Herbert Hoover's Depression - Lew. Rockwell. DIGG THIS Thisarticle is excerpted from chapter 7 of America’s. Great Depression. Ifgovernment wishes to alleviate, rather than aggravate, a depression,its only valid course is laissez- faire – to leave the economyalone. Only if there is no interference, direct or threatened, withprices, wage rates, and business liquidation will the necessaryadjustment proceed with smooth dispatch. Any proppingup of shaky positions postpones liquidation and aggravates unsoundconditions. Propping up wage rates creates mass unemployment, andbolstering prices perpetuates and creates unsold surpluses. Moreover, adrastic cut in the government budget – both in taxes and expenditures– will of itself speed adjustment by changing social choicetoward more saving and investment relative to consumption. For governmentspending, whatever the label attached to it, is solely consumption; any cut in the budget therefore raises the investment- consumptionratio in the economy and allows more rapid validation of originallywasteful and loss- yielding projects. Public Transportation; Railroad Park; Report a Problem; Work. Bidding Opportunities; Building Codes. Browse City of Birmingham departments, offices, and contacts. APUSH Chapter 33 Key Terms. Hoover Dam; A dam on the Colorado River built during the Great Depression as part of a public-works program indented to stimulate. Son of a Quaker blacksmith, Herbert Clark Hoover brought to the Presidency an unparalleled reputation for public service as an engineer, administrator, and humanitarian. Hence, theproper injunction to government in a depression is cut the budgetand leave the economy strictly alone. Currently fashionable economicthought considers such a dictum hopelessly outdated; instead,it has more substantial backing now in economic law than it didduring the 1. Laissez- fairewas, roughly, the traditional policy in American depressions before. The Works Progress Administration (renamed in 1939 as the Work Projects Administration; WPA) was the largest and most ambitious American New Deal agency, employing. Hoover also refused to the end of his presidency to begin federal relief or welfare programs. Herbert Hoover: A Public. Hoover spent $500 million a year on public works and government programs to build or improve government properties. The most famous was the Hoover (Boulder) Dam. Find out more about the history of Hoovervilles, including videos, interesting articles, pictures, historical features and more. Get all the facts on HISTORY.com. Welcome to an Engaged Community. If you are moving into a New Construction home in Hoover, please contact Hoover Public Works at 205-444-7543 so we can get your. The laissez- faire precedent was set in America’s first greatdepression, 1. President Van Burenalso set a staunch laissez- faire course, in the Panic of 1. Subsequentfederal governments followed a similar path, the chief sinners beingstate governments, which periodically permitted insolvent banksto continue in operation without paying their obligations. And this depression was over in one year– in what Dr. Anderson has called “our last naturalrecovery to full employment.”Laissez- faire,then, was the policy dictated both by sound theory and by historicalprecedent. But in 1. 92. 9, the sound course was rudely brushed aside. Led by President Hoover, the government embarked on what Andersonhas accurately called the “Hoover New Deal.” For if we define “New. Deal” as an antidepression program marked by extensive governmentaleconomic planning and intervention – including bolstering ofwage rates and prices, expansion of credit, propping up of weakfirms, and increased government spending (e. Herbert Clark Hoover must be consideredthe founder of the New Deal in America. Hoover, from the very startof the depression, set his course unerringly toward the violationof all the laissez- faire canons. As a consequence, he left officewith the economy at the depths of an unprecedented depression, withno recovery in sight after three and a half years, and with unemploymentat the terrible and unprecedented rate of 2. Hoover’s roleas founder of a revolutionary program of government planning tocombat depression has been unjustly neglected by historians. Roosevelt, in large part, merely elaborated the policies laiddown by his predecessor. To scoff at Hoover’s tragic failure tocure the depression as a typical example of laissez- faire is drasticallyto misread the historical record. The Hoover rout must be set downas a failure of government planning and not of the free market. To portray the interventionist efforts of the Hoover administrationto cure the depression, we may quote Hoover’s own summary of hisprogram, during his presidential campaign in the fall of 1. We mighthave done nothing. That would have been utter ruin. Insteadwe met the situation with proposals to private business andto Congress of the most gigantic program of economic defenseand counterattack ever evolved in the history of the Republic. We put it into action. No government in Washington has hithertoconsidered that it held so broad a responsibility for leadershipin such times. For the first time in the history of depression,dividends, profits, and the cost of living, have been reducedbefore wages have suffered. They were maintained until thecost of living had decreased and the profits had practicallyvanished. They are now the highest real wages in the world. Creatingnew jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has donemore for . We determinedthat we would not follow the advice of the bitter- end liquidationistsand see the whole body of debtors of the United States broughtto bankruptcy and the savings of our people brought to destruction. Itis instructive to trace their development and the similar developmentin the country as a whole, if we are to understand clearly how Hoovercould so easily, and with such nationwide support, reverse the policiesthat had ruled in all previous depressions. Herbert Clark. Hoover was very much the “forward- looking” politician. We have seenthat Hoover pioneered in attempts to intimidate investment bankersin placing foreign loans. Characteristic of all Hoover’s interventionswas the velvet glove on the mailed fist: i. When Hooverreturned to the United States after the war and a long stay abroad,he came armed with a suggested “Reconstruction Program.” Such programsare familiar to the present generation, but they were new to the. United States in that more innocent age. Like all such programs,it was heavy on government planning, which was envisaged as “voluntary”cooperative action under “central direction.”