnecessary.
This time the press praised him for balancing the budget,
and they blamed Democrats for failing on that.
Hoover talked with Robinson, and the next day the President offered
a bill authorizing the RFC to loan states as much as $300 million.
They could also make loans to state and private enterprises
if they had a way to pay for them.
The RFC could borrow up to $3 billion.
Hoover said,
In order to safeguard the program beyond all question,
it is proposed that there must be
proper security for the loans,
that as said projects must be income-producing,
that borrowers must have sufficient
confidence to furnish part of the capital,
and that the project must contribute
to early and substantial employment.
It is proposed to provide the necessary funds
as they are required by the sale of securities
of the Reconstruction Corporation
and its total borrowing powers
to be increased up to $3,000,000,000.7
On May 31 President Hoover addressed the Senate and
successfully appealed to them to provide unity to show that
the democracy was capable of saving itself in an emergency.
The publication of The Mirrors of 1932 and other books
greatly increased the anonymous criticism of President Hoover.
The journalist William Allen White felt they were not justified
because Hoover rarely replied to his critics.
In 1932 New York City spent $79 million
on public and
private relief, and that was equal to about one month’s lost wages
for the 800,000 unemployed New Yorkers.
On 14 January 1932 Rep. Wright Patman introduced a bill
to appropriate $2.4 billion in unbacked greenbacks for
veterans of the World War in another bonus bill.
The activist Catholic priest James Cox had organized
a soup kitchen by a shantytown in Pittsburgh.
He was concerned for the poor and preached a social gospel
that attracted more followers than the communists got.
In January 1932 Cox organized a bonus march to the capitol that began
with over 6,000 people from Pittsburgh and headed toward Washington DC.
Many joined them or organized marches from other places.
More than 15,000 veterans and other hungry protestors
made it to Washington during freezing rain.
Police met them at the District’s border and guided
them to Maryland where field kitchens served hot meals.
Police officers found vacant buildings where they could stay,
and restaurants donated coffee and bread.
Hoover wanted to talk with Cox, and he and
12 others were let into the White House.
Hoover’s former Labor Secretary Jim Davis
was a friend of Cox and escorted him.
The President told Cox that he had sympathy for his difficulties,
and the priest asked for $1 billion for jobs, free health care,
and public utilities all paid for by taxes on the wealthy.
Hoover explained his programs to restore employment.
Cox and the protestors went to Arlington National Cemetery and prayed there.
The caravan left the next day.
Police found 276 men with no money, and Treasury
Secretary Mellon paid for the train fares home.
Another bonus movement began at a National
Veterans Association gathering in Portland, Oregon.
Sergeant Walter Waters in May began with 300 indigent veterans
riding railways without paying until they got to East St. Louis.
The Baltimore and Ohio Railroad security stopped them.
Local people gave them food and paid for their transportation to Indiana.
There Gov. Paul V. McNutt helped them get
through his state quickly by giving them trucks.
Gulf Oil stations gave them free gas, and later
it was learned that Andrew Mellon paid for that.
On Sunday May 29 the Bonus Expeditionary Force (BEF) in trucks
arrived in Washington with the banner “Give us a bonus or give us a job.”
They found a thousand veterans already there.
The DC Police Chief Glassford welcomed them to the capitol
and helped them find temporary places to stay and warm food.
He issued an edict requiring them to leave within 48 hours.
They stayed, and Glassford estimated their crowd peaked at
22,000 veterans including about 300 Communists.
Hoover refused to meet with any Communists, and
he was criticized for not meeting with BEF leaders.
Glassford used a telegram and reporters to get the President’s attention,
and Hoover ordered War Secretary Patrick Hurley to cooperate with the police.
On May 31 Hurley began transferring needed kitchens, tents, and cots to Glassford.
Federal officials assigned parks and available buildings for the veterans.
More veterans arrived on June 2, and Hoover told
his aides not to use troops to keep them out.
Hoover was only irritated by some agitators from New York.
Glassford asked War Secretary Hurley for equipment,
food, and bedding for arriving troops.
On June 15 the House of Representatives approved the Veterans’ Bonus Bill
211-176, though two days later the Senate defeated the bill 62-18.
On July 6 Congress provided $100,000 for railway fare
to help the veterans leave Washington.
Thousands accepted this and left while even more decided to stay.
To prevent harassment of “deserters” Police Chief
Glassford assigned officers to protect those leaving.
Some Communists challenged Waters for acting like a fascist.
Waters gathered a posse to drive out suspected subversives.
On July 9 the Navy veteran Roy W. Robertson led about 250 Californians
into Washington, and they organized a Death March vigil at the Capitol building.
On July 14 a faction went against a Waters’ agreement with the police
by camping near the Capitol steps.
This caused Vice President Curtis, who was responsible for buildings
and the grounds, to call out sixty Marines.
Police Chief Glassford went to Curtis who did not back down.
During the hot summer financial support for the veterans was diminishing.
The main camp by the Anacostia River was about a mile from the White House.
About 7,000 men and at least a thousand women were living there
making shacks from various materials in a “Hooverville” they called “Bonus City.”
The bonus approved was not due to be paid until 1945,
and the veterans chanted, “We stay here until 1945!”
Assistant Secretary of the Treasury Ferry Heath was in charge of
a $700 million building project, and he asked Glassford to get control
over the abandoned buildings on Pennsylvania Avenue.
Col. U. S. Grant III had custody of the public meetings in the District,
and the commissioners asked Glassford to clear them.
As Congress was adjourning on July 16,
17,000 protestors gathered near the Capitol Building.
On July 26 administration leaders and Red Cross officials
held an emergency conference with BEF delegates.
The BEF was advised that any disorder or bloodshed
would mean that troops would remove them.
The veterans had occupied the Armory and three other buildings.
On July 27 President Hoover directed the US Attorney General
William Mitchell to begin with Camp Glassford.
Police were to keep order, and Waters agreed to evacuate some buildings.
Mitchell decided to order “summary evictions”
of all occupied government property.
When three veterans tried to go back into the Armory,
a riot broke out as veterans threw bricks at police.
Chief Glassford was knocked down.
A police officer shot a veteran dead, and two protestors also died.
Three policemen were seriously injured.
Commissioners and Glassford decided to
call in federal troops to prevent bloodshed.
President Hoover had a nonviolent foreign policy and so far
had not acted as commander-in-chief until this situation.
He asked War Secretary Hurley to have troops use police batons
instead of fire-arms; he gave in when Hurley said
he did not want the US Army to be “defeated by a mob.”
Hoover had appointed the young General
Douglas MacArthur chief of staff in 1930,
and now he told Hurley to have troops assemble at the Ellipse.
Hoover had military officers not wear uniforms in Washington.
MacArthur ordered his chief aide Major Dwight Eisenhower
to put on his uniform, and MacArthur did the same.
Eisenhower was MacArthur’s chief aide,
and he advised his boss to act appropriately.
MacArthur considered the Bonus Army an “incipient revolution.”
Hurley suggested that they proclaim an insurrection in order to invoke martial law.
Hoover rejected that and allowed MacArthur to take command.
He warned that there could be a communist uprising in large cities.
Hoover noted that the bonus vets were delaying construction in the Federal Triangle.
He told MacArthur that the Army was to “Cooperate fully with
the District of Columbia Police Force which is now in charge,”
and he advised him to “use all humanity.”8
On July 28 Sgt. Waters was given a paper demanding
that they leave the Armory within four hours.
Glassford led 100 police who removed them in about two hours.
In the afternoon Hoover sent War Secretary Hurley to order the
Chief of Staff General Douglas MacArthur to use troops to remove the veterans.
Hoover ordered MacArthur not to pursue
the veterans in the camps outside the city.
MacArthur called out about 1,000 cavalry and infantry.
Major George S. Patton Jr. led the cavalry charge with
sabers drawn and drove back people in the streets.
Soldiers were ordered to wear gas masks, and the infantry using tear gas
drove the veterans out of the three buildings
and chased them down Pennsylvania Avenue.
That night new tanks were used to break through a blockade.
Over a thousand people suffered from gas grenades;
63 were injured, and 135 were arrested.
MacArthur’s forces stopped to eat by the Anacostia Bridge,
and he said, “We are going to break the backs of the BEF.”9
At ten that night they attacked Bonus City where small fires were burning.
In the chaos the people began burning things, and the fires spread.
Until dawn the police and soldiers harassed the protestors.
Senator Hugo Black of Alabama said the attack was “unnecessary and ill-timed.”
MacArthur’s attack went beyond the President’s orders, and he offered to resign.
Hoover replied,
I know you disobeyed orders.
But I believe you did what you thought
you should do under the circumstances.
You have an outstanding career in the Army,
and you have a brilliant future ahead of you.
I have a broad back and can take the criticism
which will result from what has happened.
I refuse to accept your resignation.10
Thus Hoover took responsibility for the debacle.
On July 28 President Hoover issued this “Explanation of the Use of Troops,
at the Request of the Authorities of the District of Columbia,
to Control the So-called Bonus Marchers.”
For some days police authorities and Treasury officials
have been endeavoring to persuade the so-called
bonus marchers to evacuate certain buildings
which they were occupying without permission.
These buildings are on sites where Government construction
is in progress, and their demolition was necessary
in order to extend employment in the District and
to carry forward the Government’s construction program.
This morning the occupants of these buildings
were notified to evacuate and at the request of the police
did evacuate the buildings concerned.
Thereafter, however, several thousand men
from different camps marched in and attacked the police
with brickbats and otherwise injuring several policemen,
one probably fatally.
I have received the attached letter
from the Commissioners of the District of Columbia
stating that they can no longer
preserve law and order in the District.
In order to put an end to this rioting and defiance
of civil authority, I have asked the Army
to assist the District authorities to restore order.
Congress made provision for the return home
of the so-called bonus marchers who have for many weeks
been given every opportunity of free assembly, free speech,
and free petition to the Congress.
Some 5,000 took advantage of this arrangement
and have returned to their homes.
An examination of a large number of names discloses
the fact that a considerable part
of those remaining are not veterans;
many are communists and persons with criminal records.
The veterans amongst these numbers are no doubt
unaware of the character of their companions and are
being led into violence which no government can tolerate.
I have asked the Attorney General to investigate
the whole incident and to cooperate with the District
civil authorities in such measures
against leaders and rioters as may be necessary.11
In early August about 9,000 bonus marchers were
given refuge near Johnstown, Pennsylvania.
On 6 June 1932 Congress passed the Revenue Act that Hoover signed
with taxes of only 4% on income under $4,000 and 8% on income above that
with a progressive surtax that added one more percent for every additional $2,000
of income up to a total tax of 56% over $100,000.
Although Hoover had proposed the Federal Home Loan Bank bill
on 13 November 1931, the Congress did not pass it until 16 July 1932.
On August 1 Hoover appointed the Democrat Atlee Pomerene
as Reconstruction Finance Corporation (RFC) president.
The Republican National Convention was held
in a sports stadium in Chicago on June 14-16.
The Republican platform usually supported Prohibition,
but now many “wets” wanted it repealed.
Hoover was a “dry” because of his mother who had preached for that.
Alcohol was the main issue at the convention, and compromises were considered.
Hoover did not attend the convention, though seven men from his Cabinet did.
On the first ballot Hoover received all but 28 of
the 1,154 votes, and it was made unanimous.
Vice President Charles Curtis, a native American, received 634 votes
on the first ballot, and it was made unanimous for the running mate.
On June 16 Herbert Hoover replied to a telegram informing him that
Republicans had nominated him again for President and he wrote,
I am deeply grateful for the highest honor
that the party can confer.
It marks your approval and your confidence.
I shall labor as I have labored to meet the effects
of the worldwide storm which has devastated us with trials
and suffering unequalled in but few periods of our history.
That storm still surrounds us.
The measures which we have adopted
and the policies which you have outlined will,
with patience and courage, restore confidence
and with it employment, agriculture, and business.
These policies and measures will hold our hard-won
American system of ordered liberty and government.
Our youth will continue to find that
the doors of equal opportunity are open.
But beyond platforms and measures there lies
the sacred realm of ideals of hopes and aspirations,
those things of the spirit,
which make the greatness and the soul of the Nation.
These are our objectives and with unceasing effort,
with courage and faith in Almighty God,
they will be attained.
