President Hoover

President Herbert Hoover's background

Who exactly was this man that received so much criticism as president?

• Herbert Clark Hoover was born in 1874 in West Branch, Iowa.

• In 1895, Hoover graduated from Stanford University.

• He went on to work as a mining engineer in London, where he acquired his fortune.

• Soon after the First World War outbreak, Hoover became head of the Commission of Wartime Relief in Belgium.

• As a result of his success, Hoover was appointed Director of the American Relief Administration by President Wilson when the United States joined WWI in 1917.

• Hoover continued to help with food relief in European nations desperately in need after the war.

• Hoover first attempted to gain the Republican nomination for the presidency in 1920 but was unsuccessful.

• He served as Secretary of Commerce for President Warren Harding and Calvin Coolidge.

• He won a landslide victory in the 1928 presidential election with 58.2% of the vote against the Democrat candidate Alfred Smith and became president on 4 March 1929.

Fig. 1 - Portrait of Herbert Clark Hoover, 31st President of the United States (4 March 1929 - 4 March 1933)

Herbert Hoover's political philosophy

In the 1920s, three Republican presidents held office in America, of which Hoover was the third. Like Warren Harding and Calvin Coolidge, who came before him, Herbert Hoover was committed to conservatism.

Hoover focused on the economic aspects of conservatism, as he was quite progressive in his social ideas. A fundamental principle of conservatism is laissez-faire capitalism, which means that businesses are free to expand without government restrictions. Laissez-faire was not only applied to businesses; it also promoted limited government interference in general.

Hoover also believed in what he termed rugged individualism.

Hoover embraced the idea that hard work paid off; he believed that people could overcome their problems, and government intervention would encourage reliance and restrict people's freedom.

Hoover believed that the government had a duty of care in public works, defence and foreign policy but did not agree that it was the federal government's job to alleviate homelessness, hunger or unemployment – this was a job for charities and other organisations. This belief is called voluntarism.

President Hoover's policies

At the start of his presidency, Hoover was considered a progressive politician and initially focused on wide-ranging reforms in economic, social, and even environmental fields.

When the stock market crashed in 1929, Hoover saw it as a temporary blip in America’s economic affairs. Immediately after the crash, Hoover stated that

Even when the Depression persisted, he remained reluctant to act and, in 1931, blamed setbacks from abroad for the continuing crisis. From what we know about Hoover, we know he would not want to intervene in the economy. So, did he eventually help the American people, or did he stick to his principles?

President Hoover and the Great Depression

Initially, President Hoover did very little to address the Depression, which did change at the end of his presidency. Still, his policies tackled the effects of the crisis and not the cause, and this allowed the Depression to worsen. His response is considered a huge failure.

1929

Although the government did not directly intervene at this point, this did not mean Hoover did nothing.

In November 1929, Hoover met with leaders of America's largest businesses. Hoover tried to persuade them to put in measures that would reduce unemployment, maintain wages, and invest in new projects to stimulate the economy. What was his thought behind this?

1. Hoover believed that businesses maintaining employment levels would restore confidence in the American economy.

2. Hoover believed maintaining wages and employment levels would retain purchasing power and re-stimulate the economy.

3. Hoover thought that these measures would lead to increased inflation and increased demand levels.

Hoover also negotiated a $160 million tax cut and committed more federal money to public works programmes.

In an attempt to help farmers, the Agricultural Marketing Act 1929 was passed. Hoover established the Federal Farm Board to help farmers buy, sell, and store agricultural surpluses. It also offered money to farm organisations, but not to farmers themselves, as Hoover did not want them to become dependent on it. The board was rather unsuccessful, and Hoover failed at the first initiative he created.

Another failure came as the investment in American industry and the demand for goods had begun to fall, leading American businesses to lay people off. Hoover's decision to encourage rather than enforce businesses to maintain employment and wages backfired and effectively led to mass unemployment.

