Herbert Hoover
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Though humiliated, Hoover maintained a dignified silence. The New York Times pointed out the hypocrisy of Southern Democrats, themselves white supremacists who voted against Parker to embarrass the president, even if it made a fellow Southerner the sacrificial lamb.35 The Minneapolis Journal took aim at Senator Borah. “The Borahs of the Senate want no Supreme Court appointee whose opinion on a controversial subject will be formed after he has examined the subject,” the daily wrote. “They want a man whose opinion in a given controversy they can pretty well guess in advance.”36 An editorial in the New York Herald Tribune punctured the Senate’s cynical rhetoric: “An argument might have been made that the president should have appointed a more experienced jurist. A counterargument could have commended Parker as one of the ablest members in the circuit court system. Yet neither argument was made.” Instead, the paper continued, the Senate “seemed chiefly intent on demonstrating once more its ability to rank among the pettiest deliberative bodies in the world.”37
Following the Parker setback, the president nominated a safe successor, Owen J. Roberts, a Philadelphia attorney who had spent most of his career in private practice and had won every case he argued before the Supreme Court. He was one of two attorneys, along with Atlee Pomerene of Ohio, who had been appointed counsel for the government by President Coolidge to prosecute the oil scandals that had occurred during Harding’s administration. After the bitter fight over Parker’s nomination, Roberts, a moderately conservative Republican, was confirmed by the Senate within one minute after his name was presented to the upper chamber, without even a roll call.38 Nearly two years later, Hoover again faced a Supreme Court nomination battle, yet fortunately this one fared as easily as Roberts’s had. On February 15, 1932, Benjamin Cardozo, a liberal Jewish Democrat from New York, reached the bench with negligible opposition. Cardozo had not been Hoover’s first choice—he had intended to appoint Attorney General Mitchell to the slot and move Patrick Hurley to Justice, but Mitchell was lukewarm about the idea. Hoover had been impressed by Cardozo’s intellect and impressive service on the Wickersham Committee and felt he could be easily confirmed. Roberts and Cardozo both had noncontroversial stints on the Supreme Court and joined the ranks of distinguished jurists.39
NINE
Holding a Finger in the Dike
President Hoover had hoped October 29, 1929, would mark the end of America’s economic dive. Instead, it was only the beginning. The upswing he expected in the spring of 1930 did not occur, and during the summer conditions worsened. Ahead lay a bitter winter. On the heels of the stock calamity came unemployment, and along with it declining production and deflation. The market, which had once seemed to have no top, now appeared bottomless. In September 1929 the Dow Average reached 381.7. By the end of October it staggered down to 247.6; by April it edged upward to 257.3; then it was down to 196.1 by January 1930 and finally to 116.6 in January 1932, the last full year of Hoover’s term. At their lowest point, stocks declined to 85 in late 1932.1
As the Depression deepened, many realized that hard times would last longer than the 1921–22 recession had. Because the market slump was paralleled by soaring unemployment, which would leap to almost 25 percent before Hoover left office, many people believed the crash caused the unemployment and other symptoms of the Depression, and they blamed the Hoover administration for all the hardship. The president was chastised for his earlier optimistic efforts to buoy the spirits of the people, and the press grew nasty and increasingly personal. As the fall 1930 congressional elections approached, GOP political prospects dimmed.