If the American people shall again commit to me
the high trust of this great office I pledge to them
the full measure of my devotion to their service.12
On June 17 Hoover at a press conference discussed the advantages
of his furlough plan and emergency powers in the government reorganization
being considered by the Congress.
He urged them to apply the 5-day work week to the Government.
This would help provide more employment.
He concluded,
The economies are needed now more than a year hence.
The emergency powers left in the bill by the Senate
reduced the bureaus and commissions which
can be immediately dealt with to those
expending only $25,000,000 a year
and eliminated bureaus
spending $500,000,000 to $600,000,000.13
President Hoover on June 22 announced his proposals for the
World Disarmament Conference in Geneva, which had begun on February 2.
His proposals were read to the Conference by the diplomat Hugh Gibson,
and they included these principles:
First: The Kellogg-Briand Pact, to which
we are all signatories, can only mean that
the nations of the world have agreed
that they will use their arms solely for defense.
Second: This reduction should be carried out
not only by broad general cuts in armaments
but by increasing the comparative power of defense
through decreases in the power of the attack.
Third: The armaments of the world have grown up
in general mutual relation to each other.
And, speaking generally, such relativity
should be preserved in making reductions.
Fourth: The reductions must be real and positive.
They must bring actual economic relief.
Fifth: There are three problems to deal with—
land forces, air forces, and naval forces.
They are all interconnected.
No part of the proposals which I make
can be disassociated one from the other.
Based on these principles, I propose that the arms
of the world should be reduced by nearly one-third.14These ideas were welcomed by Italy, Germany, and Russia but not by France.
Hoover agreed with the Geneva Conference’s proposal to “abolish all tanks,
all chemical warfare, and all large mobile guns.”
He also proposed abolishing “all bombing planes”
and reducing all land armies and all naval ships by a third.
He concluded,The effect of this plan would be to effect
an enormous saving in cost of new construction
and replacements of naval vessels.
It would also save large amounts in the operating expense
in all nations of land, sea, and air forces.
It would greatly reduce offensive strength
compared to defensive strength in all nations.
These proposals are simple and direct.
They call upon all nations to contribute something.
The contribution here proposed will be relative and mutual.
I know of nothing that would give more hope for humanity
today than the acceptance of such a program
with such minor changes as might be necessary.
It is folly for the world to go on
breaking its back over military expenditure,
and the United States is willing to take its share
of responsibility by making definite proposals
that will relieve the world.15
The Democratic National Convention met in
the same Chicago stadium on June 27.
On the first ballot New York’s Governor Franklin D. Roosevelt
received 666 votes to 202 for Al Smith and 90 for Speaker John Garner.
Roosevelt gained a little on the second and third ballots
and won with 945 votes on the fourth ballot.
Then Garner was nominated for Vice President by acclamation.
In his acceptance speech Roosevelt promised that the
18th Amendment prohibiting alcohol would be repealed.
After rancorous debates the United States Senate passed the economy bill
on June 8, and the House of Representatives did so on June 28.
Two days later President Hoover signed the bill and said,
I have signed the economy bill with but limited satisfaction.
First, it falls far short of the economies proposed by
the Cabinet and other executive officers of the Government;
many items of their proposals, which were
in turn recommended by committees on economy
of the two Houses, failed of passage.
Also the bill is so framed as to render abolition
or consolidation of the most consequential commissions
and bureaus impossible of consummation
until some months after the next session of Congress.
Second, it imposes unnecessary hardships
on Government employees in minor matters
of little consequence economically.
Some of these hardships should be remedied
at the next session of Congress.
I believe we can administratively alleviate
some of these difficulties and hardships.
Every effort will be made to do so.16
Hoover had criticized the pork barrel spending in bills
submitted in Congress by Garner and Wagner on June 24.
On July 1 Hoover vetoed the bill relating to the rate of wages,
and he included a Memorandum by Secretary of Labor William N. Doak
who criticized the bill for being “obscure and complex”
and “impracticable” to administrate.
Doak concluded,
The whole design of the new amendatory proposal
requires an expansion of bureaucratic control over activities
which now function effectively with the minimum
of interference by the Government
and that only when dispute arises.17
On July 5 Hoover asked the Congress to appropriate funding
“to continue the work of the President’s Organization on Unemployment Relief.”
The next day Hoover issued a statement to the press
with his four objections to the Garner-Wagner Relief Bill because
he opposed direct charitable contributions to individuals.
He explained,
Any attempt to carry out such a law
under these circumstances must mean the squandering
of hundreds of millions of dollars of public funds.
The Board would be flooded
with hundreds of thousands of applications.
There would be serious interference,
if not a complete breakdown, of the vital activities
it is now carrying on under high pressure.
And there would be disappointment on the parts of hundreds
and thousands of individuals and thousands of businesses
who will have been led to believe that
the credit of the United States Government
was made available for their individual purposes.
There would be inevitable discriminations.
The organization would be subject
to predatory corporations and interests everywhere.
Aside from the utter impracticability of the proposal,
no funds, or totally inadequate funds,
are provided for the making of these loans.18
On July 11 Hoover vetoed the Garner-Wagner Relief Bill
because he believed that it damaged public credit.
On July 10 Hoover had sent a telegram to Gov. Franklin D. Roosevelt
advising him on the progress in negotiations for the St. Lawrence Waterway,
and on the 18th Hoover urged ratification of the
Great Lakes-St. Lawrence Waterway Treaty.
On July 21 Hoover signed the Emergency Relief and Construction Act
after the pork-barrel items were eliminated.
He also noted that provisions for the establishment of a gigantic
centralized banking business had been removed.
This increased RFC’s assets to $3.5 billion, allowed large loans
for works projects and unemployment, established Agricultural Credit Banks,
and allowed the RFC to give loans to states and cities.
The next day he signed the Home Loan Bank Bill which established
about ten banks around the country with $125 million in capital.
After Samuel Insull’s utilities crashed,
Chicago laid off 832 municipal employees.
The city had about 700,000 unemployed,
and people were suffering from malnutrition.
The city was behind on paying 14,000 teachers the $20 million owed them.
About 800 had to depend on loans at 42% interest.
Hoover did not make a speech accepting the nomination
until his birthday
on August 11 in Washington’s Constitutional Hall to an audience of 5,000.
He began his long speech by saying,
In accepting the great honor that you have brought to me,
I desire to speak so simply and so plainly
that every man and woman in the United States
who may hear or read my words cannot misunderstand.
The last 3 years have been
a time of unparalleled economic calamity.
They have been years of greater suffering and hardship
than any which have come to the American people
since the aftermath of the Civil War.19
Then he suggested that in 1931 the depression in Europe
began worsening conditions in the United States bringing
about “the greatest economic emergency in all history.”
He explained,
Foreign countries, in the face of their own failures,
the failures of their neighbors, not believing that
we had either the courage or the ability or the strength
to meet this crisis, withdrew from the United States
over $2,400,000,000, including a billion of gold.
Our own alarmed citizens withdrew over
$1,600,000,000 of currency from our banks into hoarding.
These actions, combined with the fears that they generated,
caused a shrinkage of credit available
for the conduct of industry and commerce
by several times even these vast sums.
Its visible expression was banks and business failures,
demoralization of security and real property values,
commodity prices, and of employment.
This was but one of the invading forces of destruction.
Two courses were open.
We might have done nothing.
That would have been utter ruin.
Instead, we met the situation with proposals to private
business and to the Congress of the most gigantic program
of economic defense and counterattack
ever evolved in the history of the Republic.
We put it in action.
Our measures have repelled
these attacks of fear and panic.
We have maintained
the financial integrity of our Government.
We have cooperated to restore
and stabilize the situation abroad.
As a nation we have paid every dollar demanded of us.
We have used the credit of the Government to aid
and protect our institutions, public and private.
We have provided methods and assurances that
there shall be none to suffer from hunger and cold.
We have instituted measures
to assist farmers and homeowners.
We have created vast agencies for employment.
Above all, we have maintained the sanctity of the principles
upon which this Republic has grown great.20
He introduced measures to aid farmers and create employment.
He gave credit to the Democrats for supporting his Republican policies.
He aimed to preserve the principles of ordered freedom
and equal opportunity for every person.
He reviewed the efforts he made to implement his policies.
He also worked on reducing the cost of armaments in the world.
He realized the recovery moved slowly.
He opposed a competitive tariff to raise revenue.
He restricted immigration so that it would not add to unemployment.
He worked on conserving national resources.
He reduced government expenditures so that taxes could be lower.
He worked on reorganizing the government to make it more efficient.
He supported the Kellogg-Briand Pact that outlawed war.
He admitted that millions are out of work, and he
was doing what he could to relieve their distress.
He concluded by saying,
I rest the case of the Republican Party upon the intelligence
and the just discernment of the American people.
Should my countrymen again place upon me
the responsibilities of this high office,
I shall carry forward the work of reconstruction.
I shall hope long before another 4 years have passed
to see the world prosperous and at peace
and every American home again in the sunshine
of genuine progress and of genuine prosperity.
I shall seek to maintain untarnished and unweakened
those fundamental traditions and principles upon which
our Nation was founded, upon which it has grown.
I shall invite and welcome the help of every man
and woman in the preservation of the United States
for the happiness of its people.
This is my pledge to the Nation
and my pledge to the Almighty God.21
Hoover in August invited the press for a day at his Rapidan retreat.
After the lunch break he declined to join them.
He said to his Press Secretary Ted Joslin,
“We are opposed by ten million unemployed,
ten thousand Bonus marchers, and ten-cent corn.”22
They turned to the RFC and used the Emergency Relief Division
to extend federal loans to states needing support for relief efforts.
State governors applied for a total of $200 million.
In Pennsylvania unemployment surpassed 30%,
and private charities were depleted.
The state had blocked direct relief.
The progressive Gov. Gifford Pinchot asked for emergency spending,
and the legislature opposed that.
In September the RFC loaned Pennsylvania $2.5 million, and
eventually Pennsylvania got $27 million a month during the winter.
In October the Self-Liquidating Division accepted three projects
in California for the Bay Bridge connecting Oakland to San Francisco,
new waterworks in Pasadena, and the Metropolitan Aqueduct
to bring water from the Colorado River to Los Angeles.
The Nation reported the story in “Buying California for Hoover.”
Most of the RFC loans went to banks and railroads,
and this was criticized as helping the rich.
Hoover noted that it went to save 25 million American families.
Hoover did not begin campaigning until October,
and he made 28 campaign speeches in that month.
In 1928 the Republican Party had spent $4 million, and in 1932
they raised only about $2.5 million with help from J. P. Morgan.
In his home state at Des Moines, Iowa on October 4
Hoover gave his longest speech.
Here is the entire speech:
My friends:
I deeply appreciate the welcome which
you have given me this evening.
I am unable to speak of the depth of feeling that
I have for the reception which I have received
from the hour that I stepped foot on my native State.
I am glad, as a son of the soil of this State,
to come back to where I was born and
where I spent the first 10 years of my boyhood.
My parents and my grandparents came to Iowa
in the covered wagon—pioneers in this community.
They lie buried in your soil.
They broke the prairie into homes of independent living.
They worshiped God; they did their duty to their neighbors.
They toiled to bring to their children greater comfort,
better education, and to open to them
a wider opportunity than had been theirs.
It was my destiny in the solicitude for an orphaned
family to be taken by the old emigrant railway train
westward to the Pacific coast and ultimately
to fix my home and hopes in California.
My sons fly those journeys in a span of daylight.
These contrasts of a half century are a vivid picture
of the change and the progress of American life.
My experiences of later years have in no way diminished
my memories and my gratitude to my native State.
It was here that the doors of opportunity
were first opened to me.
It was here that I was given that tender care
of mind and body, those first steps in education, that
knowledge of poverty and struggle for family betterment
which contribute to a real understanding of American life.
And with it all, even in those days, a boy had
his first contact with the wider life of the Nation.
Not that childhood grasps or understands these questions,
but great forces, then as now, touched
every home and farm in our country.
As a boy I walked alongside the torchlight
procession in the Garfield campaign.
I was awed by the whispered anxiety when the
President was shot by an assassin and by the
genuine grief of every person in that village
when the flag was placed at half-mast on his passing.
