Herbert Clark Hoover (1874-1964), thirty-first president of the United States, could not halt the severest economic depression in American history because his governmental theories prevented him from taking drastic steps.
Herbert Clark Hoover
On Aug. 10, 1874, Herbert Hoover was born at West Branch, Iowa, of Quaker ancestry. His father died when he was 6 and, after his mother's death less than 3 years later, he went to live with an uncle in Oregon. In 1891 he entered Stanford University, where he specialized in geology.
After graduating, Hoover worked as a mining engineer in the western United States, Australia, and China. In 1901 he became a junior partner in a London-based mining firm and 7 years later set up on his own. During these years he amassed a fortune estimated at $4 million. On Feb. 10, 1899, he married his college sweetheart, Lou Henry; they had two sons, Herbert, Jr., and Allan.
In London when World War I broke out, Hoover was asked to head the Belgian relief program. He was so successful that in May 1917 President Woodrow Wilson called him back to head the U.S. Food Administration. After the armistice he was placed in charge of the American Relief Administration, organized to feed war-ravaged Europe. When the congressional appropriation ran out, Hoover successfully appealed for private contributions to keep the work going.
Hoover was talked of as a possible 1920 presidential candidate by admirers in both parties. Although he publicly declared himself a Republican, the party's Old Guard disliked him because he was a late convert, and its isolationist wing disapproved of his advocacy of the League of Nations. Republican president Warren G. Harding, however, appointed him secretary of commerce, a post he held through the following administration of Calvin Coolidge.
Secretary of Commerce
During the 1920s Hoover set forth the basic philosophy that would guide him throughout his career. His central tenet was individualism, by which he meant equality of opportunity for each man to make the fullest possible use of his abilities. But he insisted that individualism be tempered by a sense of social responsibility and voluntary cooperation for the general good; he rejected old-fashioned free competition as wasteful. He believed that the government's function was to conserve natural resources, protect equality of opportunity, encourage business efficiency, promote scientific research, and build major public works.
Hoover transformed the Commerce Department into an effective instrument for implementing his philosophy. He fostered the growth of trade associations to bring improved efficiency and stability to industry, promoted American foreign trade, and expanded the Department's information and statistical services. He also set up a Division of Housing to encourage home building, built the Bureau of Standards into one of the country's leading scientific research institutions, and successfully pushed for stronger government regulation of the commercial aviation and radio industries.
Hoover's influence became increasingly important in all economic questions facing the Federal government. Believing that management and labor must cooperate for the good of all, he favored collective bargaining (though not the closed shop), worked behind the scenes to resolve labor disputes, and encouraged development of privately financed unemployment insurance. For relief to farmers he opposed government price-fixing of agricultural products, instead favoring increased Federal assistance to farm marketing cooperatives.
After Coolidge decided not to run again in 1928, Hoover was the popular choice of the party rank and file and won the Republican presidential nomination on the first ballot. In the election he defeated Democrat Alfred E. Smith by over 6 million votes, even breaking the "solid South."
Hoover's record in foreign affairs was mixed. Immediately after his election he made a successful goodwill tour of Latin America, and throughout his term he actively worked for a good-neighbor policy south of the border. He was interested in promoting international disarmament, but the London Naval Conference of 1930 was only partly successful, and his efforts at the Geneva Disarmament Conference (which met in 1932 to secure abolition or reduction of offensive weapons) failed. His administration's worst mistake concerned the Japanese invasion and occupation of Manchuria in 1931. Secretary of State Henry Stimson was willing to impose economic sanctions against Japan, but Hoover, fearful of instigating a war, limited the American response to the ineffectual Stimson Nonrecognition Doctrine.
Domestically, Hoover expanded the national forests and parks, laid the groundwork for many of the later New Deal accomplishments in water-resource development, increased Federal highway spending, was instrumental in setting up the privately financed Research Committee on Social Trends, reorganized the Federal prison system, promoted the growth of civilian aviation, and even approved a bill which drastically limited the use of injunctions in labor disputes.
On the other hand, Hoover's opposition to government competition with business led him to veto a bill for government operation of the hydroelectric facilities at Muscle Shoals, Ala. And despite warnings from economists of its disastrous consequences for international trade and economic stability, he signed legislation which raised the average level of tariff duties from roughly 30 to about 59 percent. But what most damaged his reputation was the inadequacy of his response to the depression that followed the stock market crash of October-November 1929.
Voluntarism versus Federal Intervention
Although previous chief executives had taken the position that the business cycle would simply have to run its course, Hoover believed that the government could and should act to cushion economic shocks. When the Depression hit, he made repeated optimistic statements about the economy to bolster business confidence, had the Federal Reserve Board follow an "easy money" policy, and accelerated work on Federal projects. However, his major emphasis was on voluntary action rather than government intervention: he exhorted industry to maintain employment and wages, induced bankers to establish the National Credit Corporation to assist threatened banks, and relied upon the traditional agencies of private charity and local government to provide relief for the unemployed.