Hunger, if not starvation, became commonplace throughout the nation. Despite the condemnation of the president’s response, Hoover’s critics were still not united behind any program to address the hunger crisis. The chief political issue seemed to be whether relief should be funneled through private charities and the states, or from the top down from the federal level. The chief executive pointed out that the private and local levels had an existing efficient infrastructure and more experience, all of which could be mobilized rapidly and distributed equitably and would skim less overhead than an unwieldy, quickly cobbled-together federal bureaucracy.2
Hoover had demonstrated this local approach in his work with the CRB, the ARA, and the Food Administration. Traditionally, the distribution of food, clothing, and shelter for those in need had been conducted by churches, temples, the Red Cross, Community Chests, the Salvation Army, and numerous other groups specifically designed to aid the needy on the basis of public donations. The chief executive felt he could stimulate their work without usurping it. The President’s Emergency Committee for Employment (PECE), from October 1930 to its end in April 1931, made significant improvements by complementing the work of private charities. For example, charitable spending in New York rose from $9 million in 1930 to $58 million in 1932. Private charities exclusive of the government-inspired philanthropies expanded their donations from $4.5 million to $21 million over the same span. Direct relief was not the only item on Hoover’s agenda, only the most urgent one. He planned to wage the war against the Depression along all fronts but did not intend to indulge in overkill, whether rhetorical, which he considered demagogic, or financial, because resources were finite.3
By the fall of 1930, unemployment had increased to about 5 million, leaving one in every nine workers jobless. Hoover responded by appointing Colonel Arthur Woods as chairman of PECE. Following the war, Woods, a former New York City police commissioner, had helped place returning veterans in jobs and had played a major role in orchestrating the 1921 Conference on Unemployment. Thirty leading citizens comprised an advisory committee, and some three thousand local committees were created to assess the needs of their communities. Woods was thoroughly dedicated. On a single day, he telephoned the governors of forty-five states and ascertained their needs for the coming winter, as well as resources on hand. His preliminary survey showed the highest pockets of unemployment existed in the industrial cities of the Northeast and Midwest. Woods appointed divisional representatives who traveled within their geographical regions and reported on needs and efforts being made. The central office collected information, devised strategies for stretching out employment, and assisted local authorities in planning distribution of relief. The local committees also undertook a house-by-house survey of necessities and local resources available. The vast majority of governors declined federal assistance. The local reports showed that many companies were complying with the president’s requests. They promised to rehire when the economy improved, and they offered loans, grants, and free or subsidized shelter when available. There were many contributions in kind, including food, clothing, fuel, medical care, rent, and loans. This aid mitigated ill feeling against employers. The Woods committee encouraged small local projects as well as larger ones. It launched a program to inspire Americans to make home repairs and asked the states to approve some $450 million in state bonds that would create construction jobs. Woods requested a congressional appropriation of $750 million in grants to the states, though Hoover, who felt Congress would reject this enormous sum, reduced it to $150 million, and Congress cut it even further to $117 million. At this point, unemployment was still around the level of the Harding recession. Walter S. Gifford, president of American Telephone and Telegraph, resigned from the committee, discouraged by the lack of progress. He was succeeded in the spring of 1930 by his able vice chairman, Fred Croxton. In August 1931 PECE’s responsibility and a portion of its personnel were transferred to the President’s Organization on Unemployment Relief (POUR) under Gifford’s leadership. Gifford appointed a committee of one hundred prominent leaders of business, labor, and industry to his advisory board. Subcommittees under Fred Croxton, Owen D. Young, and James R. Garfield planned expansion and coordination of relief.4
As the Depression swirled downward like a whirlpool, Hoover might have felt the world settling upon his shoulders. Legend holds that one group of ancient Greeks believed the earth rested
on the back of an ancient turtle. Once, when someone had the audacity to ask what lay beneath the turtle, a precocious wit responded that it was “turtles all the way down.” As the Depression worsened, it might have been appropriate for the chief executive to fear it was “Hoover all the way down.” The president had numerous critics in Congress, but until the election year 1932 approached, there was no interconnected, positive program in opposition to his plans for combating the economic downslide. Initially, the president preferred to handle direct relief at the local and state levels. Local officials knew the needs of their people best. Decentralization avoided adding another layer of bureaucracy between the people and the benefits; it was swifter and more efficient. In addition, it was less likely to be politicized and to generate the type of scandals that had occurred under the Harding administration. Hoover did not believe in trading relief checks or federal jobs for votes and feared that this would happen on a massive scale on the federal level, as it had already happened in some large cities. Nor did he believe that federal aid would be distributed impartially. On February 5, 1930, he praised a group of Community Chest fund-raisers he had brought to the White House and lauded their selflessness. “Their great purpose,” he said, “is the handling with large vision of the obligations of a whole city to its less fortunate residents.” The president said the Community Chest provided skill in fund-raising as well as freedom from prejudice.5 The administration sent out cabinet officers and the president himself to participate in fund-raising for private charities. These drives raised hundreds of millions of dollars and continued throughout Hoover’s tenure. The National Association of Community Chests and Councils ended its 1931 drive on Thanksgiving Day with 131 cities having raised $45,694,387.6