I have been accorded the highest honor
which my country can bestow—that is to lead it
amongst the nations of the world in the paths of peace
and to serve in the stern duty of the battle against
the invisible forces of a great world calamity.
It was in this community, in this State that
I came in contact with my first economic depression.
I was born in the midst of the terrible times of the seventies,
with their poverty and their difficulties.
And only in that period has our Nation had to meet
a situation in any degree comparable
with that with which we now contend.
That was the economic storm which broke upon us
when the aftermath of the Civil War
coincided with the wars of Europe.
But in those days agriculture and industry were less
dependent upon each other, and there was far less
interdependence amongst the nations of the world,
and thus the violence of the storm in human suffering
and loss was infinitely less disastrous.
Not that I would suggest that at that age I knew
what an economic depression was or that I had ever
heard the words, but I do vividly recollect a Christmas
upon that farm when the sole resources of joy were
popcorn balls, sorghum, and hickory nuts;
when for a flock of disappointed children
there were no store toys, no store clothes;
when it was carefully explained that because of the
hard times everything must be saved for the mortgage.
The word "mortgage" became for me a dreaded
and haunting fear from that day to this.
I know now from reading history that that
Christmas was also a time when the country
was coming out of a great depression.
The Democratic Party was still coquetting
with the panacea of that time—greenbacks.
I did not then know what greenbacks were,
but I do know that that family tightened its belt and,
with confidence, voted for James A. Garfield,
a Republican President.
My purpose tonight is to deal with
some of the problems of the day.
Seldom in our history have we gone through
greater dangers, or have the difficulties
before the Nation been of such gravity.
They attain this gravity not only because of
the unprecedented dislocation in our domestic life
but because our problems are worldwide.
Aside from the value of truth, the causes and origins of
this unparalleled storm are of importance only as they
indicate the policies we must pursue to attain our safety.
I say to you that a storm which embraces the whole world,
which ramifies to every village in China,
every sheep ranch in Patagonia, every factory in Germany,
every mine in Australia, every countinghouse in England,
every farm in the State of Iowa, is the result of
a terrific disruption in civilization itself.
Something infinitely deeper and of greater portent has
happened in the world than any reaction from our own
reckless speculation and our own reckless exploitation.
We are contending today with forces at home and abroad
that still threaten the very safety of civilization.
I know it seems a far cry to the village home of America
from the effect of the 40 million people who were killed,
starved, or maimed in the Great War,
with all its loss in skill and character.
It seems a far cry from the increase in debt of governments
from $20 billion before the war to $220 billion immediately
after or an amount equal to nearly two-thirds
the value of the whole United States.
It seems a far cry from the effect of an increase
in the peace armies of the world in 20 years
from 2 million men to 5 million men
with the hate and suspicion that they excite.
It seems a far cry from the last 12 years of frantic political
and financial policies of foreign nations, with the ultimate
collapse of governments and revolutions and dictatorships.
You can test the part which the Great War played in
the difficulties in your own home and their relation to the
gravity of the situation today right at your own doors.
You will recollect that the values of land
in this State doubled and trebled under
the transitory demands of the Great War.
You will recollect the expansion of mortgages,
the collapse in values immediately thereafter,
the doubling of taxation, the aftermaths—
all of which are still a part of the problems
you are struggling with.
You know the stifling of your markets from the collapse
of other nations under the calamities
they have inherited from the war.
Now, we have fought an unending war against the effect
of these calamities upon our people in America.
This is no time to recount the battles on a thousand fronts.
We have fought the fight to protect our people
in a thousand cities from hunger and cold.
We have carried on an unceasing campaign to protect
the Nation from the unhealing class of bitterness which
arises from strikes and lockouts and industrial conflict.
We have accomplished this through the willing agreement
of employer and labor which placed humanity before money
through the sacrifice of profits and dividends before wages.
We have defended millions
from the tragic result of droughts.
We have mobilized a vast expansion of public construction
to make work for the unemployed.
We fought the battle to balance the budget.
We have defended the country from being forced
off the gold standard, with its crushing effect
upon all who might be in debt.
We have battled to provide a supply of credits
to merchants and farmers and industries.
We have fought to retard falling prices.
We have struggled to save homes and farms
from foreclosure of mortgages, battled to save millions
of depositors and borrowers from the ruin
caused by the failure of banks, fought to assure
the safety of millions of policyholders from failure
of their insurance companies, and fought to save
commerce and employment from the failure of railways.
We have fought to secure the disarmament
and to maintain the peace of the world.
We have fought for stability in other countries
whose failure would inevitably injure us.
And, above all, we have fought to preserve the safety,
the principles, and the ideals of American life.
We have built the foundations of recovery.
Now, all these battles, related and unrelated,
have had a single strategy and a single purpose.
That was to protect your living, your comfort,
and the safety of your fireside.
They have been waged and have succeeded
in protecting you from infinitely greater harm
that might have come to you.
Thousands of our people in their bitter distress
and losses today are saying
that "things could not be worse."
No person who has any remote understanding
of the forces which confronted this country
during these last 18 months ever utters that remark.
Had it not been for the immediate and
unprecedented actions of our Government
things would be infinitely worse today.
Instead of moving forward we would be
degenerating for years to come,
even if we had not gone clear over the precipice,
with the total destruction of every ideal we hold dear.
Let no man tell you that it could not be worse.
It could be so much worse that these days now,
distressing as they are, would look like veritable prosperity.
In all these great efforts there has been a
constant difficulty of translating the daily action
into terms of public understanding.
The forces in motion have been so gigantic,
so complex in character, the instrumentalities
and actions that we must undertake to deal with them
have been so involved, the figures we must use are so
astronomical as to seem to have but little relation to the
family in the apartment or the cottage or on the farm.
Many of these battles have had to be fought in silence
without the cheers of the limelight or the encouragement
of public support, because the very disclosure of the forces
opposed to us would have undermined the courage
of the weak and induced panic in the timid
and would have destroyed the very basis of success.
Hideous misrepresentation and unjustified complaint
have had to be accepted in silence for the national good.
It has been as if a great battle in war should be fought
without public knowledge of any incident except
the stream of the dead and the wounded from the front.
There has indeed been much of tragedy,
but there has been but little public evidence
of the dangers and enormous risks from which
a great national victory has been achieved.
I have every confidence that the whole American people
know in their hearts that there has been
but one test in my mind, one supreme object
in the measures and policies we have forged
to win in this war against depression:
that test was the interest of the people in the homes
and at the firesides of our country.
I have had before me but one vision: that is,
the vision of the millions of homes of the type
which I knew as a boy in this State.
I wish to describe one of the battles we have fought
to save this Nation from a defeat that would have dragged
farmers and city dwellers alike down to a common ruin.
I know that it is the most involved of economics
and the most complex of descriptions to attempt.
But I shall try it if you will have patience.
That battle was fought parallel
with other battles on other fronts.
Much of what I will tell you has been hitherto undisclosed.
It had to be fought in silence, for it will be evident to you
that had the whole of the forces in motion been made public
at that time there would have been no hope of victory
because of the panic through fear and the destruction
of confidence that very disclosure would have brought.
Happily we have won this battle.
There is no longer any danger from disclosure.
Our own speculative boom had weakened
our own economic structure,
but the critical assaults and dangers
swept upon us from foreign countries.
We were therefore plunged into a battle against
Invading forces of destruction from abroad, a battle
to preserve the financial integrity of our Government,
to counteract the terrific forces of deflation aligned
against us, to protect the debtor class who were
being strangled by the contraction of credit
and the demands for payment of debt,
to prevent our being pushed off the gold standard,
which in our country would have meant disaster
to every person who owed money,
and finally to preserve the savings of the American people.
We were fighting to hold the Gibraltar of world stability,
because only by holding this last fortress could we be saved
from a crashing world with a decade of misery
and the very destruction of our form of government
and our ideals of national life.
When 18 months ago the financial systems of Europe
were no longer able to stand the strain of their war
inheritances and of their after-war economic and political
policies, of their debt and their political and military actions,
an earthquake ran through 40 nations.
Financial panics; governments unable to meet their
obligations; banks unable to pay their depositors;
their citizens, fearing inflation of currency, seeking
to export their savings to foreign countries for safety;
citizens of other nations demanding payment of their loans;
financial and monetary systems either in collapse
or remaining only in appearance.
The shocks of that earthquake ran from Vienna to Berlin,
from Berlin to London, from London
to Asia and to South America.
From all those countries they came to this country,
to every city and farm in it.
First one and then another of those 40 nations
either abandoned payment in gold of their obligations
to other countries, or restricted payments by their citizens
to foreign countries, so as to practically amount to
at least a temporary or a partial
repudiation of public and private debts.
Every one of them, in a frantic endeavor
to reduce the expenditures of their citizens,
imposed drastic restrictions upon their imports of goods.
These events were not as children playing with blocks.
They brought revolutions, mutinies, riots,
downfalls of governments, and a seething of despair
which threatened civilization itself.
In order to prevent total collapse of the German people
and its inevitable effect upon us, I brought about
the German moratorium and the so-called German standstill
agreements by which Europe was given a breathing spell
in which to arrange and stabilize its affairs.
But the shocks grew in violence, and finally,
at the end of September a year ago, the difficulties
of Europe culminated with the suspension of gold payments
by the Bank of England, followed by many other nations.
With no stability in foreign currencies trade again slackened
because merchants could not calculate the amount
they might realize when they shipped their goods.
Now, an amazing statement was made a few days ago
in this State that the passage of the Tariff Act of 1930
"started such a drain on the gold reserves of the
principal commercial countries as to force
practically all of them off the gold standard."
The facts are that the Tariff Act was not passed
until nearly a year after this depression began.
This earthquake started in Europe.
The gold of Europe was not drained
and never has been drained.
It has increased in total every year since the passage
of the Tariff Act and is right now $1,500 million greater than
when the act was passed, and the tariff is still operating.
It has been my daily task to analyze and to know
the forces which brought these calamities.
I have to look them in the face.
They require far more penetration
than such assertions as this would indicate.
The shocks which rocked these nations
came from profound depths; their spread gave
fearful blows to our own system, finally culminating
October last in what, had they not been courageously
met with unprecedented measures, would,
because of our peculiar situation, have brought us
to greater collapse than many of the countries of Europe.
The first effect of these shocks on us was
from foreign dumping of American securities on our markets
which demoralized prices upon our exchanges,
depreciated the securities and investments held by
our insurance companies and our trusts,
foreign buying power stagnated because of
their internal paralysis, and this in turn
stifled the markets for our farms and factories;
it increased our unemployment and by piling up our
surpluses demoralized our agricultural prices even further.
The frantic restrictive measures on exchanges
which they took and the abandonment of gold standards
made it impossible for American citizens to collect billions
of the money due to us for goods which our citizens
had sold abroad, or short-term loans
they had made to facilitate commerce.
At the same time citizens of those foreign countries
demanded payment from our citizens of the money
due for goods which they had sold to our merchants
and for securities they had sold in our country.
Before the end foreign countries drained
nearly a billion dollars of gold and a vast amount
of other exchange from our coffers.
We had also to meet an attack upon our own flank
from some of our own people who, becoming infected
with world fear and panic, withdrew vast sums from
our own banks and hoarded it from the use of our
own people, to the amount of nearly $1,500 million.
This brought its own train of failures and bankruptcies.
Even worse, many of our less patriotic citizens
started to export their money to foreign countries
for fear we should be forced onto a paper money basis.
Now, all this cataclysm did not develop at once.
It came blow by blow.
Its effect upon us grew steadily,
and our difficulties mounted higher day by day.
This is no time to trace its effect stage by stage.
No statement of mine is needed to portray the effects
which you have felt at your own door.
No statement could portray the full measure of perils
which threatened us as a nation.
Three of the great perils were invisible except to those
who had the responsibility of dealing with the situation.
The first of these perils was the steady strangulation
of credit through the removal of $3 billions of gold and
currency by foreign drains and by the hoarding of our own
citizens from the channels of our commerce and business.
And let me remind you that credit is the lifeblood
of business, the lifeblood of prices and of jobs.
Had the consequences of this action, of that drain
been allowed to run their full extent, it would have resulted,
under our system of currency and banking,
in the deflation of credit anywhere from $20 to $25 billions,
or the destruction of nearly one-half of the
immediate working capital of the country.
