1920’s and Early 30’s
One of the things I learned when I was a drama major is that one can
tell the same story in many different ways, and get a completely
different meaning from the same story with just a slight
reinterpretation on that story. While this is a great thing in
literature, and while it's really delightful to see how many new and
creative things authors can do to make an old story new, it's more than
a bit uncomfortable in history. We would like to know, not one of
many possible interpretations of events, but we'd like to know *the*
proper interpretation of that event, the one thing it *really*
means. But history is in some ways just a branch of literature,
and, quite often we can't get that single, universal interpretation of
individuals and events we would like.
This is particularly true when it comes to America in the 1920-1932
period. While there is a general consensus on which
figures and events of the 1920's and 1930's are particularly important,
there are major differences in interpreting just about every one of
these figures and events.
One example of this is Prohibition. Prohibition is the period
from 1920-1933 when the manufacture, transportation, and sale of
intoxicating beverages was illegal in this country. It was made
possible by 18th Amendment (proposed in December of 1917, ratified in
1919, and put into effect in 1920).
One view of Prohibition is that it was a great mistake, agreeing with
the sentiment in this 1920's poem:
Prohibition is an awful flop. We like it.
Those who think of Prohibition as a mistake not that, during
Prohibition, licensed saloons were replaced by illegal, unregulated
"speak-easies." The point out also that organized crime took off,
financed by liquor sales, and that the profits from boot legging
financed the growth prostitution and illegal gambling rings as
well. Further, political corruption increased as police and civic
officials were paid by now-wealthy crime-bosses to ignore what they
It can't stop what it's meant to stop. We like it.
It's left a trail of graft and slime,
It's filled our land with vice and crime,
It don't prohibit worth a dime.
Nevertheless, we're for it.
On the other side, there are those who argue that Prohibition was, in
the end, a success: a measure that gave the nation a much-needed drying
out. Drinking declined by 2/3 and all of the problems associated
with problem drinking lessened.
And then there is a third view--that prohibition on the state and local
level sometimes made sense, but that trying to institute prohibition on
the national level was a grave mistake. The fact that it took a
constitutional amendment to make it possible should have been a clue
that such a measure was not in keeping with the limited federal
government envisioned by the founding fathers.
The Sacco and Vanzetti Trial
Its possible also to interpret very differently some of the the
famous court cases of the 1920's including, in particular, the Sacco
and Vanzetti trial.
In 1920, Nicola Sacco and Bartolomeo Vanzetti were put on trial for the
murder of a Massachusetts security guard and paymaster. They
were convicted, and sentenced to death. Many intellectuals from
American and Europe were convinced that the trial had been unfair:
Sacco and Vanzetti had been convicted, not on the evidence, but because
they were anarchists, socialists, and foreigners. How could a
judge who had used terms "dago" be impartial? For seven years,
the execution was delayed, and there was push after push for a new
trial. To the intellectuals, Sacco and Vanzetti became heroes and
martyrs. Lots and lots of dramatic quotes from Vanzetti in
wish to a dog or a snake, to the most low and misfortunate creature of
earth — I would not wish to any of them what I have had to suffer for
that I am not guilty of. But my conviction is that I have suffered for
that I am guilty of. I am suffering because I am a radical, and indeed
I am a
radical; I have suffered because I am an Italian, and indeed I am an
If you could execute me two times, and if I could be reborn two other
would live again to do what I have done already".
If it had not been for these thing, I might have live out my life
talking at street corners to scorning men. I might have die, unmarked,
unknown, a failure. Now we are not a failure. This is our career and
our triumph. Never in our full life could we hope to do such work for
tolerance, for joostice, for man's onderstanding of man, as now we do
by accident. Our words - our lives - our pains - nothing! The taking of
our lives - lives of a good shoemaker and a poor fish peddler - all!
That last moment belong to us - that agony is our triumph.
American writers like Dorothy Parker and John Dos Passos championed
Sacco and Venzetti's cause, while George Bernard Shaw Shaw and H.G.