But this voluntarism was a failure. The business community lacked the discipline and sense of social responsibility for effective cooperation. Yet, despite increasing hardship in all sectors, Hoover was convinced that the country was basically sound. He held that the causes of the Depression lay outside the United States. To prevent the threatened breakdown of the German economy under the burden of reparations payments—which would have jeopardized millions of dollars of American loans—he arranged a one-year moratorium on payment both of reparations and inter-Allied war debts.
By late 1931 Hoover was driven to embrace more direct Federal intervention. He established the Reconstruction Finance Corporation to make emergency loans to financial institutions and certain corporations. He supported the Glass-Steagall Act, which liberalized the Federal Reserve System's credit requirements; and the Federal Home Loan Bank Act, to assist building and loan societies, savings banks, and insurance companies in expanding loans for residential construction. Hoover's program rested on the assumption that infusing additional credit into the economy would be enough to revive business activity. Still the economy continued its downward slide.
Nevertheless, Hoover stood firm against the massive public-works spending that Democrats and progressive Republicans increasingly demanded. He was adamantly against any direct Federal relief for the unemployed, not only for budgetary reasons, but because he was determined to preserve what he regarded as the fundamental American principles of individual and local responsibility.
Despite sharp Republican losses in the 1930 congressional elections, Hoover largely had his way. He successfully fought a proposal to strengthen the ineffective U.S. Employment Service. And the Relief and Construction Act (1932), which authorized loans of $1.5 billion to state and local agencies for self-liquidating public works and $300 million to the states for relief purposes, was watered down to meet his specifications. He suffered only two major legislative defeats: a proposed sales tax for balancing the budget and an overridden veto on the bill permitting veterans to borrow up to 50 percent of the face value of their bonus certificates.
"Bonus Army" Blunder
In his personal relations Hoover was affable and genial, a sensitive and humane idealist—qualities he was unable to project to the public. His sensitivity to criticism led to poor relations with the press, and his resistance to direct Federal relief made him appear callous to the suffering around him.
Perhaps Hoover's worst blunder was his handling of the "bonus army." An estimated 17, 000 former servicemen flocked to Washington in the spring of 1932 to demand that Congress authorize the immediate payment in full of their bonus certificates. When the Senate, under Hoover's prodding, defeated the measure, most returned to their homes. An attempt by Washington police to evict those remaining resulted in the death of two veterans and two policemen. Hoover then called out Federal troops on July 28, 1932—an action that made him even more unpopular.
New Deal Triumphs
In the 1932 campaign Hoover warned that the program of Democratic nominee Franklin D. Roosevelt threatened a "radical departure" from the American way of life. His efforts to cooperate with the president-elect came to naught, because Roosevelt and his "Brain Trust" correctly suspected that Hoover wanted to commit the new administration to a continuation of his own policies. When Hoover left office in March 1933, nearly the entire United States economy was paralyzed.
In the years that followed, Hoover remained politically active, attacking Roosevelt's New Deal policies, which he blamed for prolonging the Depression by destroying business confidence. Prior to Pearl Harbor, Hoover was a strong isolationist; after World War II he was a leading exponent of the "Fortress America" theory.
When Hoover left office, he was probably the most hated president in American history. Only the passage of time led to a fairer judgment. In 1947 President Harry S. Truman appointed him chairman of the Commission on Organization of the Executive Branch of the Government. In 1953 President Dwight Elsenhower appointed him to the same job. The work of these two Hoover commissions provided the basis for a major reorganization of the executive branch. When he died on Oct. 20, 1964, Hoover was widely respected as one of the nation's foremost elder statesmen.
Hoover did more than any previous chief executive to combat a depression, but the limitations of his political and social philosophy proved his undoing. Perhaps the most significant result of his experiment in voluntarism was that its failure prepared the public to accept the farreaching expansion of Federal authority under the New Deal.
Further Reading on Herbert Clark Hoover
Before his death Hoover completed his Memoirs (3 vols., 1951-1952), covering the years up to 1941. There is no adequate biography. Eugene Lyons, Herbert Hoover: A Biography (1964), is superficial and eulogistic. Harris Gaylord Warren, Herbert Hoover and the Great Depression (1959), and Albert U. Romansco, The Poverty of Abundance: Hoover, the Nation, the Depression (1965), are useful, but both suffer from lack of access to the Hoover papers. See also Harold Wolfe, Herbert Hoover, Public Servant and Leader of the Loyal Opposition: A Study of his Life and Career (1956). A discussion of foreign policy is Robert H. Ferrell, American Diplomacy in the Great Depression: Hoover-Stimson Foreign Policy, 1929-1933 (1957).