Murray Rothbard opened my eyes to the real story about Herbert Hoover,
but his quotation splicing makes me wince. In my next two posts, I'm going to dissect one of Hoover's last major speeches before the 1932 election - his
November 5, 1932 address in St. Paul. In this speech, Hoover gives two long lists: The first about "
our long-view policies to cement that recovery and to stimulate progress in our country for the future", the second about "
the measures, lack of measures, or destructive measures proposed by our opponents."
In this post, I'm going to review all 21 items on Hoover's list of what he did right; in the next, I'll turn to all 19 items on his list of what his opponents did wrong. Ready? OK, here are the 21 policies Hoover wanted the whole country to know about:
1. The revision of the tariff:
By this act we gave protection to our agriculture from a world
demoralization which would have been infinitely worse than anything we
have suffered, and we prevented unemployment of millions of workmen.
2. Extension of the authority of the Tariff Commission...
by
which the adjustments can be made to correct inequities in the tariff,
and to make changes to meet economic tides and emergencies, thereby
avoiding the national disturbance of general revision of the tariff
with all its greed and logrolling...
3. Informal pressure to maintain wages and control strikes:
At the outset of the depression we brought about an understanding
between employers and employees that wages should be maintained. They
were maintained until the cost of living had decreased and the profits
had practically vanished. They are now the highest real wages in the
world.
With the concurrent agreement of labor leaders at that
time to minimize strikes, we have had a degree of social stability
hitherto unknown in the history of any depression in our country. We
have not once in this depression had Federal troops under arms to quell
conflicts which is the first time in 15 depressions over a century...
4. Informal pressure to "share the work":
An agreement to a spread of work where
employers were compelled to reduce production was brought about in
order that none might be deprived of all their living and all might
participate in the existing jobs and thus give real aid to millions of
families...
5. "Mobilization" of private charity and local and state government relief.
6. An increase in Federal construction spending (plus an attempt to claim credit for other construction spending):
By the
expansion of State, municipal, and private construction work as an aid
to employment, and by the development of an enlarged program of Federal
construction which has been maintained at the rate of $600 million a
year throughout the depression, we have given support to hundreds of
thousands of families.
7. Debt renegotiations with Germany:
By the negotiation of the German
moratorium and the standstill agreements upon external debts of that
country, we saved their people from a collapse that would have set a
prairie fire and possibly have involved the whole of our civilization.
8. Creation of the National Credit Association:
We created the National Credit Association by cooperation of the
bankers of the country, with a capital of $500 million which prevented
the failure of a thousand banks with all the tragedies to their
depositors and their borrowers.
9. Trying to balance the budget by cutting "ordinary operating expenses" of the Federal government and raising taxes (with the top rate rising from 25% to 63%, though Hoover doesn't specify):
By drastic reduction in the
ordinary operating expenses of the Federal Government, together with
the increasing of the revenues in the year 1932, we contributed to
balancing the Federal budget and thus held impregnable the credit of
the United States.
10. Creation of the RFC:
We created the Reconstruction Finance
Corporation, originally with $2 billion of resources, in order that,
having maintained national credit, we should thrust the full resources
of public credit behind private credit of the country and thus
reestablish and maintain private enterprise in an unassailable
position; that with this backing of the Federal credit, acting through
existing institutions, we might protect depositors in savings banks,
insurance policyholders, both lenders and borrowers in building and
loan associations...
11. Using the RFC to strengthen Federal land banks and other lenders:
In
addition to strengthening the capital of the Federal land banks by $125
million we have, through the Reconstruction Corporation, made large
loans to mortgage associations for the same purpose, and lately we have
organized all lending agencies into cooperative action to give the
farmer who wants to make a fight for his home a chance to hold it from
foreclosure.
12. Extending authority under the Federal Reserve Act to protect the gold standard:
We extended authorities under the Federal
Reserve Act to protect beyond all question the gold standard of the
United States and at the same time expand the credit in counteraction
to the strangulation due to hoarding and foreign withdrawals of gold.
13. Creation of home loan discount banks:
We created the home loan discount banks with direct and indirect
resources of several hundred millions, also acting through existing
institutions in such fashion as to mobilize the resources of building
and loan associations and savings banks and other institutions...
14. Using the RFC to help depositors in closed banks:
We secured further authorities
to the Reconstruction Corporation to assist in the earlier liquidation
of deposits in closed banks in order that we might relieve distress to
millions of depositors...
15. Using the RFC to subsidize state-level relief:
We secured increased authorities to the
Reconstruction Corporation to loan up to $300 million to the States
whose resources had been exhausted, to enable them to extend full
relief to distress, and to prevent any hunger and cold in the United
States over this winter.
16. Using the RFC to fund public works (which are going to pay for themselves!):
We increased the resources to the
Reconstruction Corporation by a further $1,500 million for the
undertaking of great public works which otherwise would have been
delayed awaiting finance, due to the stringency of credit. These works
are of a character which by their own earnings will enable disposal of
the repayment of these loans without charge upon the taxpayer.
17. Creation of a new system of agricultural banks:
We have erected a new system of agricultural credit banks with indirect
resources of $300 million to reinforce the work of the intermediate
credit banks and our other financing institutions in the financing of
production and livestock loans to farmers...
18. Using the RFC to make agricultural commodity loans:
We have extended the
authority to the Reconstruction Corporation to make loans for financing
the normal movement of agricultural commodities to markets both at home
and abroad.
19. "Mobilization" of banking, industry, business, labor, and agriculture:
We have systematically mobilized banking and
industry and business of the country with the cooperation of labor and
agricultural leaders to attack the depression on every front...
20. Developing a worldwide economic conference:
...with view to
relieving pressure upon us from foreign countries, to increase their
stability, to deal with the problems of silver, and to prevent
recurrence of these calamities if it can be humanly done.
21. Disarmament.
We
have given American leadership in development of drastic reductions of
armament in order to reduce our own expenditures by $200 million a year
and to increase the financial stability of foreign nations and, above
all, to relieve the world of fear and political friction.
Now I ask you: Out of Hoover's full list of 21 policy achievements, how many remotely resemble the "do-nothing" "laissez-faire" stereotype of the history textbooks? #12, where he says
he tried to protect the gold standard, and #21 -
disarmament.* You might also count part of #5, where he talks about mobilizing private charity (in the same breath as local and state government relief), and parts of #9, where he brags about fighting to balance the budget (and only hinting at his massive tax increase).
In short, out of 21 measures, we have two matches with Hoover's stereotype, plus two partial matches. The remaining 17 measures directly contradict the stereotype. If liberal historians focused on policy instead of party, they would cast Hoover as John the Baptist to FDR's Jesus - not Satan.
* Although Rothbard must have supported Hoover's disarmament policies, America's Great Depression never even mentions the word.
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