Wells chimed in from across the Atlantic. When Sacco and Vanzetti
finally were executed, there were riots in Germany and London--and the
American embassy in Paris was bombed. Those bigoted racists in
America were murders.
And the intellectuals were going to rub our noses in it. In 1928,
Upton Sinclair, a prominent American writer who eventually won a
Pulitzer prize published a two-volume book, Boston, using the Sacco and
Vanzetti case to lambaste the American legal system--in the same way
that, two decades earlier, he had lambasted the meat-packing industry
in his famous The Jungle.
In the late 30's, James Thurber and Elliot Nugent teamed to write a
play, The Male Animal,
in which the hero, a college professor gets in trouble for his
courageous stand for Sacco and Vanzetti. It was a hit on
Broadway, and, in 1942, a successful movie.
The result of all this: the lasting impression that the American
justice system was anything but just because of the racism and bigotry
that dominated America.
But there is a very different view--the view that the real threat to
American democracy comes not from the bigotry of ordinary Americans but
from the bigotry of the intellectuals--because, as it turns out, every
review of the evidence the jury looked at shows that they came to
exactly the right conclusion. Sacco was certainly guilty of
murder, and Vanzetti was at least an accomplice. Curiously, Upton
Sinclair seems to have known this--or, at least--he could have known
this had he been able to overcome his own prejudices and desire for
While doing research for his book, Sinclair interviewed one of Sacco
and Vanzetti's attorneys, Fred Moore. Sinclair describes that
meeting in a 1929 letter he wrote to his own attorney:
in a hotel room
with Fred, I begged him to tell me the full truth, ... He then told me
men were guilty, and he told me in every detail how he had framed a set
alibis for them. ... I faced the most difficult ethical problem of my
that point, I had come to Boston with the announcement that I was going
write the truth about the case".
Ok. So apparently the truth was that Sacco and Vanzetti were
guilty, and their lawyers were trying to help them cover up. Is
that what Sinclair wrote in Boston? Hardly. Why not?
Well, he convinced himself that Moore was a bitter man, and that Moore
was lying. Well, he wasn't lying--but, even if he was, shouldn't
Sinclair have included some mention of the fact that Moore claimed to
have helped provide fake alibis for Sacco and Vanzetti?
The Scopes Trial
Another very famous--and still controversial--1920's trial was the
Scopes "Monkey" Trial. The state of Tennessee had passed a law
forbidding the teaching of Darwinism in the public schools. The
ACLU wanted a court case to challenge the law, and persuaded a high
school science teacher, Charles Scopes, to deliberately break the law
and teach Darwinism anyway. Scopes was put on Trial in Dayton, TN
The trial drew national attention. Clarence Darrow, the most
famous defense attorney in the country, came to help the defense.
William Jennings Bryan came to Dayton to assist the prosecution.
H.L. Mencken showed up to cover the case. Eventually, Scopes was
convicted and asked to pay a fine.
Typically, the trial is interpreted as the last stand of bigoted,
ignorant fundamentalists unwilling to accept the proven teachings of
modern science. For, although Scopes was convicted and sentenced
to a minor fine, Darrow made a monkey out of Bryan and made his whole
position look ridiculous.
This was the view of Mencken whose articles praised Darrow to the skies
and mocked Bryan unmercifully. I was also the view popularized by
the play "Inherit the Wind" by Jerome Lawrence and Robert E. Lee.
Lawrence and Lee follow the general course of the Scopes Trial fairly
accurately, but they change all the names. Dayton becomes
Hillsborough, Bryan becomes Matthew Harrison Brady, Mencken becomes
E.K. Hornbeck, Darrow becomes Henry Drummond. Now it seems to me
there is a good reason for this. If they had ascribed the lines
they write to the real people, they would certainly have been guilty of
the most vile slander...and, actually, the play (though a fine play)
slanders in particular William Jennings Bryan.