1930

At this point, Hoover was praised for his efforts; in fact, the New York Times wrote:

Business and government spending was increasing, but unemployment also continued to rise. In an attempt to tackle this, Hoover created the President’s Emergency Committee for Employment (PECE) in October 1930 to provide welfare to US citizens who had lost their jobs.

The PECE coordinated state and local relief programmes rather than giving federal assistance, limiting its success as state and local governments lacked finances. In keeping with Hoover's belief in voluntarism, he also convinced Congress to allow agriculture surpluses to be transferred to the Red Cross and distributed by various relief agencies.

One of Hoover’s most infamous responses to the Great Depression was the protectionist Smoot Hawley Tariff, introduced on 13 March 1930. Hoover placed high tariffs on imports to America to protect American labour, business, and farmers. What were the consequences?

• Over 25 nations responded by placing tariffs on American goods.

• This was catastrophic for the United States, its manufacturers and producers.

• These tariffs, and their retaliation, played a key part in the collapse of world trade.

1931

In August 1931, the PECE was reorganised as the President’s Organisation on Unemployment Relief (POUR), which continued to coordinate other relief efforts, and pushed for donations from wealthy people to help the people, again refusing to provide direct funding.

Hoover was subject to much criticism, focusing on public works funding seen as a waste of money and his refusal to give federal aid seen as cruel. In late 1931, Hoover switched tactics.

1932

What did Hoover's new approach include?

1. On 22 January 1932, Hoover established The Reconstruction Finance Corporation (RFC) to provide financial aid to businesses in urgent need. This did stabilise some businesses but the aid was not large enough to give significant relief.

2. In July 1932, the Emergency Relief Construction Act gave the RFC power to lend money to states and public works. Public works projects did not really take off until after Hoover's presidency had ended.

3. The Federal Home Loan Bank System was developed to provide banks with funds to be used for mortgages, and to make homeownership and home security more achievable; these banks were given $125million.

1933

Hoover lost the 1932 election to Democrat candidate Franklin Roosevelt, who brought in the 'New Deal', which included programs Hoover had advocated in his final months as President, but Congress refused to enact his policies. For example, the Emergency Banking Relief Act introduced by Roosevelt in the first days of his presidency was very similar to one proposed by Hoover.

Life during Hoover's presidency

Life in America during the Great Depression was miserable and Hoover's policies did not do much to remedy this. Below we will look at some of Hoover's impacts on the American people.

Social impacts	Economic impacts
A huge proportion of the population was living in poverty, with millions also at risk of starvation.	Between 1930 and 1933, around 9,000 banks failed.
Unemployment was estimated to be around 25% by 1933.	Industrial production between 1929 and 1933 fell by over 40%.
Average income dropped by 40% between 1929 and 1933.	The lack of tax income led to many towns and cities going bankrupt. These towns and cities were forced to slash their employees' salaries, like teachers and police, or make them redundant.
African Americans were particularly affected: In areas where agriculture was the main source of income, the unemployment rate for African American men was over 50% by 1932. White Americans were chosen for available jobs due to racial discrimination. Even when African Americans could find work, their wages were lower than their white colleagues.	Between 1929 and 1933, Gross Domestic Product (GDP) declined by around 30%. Gross Domestic Product The total value of the goods and services produced in a country
Thousands of people were evicted from their homes. Many Americans had to live in self-constructed corrugated makeshift housing structures in shanty towns, popularly coined as Hoovervilles. See right -->	Hoovervilles in Manhattan, Wikimedia Commons.

Herbert Hoover accomplishments

Before we evaluate Hoover's failure to tackle the Depression effectively, let's acknowledge some of his achievements:

1. Hoover did substantial work on prison reform, tackling overcrowding, and offering more educational opportunities for those in prison.

2. Before the Depression had painted him as a cruel man, he had a reputation as a successful humanitarian due to his relief work.

3. In 1930, he convened the first White House Conference on Child Health and Protection, bringing children's issues into the discussion.

His achievements were overshadowed by his failure to alleviate the damages of the Depression – the key reason for this was that he tackled the effects, not the causes. Hoover's response exacerbated the economic crisis, so he was heavily blamed for the Depression.