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Digital History ID 3436

 

When President Herbert Hoover took office, the unemployment rate was 4.4 percent. When he left office, it was 23.6 percent.

Hoover’s efforts in providing relief during and after World War I saved millions of Europeans, including Germans and Russians, from starvation and made him an international hero. Yet little more than a decade later, many of his own countrymen regarded him as a heartless brute who would provide federal aid for banks but not for hungry Americans.

Hoover was a proponent of "rugged individualism." But he also said, "The trouble with capitalism is capitalists; they're too damn greedy."

Born into a hardworking Quaker family in Iowa, Hoover was orphaned before he was ten years old and was sent west to live with relatives. He was admitted to the first class at Stanford University, mainly because the new institution needed students. He rose quickly from mine worker to engineer and entrepreneur. He was worth $4 million by the age of 40, and then devoted himself to public service. He was elected president at the age of 54.

In the speech that closed his successful 1928 presidential campaign, Hoover, a self-made millionaire, expressed his view that the American system was based on "rugged individualism" and "self-reliance." Government, which had assumed unprecedented economic powers during World War I, should, in his view, shrink back to its prewar size and avoid intervening with business.

During the early days of the Great Depression, Hoover launched the largest public works projects. Yet, he continued to believe that problems of poverty and unemployment were best left to "voluntary organization and community service." He feared that federal relief programs would undermine individual character by making recipients dependent on the government. He did not recognize that the sheer size of the nation's economic problems had made the concept of "rugged individualism" meaningless.

The president appealed to industry to keep wages high in order to maintain consumer purchasing power. Nevertheless, while businesses did maintain wages for skilled workers, it cut hours and wages for unskilled workers and installed restrictive hiring practices that made it more difficult for under qualified younger and older workers to get a job. By April 1, 1933, U.S. Steel did not have a single full-time employee.

Many Republicans believed that a protective tariff would rescue the economy by keeping out foreign goods. The Smoot-Hawley tariff, signed by Hoover in 1930, raised rates but provoked retaliation from Britain, Canada, France, Germany, and other traditional trading partners. The United States found it much more difficult to export its products overseas.

Hoover persuaded local and state governments to sharply increase public works spending. However, the practical effect was to exhaust state and local financial reserves, which led government, by 1933, to slash unemployment relief programs and to impose sales taxes to cover their deficits.

Hoover quickly developed a reputation as uncaring. He cut unemployment figures that reached his desk, eliminating those he thought were only temporarily jobless and not seriously looking for work. In June 1930, a delegation came to see him to request a federal public works program. Hoover responded to them by saying, "Gentlemen, you have come sixty days too late. The Depression is over." He insisted that "nobody is actually starving" and that "the hoboes...are better fed than they have ever been." He claimed that the vendors selling apples on street corners had "left their jobs for the more profitable one of selling apples."

By 1932, comedians told the story of Hoover asking the treasury secretary for a nickel so he could call a friend. Mellon replies, "Here, take a dime and call all your friends."

Hoover was a stubborn man who found it difficult to respond to the problems posed by the Depression. "There are some principles that cannot be compromised," Hoover remarked in 1936. "Either we shall have a society based upon ordered liberty and the initiative of the individual, or we shall have a planned society that means dictation no matter what you call it.... There is no half-way ground." He was convinced that the economy would fix itself.

Only toward the end of his term in office did he recognize that the Depression called for unprecedented governmental action. In 1932, he created the Reconstruction Finance Corporation (RFC) to help save the banking and railroad systems. Loans offered under the program funded public works projects and the first federally-supported housing projects. Originally intended to combat the Depression, the RFC lasted 21 years and was authorized to finance public works projects, provide loans to farmers and victims of natural disasters, and assist school districts. When it was abolished in 1953, it had dispersed $40.6 billion. Its functions were taken over by the Small Business Administration, the Commodity Credit Corporation, and other housing, community development, and agricultural assistance programs.

Herbert Hoover was not an insensitive man. He was the first president since Theodore Roosevelt to invite African American dinner guests to the White House. He said that the use of atomic bombs against Japan "revolts my soul." He played a key role in launching the United Nation's Children's Emergency Fund (UNICEF) and CARE. Despite his staunch anti-communism stand, he opposed U.S. involvement in Korea and Vietnam.

Nevertheless, his reputation was forever clouded by the Depression. A dam that was to carry Hoover's name was rechristened Boulder Dam. Washington's airfield, which was to be named for Hoover, was renamed National Airport.

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