President Herbert Hoover Wants “National Results” in His First Measure to Combat the Depression

The stock market crash of 1929 marked the end of six years of unparalleled prosperity for most sectors of the American economy. The “crash” peaked on October 29, at which point stock prices had plummeted 40% from September values and banks were calling in loans. Substantial unemployment immediately followed.

The snowballing crisis resulted in calls for the federal government to do something, and President Hoover responded on November 15: “I have during the past week engaged in numerous conferences with important business leaders and public officials with a view to the coordination of business and governmental agencies in concerted action for continued business progress.”

A week later, another meeting with businessmen resulted in an agreement that industrial expansion would be the remedy for the crisis, and the President secured a promise to hold the line on wages. From the nation’s utilities, he won commitments of $1.8 billion in new construction and repairs for 1930. Railroad executives made a similar pledge. Hoover saw a role for the U.S. government in “righting the ship” to the extent that he ordered federal departments to speed up construction projects. He believed that the states would play an important part in the effort and determined to encourage them to undertake a portion of the needed industrial expenditures, as well as to enlist their cooperation with his own program.

On November 23, he sent the governors a telegram, saying “With a view to giving strength to the present economic situation…the Federal Government will exert itself to the utmost…I should like to feel that I have the cooperation of yourself and the municipal, county and other local officials in the same direction. It would be helpful if road, street, public building and other construction of this type could be speeded up…I am asking Secretary Lamont of the Department of Commerce to take in hand the detailed measures of cooperation with you…” The telegram’s complete text is in the Hoover Library. John Erickson, Governor of Montana, was one of the recipients of this telegram, and he responded positively. Hoover was grateful and hopeful.

Herbert Hoover autograph on a Typed Letter Signed on White House letterhead, Washington, November 24, 1929, to Erickson, whom he addresses as “Dear Mr. Governor”, thanking him for agreeing to cooperate with his plan. “I have received your response to my telegram of November 23. I deeply appreciate the fine spirit of cooperation which you have extended in this national effort. I am arranging for Secretary Lamont to keep you informed as to the progress in other states in order that you may be assured of the unity of action necessary for national results.”

This letter is thus part of Hoover’s first measure to combat the Depression, the event that consumed his presidency. President Hoover is criticized for having done nothing to fight the Depression, but, as we see here, that criticism is unfair, as he took a number of measures. However, he felt there were limits to how much the federal government should do, and his measures proved to be inadequate. In the meantime, as the Depression deepened and dispair spread, he insisted optimistically that prosperity was just around the corner, sometimes adding the prediction of an upturn by a given date, and then another date, and then another. By 1932, the nation’s economy was essentially on life support, and most voters wanted someone with fresh ideas in the White House.