There would have been almost a universal call for
the payment of debts which would have brought about
inevitable universal bankruptcy because property
could not be converted into cash, no matter what its value.
There were other forces equally dangerous.
The tax income of the Federal Government
is largely based upon profits and income.
As these profits and income disappeared,
the Federal resources fell by nearly one-half, and thus
the very stability of the Federal Treasury was imperiled.
The Government was compelled to borrow
enormous sums to meet current expenses.
The third peril, which we escaped only by the most drastic
action, was that of being forced off of the gold standard.
I would like to make clear to you what that would have
meant had we failed in that sector of the battle.
Going off the gold standard in the United States
would have been a most crushing blow to most of those
with savings and those who owed money,
and it was these we were fighting to protect.
Going off the gold standard is no academic matter.
By going off that standard, gold goes to a premium,
and the currency dollar becomes depreciated.
In our country, largely as a result of fears generated
by the experience after the Civil War and by the
Democratic free-silver campaign in 1896,
our people have long insisted upon writing a large part
of their long-term debtor documents as payable in gold.
A considerable part of farm mortgages,
most of our industrial and all of our Government,
most of our State and municipal bonds, and most other
long-term obligations are written as payable in gold.
This is not the case in foreign countries.
They have no such practice.
Their obligations are written in currency.
When they abandon the gold standard, and gold goes to
a premium, the relation of their domestic debtors and
creditors is unchanged because both he who pays
and he who receives use the same medium.
But if the United States had been forced off
the gold standard, you in this city would have
sold your produce for depreciated currency.
You would be paid your bank deposits and your insurance
policy in currency, but you would have to pay a premium
on such of your debts as are written in gold.
The Federal Government, many of the States,
the municipalities, to meet their obligations, would either
need to increase taxes which are payable in currency,
or alternatively, to have repudiated their obligations.
Now, I believe I can also make it clear to you
why we were in danger of being forced off the gold
standard, even with our theoretically large stocks of gold.
I have told you of the enormous sums of gold and
exchange that were drained from us by foreigners.
You will realize also that our citizens who hoard
Federal Reserve and our other forms of currency are
in effect hoarding gold because under the law we must
maintain 40 percent gold reserve behind such currency.
Owing to the lack in the Federal Reserve System
of the kind of securities required by the law
for the additional 60 percent of coverage of the currency,
the Reserve System was forced to increase
their gold reserve up to 75 percent.
Thus with $1,500 million of hoarded currency, there was in
effect over $1 billion of gold hoarded by our own citizens.
These drains had at one moment reduced the amount of
gold we could spare for current payments to a point where
the Secretary of the Treasury informed me that,
unless we could put into effect a remedy, we could not
hold to the gold standard in the United States
for 2 weeks longer because of inability to meet
the demands of foreigners and our own citizens for gold.
Being forced off the gold standard
in the United States means chaos.
Never was our Nation in greater peril, not alone
in banks and financial systems, money and currency,
but that forebode dangers—moral and social—
with years of conflict and disarrangement.
In the midst of this hurricane the Republican
administration kept a cool head, and it rejected
every counsel of weakness and cowardice.
Some of the reactionary economists urged that
we should allow the liquidation to take its course
until it had found its own bottom.
Some people talked of vast issues of paper money.
Some talked of suspending payments of Government issues.
Some talked of setting up a Council of National Defense.
Some talked foolishly of dictatorship—
any one of which ideas would have produced panic in itself.
Some assured me that no administration could propose
increased taxes in the United States to balance the budget
in the midst of a depression and survive an election.
However, we determined that we would not enter the
morass of using the printing press for currency or bonds.
All human experience has demonstrated that that path
once taken cannot be stopped, and that the moral integrity
of the Government would be sacrificed because ultimately
both currency and bonds must become valueless.
We determined that we would not follow the advice of the
bitter-end liquidationists and see the whole body of debtors
of the United States brought to bankruptcy and the savings
of our people brought to destruction.
We determined we would stand up like men and render
the credit of the United States Government impregnable
through the drastic reduction of Government expenditures
and increased revenues until we balanced that budget.
We determined that if necessary we should lend the full
credit of the Government thus made impregnable
to aid private institutions to protect the debtor
and the savings of our people.
We decided, if necessary, upon changes in the
Federal Reserve System which would make our gold active
in commercial use, and that we would keep the
American dollar ringing true in every city
in America and every country in the world.
We determined that we would expand credit to offset
the contraction brought about by hoarding and foreign
withdrawals; that we would strengthen the Federal
land banks and all other mortgage institutions;
that we would lend to the farmers for Production;
that we would protect the insurance companies,
the building and loan associations,
the savings banks, the country banks,
and every other point of weakness in this Nation.
We determined to place the shield of the Federal
Government in front of those local communities
in protection of those in distress, and that we would
increase employment through profitable construction work
with the aid of Government credit.
On the 3rd of October last year, I called to Washington
the leading bankers of the country and secured
from them an agreement to combine the resources
of the banks to stem the tide.
They pledged themselves to $500 million for this purpose.
On October 6, I called in the leaders of both political parties.
I placed before them the situation at home and abroad.
I asked for unity of national action.
That unity was gladly given.
We published a united determination
to the country to meet the situation.
Our people drew a breath of relief.
The ship swung to a more even keel.
But by the 1st of December the storm had grown
in further intensity abroad, and the menace
became more serious than ever before.
With the opening of Congress in December,
I laid before it a program of unprecedented dimensions
to meet our unprecedented situation.
Now, the battalions and regiments and armies
which we thus mobilized for this great battle
turned the tide toward victory by July.
The foreigners drew out most of the money that they could
get, but finding that the American dollar rang honest, they
gained in confidence, and they are now sending it back.
Since June, $275 million of gold has
flowed back to us from abroad.
Hoarders in our own country, finding our institutions
safeguarded and safe, have returned $250 million
to the useful channels of business.
The securities held by our insurance companies, our savings
banks, and our benevolent trusts have recovered in value.
The rills of credit are expanding.
The pressure on the debtor to sacrifice his all
in order to pay his debts is steadily relaxing.
Men are daily being reemployed.
If we calculate the values of this year's agricultural products
compared with the low points, the farmers as a whole,
despite the heartbreaking distress which still exists,
are a billion dollars better off.
Prices have a long way to go before the farmer has
an adequate return, but at least the turn is toward recovery.
Now, I have been talking of gold and of currency, of credit
and of banks and bonds and insurance policies and of loans.
Do not think these things have no human interpretation.
The happiness of 120 million people was at stake in the
measure to enable the Government to meet its debts and
obligations, to save the gold standard, in enabling 5,500
banks, insurance companies, building and loan associations,
and a multitude of other institutions to pay their obligations
and ease their pressure upon their debtors.
These institutions have been rendered safe and with them
several million depositors, policyholders, and borrowers.
More than half of all of them were in the Midwest—
500 in your own State of Iowa.
Had they gone down, the shock of their failure would have
carried down with them every man and institution who
owed money and the whole employment and
marketing fabric of the United States into chaos.
I wish I could translate what these perils,
had they not been overcome, would have meant
to each person in the United States.
The financial system is not alone
entrusted with your savings.
Its failure means that the manufacturer
cannot pay his worker, the worker cannot pay his grocer,
the merchant cannot buy his stock of goods,
the farmer cannot sell his products.
The great clock of economic life stops.
Had we failed, disaster would have translated itself into
despair in every home, every village, and every farm.
Now, we won this great battle to protect
our people at home.
We held the Gibraltar of world stability.
The world today has a chance.
It is growing in strength.
Let that man who complains that things could not be worse
thank God for this victory and make reverent
acknowledgement to the courage and stamina
of a great democracy.
Let him also be thankful for the presence
in Washington of a Republican administration.
I say this with full consideration of its portent,
for I wish to call your attention to the part which the
dominating leadership, the majority of the
Democratic Party has played in this crisis.
I wish to bring before you the real doctrines and programs
of the men who then and now and in the future
will dominate that party.
You will recollect that the congressional election
2 years ago gave the control of the lower
House of Congress to our opponents.
They were also in position to control
the policies of the Senate.
After that election their leaders announced to the world that
their party would present a program to restore prosperity.
One year later, when the new Congress assembled
last December in the midst of this crisis,
they presented no program.
The administration did present a program
which has saved the country from disaster.
That program was patriotically supported by many members
of the Democratic Party who joined
in enactment of these measures.
To these men, who placed patriotism above party,
I pay tribute, but later in that session of Congress the
opposition majority of the House of Representatives could
not restrain the real purposes and doctrines of their party.
It is of importance to the country to realize what that
program was, for the American people are asked to entrust
the future of the United States into the hands of these
same men and to these policies.
At a time when the most vital need was for the reduction
of expenditures and the balancing of the budget to preserve
the stability of the Federal Government as the keystone
of all stability, they produced a program of pork-barrel
legislation in the sum of $1,200 million for nonproductive
and unnecessary works at the expense
of the American taxpayer.
They produced the cash bonus bill.
They passed that through the House of Representatives
by their leadership.
I opposed it.
It failed in the Senate.
Under that bill it was proposed to expend $2,300 million.
Worse still, the bill that they passed provided the bonus
should be paid through the creation of sheer fiat money.
They would have made our currency a football
to every speculator and every vicious element
in the financial world at the very time when
we were fighting for the honesty of the American dollar.
I can do no better than to quote Daniel Webster, who,
100 years ago, made one of the most prophetic
statements ever made when he said:
"He who tampers with the currency
robs labor of its bread.
He panders, indeed, to greedy capital, which is keen-sighted
and may shift for itself, but he beggars labor, which is
unsuspecting and too busy with the pursuit:
of the present to calculate for the future.
The prosperity of the workpeople lives, moves and has its
being in established credit and steady medium of payment."
The experience of scores of governments in the world
since that day has confirmed Webster's statement,
and yet the dominant leadership of the Democratic Party—
and I am not accusing the Democratic minority who stood
out against these things—but that dominant leadership
passed that measure to issue paper money
through the Democratic House of Representatives.
And, further, the administration proposed economy
measures to bring about reduction in specialized
governmental expenditures by $250 to $300 million.
When those recommendations had passed through the filter
of the Democratic majority of the House, only $50 million of
savings were left, and yet we hear a multitude of speeches
from them on the subject of governmental economy.
They passed a bill to destroy the effectiveness
of the Tariff Commission.
I vetoed that bill.
They passed a price-fixing bill creating
what might be colloquially called the "rubber dollar."
I opposed that also.
They passed a provision for loans to corporations
and everybody else, whether they were affected
and guarded by public interest or not.
It would have made the Government
the most gigantic pawnbroker of history.
I vetoed that.
They passed other measures with this same reckless
disregard for the safety of the Nation.
All this undermined public confidence and delayed
all the efforts of the administration and the powerful
instrumentalities which we had placed in action
to save the country.
Those of you who will recollect will realize that last March
there was a period of upward trend, and after that
we descended again into the abyss
through these destructive actions.
These measures represented the
dominant Democratic control,
and they brought discouragement and delay to recovery.
That recovery began the moment when it was certain
that these destructive measures of this Democratically-
controlled House of Representatives had been stopped.
Had that program passed, it would have been the end of
recovery, and if it ever passes, it will end hope of recovery.
These measures were not simply gestures for vote-catching.
These ideas and measures represented the true sentiments
and doctrines of the majority of the men
who control the Democratic Party.
A small minority of Democratic Members of the House
and the Senate disapproved of these measures.
These men obviously no longer voice
the control of that party.
This program was passed through the Democratic
House of Representatives under the leadership of the
gentleman who has been nominated the Democratic
candidate for Vice-President, and thus these measures
and policies were approved by that party.
At no time in public discussion of the vital issues
of this campaign has any Democratic candidate,
high or low, disavowed these destructive acts
which must again emerge if they come to power.
I ask you to compare this actual Democratic program
and these Democratic actions with the constructive program
produced by the administration to meet the emergency.
And I ask: Do you propose to place these men in power and
subject this country to that sort of measures and policies?
It is by their acts in Congress and their leadership
that you shall know them.
Now, of vital concern to you and to all the Nation
are the difficulties of agriculture.
They have been of vital concern to me
for the whole of these difficult years.
