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Herbert Hoover: Great Depression
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Hoover wrote 30 books after he retired from the White House, including three volumes of memoirs and The Ordeal of Woodrow Wilson, a study of Wilson's failure to obtain Senate consent to the Treaty of Versailles. It was the first time one former President had written a book about another former President. During World War II Hoover tried unsuccessfully to organize food relief efforts to nations occupied by Nazi Germany. After the war he served as coordinator of the European Food Program, advised the U.S. government on occupation policies in Germany and Austria, and chaired two Commissions on the Organization of the Executive Branch of Government that made recommendations for greater efficiency. He remained associated with the conservative wing of the Republican party, and he was asked for advice by leading politicians from his party, including Richard Nixon. Hoover died at the age of 90; John Adams was the only President who lived longer.
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Hoover, who had been a great American success story until his Presidency, was elected on his promise of continued prosperity for America. Unfortunately, almost immediately upon his arrival in office, Hoover was faced with the stock market crash that begat the Great Depression. The crash soon resulted in large-scale bank failures which, in turn, resulted in business collapse on a scale unprecedented in history. Before long, there were 13 million unemployed Americans. Hoover was torn between two conflicting instincts, and two opposing sets of advice. On the one hand, his individualist tendencies, and his belief in the business system, tended to make him opposed to large-scale government relief.
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Hoover deeply believed in the Efficiency Movement (a major component of the Progressive Era), arguing that there were technical solutions to all social and economic problems. That position was challenged by the Great Depression, which began in 1929, the first year of his presidency. He energetically tried to combat the depression with many new programs, such as the Reconstruction Finance Corporation, but none of them worked since he and Congress failed to acknowledge the disastrous effects of the Smoot-Hawley Tariff of 1930, which throttled US trade, engendered retaliatory tariffs, and began a cascade of international bank failures. The consensus among historians is that Hoover's defeat in the 1932 election was caused primarily by failure to end the downward spiral into deep depression, compounded by popular opposition to prohibition, Hoover's lack of charisma in relating to voters, and his poor skills in working with politicians.
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Inaugurated in March 1929, Hoover enjoyed only a half year of the economic prosperity with which the country had become familiar during the 1920s. In the fall, after the stock market had crashed, he took unprecedented measures to deal with the depression that followed. In the interest of maintaining consumer purchasing power, he urged business leaders not to cut wages, as had been their usual custom during hard times. The policy was only temporarily successful; production declined, unemployment grew, and eventually wages for those still employed were cut after all. In addition, the government’s own policies, leading to a drastic decline in the money supply, may have hastened the slide into the depression.
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Hoover, believing in the basic soundness of the economy, felt that it would regenerate spontaneously and was reluctant to extend federal activities. Nonetheless he did recommend, and Congress gave the funds for, a large public works program, and the Reconstruction Finance Corporation was created (1932) to stimulate industry by giving loans unobtainable elsewhere. Congress, which had a Democratic majority after the 1930 elections, passed the Emergency Relief Act and created the federal home loan banks. As the Great Depression deepened, veterans demanded immediate payment of bonus certificates (issued to them in 1924 for redemption in 1945). In 1932 some 15,000 ex-servicemen, known as the Bonus Marchers, marched on Washington; Hoover ordered federal troops to oust them from federal property.
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In 1930, Hoover signed the Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 dutiable items. The tariff, combined with the 1932 Revenue Act, which hiked taxes and fees (including postage rates) across the board, is often blamed for deepening the depression, and are considered by some to be Hoover's biggest political blunders. Moreover, the Federal Reserve System's tightening of the money supply (for fear of inflation) is regarded by Milton Friedman and most modern economists as a mistaken strategy, given the situation. Hoover's stance on the economy was based on volunteerism. From before his entry to the presidency, he was among the greatest proponents of the concept that public-private cooperation was the way to achieve high long-term growth. Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values.
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