Who is President Herbert Hoover | 31st United States President | The Great Depression

Herbert Clark Hoover (August 10, 1874 - October 20, 1964), the thirty-first President of the United States (1929-1933), was a world-famous mining engineer and humanitarian administrator. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted economic modernization. In the presidential election of 1928 Hoover easily won the Republican nomination. The nation was prosperous and optimistic, leading to a landslide for Hoover over the Democrat Al Smith, a Catholic whose religion was distrusted by many. 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 volunteer efforts and government action, none of which produced economic recovery during his term. 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. Other electoral liabilities were Hoover's lack of charisma in relating to voters, and his poor skills in working with politicians. Source

The economy was put to the test with the onset of the Great Depression in the United States in 1929. It is not accurate, as was routinely claimed by his Democratic opponents, that Hoover "did nothing" in the face of the crisis, nor that he was a believer in laissez-faire policies. He explicitly denounced laissez-faire in his 1922 book American Individualism, took an active pro-regulation stance as Commerce Secretary, and saw tariff and agricultural support bills through Congress. In his memoirs he recalled his rejection of Treasury Secretary Mellon's suggested "leave-it-alone" approach. However, Hoover opposed direct relief from the federal government, seeking instead to organize voluntary measures and encourage state and local government responses. Except for accelerating public works expenditures, Hoover largely shunned legislative relief proposals until late in his term. While his efforts were small in comparison to that of the Roosevelt administration, they exceeded that of any federal administration before him. In February, Hoover announced—prematurely—that the preliminary shock had passed and that employment was on the mend.

Together government and business actually spent more in the first half of 1930 than the previous year. Frightened consumers cut back their expenditures by ten percent. A severe drought ravaged the agricultural heartland beginning in the summer of 1930. The combination of these factors caused a downward spiral, as earnings fell, smaller banks collapsed, and mortgages went unpaid. Hoover's hold-the-line policy in wages lasted little more than a year. Unemployment soared from five million in 1930 to over eleven million in 1931. A sharp recession had become the Great Depression.

In 1930, although he had opposed its passage, Hoover signed the Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 dutiable items, despite the protests of economists. Major trading partners, like Canada, immediately retaliated. The tariff, combined with the 1932 Revenue Act, which hiked taxes and fees across the board, is often blamed for deepening the depression. It brought on a wave of retaliation and choked world trade.

Also, between 1930-1932, some 5,100 banks alone in those two years failed as panicked depositors withdrew their funds. Those losses amounted to $3.2 billion. These are considered by some to be Hoover's biggest political blunders (although Hoover himself, years later, said that he felt his only real mistake was to not immediately repudiate the foreign debt, which would have relieved the financial burden on much of Europe early on during the worldwide economic crisis, and thus spurred more trade with the United States). 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. Though he was not averse to taking action which he considered was in the public good, such as regulating radio broadcasting and aviation, he preferred a voluntary, non-government approach to economic recovery. As if to prove the president's point, the First Lady exhorted her forces to service. She pressed the more than 250,000 Girl Scouts nationwide to join in relief work and helped to promulgate the Rapidan Plan in 1931 to achieve that end. As the First Lady used the radio, she rallied support for volunteerism, encouraging groups such as the 4-H clubs to devote themselves to local relief. Behind the scenes, she mobilized informal networks of friends and women's organizations and ensured that appeals to the White House found their way to local sources of aid.

In June 1931, to deal with a very serious banking collapse in Vienna that threatened to cause a worldwide financial meltdown, Hoover issued the Hoover Moratorium that called for a one-year halt in reparations payments by Germany to France and in the payment of Allied war debts to the United States. The Hoover Moratorium had the effect of temporarily stopping the banking collapse in Europe. In June 1932, a conference canceled all reparations payments by Germany. See, depression.

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