I have been at the post to which the first news
of every disaster is delivered and to which
no detail of human suffering is ever spared.
I have heard the cries of distress, and not only
as a sympathetic listener but as one oppressed
by a deep sense of responsibility to do all
that human ingenuity could devise.
I wish to speak directly to those of my hearers
who are farmers of what is on my mind,
of what is in my heart, to tell you the conclusions
that I have reached from this bitter experience
of the years in dealing with these problems which affect
agriculture at home and their relations abroad.
That agriculture is prostrate needs no proof.
You have saved and economized and worked
to reduce costs, but with all this,
yours is a story of suffering and distress.
What the farmer wants and needs is higher prices,
and in the meantime to keep from being dispossessed
from his farm, to have a fighting chance to save his home.
The immediate and pressing question is
how these two things are to be attained.
Every decent citizen wants to see the farmer receive
higher prices and wants to see him keep his home.
Every citizen realizes that the general recovery
of the country cannot be attained unless
these things are secured to the farmer.
Every thinking citizen knows that most of these low-price
levels and most of this distress, except in one or two
commodities where there is an unwieldy surplus,
are due to the decreased demand for farm products
by our millions of unemployed and by foreign countries.
Every citizen knows that part of this unemployment
is due in turn to the inability of the farmer
to buy the products of the factory.
Every thinking citizen knows that the farmer, the worker,
and the businessman are in the same boat
and must all come to shore together.
Every citizen who stretches his vision across the whole
United States realizes that for the last 3 years
we have been on this downward spiral owing to the
destructive forces some of which I have already described.
If he has this vision, he today takes courage and hope
because he also knows that these destructive forces
have been stopped; that the spiral is now moving upward;
that more men are being employed and are able
to consume more agricultural products.
The policies of the Republican Party and the
unprecedented instrumentalities and measures
which have been put in motion—many of which
are designed directly for agriculture—are winning out.
If we continue to fight along these lines, we shall win.
There are 12 facets of this subject,
12 parts of the problem that
I should like to discuss with you.
The first is that the very basis of safety
to American agriculture is the protective tariff.
The Republican Party originated and proposes to maintain
the protective tariff on agricultural products.
We will even widen that tariff further
if it is necessary to protect agriculture.
Ninety percent of the farmer's market is at home,
and we propose to reserve that market to him.
Now, has the Democratic Party ever proposed
or supported a protective tariff on farm products?
Has it ever given one single evidence of protection
of this home market to the American farmer from the
products raised by peasant labor on cheap land abroad?
The Democratic Party, as you know, took the tariff off
a large part of farm products in 1913,
and put them on the free list.
A Republican Congress passed the emergency farm tariff,
and a Democratic President vetoed it.
The Democratic minority in the next Congress in 1921
voted against the revived emergency farm tariff.
The Republican majority passed it,
and the Republican President signed it.
The Democratic minority voted against the increase of
agricultural tariffs in the Republican tariff of 1922.
Most of the Democratic Members of Congress voted
against the increases in the tariff bill of 1930.
Their platform enunciates the principle of
"a competitive tariff for revenue."
What that competition must mean is
peasant labor and cheap lands.
That is the kind of competition we don't want.
Their candidate states that: "We sit on a high wall of a
Hawley-Smoot tariff; ... sealed by the highest tariffs in the
history of the world"—which incidentally isn't true—
"a wicked and exorbitant tariff."
He calls it: "a ghastly jest," and states that "our policy
declares for lowered tariffs."
This is surely a promise of reducing farm tariffs.
They will reduce farm tariffs if they come to power.
When you return to your homes you can compare prices
with foreign countries and count up this proposed
destruction at your own firesides.
There are at this minute 2 million cattle in the
northern States of Mexico seeking a market.
The price is about $2.50 per 100 pounds
on the south bank of the Rio Grande.
It is $4.50 on the north bank—
and only the tariff wall in-between.
Bad as our prices are, if we take comparable prices of
farm products today in the United States and abroad,
I am informed by the Department of Agriculture that
you will find that, except for the guardianship of the tariff,
butter could be imported for 25 percent below your prices,
pork products for 30 percent below your prices,
lamb and beef products from 30 to 50 percent below,
flaxseed for 35 percent below, beans for 40 percent below,
and wool 30 percent below your prices;
both corn and wheat could be sold in New York
from the Argentine at prices below yours
at this moment were it not for the tariff.
I suppose these are ghastly jests.
Now, the removal of or reduction of the tariff
on farm products means a flood of them into the
United States from every direction, and either you
would be forced to further reduce your prices,
or your products would rot in your barns.
The opposition party has endeavored to persuade
our farmers that increased tariffs abroad are
the result of reprisals against the United States.
There are a half dozen suppressions of truth
in that statement that are of profound interest
especially to the farmer.
The first is that many increases in tariffs abroad took place
before, and not after, our farm tariffs were increased.
The second is that the restrictions on imports
in most cases are not directed at the United States.
They are for the purpose of reducing all expenditure
of their people during their financial crises.
The third is that if we survey the growls of some nations
when our tariffs were changed, we find the objections
in overwhelming majority were directed at
the increase in our agricultural tariffs.
American farmers are entitled to know this.
The very object of our increases was
to protect them in our home market.
The main thing that those countries want is entrance
for their surplus agricultural products into our markets.
Many of those countries would decrease their tariffs against
our industrial goods tomorrow in exchange for reduction on
their farm products to us, but that is no help to our farmer.
Now, the Democratic Party proposes that they would
enter into bargaining tariffs to secure special concessions
from other countries for the entry of American goods.
They represent this to be in the farmer's interest.
But I may tell you here and now that the largest part
of the whole world desires to make
only one bargain with the United States.
The bargain these countries wish to make is to lower
our tariff on agricultural products in exchange for
lowering their tariffs on our industrial goods.
American industrial leaders, realizing the needs of the
American farmer, do not want to be a part of such bargains.
Now, all tariff acts contain injustices and inequities.
That is the case in the last tariff bill.
I have never said that tariff bill was perfect.
Some people get too much, and some people get too little.
But those of you who have followed the accomplishments
of this administration will recollect that I secured in the
last tariff act, 25 years after it had originally been advocated
by President Theodore Roosevelt, the adoption of
effective flexible tariff provisions
to be administered by a bipartisan body.
That authority of a bipartisan Tariff Commission
to revise the tariff is based upon a definite principle
of protection to our people, and it is one of the
most progressive acts which have been secured
in the history of all American tariff legislation.
By maintaining that reform the country need no longer
be faced with heartbreaking logrolling, selfishness,
and greed which come to the surface on every occasion
when Congress tries to revise the tariff.
This bipartisan Commission has now been engaged for
over 18 months in an effective revision of the tariff.
It has heard every complaint.
It has found that many rates were just.
It found some were too high and some too low.
But if there are tariffs which are too high
and result in damage to the American people,
those tariffs can be readjusted by mere application to the
Commission and the presentation of the evidence thereof.
That tribunal is open to all the people.
Now, our opponents opposed this reform
in tariff legislation.
They passed a bill last session to destroy
the independence of the Commission.
They propose in their platform to destroy it.
The reasons for this action are obvious.
The bipartisan Tariff Commission has proved a
serious political embarrassment to them.
Either one of the Houses of Congress has the right
to call upon the Tariff Commission for reconsideration
of any schedule by a mere resolution.
Notwithstanding their outcries against the 1930 tariff act,
the Democratic-controlled House of Representatives,
after being in session for 7 months, did not pass
a single resolution requesting readjustment
of a single commodity or a single schedule.
What the Democratic Party proposes is
to reduce your farm tariffs.
Aside from ruin to agriculture, such an undertaking
in the midst of the depression will disturb
every possibility of recovery.
Now, 4 years ago organized agriculture requested
the passage of an agricultural marketing act.
I called a special session of Congress to pass
such an act and to increase tariffs on farm products.
A distinguished board of men recommended by organized
agriculture was appointed to administer the act,
and they were given a capital of $500 million
to use for the benefit of the American farmer.
Those portions of the Board's activities which
directed themselves to the support and expansion of
cooperative marketing organizations
have proved of great benefit to the farmer.
Today over a million farm families participate in the benefits
and organizations which flow from the Farm Board.
Now, I wish to state frankly the difficulties that have
arisen under some other portions of the act.
They arise mostly from the so-called stabilization provisions
which never were and are not now
the major purpose of the Farm Board.
Even indirect purchase and sale of commodities
is absolutely opposed to my own theory of government.
When the panic struck agricultural prices some 2 years
ago, the Board determined that unless the markets were
supported hundreds of thousands of farmers would be
bankrupt by the sale of their products at less than the
money they owed, less than the money they had already
borrowed upon and that a thousand country banks would
likely be closed and that a general panic was possible.
As a result of emergency purchases which they
undertook, the prices of farm commodities
were temporarily held and their fall cushioned.
The farmers secured hundreds of millions of dollars of
income which they would not otherwise have received.
Experience has shown that the patent weakness
of such actions is the damaging aftermath
which accompanies disposal of these products.
I am convinced that the act should be revised in the interest
of the farmer, in the light of our 3 years of experience,
and that this particular provision should be repealed.
Now, for several years the United States Department
of Agriculture has studied the complex social and
economic problems which lie bedded
in the general problem of land use.
About a year ago these studies had reached such a point
that the Secretary of Agriculture felt justified in calling
a nationwide conference of farm leaders, economists,
and agricultural college authorities
to formulate a practical means of action.
The broad objective of such a program is to promote
the reorganization of agriculture so as to divert lands
from unprofitable to Profitable use and to avoid the
cultivation of lands the chief return on which is
the poverty and misery of those who live upon them.
The Republican platform contains a plank which
constitutes the first declaration upon that subject.
I shall be happy to support any sound program.
Now, 4 years ago, in this State, I gave assurance to the
farmers and to our own people at large that one of the
first policies of my administration would be the vigorous
prosecution and completion of the inland waterway system
and advancement of the Great Lakes-St. Lawrence seaway
as a fundamental relief to Midwest business and agriculture.
I am glad to report to you that more than twice the amount
of work has been done on the waterways in the last 3 years
than in any similar period in the history of the United States.
I am also glad to report that after 20 years of discussion,
of examination, and intermittent negotiation a treaty has
been signed with Canada which only awaits ratification of
the United States Senate and the Dominion Parliament
for us to undertake that great contribution to the
strengthening of the Midwest in its
reaching out to world markets.
We have suffered from unprecedented droughts
both to the north and to the south of you.
Some other sections have been unable
to obtain credit for seed and feed for livestock.
Through various governmental agencies loans
to the amount of about $120 million have been made to
over 900,000 of our families to rehabilitate
their production and ameliorate that situation.
Some of these families are in difficulties in making
immediate repayment because of demoralized prices.
I have seen to it that they are not unduly pressed.
Last April, I delivered an address to the conference
of the Governors of the various States.
I stated in effect that the most inflexible tax in our country
is the tax on land and on real property generally.
It is the least adaptable to the
varying income of the taxpayers.
I stated that in the present situation the taxes upon farms
and homes and real property have become almost
unbearable and that such taxes are wholly
out of proportion to other forms of taxes.
I stated then emphatically that there is no farm relief
more needed today than readjustment of land taxes.
Now, the Federal Government collects no direct property
taxes, but at that meeting I proposed that we should review
the whole relations of our tax system between the Federal,
State, and local governments and seek a basis of taxation
for each that would give opportunity for readjustments
between our different forms of government.
Such readjustments should be found which would enable the
States to find other sources of tax revenue and would more
equitably distribute the burden over the whole people.
I announced last April that I would call tax experts
of the Nation together to determine the methods
we should pursue.
I shall do so as soon as the national election is out of the
way, and I shall then recommend methods to Congress.
The very first necessity in preventing collapse and
securing recovery in agriculture is to keep open to the
farmer the banking and other sources from which to make
short-term loans for planting, harvesting, feeding livestock,
and other production necessities.
That has been accomplished indirectly in a large measure
through the increased authority to the Federal Reserve
System and its expansion of credits—also indirectly through
the Reconstruction Corporation loans to your banks.
It has been aided directly through the intermediate credit
banks and especially through the 10 new agricultural credit
associations which alone can command over $300 million
credit and which are now being erected and within the
next week will be operating in all parts of the country.
