Hoover Sings His Own Praises By Bryan Caplan

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.