Despite reservations, Hoover was willing to have the federal government step in and convert from loans to direct grants if his grassroots approach proved insufficient. But he wanted to try decentralization first, to determine whether or not it was practical. He considered decentralized government democratic. He did not want to increase his own power or that of the executive branch at the expense of state and local governments and individual citizens. His experience in relief efforts had demonstrated that decentralization worked well. Moreover, as a profound idealist reared in a Quaker environment, where all men were literally considered brothers, and having lived worldwide and immersed himself in American history, the president believed that the American people were the most generous people in the world and would take care of their neighbors. Hoover’s reputation as a humanitarian sprang from the moral concept that giving not only helps the needy; it ennobles the giver. “A cold and distant charity which puts out its sympathy only through the tax collector yields a very meager dole of unloving and perfunctory sympathy,” he wrote.7 Federal money, on the contrary, meant federal control and some inevitable corruption. Hoover wanted to avoid that if possible. If it became necessary, it would be at best a necessary evil. In 1930 he did not know whether such a contingency would materialize. But his plan was to start with the least drastic remedy and escalate until the problem was solved. “This is not an issue as to whether people shall go hungry or cold in the United States,” he explained. “It is solely a question of the best method by which hunger and cold should be prevented.”8 Hoover’s fears about public welfare contained at least elements of truth. As historian David Kennedy points out, “He knew that once government aid began, it was likely to create dependency.” For any type of government program or contribution, the demand inevitably exceeds the supply, because the demand is infinite.9 In the twenty-first century, with an extremely widened safety net that would awe Americans of the 1930s, people still go hungry in America—and worldwide.
The subsequent failures of the New Deal to end the Depression and of twenty-first-century administrations to end the Great Recession have made Hoover a prophet. His empathy for human suffering was clear, but for Hoover, decentralization was more than a matter of ideology; it was common sense. Further, he was dubious about the proposition that a government solution existed for every problem. “Economic depression cannot be cured by legislative action or executive pronouncement,” he said. “Economic wounds must be healed by the actions of the cells of the economic body—the products and consumers themselves.” Still, Hoover ultimately became the most activist president in hard times until 1932 because he felt he had no choice. He said on February 3, 1931, that if state and local resources proved insufficient, “I am willing to pledge myself . . . I will ask the aid of every resource of the federal government.”10 Secretary of State Henry L. Stimson said that Hoover planned to summon a special session of Congress to provide for relief in 1931 if state and local resources proved inadequate. The president himself stated unequivocally that “I am willing to pledge myself that if the time should ever come that the voluntary agencies of the country together with the state and local governments are unable to find resources with which to prevent hunger and suffering in my country, I will ask the aid of every resource of the Federal government because I would no more see starvation amongst our countrymen than would any Senator or Congressman.”11
Hoover employed every weapon in his fiscal and humanitarian arsenal to combat the Depression, in a multifaceted approach. The Fed, now in agreement with the president on fiscal policy, slashed its rediscount rate during the stock decline, yet fear kept both borrowers and lenders at bay. Both preferred to retain their liquidity rather than take even moderate risks. Near the beginning of 1930 Hoover signed a $160 million tax cut designed to stimulate spending shortly before Christmas. The reductions were highly graduated. Taxes on small incomes were sliced by 66 percent; those on larger incomes, 4 percent; and corporate income levies were pared down by 8.33 percent. Hoover cut taxes while still balancing his initial fiscal budget, including higher appropriations for the Departments of Labor, Commerce, and Agriculture. He reduced appropriations for the army and hoped to save money on the navy by commencing implementation of the London Naval Treaty, then under negotiation. He hoped to redirect funds saved by arms reductions into social and economic programs that would spur domestic growth.12 Throughout about thirteen years of the New Deal that succeeded Hoover, there was not a single tax reduction intended to stimulate production, commerce, and consumption, although there were several tax increases, whereas billions were devoted to public works.