We are thus rapidly everywhere restoring normal
short-term credits to agriculture.
In another direction upon my recommendation the
Reconstruction Corporation has been authorized to make
credit available to processors to purchase and carry their
usual stocks of agricultural products and thus relieve a
burden which was resting on farm prices because the
farmer was forced to carry these stocks himself.
But even more important than that, at my recommendation
that Corporation has been authorized to make credits
available for sales of farm products in new markets abroad.
This is today and will, with increasing activity, I believe,
extend immediate markets in relief of farmers
and the price of products.
Now, the mortgage situation—that is, long-term credits—
is one of our most difficult problems.
On the 6th of October a year ago, I secured and published
an undertaking from the leaders of both political parties
that we should extend aid in this situation.
In December we appropriated $125 million directly
to increase the capital of the Federal land banks,
and we provided further capital to these banks
through the authority of the Reconstruction Corporation
to purchase their bonds when needed.
The purpose was to enable the Federal land banks
to expand their activities and to give humane and
constructive consideration to those indebted to them
who were in difficulties.
In the large sense, it has pursued that policy.
A little over 1 percent of the farms held under mortgage by
the Federal land bank system today are under foreclosure,
and these are mostly cases where men wished to give up.
The character of the organization of the joint stock
land banks whose business methods are not controlled
by the Federal Farm Loan Board has resulted in
unjust pressure for payments in some of those banks.
The basis of that organization should be remedied.
We have sought to further aid the whole mortgage
situation by loans from the Reconstruction Corporation
to banks, mortgage companies, and insurance companies
generally, to enable them to transmit consideration
to their borrowing farmers.
Indeed, as a result of these actions hundreds of thousands
of foreclosures have been prevented.
But despite the relief afforded by these measures,
the mortgage situation has become more acute.
There must be more effective relief.
In it lies a primary social problem.
I conceive that in this civilization of ours, and more
particularly under our distinctive American system,
there is one primary necessity to its permanent success.
That is, we must build up men and women in their own
homes, on their own farms, where they may find
their own security and express their own individuality.
Now, a nation on such foundations is a nation where
the real satisfactions of life and happiness thrive.
It is where real freedom of mind and aspiration secure
that individual progress in morals, in spirit and
accomplishment, the sum of which makes up
the greatness of American life.
Some will say this is a mere ideal.
I am not ashamed of ideals.
America was rounded upon them,
but they must be the premise for practical action.
And for prompt and practical action I have, during the
last month, or at least in the developments of the
last 2 months, finally secured definite and positive steps in
coordination of the policies not only of the Federal agencies
but of the important private mortgage agencies as well.
These agencies have undertaken to give you
their help in the solution of this problem.
But further and more definitely than this, I shall propose
to Congress at the next session that we further reorganize
the Federal land banks, and that we give to them the
resources and liberty of action, which they do not today
possess, which may be necessary to enable them definitely
and positively to expand in the refinancing of the
farm-mortgage situation where it is necessary to give men
who want to fight for it a chance to hold their homes.
I cannot overemphasize the importance of the element
of world stability in the recovery and expansion
of our agricultural and other markets.
This involves the promotion of good will,
of disarmament, and of maintenance of peace.
It requires the rebuilding of the credit structure
within nations which have been forced off the gold standard
or compelled to default or to restrict exchange.
Until that is done there is a definite blockade
upon the movement of commodities and
upon the market for farm products.
We have given aid in these things.
That we may get to grips with these questions in the interest
of agriculture and all of our industry and in the interest of
world progress itself, I am participating in the organization
of a world economic conference to be held late this year.
Every intelligence the world can command will be
concentrated on the rehabilitation of economic stability.
I shall send a representative of agriculture
as a member of that world conference.
And in connection with agriculture,
I may mention the question of war debts.
I do not approve cancellation of these debts.
I certainly do not approve the proposal of our opponents
to lower our tariffs in order that by profits gained from a
flood of goods into the United States this debt should be
transferred to our workers by putting them out of
employment and to our farmers by forcing
their produce to rot in their barns.
It would be better to cancel the debts than to do that.
In my acceptance address I stated
the reverse of that proposal.
I said that:
"If for some particular annual payment we are offered
some other tangible form of compensation, such as the
expansion of markets for American agriculture and labor and
the restoration and maintenance of our prosperity, then I
am sure our citizens would consider such a proposal."
I am prepared to go farther.
I am prepared to recommend that any annual payment
on the foreign debt be used for the specific purpose of
securing an expansion and an opening of the foreign
markets for American agricultural products.
There is justice in that, for the difficulties inherited from the
war are part of the agricultural difficulties at this moment.
Now, that is a proposal of more importance
to the farmer than many a panacea.
In the advancement of agricultural prices from the
depression the first fortress to 'take and to hold
was the increased tariffs on farm products.
This is, of course, what would be surrendered
if our opponents had their way.
The next move in the battle for improved prices
was to stop the general deflation.
By deflation I mean the lessening of market values
and prices for land, products of the land, manufactures,
and securities and everything we possess.
That battle has been won.
The next attack on this front is to reverse these processes
of deflation and bring things back to their real values.
That battle is in progress, and we must all move together.
The Government is giving aid by its vast constructive
program for agriculture, for commerce, and for industry.
Through the renewed flow of credit for industry and by
direct measures of employment, by the great
cooperative movements which we have instituted in
commerce and industry, for attacks all along the line,
we are returning men to work.
Every new man reemployed is a greater
purchaser of farm products.
Wherever we properly can, without entangling ourselves
in political difficulties, we are and should join in the
rehabilitation of the world and thereby
the foreign markets for agricultural products.
Now, I come to you with no economic patent medicine
especially compounded for farmers.
I refuse to offer the counterfeit currency or false hopes.
I will not make any pledge which I cannot fulfill.
As I have stated often before, in the shifting battle
against depression we shall need to adopt new measures
and new tactics as the battle moves on.
The essential thing is that we should build solidly
and soundly for the future.
My solicitude and willingness to advance and protect
the interests of agriculture is shown by the record.
Protection and advancement of this industry will have
my continued deepest concern,
for in it lies the progress of all America.
It was in this industry that I was born.
The battle against depression is making progress.
We are still faced with forces which render 10 million men
idle and agriculture prostrate.
We have forged new weapons;
we have turned the tide from defense to attack.
I shall continue that fight.
It calls for that cooperation, for that courage
and patience and fortitude with which our fathers
conquered these prairies.
Now, in conclusion, my friends, there are many other
subjects of vast importance to our country.
The farmers of America are not selfishly
interested in their own industry alone.
They are Americans with the same concern for the
welfare of the Nation in its multitude
of other problems at home and abroad.
Time does not permit of their exposition tonight.
The issues are grave; the stake is great.
These issues rise above the concern
of an ordinary campaign.
Our cause is not alone the restoration of prosperity.
It is to soundly and sanely correct the weaknesses
in our system which this depression
has brought to the surface.
It is the maintenance of courageous integrity
in political action and in government.
It is the holding of this Nation to the principles and ideals
which it has had from its very beginning.
It is to make a nation of free men and women.
Finally, let me deal for a moment with an ultimate reality.
I have had to describe the complicated processes of
currencies and taxation and other dreary things.
They are but the tools we use to manage the processes
by which we answer the old, old question,
wherewithal shall we live?
They are necessary tools,
but they are not an end in themselves.
Our toils and cares are for a higher purpose.
We are not a nation of 120 million solitary individuals,
we are a nation of 25 million families dwelling in 25 million
homes, each warmed by the fires of affection and cherishing
within it a mutual solicitude for kinfolk and children.
Their safety is what we are striving for.
Their happiness is our real concern.
Our most solemn hope for them is that they may share
richly in a spiritual life as well, that puts them not only
at peace with their fellows but also in harmony
with the will of a beneficent Providence.
Out of our strivings for material blessings must come
safety for homes and schools and churches and holding
of national ideals and the forming of national character.
These are the real aspirations of the American people.
These are the promises of America,
and these promises must be fulfilled.23
He described his 12-point program on agriculture that included a protective tariff,
the Farm Board, making use of unprofitable lands, completing inland waterways,
credit for drought-afflicted farmers, readjusting land taxes,
facilitating short-term loans for planting, harvesting, and feeding livestock,
credit from RFC to sell products abroad, easing farm mortgages,
aid on other nations’ credit structure, expanding in foreign markets
and advancing agricultural prices to reverse deflation.
Many lies were told about Hoover especially by Drew Pearson
in his column “Washington Merry-Go-Round.”
On October 5 at Fort Wayne, Indiana the President responded,
I wish to take the occasion of this meeting to say
a word to you and to all the people of the great Midwest.
During my public life, I have believed that sportsmanship
and statesmanship called for the elimination
of harsh personalities between opponents.
On this journey, however, I have received a multitude
of reports as to the widespread personal misrepresentations
which have been promulgated
in the Midwest in the past few weeks.
I regret that the character of these personalities
necessitates a direct word from me.
I shall say now the only harsh word
that I have uttered in public office.
I hope it will be the last I shall have to say.
When you are told that the President of the United States,
who by the most sacred trust of our Nation
is the President of all the people, a man of your own blood
and upbringing, has sat in the White House
for the last 3 years of your misfortune
without troubling to know your burdens,
without heartaches over your miseries and casualties,
without summoning every avenue of skillful assistance
irrespective of party or view, without using every ounce
of his strength and straining his every nerve
to protect and help, without using every possible agency
of democracy that would bring aid, without putting aside
personal ambition and humbling his pride of opinion,
if that would serve—then I say to you that
such statements are deliberate, intolerable falsehoods.24
On October 7 in a fairly long radio address from the White House
he appealed to women to support his re-election campaign, saying,
Three great tasks lie before the Nation.
The first of these is the battle for recovery
from this depression which is now in the stage
of winning counterattack on a long-extended front.
Second, we must correct economic weaknesses
and wrongs which have been brought
vividly to the surface in the depression.
We must set up protection against recurrence
of these terrible calamities for the future.
Third, we must advance political and social organization
for the accomplishment of the real purposes of life, which
are security and independence of the family and the home,
wider opportunity, and equal opportunity for the individual,
the development of moral
and spiritual equality in the Nation,
the strengthening of national ideals and national character.
We must upbuild the moral leadership
of America in the world.25
On October 12 he spoke to lawyers at the
American Bar Association meeting in Washington.
He said,
We have long recognized that certain functions
in our economic life are affected with public interest,
which requires that their activities shall be
in some measure controlled by government,
either State or Federal, in protection of the citizens.
In that situation we have sought to find a bridge
between these controls and the maintenance
of that initiative and enterprise which assures the conduct
and expansion and perfection of these functions.
One of the great good fortunes of our form of government
is that in the 48 States we have 48 laboratories
of social and economic experimentation.26
On the 15th Hoover spoke from the train at Cumberland, Maryland,
and then he gave a long speech on unemployment and wage earners
in Cleveland, Ohio, saying,
First, my concern in dealing with the problems
of these times, while fighting to save our people from chaos
and to restore order in our economic life,
has been to avert hunger or cold amongst those upon whom
these blows have fallen with heartbreaking severity—
that is our unemployed workers….
I am confident that if these policies which
we are proposing in building up in these three directions—
that is, disarmament, economic stability of the world,
and the proposed use of these debts
to secure the ends I have mentioned—
I believe we can confidently hope to promote
more rapid recovery and that we can greatly safeguard
ourselves from future economic shocks.
And that is the record of organization
and the measures that we have taken in aid to labor.
It is radical in its defense of our people’s interests;
it is progressive in constructive advancement of our people,
it is conservative in maintaining
the fundamental principles of American life.27
On October 16 on radio Hoover asked for community funds
to provide relief for the coming winter that the
National Association of Community Chests agreed to
organize with volunteers in every community.
On the 22nd in Charleston, West Virginia he explained
how the protective tariff benefits them.
Also on that day he gave a long and comprehensive speech in Detroit
on Government finances and its emergency program.
He noted that exports and imports had “increased nearly 23 percent.”
He said, “If there is a deficit this year, it will be due
to the Democratic Members of Congress.”28
He described in detail how his policies were designed to improve the economy.
