Splendid Isolation (Part Two)

CCLXXV

Herbert Hoover (1874 – 1964) was the 31^st President of the United States (1929 – 1933). A brilliant thinker and administrator he nonetheless found himself tied and bound by the Great Depression.  Thinking the economy would correct itself naturally, he waited two years before taking decisive economic action --- and then moved too slowly to effect change

People reduced to sleeping in the streets used “Hoover blankets” --- newspaper --- to cover themselves at night. Turned-out pockets were called “Hoover flags”

America’s President in 1929 was Herbert Hoover, and in a crisis a more competent Chief Executive it would seemingly be hard to find. Hoover had been a mining engineer in China and other places overseas; he understood the world beyond the U.S. borders.  He had been Director of the American Relief Administration, which provided food, aid, and recovery funds and materials to shattered Europe in the aftermath of World War I (General George Marshall’s dynamic reconstruction plan for post-WWII Europe owed much to Hoover’s example). He had been Secretary of Commerce from 1921 to 1928, the halcyon years of the Roaring Twenties.  

Herbert Hoover did not cause the Great Depression but his Administration’s policies did nothing to ameliorate it for what seemed a very long time. Any help was local, and much of it was private. This might be the only food a man got all day long

And yet as President, Hoover lurched from plan to plan to combat the Great Depression. In 1930, under pressure from less wise Congressmen who believed they were protecting American manufacturers, he (much against advice and his own common sense) signed the Hawley-Smoot (or Smoot-Hawley) Tariff Act. It forced Americans to pay more for foreign goods. It also caused America’s trading partners to impose retaliatory tariffs, meaning that American manufacturers were shut out of foreign markets. And with the contraction of domestic markets too many sellers went bust. By 1931, U.S unemployment was hovering around 12%; it would continue to rise.

Throughout 1930 and 1931 Hoover steadfastly refused to involve the U.S. Government in market regulation. He was convinced that the economy would right itself given adequate time. He was probably right (in theory) but in the meantime people lived in “Hoovervilles” (shantytowns) and fixed their worn-out shoes with “Hoover Leather” (cardboard). He was profoundly troubled by conditions in the country, but he was not a dynamic speaker, offering only anodynes:  “I am convinced we have now passed the worst, and with continued unity of effort, we shall rapidly recover.”  

The problem was, Hoover convinced no one else.   

By 1932, U.S. unemployment was at 24%, and among African-Americans it was nearly 55%. 

In 1932, Hoover finally, decisively, stepped up. He created the Reconstruction Finance Corporation (RFC), which gave low-interest loans to small businesses, signed the Federal Home Loan Bank Act, which divided the country into twelve economic sectors and aided citizens in paying their mortgages, and passed the first Glass-Steagall Act (of 1932), which allowed the 12 economic sectors to manage the currency economy --- eventually, this system would be known as the Federal Reserve. Herbert Hoover had laid the foundations of the New Deal. His Presidential successor, Franklin Delano Roosevelt, would get all the credit.

The Iowan President realized sooner than most that farmers were in trouble in the late 1920s. His first Farm Relief Bill predated The Crash by four months