. House, Franklin D. Roosevelt, and other prominent Democrats for a while boomed Hooverfor the presidency. Wilson, a former official of the United Mine Workers of America. The conference – which included “forward- looking” industrialistslike Julius Rosenwald, Oscar Straus, and Owen D. Young, labor leaders,and economists like Frank W. Taussig – recommended wider collectivebargaining, criticized “company unions,” urged the abolition ofchild labor, and called for national old- age insurance, fewer workinghours, “better housing,” health insurance, and government arbitrationboards for labor disputes. These recommendations reflected Hoover’sviews. On the contrary, he “setout to reconstruct America.”. The committee established a branchin every state having substantial unemployment, along with subbranchesin local communities and mayors’ emergency committees in 3. We persuaded employers to “divide”time among their employees so that as many as possible wouldhave some incomes. We organized the industries to undertakerenovation, repair, and, where possible, expand construction. In December 1. 92. War Finance Corporation was revived as an aid to farm exports, anda $1. Foreign Trade Financial Corporation was established. Farm agitation against short- selling led to the Capper Grain Futures. Act, in August 1. Furthermore, on the state level, New York passed rent laws, restrictingthe eviction rights of landlords; Kansas created an Industrial Courtregulating all key industries as “public utilities”; and the Non- Partisan. League conducted socialistic experiments in North Dakota. This was probably the mostfateful omen of antidepression policies to come. About 3. 00 eminentmen in industry, banking, and labor were called together in September. President Harding’saddress to the conference was filled with great good sense and wasalmost the swan song of the Old Order’s way of dealing with depressions. Harding declared that liquidation was inevitable and attacked governmentalplanning and any suggestion of Treasury relief. He said, “The excessstimulation from that source is to be reckoned a cause of troublerather than a source of cure.”. Theconferees obviously preferred Hoover’s opening speech, to the effectthat the era of passivity was now over; in contrast to previousdepressions, Hoover was convinced, the government must “do something.”. The important steps, in the view of the dominant leaders, wereto urge the necessity of government planning to combat depressionsand to bolster the idea of public works as a depression remedy. For example, the economist William Leisersonhad thought that a Federal Labor Reserve Board “would do for thelabor market what the Federal Reserve Board did for the bankinginterests.” But the wiser heads saw that they had made a great gain. As a direct result of Hoover’s conference, twice as many municipalbonds for public works were floated in 1. American opinion was aroused on the entiresubject. It was no accidentthat the conference had arrived at its interventionist conclusions. As usually happens in conferences of this type, a small group ofstaff men, along with Herbert Hoover, actually prepared the recommendationsthat the illustrious front men duly ratified. Mallery was a member andguiding spirit of the Pennsylvania State Industrial Board and Secretaryof the Pennsylvania Emergency Public Works Commission, which hadpioneered in public- works planning, and Mallery’s resolutions thoughtfullypointed to the examples of Pennsylvania and California as beaconlights for the federal government to follow. The Association had held thefirst national unemployment conference in early 1. Now, its executivedirector, John B. Andrews, boasted that the presidential conference’srecommendations followed the standard recommendations formulatedby the AALL in 1. These standard recommendations featured publicworks and emergency public relief, at the usual hours and wagerates – the wage rates of the boom period were supposedto be maintained. Asidefrom Mallery’s critical role, the conference also employed the expertknowledge of the following economists, all of whom were officialsof the AALL: John B. Lewisohn, Samuel Mc. Cune Lindsay, Wesley C. Tarbell, Mary Van Kleeck, and Leo Wolman. Andrews singled out for particular praise in this regard. Joseph H. Defrees, of the United States Chamber of Commerce, whoappealed to many business organizations to cooperate with the mayors’emergency committees, and generally to accept “business responsibility”to solve the unemployment problem. President Samuel Gompers of the. While this image was. A More Balanced Historical Perspective. Herbert Hoover was in the right. He could well have been a good - if not great. His ideological beliefs were. Great Depression. He was far more committed to active government than either. Calvin Coolidge or Warren Harding. However, as the presiding chief executive. Depression began, he has received the blame for the Depression. Working. his way through Stanford University to a degree in mining engineering. During. the Great War he served in a voluntary capacity as director of the Food. Administration Board, assigned the task of overseeing the production and. Following World War I. Europeans - literally. His efforts were highly. Republican. candidate for president. While Warren Harding would be the nominee of a. Hoover would serve as Secretary of Commerce during. Escaping any involvement in the Teapot Dome scandal. Hoover entered the presidency in 1. During. the 1. 