Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs.
- Herbert Hoover, address at Des Moines, Iowa, October 4, 1932. — The Public Papers of the Presidents of the United States: Herbert Hoover, 1932–1933, p. 467. (courtesy of Wikiquote)
Just a month before he would be crushed at the polls by Franklin Roosevelt, President Herbert Hoover returned to Iowa, his proud home state, to deliver this speech in Des Moines, detailing actions his administration had taken over the previous 18 months to save the U.S. and world economies. Much of this action had been out of the glare of popular press. Hoover hoped that by explaining the difficult battles his administration fought behind the huge oak doors of boardrooms and international diplomacy, Americans might appreciate more what he had accomplished, and not focus so much on the fact that the Great Depression still ravaged millions of Americans.
In today’s anti-credit political environment, it is interesting to see one of our most ardent businessman presidents defend credit. In an irony unappreciated in today’s political discussions, much of the discussion in 1932 between Hoover and Roosevelt was over which one could better manage to get to and keep a balanced budget.
The full speech is available at The American Presidency Project housed at the University of California – Santa Barbara. Politics wonks, history fans, and economists will want to look at the full speech this line is ripped from, contextually bereft. Context, in this case, does not change the meaning, but deepens the complexity of the issues and time. Hoover bragged about keeping the U.S. on the gold standard, because so many contracts and mortgages were written to be payable in gold, and not currency. So leaving the gold standard could have enormous disrupting influence on credit.
The first of these perils was the steady strangulation of credit through the removal of $3 billions of gold and currency by foreign drains and by the hoarding of our own citizens from the channels of our commerce and business. And let me remind you that credit is the lifeblood of business, the lifeblood of prices and of jobs.
Much of the rest of the speech defended Hoover’s use of government in ways that would cause apoplexy among Tea Partiers and a blizzard of critical press releases from Republicans, today:
Now, we have fought an unending war against the effect of these calamities upon our people in America. This is no time to recount the battles on a thousand fronts. We have fought the fight to protect our people in a thousand cities from hunger and cold.
We have carried on an unceasing campaign to protect the Nation from those unhealing class bitternesses which arise from strikes and lockouts and industrial conflict. We have accomplished this through the willing agreement of employer and labor which placed humanity before money through the sacrifice of profits and dividends before wages.
We have defended millions from the tragic result of droughts. We have mobilized a vast expansion of public construction to make work for the unemployed. We fought the battle to balance the budget. We have defended the country from being forced off the gold standard, with its crushing effect upon all who might be in debt. We have battled to provide a supply of credits to merchants and farmers and industries. We have fought to retard falling prices. We have struggled to save homes and farms from foreclosure of mortgages, battled to save millions of depositors and borrowers from the ruin caused by the failure of banks, fought to assure the safety of millions of policyholders from failure of their insurance companies, and fought to save commerce and employment from the failure of railways.
We have fought to secure the disarmament and to maintain the peace of the world. We have fought for stability in other countries whose failure would inevitably injure us. And, above all, we have fought to preserve the safety, the principles, and the ideals of American life. We have builded the foundations of recovery.
Now, all these battles, related and unrelated, have had a single strategy and a single purpose. That was to protect your living, your comfort, and the safety of your fireside. They have been waged and have succeeded in protecting you from infinitely greater harm that might have come to you.
Thousands of our people in their bitter distress and losses today are saying that “things could not be worse.” No person who has any remote understanding of the forces which confronted this country during these last 18 months ever utters that remark. Had it not been for the immediate and unprecedented actions of our Government things would be infinitely worse today.
Instead of moving forward we would be degenerating for years to come, even if we had not gone clear over the precipice, with the total destruction of every ideal we hold dear.
Let no man tell you that it could not be worse. It could be so much worse that these days now, distressing as they are, would look like veritable prosperity.
In all these great efforts there has been a constant difficulty of translating the daily action into terms of public understanding. The forces in motion have been so gigantic, so complex in character, the instrumentalities and actions that we must undertake to deal with them have been so involved, the figures we must use are so astronomical as to seem to have but little relation to the family in the apartment or the cottage or on the farm.
If Hoover made that speech today, every fellow at the Hoover Institution would sign a petition demanding his impeachment, never mind that he’s not president any more.
A few notes about the photograph at the top: This photo shows two former presidents, Herbert Hoover and Harry S Truman, walking through a crowd at the dedication of the Hoover Presidential Library and Museum, in West Branch, Iowa, in 1962. One might pay careful attention to how lax security was, generally — the crowd is allowed within an arm’s length of the two former presidents — and this was after an assassination attempt had been made on Truman, in Washington, years before. Insignia on the uniforms of the police are difficult to discern, but from the uniforms it looks as if there was a combination of local police, possibly a county sheriff’s staff, and Iowa state highway patrol troopers. I found it interesting to note that several of the younger men appear to be Explorer Scouts, BSA — one wearing what appears to be an Eagle Scout neckerchief. Cameras were special event tools, but generally not of the quality that could get a decent photograph at an event like this, except for professionals with professional cameras. Still, visible are double-lens reflex cameras held up in hope of a proper aim, small Kodaks, one man winding film in a 35-mm single-lens reflex, and a tiny handful of home movie cameras (with three lenses on the front — wide angle, normal and modest telephoto). Click on the photo for an expanded view, and see what else you may. If by chance you know anything about this photo, Dear Reader, please tell, in comments.
More, and resources:
- Herbert Hoover at His More Typical: Expansionary Fiscal Policy Is Contractionary (delong.typepad.com)
- Is This How the Myth of the Laissez Faire Herbert Hoover Was Invented? (coordinationproblem.org)
- A Stray Thought on Herbert Hoover: At Least He Was Trying (delong.typepad.com)
- Herbert Hoover Presidential Library and Museum
- More that you didn’t know about Hoover: Iowa Public Television link to The American Experience, “The Great Famine,” the story of Herbert Hoover’s attempt to save the people of the Soviet Union from starvation in the 1920s, when he was Secretary of Commerce.