He also criticized Gov. Franklin D. Roosevelt for making promises
to the unemployed that the Government could not fulfill.
On October 24 Hoover addressed the Convention
of the American Public Health Association in Washington.
On the 28th at Indianapolis in a very long speech he compared the policies
of his administration to those of the Democratic Party and its candidates.
He accused Roosevelt of lying when he said that Hoover had done
“absolutely nothing to remedy the situation,” and that his position
was “that Congress could do nothing.”29
Hoover compared the philosophies of the Republican and Democratic
parties at Madison Square Garden in New York City in another speech.
He noted,
We have heard a great deal in this campaign
about reactionaries, conservatives,
progressives, liberals, and radicals.
I have not yet heard an attempt by any one of the orators
who mouth these phrases to define the principles
upon which they base these classifications.
There is one thing I can say without any question of doubt—
that is, that the spirit of liberalism is to create free men;
it is not the regimentation of men.
It is not the extension of bureaucracy.30
On November 3 Hoover proclaimed an invitation to observe Armistice Day
on November 11 and to set aside November 24 as Thanksgiving Day.
He spoke in St. Louis, Missouri on November 4.
The next day at St. Paul, Minnesota he emphasized the importance of
economic recovery, and he described 21 “measures” he had implemented.
He cited statistics that showed the economy
was improving in the previous four months.
On November 7 he spoke on Philippine issues and the futility of war.
Also on that day he spoke by radio from Elko, Nevada and considered the future.
The ex-President Calvin Coolidge at Madison Square Garden on October 11
had praised Hoover for his performance as a world leader.
Senator Borah no longer supported Hoover, and Vice President Curtis
was unpopular with “wets” like Al Smith and Franklin Roosevelt
for supporting Prohibition as a “dry.
Hoover while returning to his home at Palo Alto on election day
spoke from the train platform at Sacramento, Oakland, San Francisco,
and to 2,000 students at Stanford University where he voted.
That night he sent a telegram congratulating Franklin D. Roosevelt,
wishing him success, and offering to dedicate himself to “helpful effort.”
In the election on November 8 the Roosevelt-Garner ticket easily defeated
Hoover and Curtis with 22,821,277 votes to Hoover’s 15,761,254
and 42 states to 6 yielding a 472-59 electoral college victory.
In the Senate the Democrats took 12 seats away
from the Republicans to give them a 59-36 advantage.
In the House of Representatives the Democrats gained 97 seats
as the Republicans lost 101 to a 313-117 domination.
The Farmer-Labor Party gained four seats to give them 5, and they had one senator.
Hoover gave a brief speech on November 12 in Glendale, California
in which he urged Republicans to cooperate with the new administration,
and he thanked those who had worked for him.
Also on that day he gave a talk at Boulder Dam, Nevada, and he described
the four purposes of the project as stabilizing the Colorado River,
providing water for southern California and Arizona,
irrigating much of Arizona and other valleys,
and preserving American rights to the river.
Also on that day Hoover sent a long telegram to Gov. Roosevelt inviting him
to confer
with him on the situation of war debts and stating the current circumstances.
He also mentioned the disarmament conference which
could advance world peace and improve the economy.
At the Cabinet meeting on November 19 they
discussed how to reduce and balance the year’s budget.
On the 23rd Hoover summarized for the press the war debts situation.
On November 22 Hoover met with President-Elect Roosevelt,
and Hoover urged him to take certain positions.
FDR did not commit himself to anything.
Hoover later said that Roosevelt “was amiable, pleasant, anxious to be of service,
very badly informed and of comparatively little vision.”31
On December 6 Hoover sent his Fourth Annual Message to Congress.
He noted that the nation was at peace, that education and science
were advancing, and that public health had never been better.
He discussed the current economic situation and included detailed statistics,
showing how much was spent on public works and agricultural relief
and financial loans in each of the previous four years.
He proposed a budget that would spend $830 million less than
Congress had approved in its last session. He wrote,
The banking and financial system is presumed to serve
in furnishing the essential lubricant to the wheels
of industry, agriculture, and commerce, that is, credit.
Its diversion from proper use, its improper use,
or its insufficiency instantly brings
hardship and dislocation in economic life.
As a system our banking has failed
to meet this great emergency.
It can be said without question of doubt that
our losses and distress have been greatly augmented
by its wholly inadequate organization.
Its inability as a system to respond to our needs is today
a constant drain upon progress toward recovery.32
He urged economic cooperation with other countries,
western range conservation, extending Federal aid to
child-health services, membership in the World Court,
ratifying the Great Lakes-St. Lawrence Seaway Treaty,
and revising bankruptcy acts and Federal court procedure.
On December 7 he sent his budget for the next fiscal year to Congress.
On the 9th Hoover gave Congress a plan to group,
coordinate, and consolidate Government agencies.
On December 10 he spoke at a dinner of the Gridiron Club
about his experience, the need for the two-party system,
and he encouraged cooperation with the new administration.
My country gave me,
as it gives every boy and every girl, a chance.
It gave me schooling, the precious freedom of equal
opportunity for advancement in life, for service and honor.
In no other land could a boy from a country village
without inheritance or influential friends
look forward with unbounded hope.
It gave to me a certain measure
of success in my profession.
It conferred upon me the honor of administering
the world’s response to the appeal of hundreds of millions
of afflicted people during and after the war.
It gave me high place in the war councils of the Nation.
My country called upon me to represent it
in the reconstruction of human and economic relations
between former enemies
on the Continent of Europe after the armistice.
It gave me an opportunity for service
in the Cabinets of two Presidents.
It gave me the highest honor that comes to man—
the Presidency of the United States.
For this fullness of life, for the chance to serve
in many emergencies, I am indebted
to my country beyond any human power to repay.
Only a few rare souls in a century,
to whose class I make no pretention,
count much in the great flow of this Republic.
The life stream of this Nation is the generations of millions
of human particles acting under impulses of advancing ideas
and national ideals gathered from a thousand springs.
These springs and rills have gathered into great streams
which have nurtured and fertilized
this great land over these centuries.
Its dikes against dangerous floods are cemented
with the blood of our fathers.
Our children will strengthen these dikes,
will create new channels,
and the land will grow greater and richer with their lives.
We are but transistory officials in Government
whose duty is to keep these channels clear
and to strengthen and extend their dikes.
What counts toward the honor of public officials is that
they sustain the national ideals upon which are patterned
the design of these channels of progress
and the construction of these dikes of safety.
What is said in this or in that political campaign
counts no more than the sound of the cheerful ripples
or the angry whirls of the stream.
What matters is that God help the man
or the group who breaks down these dikes,
who diverts these channels to selfish ends.
These waters will drown him or them
in a tragedy that will spread over a thousand years.
If we lift our eyes beyond the scene of our recent battle,
if we inspect the fate of other democracies
under the pressures of the past 3 years,
the outstanding demonstration is
the complete necessity in modern democracies
of maintaining two strong political parties.
Block government among several parties leads
not only to negative policies but to destruction
of all responsibility which carries government
always on the brink of chaos.
Coalition government leads inevitably to danger
and often to revolution for it offers the people
no alternative through which to explode their emotions.
To carry on competent government
there must be a strong and constructive opposition.
The Republican Party now has that duty
to the American people.
But opposition cannot function without political organization,
constancy to principles, and loyalty of men to their party.
Likewise, no party in power can serve the country
unless the members show loyalty, courage,
and a willingness to accept the responsibility of government.
Nor does this preclude that cooperation which
far transcends partisanship in the face of common danger.
That great common danger is
still in the economic field both at home and abroad.
During the past 2 years we have been fighting
to maintain the very foundations of our own stability.
That front can be held if no mistakes are made.
Today one of the visible evidences of our economic problem
is the impassable bridge
between the debtor and the creditor.
Either prices must rise or debts be reduced.
Not one but many economic forces have brought this about.
To increase prices we must give consideration
to the continuing effect of the foreign situation.
The vicious spiral of economic and social instability has been
continuing in the great majority of foreign countries.
If we would make a full and secure recovery,
if we would prevent future relapse, we must consider
major action in cooperation with other nations.
But that cooperation does not imply that it shall be
accomplished at the expense of the American people.
Others must bear their just burdens,
and open hope to the people of the United States.
To fulfill these tasks
we must maintain a solidarity in our Nation.
We must maintain that cooperation at home
which while it maintains party responsibility
yet rises above partisanship.
The new administration has my good wishes;
it has the good wishes of every American
for in their success lies the welfare of our country.33
The British Government led by Prime Minister MacDonald made its
debt payment in gold on December 12, and officials warned that it was
the last installment paid until the terms are renegotiated.
Hoover responded by advising President-elect Roosevelt
to appoint a new debt commissioner.
Secretary of State Stimson was developing a friendship with Roosevelt,
and he acted as an intermediary during the transition.
On December 19 he sent Congress another message
on international finance and its relation to the issues of war debts.
A year ago I requested that the Congress should authorize
the creation of a Debt Commission to deal with situations
which were bound to arise.
The Congress did not consider this wise.
In the situation as it has developed it appears necessary
for the Executive to proceed.
Obviously any conclusions would be
subject to approval by the Congress.
On the other hand should the Congress prefer to authorize
by legislative enactment a commission
set up along the lines above indicated
it would meet my hearty approval.
I had occasion recently in connection with
these grave problems to lay down certain basic principles:If our civilization is to be perpetuated,
the great causes of world peace,
world disarmament and world recovery must prevail.
They cannot prevail until a path to their attainment
is built upon honest friendship, mutual confidence,
and proper cooperation among the nations.
Those immense objectives upon which the future
and welfare of all mankind depend
must be ever in our thought
in dealing with immediate and difficult problems.
The solution of each of these, upon the basis
of an understanding reached after frank and fair discussion,
in and of itself strengthens the foundation
of the edifice of world progress we seek to erect;
whereas our failure to approach difficulties and differences
among nations in such a spirit
serves but to undermine constructive effort.
Peace and honest friendship with all nations
have been the cardinal principles by which
we have ever guided our foreign relations.
They are the stars by which the world must today
guide its course—a world in which our country
must assume its share of leadership and responsibility.The situation is one of such urgency that we require
national solidarity and national cooperation
if we are to serve the welfare of the American people
and indeed if we are to conquer the forces which today
threaten the very foundations of civilization.34
Three days later Hoover told the press that the President-elect was
not cooperating on the war-debts problem, and he included copies
of telegrams between the two presidents.
On 3 January 1933 President Hoover issued this statement
recommending that Congress appropriate expenses for participation
by the United States in the Arms Conference and the International Conference:
The President has today sent to Congress an estimate
for an appropriation of $150,000 for continuation of the work
of the Arms Conference and a message recommending
an appropriation of $150,000 for expenses of participation of
the United States in the International Economic Conference.
The purpose of these recommendations is to enable
the Arms Conference to be carried forward,
together with preparatory work of the Economic Conference,
but more particularly to provide President-elect Roosevelt
with necessary resources to carry forward these activities.35
On January 5 Hoover had the sad duty of informing Congress
that the former President Calvin Coolidge had died.
He wrote,
Mr. Coolidge had devoted his entire life
to the public service, and his steady progress
from Councilman to Mayor of Northampton and thence
upward as Member of the State Senate of Massachusetts,
Lieutenant-Governor and Governor of Massachusetts,
to Vice-President and President of the United States,
stands as a conspicuous memorial to his private
and public virtues, his outstanding ability,
and his devotion to the public welfare.
His name had become in his own lifetime a synonym
for sagacity and wisdom; and his temperateness in speech
and his orderly deliberation in action bespoke
the profound sense of responsibility
which guided his conduct of the public business.
From the American people he evoked
an extraordinary warmth of affectionate response
to his salient and characteristic personality.
He earned and enjoyed their confidence
in the highest degree.36
On January 10 President Hoover sent a message to Congress
urging ratification of the Convention for the Suppression of International
Trade in Arms and Ammunition, and Implements of War.
He wrote,
Recent events have emphasized the urgent need
of more authority to the Executive in control of the shipment
of arms from the United States for military purposes.
There can be no doubt that the control of such shipments
to areas of prospective and actual international conflict
would greatly aid the earnest and unceasing efforts
which all nations now make to prevent
and lessen the dangers of such conflicts.
However, for one nation alone to engage in such
prohibitions while other nations
continue to supply arms is a futility.