At the end of the trial in Inherit the Wind, the Scopes character
(Bertram Cates) is asked to pay a fine of $100. The Bryan
character (Brady) comes unglued, screaming that the court should meet
out more drastic punishment. Well, first of all the fine was
$100-$500--the latter a *very* hefty sum in 1925. But note what
Bryan really said, not as an outburst at all, but when specifically
asked by the judge for comment.
don't know that there is any special reason why I should
add to what has been said, and yet the subject has been presented from
so many viewpoints that I hope the court will pardon me if I mention a
viewpoint that has not been referred to. Dayton is the center and the
of this trial largely by circumstance. We are told that more words have
been sent across the ocean by cable to Europe and Australia about this
trail than has ever been sent by cable in regard to anything else
in the United States. That isn't because the trial is held in Dayton.
isn't because a schoolteacher has been subjected to the danger of a
$100.00 to $500.00, but I think illustrate how people can be drawn into
prominence by attaching themselves to a great cause. Causes stir the
It is because it goes deep. It is because it extends wide, and because
it reaches into a future beyond the power of man to see. Here has been
fought out a little case of little consequence as a case, but the world
is interested because it raises an issue, and that issue will some day
be settled right, whether it is settled on our side or the other side.
It is going to be settled right. There can be no settlement of a great
cause without discussion, and people will not discuss a cause until
attention is drawn to it, and the value of this trial is not in any
of the trial, it is not because of anybody who is attached to it,
in an official way or as counsel on either side. Human beings are
small, your honor. We are apt to magnify the personal element and we
become inflated with our importance, but the world little cares for man
as an individual. He is born, he works, he dies, but causes go on
and we who participated in this case may congratulate ourselves that we
have attached ourselves to a mighty issue.
can--and perhaps should--read the trial
transcript for yourself, and perhaps Mencken's
articles. It is interesting to see the interchange when
Darrow questions Bryan on his faith in an infallible Bible. It's
certainly possible to read this differently than I do, but while Darrow
*seems* to have the upper hand with his clever mocking, Darrow is
clearly does not understand--and does not attempt to understand--what
Bryan is saying. Now Darrow's job, of course, is to make the
prosecution look bad. But Mencken had no excuse for his his
scoffing, sneering , and condescending articles.
Dr. Blanchard tells the story of Thales the philosopher who, while
gazing up into the heavens, happened to trip. A Thracian slave
girl laughed at him for thinking about the heavens and tripping over
his own two feat. According to Dr. Blanchard, Martin Heidegger,
the German philosopher used the story for a definition of
philosophy. "Philosophy is what Thracian slave girls laugh at."
I get this feeling with Mencken. Committed Christianity is what
sneering reporters laugh at.
Anyway, Bryan was right in thinking that Dayton was, temporarily, the
focus of a debate for more important than any of the individuals
involved. What's interesting also is how well Bryan's arguments from
the 1920's still hold up compared to the arguments in favor of
evolution that were in vogue in 1925. I learned about evolution
from a 1940's college text my mom had used as a student. Much of
it would be laughed at by anthropologists and biologists today: they
make an entirely different case for evolution. I can't imagine
anyone reading it except, perhaps, as a curiosity.
Bryan's "In his
Image," his critique of the Darwinist world view, written in 1922,
stands up in almost every way, and his comments about the ethical and
social consequences of the Darwinist view are near-prophetic.
Particular impressive is Bryan's sense that the *way* Darwinism was
being taught was as important--even more important--than *what* was
being taught, his clear sense that the way Darwinism was being
presented was potentially going to undercut all morality. Not so very
much later, Hitler's follow through on Darwinist ideas would show how
dead on Bryan was.
Now, obviously, I have tipped my hand here. I like Bryan--a
lot. I think he was right on all sorts of issues throughout all
of his long career--though he missed badly with Pancho Villa. He
deserves better than the Inherit the Wind caricature.
