The Depression entered a second phase in the spring of 1931
when the collapse of Austria’s
foremost bank, Kreditanstalt, sent shock waves through Europe, and, once again,
Hoover took
command. Alarmed that extremists might seize power in Germany, he
hazarded bold initiatives: a moratorium on World War I debts payment and
approval of the charter of the Reconstruction Finance Corporation (RFC), an
unparalleled intervention into the market by the federal government in
peacetime. To supplement the RFC, he advocated legislation to undergird
mortgages and to liberalize requirements for the issue of Federal Reserve
notes. Today these measures seem modest, but, at the time, Business Week called the law to ease credit “perhaps the most
powerful dose of monetary medicine that has ever been applied to the
strengthening of the banking system in a similar period.”
So conspicuous was the activism of a man reputed to be a
do-nothing president that some historians perceive Hoover to be the progenitor of the New Deal.
But that view is absurd. Even during the first two phases of the Depression, Hoover exhibited an
almost pathological fear of granting federal relief to the impoverished. By the
time the Depression had entered its third phase--the banking crisis of his last
weeks in office--he had become a prisoner of economic orthodoxy, obsessed with
balancing the budget.
Indeed, Hoover
does resemble Bush in a number of regrettable ways. He was stubborn and often
myopic. He rejected counsel that did not accord with his misconceptions, and he
deceived himself that conditions were far better than they were. He agreed to a
massive federal program only after a long period of resistance, and he
appointed men to administer it who had small sympathy for government intrusion
into the private sector. He favored aid to financial institutions, but not to
the victims of hard times. He was nonplused about how to stanch the
hemorrhaging when the financial illness became an epidemic. Furthermore, he
failed to inspirit the nation. Gutzon Borglum, the sculptor of Mount Rushmore,
said, “If you put a rose in Hoover’s
hand, it would wilt.” Even revisionist historians who view Hoover kindly concede that his was a failed
presidency.
Still, it’s unfortunate that commentators and politicians are
employing “Hoover”
as an epithet for inaction. His White House tribulations consumed only four of
more than 90 years studded with extraordinary achievements--as Great Engineer,
as World War I Food Czar, and, above all, as Great Humanitarian. During the
Great War, Hoover heroically crossed mine-strewn
waters from Britain
to the Continent on errands of mercy countless times. While Secretary of
Commerce in the 1920s, he sped relief to famine sufferers in Soviet Russia
despite his loathing of bolshevism. “In the past year,” Maxim Gorki wrote him,
“you have saved from death three and one-half million children, five and
one-half million adults.”
Far from being a right-wing zealot, Hoover won the admiration of progressives for
his advanced views. In the Wilson era, Supreme
Court Justice Louis Brandeis called him “the biggest figure injected into Washington by the war,” and John Maynard Keynes,
reflecting on the Versailles conference,
concluded that Hoover was “the only man who
emerged from the ordeal of Paris
with an enhanced reputation.” As the 1920 election approached, Franklin D.
Roosevelt said of him, “He is certainly a wonder, and I wish we could make him
President of the United
States. There would not be a better one.”