Moreover it would tend to give advantage to one nation
over another by increasing the war potentialities
in manufacture and skill of noncooperating nations.
There is before the Senate an international convention
for the suppression of international trade in arms
and ammunition and implements of war signed at Geneva,
June 17, 1925, awaiting ratification.
This convention has been adhered to by a large number
of the other important nations and is practically stopped
through failure of the United States to adhere to it.
Its ratification would contribute to the ends being sought
by the entire world for the prevention and limitation of war.
I earnestly urge that this convention should be ratified.
If, however, it is impossible, as seems to be the case,
for the Senate to now ratify this treaty it is urgent that
legislation should be passed conferring upon the President
the authority in his discretion to limit or forbid shipment
of arms for military purposes in cases where
special undertakings of cooperation can be secured
with the principal arms manufacturing nations.37
On January 13 President Hoover vetoed the House of Representatives Act
providing for the independence of the Philippine Islands.
Congress overrode his veto on January 17 making the
Hare–Hawes–Cutting Act the law, though the Philippine Senate rejected the bill.
This is how Hoover explained his veto:
The Philippine people have today as great a substance
of ordered liberty and human freedom
as any people in the world.
They lack the form of separate nationality
which is indeed their rightful spiritual aspiration.
They have been encouraged in this aspiration
by every President of the United States
during the years of our association with the Philippines
and by declarations of the Congress.
But in securing this spiritual boon to the 13,000,000 people
in these islands the United States has a triple responsibility.
That is responsibility to the Philippine people,
responsibility to the American people,
and responsibility to the world at large.
Our responsibility to the Philippine people is that in finding
a method by which we consummate their aspiration
we do not project them into economic and social chaos,
with the probability of breakdown in government,
with its consequences in degeneration of a rising liberty
which has been so carefully nurtured by the United States
at the cost of thousands of American lives
and hundreds of millions of money.
Our responsibility to the American people is that
we shall see the fact of Philippine separation accomplished
without endangering ourselves in military action hereafter
to maintain internal order or to protect the Philippines
from encroachment by others, and above all that
this shall be accomplished so as to avoid
the very grave dangers of future controversies
and seeds of war with other nations.
We have a responsibility to the world
that having undertaken to develop and perfect freedom
for these people we shall not by our course project
more chaos into a world already sorely beset by instability.
The present bill fails to fulfill these responsibilities.
It invites all these dangers.
It does not fulfill the idealism with which
this task in human liberation was undertaken.38
Secretary of State Stimson in January informed the League of Nations
and American allies that the administration’s policy of not recognizing territories
that were claimed by means of aggression would continue.
Roosevelt had approved this.
Hoover in January and February continued to
make statements, speeches, and send messages to Congress.
On January 25 Louisiana’s Governor Huey Long began his terms as a US Senator.
He had declared a bank holiday in Louisiana that worked.
On Sunday February 5 Hoover worked on helping RFC bail out
the Hibernia Bank in New Orleans with a loan of $20 million.
Local partners raised $4 million, and the bank opened on Monday.
Bank failures had begun to accelerate in December 1932,
and a gold panic provoked 195 bank failures in Michigan
in the first three weeks of January 1933.
On February 14 Michigan’s new Governor William A. Comstock
suspended more than 500 banks in the state,
and it was extended past eight days to almost a month.
The 20th Amendment to the US Constitution was ratified on January 23
ending the President’s and Vice President’s terms on January 2
and those of the Senators and Representatives on January 3.
Thus Hoover was the last President whose term ended on March 4.
Roosevelt declined to negotiate any agreement
until he became President on that day.
On February 13 Hoover spoke in New York City at the Lincoln Day Dinner
of the National Republican Club, and he read a fairly long address urging
international cooperation to restore the economic condition of the world recovery.
He discussed economic issues and then concluded with this peroration:
Despite many discouragements, the world has shown
an increasing ability in the establishment
of effective agencies in the solution
of many controversies which might have led to war.
When we compare the attitude of nations and their ability
to cooperate with each other with that which
existed 20 years ago, we can say that
there has been developed both the spirit and the method
of cooperation in the prevention of war
which gives a profound hope for the future.
In its broad light the problem before the world today is
to work together to prevent the dangers of a developing
economic conflict—to secure economic peace.
That is a field in which the world can cooperate
even more easily than in the field of the prevention of war,
because there is involved in it no background
of century-old controversies, injustices, or hates.
The problems in the economic field contain
less of the imponderables and more of the concrete.
There is involved in it the most important
and appealing self-interest of every nation.
Through such cooperation the world can mitigate the forces
which are destroying the systems of production
and distribution upon which the maintenance
of these gigantic populations are today dependent.
There is a driving force before the eyes of every statesman
in the misery and suffering
which have infected every nation.
Throughout the world
the people are distraught with unemployment;
the decline of prices have plunged the farmers into despair,
the loss of homes, of savings, and provisions of old age.
And therefore, just as there is an obligation amongst nations
to engage in every possible step
for the prevention of war itself,
there is before us today the necessity for world cooperation
for the prevention of economic warfare.
And who can say that the greatest act
in the prevention of war is not to allay economic friction.
On our side this problem is not to be solved
by partisan action but by national unity.
Whatever our differences of view may be
on domestic policies, the welfare of the American people
rests upon solidarity before the world,
not merely in resisting proposals which would weaken
the United States and the world with it
but solidarity in cooperation with other nations in
strengthening the whole economic fabric of the world itself.
These problems are not insoluble.
There is a latent, earnest, and underlying purpose
on the part of all nations to find their solution.
Of our determination there should be no question.
The problem before the world is to restore confidence
and hope by the release of the strong, natural forces
of recovery which are inherent in its very civilization.
Civilization is the history of surmounted difficulties.
We of this world are today of the same strain
as our fathers who builded this civilization.
They passed through terrible conflicts.
They met many great depressions.
They created a state of human well-being in normal times
such as the world has never seen.
The next forward step is as great as any of that history.
It is that we perpetuate the welfare of mankind through the
immense objectives of world recovery and world peace.39
The next day President Hoover summoned the United States Senate
to a Special Session on 4 March 1933.
On February 15 when Franklin Roosevelt was at a park in Miami, Florida
the Italian immigrant Giuseppe Zangara attempted to assassinate the President-elect,
but instead Chicago’s Mayor Anton Cermak’s was mortally wounded.
Hoover telegraphed Roosevelt his concern, and he ordered
the secret service to increase its protection of Roosevelt.
On February 18 he wrote a letter to Franklin Roosevelt urging him
to make a public statement on orthodox fiscal and monetary issues
in order to prevent the fears of an economic collapse, saying,
It would steady the country greatly if there could be
prompt assurance that there will be
no tampering of inflation of the currency;
that the budget will be unquestionably balanced,
even if further taxation is necessary;
that the government credit will be maintained
by refusal to exhaust it in the issue of securities.40
Hoover soon realized that Roosevelt was not going to adopt
Hoover’s policy instead of his New Deal.
Roosevelt refused to try to influence Congress until he became President.
On February 20 Hoover sent a message to Congress
urging eight measures to promote economic recovery.
These were supporting the Bankruptcy Bill, the
Great Lakes-St. Lawrence Seaway Treaty, the Glass Banking Bill,
increasing the loans of the Reconstruction Finance Corporation (RFC),
reducing surplus farm production, repeal of the House of Representatives’
publishing RFC loans that caused hoarding of money,
expanding Home Loan Discount Banks to relieve the burden on the RFC,
and promoting peace by stopping killing and shipping of arms.
On February 25 Maryland’s Governor Albert Richie declared a bank holiday,
and six more states closed their banks on March 2.
Millions of dollars of gold were withdrawn on March 3.
Hoover declined to suspend bank operations
“without the consent of the incoming administration.”
At a tea in the White House the President and his successor
brought in their economic advisors for the discussion.
Thousands of banks were closing, and gold was being withdrawn
from the financial centers in New York and Chicago.
Roosevelt decided against joining Hoover in closing the banks.
That night the governors of the Federal Reserve continued to meet,
and after 3 a.m. they approved a national shutdown of banks.
As Hoover ended his presidency on March 4 he said,
“Democracy is not a polite employer.”
In the third volume of The Memoirs of Herbert Hoover:
The Great Depression 1929-1941 he summarized his view
in the introduction this way:
The “Great Depression” did not start in the United States.
To be sure, we were due for some economic readjustment
as a result of the orgy of stock speculation in 1928-1929.
This orgy was not a consequence
of my administrative policies.
In the main it was the result of the Federal Reserve Board’s
pre-1928 enormous inflation of credit at the request
of European bankers which, as this narrative shows,
I persistently tried to stop, but I was overruled.
Aside from the inevitable collapse of this Mississippi Bubble,
some secondary economic forces also
contributed to the October, 1929, events.
But even this slump started in foreign countries
before it occurred in the United States,
and their difficulties were themselves
a contributing factor to the stock market crack.
Our domestic difficulties standing alone
would have produced no more than the usual type
of economic adjustment
which had re-occurred at intervals in our history.
Eighteen months later, by early 1931,
we were convalescing from our own ills
when an economic hurricane struck us from abroad.
The whole financial and economic structure of Europe
collapsed at this time as a result
of the delayed consequences of the First World War,
the Versailles Treaty, and internal policies.
The immediate effect of Central Europe’s collapse
was the terrible unsettlement
of all economically sensitive nations everywhere.
Among the dire consequences were
Britain’s suspension of payments to foreigners,
abandonment of the gold standard by scores of nations,
trade wars, political revolutions
in more than a dozen countries outside of Europe,
and disaster for the American economy.
The eventual effect of this gigantic catastrophe
was to kindle political and social revolutions
in all the defeated nations of Central and Eastern Europe.
Communism reached its dread hand into those areas,
and Fascist dictators arose as the antidote.
In the end, these forces were to plunge the world
into a Second World War….
That our administration policies were right
is amply evidenced by the fact that
after the world turned toward recovery in July, 1932,
the twelve nations retaining their free economies,
and pursuing our policies, fully recovered,
within two or three years,
to levels above the boom year of 1929.41
Notes
1. Herbert Hoover in the White House: The Ordeal of the Presidency
by Charles Rappleye, p. 308.
2. The Hoover Administration: A Documented Narrative by William Starr Myers
and Walter H. Newton, p. 176.
3. Ibid. p. 179.
4. The State Papers and Other Public Writings of Herbert Hoover, Volume Two,
p. 151.
5. Franklin D. Roosevelt "The 'Forgotten Man' Speech" April 7, 1932" (Online).
6. The State Papers and Other Public Writings of Herbert Hoover, Volume Two,
p. 169, 175.
7. Ibid. p. 188.
8. Herbert Hoover in the White House: The Ordeal of the Presidency
by Charles Rappleye, p. 374.
9. Ibid. p. 375.
10. Ibid. p. 378.
11. The State Papers and Other Public Writings of Herbert Hoover, Volume Two,
p. 242.
12. Ibid. p. 209-210.
13. Ibid. p. 211.
14. Ibid. p. 211-212.
15. Ibid. p. 213.
16. Ibid. p. 216.
17. Ibid. p. 220.
18. Ibid. p. 224.
19. Ibid. p. 247.
21. Ibid. p. 249.
22. Ibid. p. 265.
23. Herbert Hoover “Address at the Coliseum in Des Moines, Iowa” (Online).
24. The State Papers and Other Public Writings of Herbert Hoover, Volume Two,
p. 295-297.
25. Ibid. p. 319.
26. Ibid. p. 320-321.
27. Ibid. p. 332.
28. Ibid. p. 344, 355-356.
29. Ibid. p. 372.
30. Ibid. p. 390.
31. Ibid. p. 425.
32. Herbert Hoover by William E. Leuchtenburg, p. 144.
33. The State Papers and Other Public Writings of Herbert Hoover, Volume Two,
p. 500-501.
34. Ibid. p. 542-544.
35. Ibid. p. 553-554.
36. Ibid. p. 561.
37. Ibid. p. 563-564.
38. Ibid. p. 565-566.
39. Ibid. p. 569.
40. Ibid. p. 594-595.
41. Herbert Hoover in the White House: The Ordeal of the Presidency
by Charles Rappleye, p. 445.
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