Interpretations of the major political figures of this time also
vary radically. Warren G. Harding, for instance, is often
presented in a very negative light, and it's not unusual for textbooks
to suggest that he was the worst of all American presidents. His
administration is sometimes thought of as the most corrupt in American
There is some evidence to support this view. Certainly there were
some great scandals during the Harding administration. The Teapot
Dome scandal, for instance, was an obvious case of high-level
corruption. Sinclair's Mammoth Oil Company obtained access to
government oil reserves in Teapot Dome, Wyoming. They got these
leases without competitive bidding and at a very low price. How
had the company managed this? Well, the gave Harding's Secretary
of the Interior, Albert Fall some $400,000 in bribes! Similarly,
Charles Forbes, Harding's Veteran's Bureau director, got big kickbacks
from people who through him were able to get bargain-basement prices
for surplus medical supplies.
Those who would blacken Harding's reputation further say he turned the
White House into a speak-easy, filling the place with liquor, poker
games, and loose women--by one of who he had an illegitimate
And on top of all this, he was a lousy speaker, a master of what
Harding himself called bloviation: speaking as long as you want without
saying anything in particular at all.
From this point of view, Harding's sudden death from a heart attack was
a blessing in disguise. He was still popular at the time, and
didn't have to go through the pain of having the American people find
out what he was *really* like.
But one can take a very different view of Harding. Your Johnson
book says that Harding was actually a shrewd and effective
president--and with good reason!
First note that Harding was an immensely popular president, winning the
presidency in 1920 over his Democrat opponent (Cox) by the largest
margin hi U.S. election history. This was in part because Harding
(bloviator or not) could often put into words exactly what the rest of
America was thinking. "America's present need," he said, "is not
heroics, but healing; not nostrums but normalcy; not revolution, but
restoration; not surgery, but serenity."
Hey! He even invented a new word! "Normalcy." How
many presidents can claim that?
Harding in some ways delivered more than he promised. When he
took office, there had essentially been no president for more than a
year. Wilson had been incapacitated by a stroke and went for
months without meeting with his cabinet. What strength he had was
taken up with the League of Nations push. The country was in a
major depression. And Harding did something enormously clever.
Well, maybe not quite nothing. He did adopt a (mostly) laissez
faire business policy, a policy of allowing the economy to right
itself. "What we want in America is less government in business
and more business in government," said Harding.
But there was one additional thing: Harding cut government
spending. He cut it 40%. Furthermore, he did it the right
way: he cut out the deadwood--something that is enormously difficult to
do. The right kind of pruning *does* make government more
efficient and more effective--but very few people have the ability to
do what Harding did here.
Harding, then, should probably be given at least some credit for what
became a huge economic expansion in the 1920's.
What about the corruption? Those who would defend Harding admit
that he had bad apples in his administration, but they insist that, had
only he lived, he would have weeded them out himself.
When I first taught the class, I cited writers who claimed there was no
evidence at all that Harding fathered an illegitimate
daughter or spent his time with loose women. Well, at the time
that was so. But in 2014, some of Harding's personal letters
(which Harding's family had mangaged to keep private) were finally
released. Don't know if there's proof of an illegitmate
daughter there, but plenty of evidence of marital infidelity, a
long-term affair--and, perhaps, of something more troubling: German
influence on Harding through his long-time mistress. Here's a
on the Harding letters.
Opinions about Harding's successor, Calvin Coolidge, are also all
over the map. There is some agreement on basics. All agree
Coolidge was a cool, thoughtful, scholarly man with a sharp wit--not
the kind of "people" person our presidents usually are. All agree
that it was his role in crushing a Boston police strike that helped
lead him to national prominence ("There is no right to strike against
the public safety by anybody, anytime, anywhere." All agree
Coolidge was a quiet president who well-earned his nickname "Silent
Cal." All agree that Coolidge slept a lot.
Where historians disagree is on what this all means. Coolidge's
silence is sometimes viewed as a character defect: presidents should be
great communicators, shouldn't they, and should great communicators be
Well, maybe. But there is more than a little to be said for
Coolidge's style. "The things I never say never get me into
trouble," said Coolidge. And then there's this from Coolidge:
"Nine out of ten callers to the White House want something they ought
not to have. If you keep dead still, they will run out in three
or four minutes."