92. Thus, when the Depression began and Hoover's. Hoover. himself was apparently aware of the potential problem. As president- elect. William. J. Abbot who was editor of the Christian Science Monitor. He purportedly. said: . He said that he had. To a Republican senator he said: . Hoover applied a conservative business- oriented. Americans rather than governmental. What he tried was unsuccessful and sometimes. Having taken at least partial credit. Twenties when he campaigned for the presidency. Hoover had trouble personally accepting the end of the boom or. Depression would be. He, however. was not alone in this. Hoover initially felt that the Depression was a. Therefore, President Hoover responded to. Depression by counseling. Americans didn't let panic cause them to take. Confidence was the. The President waged a campaign to. This approach was less than successful. While businessmen. Hoover also failed in. Seeing. other workers laid off and fearing for their own future, laborers cut back. Hoover's. confidence campaign, while well intentioned, simply did not work. The economy. continued its downward spiral - workers cut back on consumption, more workers. In order to understand Hoover's. Great Depression, one must. Hoover's idea of . President Hoover felt that while government intervention in. This philosophy. was a curious cross between the . As Robert Mc. Elvaine. Only if businessmen reinvested their. Therefore. he pursued for three plus years a conservative business- oriented approach. A fiscal conservative, he fought. This was extremely. As Mc. Elvaine points out: . Yet, as Hoover himself had recognized. Many Americans reasoned that since. They urged. the government to abandon the gold standard and flood the economy with. Hoover rejected such demands arguing that a stable or. This would simply delay. Thus, Hoover refused to give. President Hoover was also supportive. American businessmen from foreign competition. In 1. 93. 0 the United. States Congress passed and President Hoover signed into law the Smoot- Hawley. Tariff. Only partially a response to the crash of the stock market and. Depression, this was the highest tariff in American. While Hoover hoped the tariff would help economically. As more and more millions. They demanded that the federal government institute relief. President Hoover rejected such demands. He felt relief should be handled. Community Chest, United Way, the Salvation Army. If government had to deal with. Hoover also. refused to the end of his presidency to begin federal relief or welfare. Hoover's position overlooked the. This was so massive. Nonetheless, Hoover. President. Hoover did increase federal spending on public works as a way of trying. However, he grew more hostile with the passage of time believing. When Congress. passed the Emergency Relief and Construction Act in 1. Hoover's administrators. Hoover acted boldly in calling for. Reconstruction Finance Corporation - a government lending. While RFC loans did forestall. As Mc. Elvaine points out - . Expansion was the last. Therefore, businesses. While the RFC was an innovative. Hoover's conservative business- oriented. The loans went to banks and big businesses not. Evaluation. Herbert Hoover once told his old. Julius Barnes: . He refused to recognize that his philosophy and programs. Rather than try something different, he clung rigidly. Americans that things were getting better, and lost the support of. Why? Partly, it was his personality. She points. to a business venture launched by Hoover that very clearly failed but that. According to Wilson, Hoover had no. He just couldn't admit defeat or. He had a great capacity for self- delusion. Note the denial of reality in these words he. He was an idealist who firmly (and rightly). This was admirable up. But his method proved disastrous during the Great Depression. Despite every indication that his approach. Depression was not succeeding, he tenaciously continued down. However, the. president. While he counseled. He also failed to use the media effectively to communicate with. At the depth of the national catastrophe in 1. Hoover. In the summer of that year, Movietone. News crews filmed the president feeding his dog T- bone steak in the Rose. Garden at the White House. This footage played over and over again in movie. American. character. On top of this came the government. General Douglas Mac. Arthur violated a direct presidential directive. Hoover not to attack the veterans of the Great War encamped at Anacostia. Flats in the nations capital. Hoover, however, took the blame for this. In the seventy years since his administration. Hoover. Like. all incumbents, his reputation was in many ways simply a reflection of. Incumbents get the credit when things go well, whether they had. Conversely, incumbents get the blame when. Finally, the Democratic party ran against. Hoover for a half century. At election time, every Republican candidate. Herbert Hoover. It was an effective partisan technique for. Mc. Elvaine, The Great Depression: America, 1. Time Books (New York, 1. Suggested Readings: David Burner, Herbert Hoover. A Public Life , Knopf (New York, 1. Martin I Fausold, The Presidency. Herbert Hoover, University Press of Kansas (Lawrence, Kan., 1. Herbert Hoover, The Memoirs of. Herbert Hoover: The Great Depression, 1. Macmillan (New York. Gene Smith, The Shattered Dream. Herbert Hoover and the Great Depression, William Morrow & Company. New York, 1. 97. 0). Harris Gaylord Warren, Herbert. Hoover and the Great Depression, Norton Library (New York, 1. Joan Hoff Wilson, Herbert Hoover. Forgotten Progressive, Little, Brown, and Company (Boston, 1.
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