Unemployment quickly became the president’s primary concern. He confessed that “the Presidency is primarily an employment agency to find jobs for 12,000,000 people.” As fall and winter approached, the president stepped up a part of his relief package. A major public works program was presented that would not only employ Americans, but result in an enormous array of highways, public buildings, dams, waterways, parks, and beautification projects. Placed where the work was most badly needed, without political considerations, the programs were intended to remunerate the government over time, when possible. For example, farmers would receive loans to build grain elevators in order to sell their produce at peak market value, then repay a part of the loan from their profits. In addition, compensation flowed back to federal coffers from toll roads and bridges, dams that generated and indirectly sold electricity, and buildings that were rented. Some of the projects that were not directly remunerative simply delivered better services to the people, the recreation, and the beautification of Washington, DC.
The federal government provided the impetus, the expertise, and the leadership for these projects, yet in contrast to later federal reactions to economic downturns, Hoover considered the national government a partner with the states and with private enterprise in a coordinated, mutually beneficial effort. The federal government, for example, made obtaining credit easier, to facilitate home construction and business expansion, and the Commerce Department continued to disseminate statistical data as it had done during the 1920s. Hoover still believed that one of the lessons learned from the earlier downturns was that the construction industry was the balance wheel of the economy. While th
e public works program was masterminded by the president, its implementation relied upon a cabinet committee chaired by Commerce Secretary Robert Lamont and secretaries Davis, Wilbur, Hurley, Hyde, and Eugene Meyer, chair of the Federal Reserve Board. Hoover gave only general directions and left the details of the work to the committee. Beginning in 1930, Hoover initiated the largest public works program in history. The year following the crash, despite some trepidation, construction work in all sectors totaled more than $1 billion above normal. Federal construction alone amounted to $2.4 billion during Hoover’s administration. “I do not accept the fatalistic view that the discovery of the means to restrain destructive tendencies is beyond the genius of our people,” the president said.13
In the longer run, Hoover planned a systematic approach to building projects that lasted well into the future. The administration subsequently added thirty-seven thousand miles of highways and began to construct the Golden Gate Bridge at San Francisco. The federal highway budget doubled between 1930 and 1931 and the number of workers employed on highways nearly tripled by the end of the Hoover administration. Construction began on the scenic Skyline Drive in Shenandoah National Park in Virginia, maximizing hand labor. Workers were employed in national parks and forests in path and trail building, reforestation, and fire prevention. Hoover established federal land banks to reduce farm foreclosures and home loan discount banks to protect homeowners from foreclosure. To aid farmers, Hoover persuaded the Interstate Commerce Commission to order railroads to reduce rail rates for water and forage. More waterway work was done under Hoover than under any other president, a major theme in his public works program, generating jobs in every region. The integrated concept included navigation, flood control, generation of electricity, irrigation, and an interior barge canal system providing cheap transportation for bulk commodities. The federal government had already established a Division of Construction within the Department of Commerce. However, the president often was ahead of Congress in his attempts to increase federal authority to combat the Depression. When Hoover presented legislation to consolidate all federal public works in a Department of Public Works with cabinet status, Congress defeated the measure. By late 1931 Hoover was only beginning to hurtle down the tracks. His head bubbled with additional ideas for thwarting the hard edges of the Depression. Yet many of the more ambitious measures required congressional approval, including greater appropriations, and doubtless some unbalanced budgets, anathema to conventional wisdom. The Founding Fathers built a democracy more adept at preventing abuses than at moving with dispatch during emergencies. It was encumbered with checks and balances and was not built for speed, as Hoover quickly learned.14