The silent routine also seems to have reflected a keen sense of
humor. One woman came up to Coolidge and said she had bet her
friend she could get more than two words our of him. "You lose,"
said silent Cal.
Now Coolidge didn't propose much in the way of legislation, and some
would fault him for laziness. But Will Rogers had a great line
here, "He didn't do anything, but that's what the people wanted done."
Thomas Edison, no dummy, noted the United States was lucky to have
Coolidge as president--and the rest of America agreed. When he
ran for election at the top of the ticket in 1924, Coolidge won by an
even larger margin than Harding had in 1920. Americans in the
1920's spoke of "Coolidge prosperity," and there was much surprise and
disappointment at Coolidge's 1928 announcement, "I do not choose to run
American Economy of the 1920's
Evaluations of Harding and Coolidge depend in part on one's evaluation
of the American economy of the 1920's--another subject on which there
are two decidedly different views.
According to some, the 1920's were an economic high point for America,
the proof that laissez faire economics works. Both presidents,
Harding and Coolidge, believed in minimal government interference with
business. Harding said the country needed less government in
business and more business in the government. Coolidge said, "The
business of this country is business."
Naturally enough, both me turned to the business community for advice
and for members of their cabinets. The most important: Andrew
Mellon. Andrew Mellon was one of the richest men in
America. Harding chose him to be Secretary of the Treasury, and
he continued to hold that position under Coolidge and Hoover: the only
man to serve as Treasury Secretary under three presidents or--as many
have noted--the only Treasury Secretary to have three presidents serve
Mellon's basic idea was that keeping income tax rates low was a good
idea. If tax rates were low, there would be more investment,
more economic growth, a stronger economy--and more tax *revenue* even
with lower tax *rates*. Result? It worked--or it seemed
to. Under Mellon, the national debt dropped from $24 billion to
$17 billion in just 10 years. Pretty impressive!
At the same time, America went throw an unprecedented economic growth
spirit. The electronics industry tripled in size, air travel
increased ten fold. And even more impressive, the growing automobile
industry. By 1929, America was producing 5 million cars per year
(5/6 of all produced in the world!) and we owned ourselves more cars
than the rest of the world put together.
The movie industry took off, and, all of a sudden, there were radios
everywhere. With their husbands earning more, many women left the
work force, getting out of those crummy factory jobs--and putting their
time to much better use, getting involved with charitable activities,
volunteer activities, and cultural activities. Literary quantity
and quality boomed, in large part because women (especially) had time
for books and reading.
Education took off as well. Spending on education increased at
ever level--not always a good thing: but, this time, Americans got
something for their education dollars. Illiteracy was cut in
half: 95% of Americans could now read.
Paul Johnson says, "The truth is that the Twenties was the most
fortunate decade in American history."
No one disputes the statistics and yet, as Johnson notes, views of the
1920's economy are often extraordinarily negative. "A drunken
fiesta," "The gaudiest spree in history."
Why so negative?
Well, there is some reason for this. Not all Americans prospered
during the 1920's. Farm income actually dropped drastically as
increased production led to a crash in the price of most
commodities. Also, while *income tax rates* dropped, guess what
went back up? Yes--the tariff: much to the delight of Northern
industry, but a blow to farmers in general and to southerners in
Still, in 1928, it was clear that most Americans were pleased with how
things were going and were ready to reward the Republicans by electing
another GOP president. The 1928 election again was a Republican
landslide: Herbert Hoover (despite his silly "Hoo but Hoover?" slogan)
swept all but six states and won the popular vote 21,000,000 to
Boom to bust
As Hoover took office, the American people were immensely
confident. Outgoing president Coolidge said, "No Congress of the
United States ever assembled on surveying the state of the union has
met with a more pleasing prospect. The great wealth created by
our enterprise and industry, and saved by our economy has gone out in
the widest possible distribution among our own people...Enlarging
production is consumed by an increasing demand at home and an expanded
commerce abroad. The country can regard the present with
satisfaction and anticipate the future with optimism."
Hoover himself said, "We in America are nearer to the final triumph
over poverty than ever before in the history of any land...We have not
reached the goal, but, given a chance to go forward with the policies
the las eight years, we shall soon, with the help of God, be in sight
of the day when poverty will be banished from this nation."
Late October, 1929. Hoover had been in office only 7
months. Everything looked rosy, but the stock market was
jittery. October 24, 1929, Black Thursday: stocks fell
drastically. There was somewhat of a recovery on Friday, then the
plummeted...and plummeted some more.
Now how important was all this? In the minds of many, the October
1929 stock market crash is directly responsible for the Great
Depression that eventually followed. But did the crash really cause the
depression? And, if so, how?
Perhaps the first question to ask is why stock prices were so high in
the first place. A company's stock, theoretically, should have a
pretty well-defined value. If you own 10% of a company's
stock (tycoon that you are), your stock should be equal in value to 10%
of the company. But people will actually pay far more than that
for their shares of stock. Why? Because stock prices take
into account, not only current value of a company, but also prospects
for growth. A start up company, for instance, may actually have
no net worth--may even be in debt--but if its long term prospects are
good, investors will buy its shares anyway.
But sometimes people will pay more for a company's stock than that
share can ever conceivably be worth if you are thinking of a share as a
portion of the true value of the company. Why would they do
this? Would you pay $100 for something that will never be really
worth, at most,
$50? Well, if you could count on someone else to pay you $150 for
it, you might. And they might pay that $150 if they thought they
were going to be able to dump it on someone else for $200. And as
long as the direction of the market is only upward, this works just
fine. And you might be tempted to do something else.
Suppose a small amount of money (say $100) could give you control
shares of stock with a current value of $1000. You'll pay the
remaining $900 sometime in the future. Meanwhile, you find that
your $1000 (face value) stock is going for $1500. You sell your
shares, get your $1500, pay off the $900 remaining commitment from your
purchase--and pocket the difference. You've now got $500 in your
pocket. So you go out and use it to purchase control of
$5000 worth of stock, promising to pay of the remaining $4500
later. The stock goes up and you find your shares worth
$10,000. So you sell, pay off the remaining $4500 you owed, and
now you've got $5000 in your pocket. You use that $5000 to get control
of stock worth $50,000. The stock price goes to
$75,000. You sell at that price, pay off the remaining $45,000
you owe...and you've now got $30,000 in your pocket....and you are well
on your way to being a millionaire.
But...suppose you get caught. Suppose on that last transaction
the stock price drops to $30,000. You're in hock for $45,000--and
there's $15,000 you can't cover. There goes the car, the
house--and there goes you to the poor farm.
Buying "on the margin" made many into millionaires in the 1920's, but
the crash turned many overextended margin buyers into paupers in a
matter of days. Men who had been (on paper) worth millions, were
now worth nothing.--well, in a certain sense. Some responded by
Personal tragedies, to be sure, but did the depression have to follow?
Hoover said no: he insisted the economy was fundamentally sound, that
they only real problem was lack of confidence.
But was the economy of the 1920's sound? Perhaps not entirely,
and it seems to me that the policies of Andrew Mellon were partly to
Mellon pushed for policies that cut income taxes on the rich,
suggesting that when these people
would have more money to invest, the economy would boom, and everyone
would be better off. Well, the rich men did invest and there was
a boom...but one thing was missing. Increased investment *should*
have led to increased productivity and declining prices. It did
lead to increased productivity, but not to declining prices. Why
Prices don't fall unless there is sufficient competition, and, during
the 1920's, competition decreased. Partly this was because the
trusts (which had been attacked by Roosevelt, Taft, and Wilson) began
again. Neither Harding nor Coolidge had pushed hard to apply
anti-trust legislation. But another problem was the tariff.
A high tariff
means no competition from foreign producers either.
Mellon also kept prices high by keeping demand high. How?
By pushing for increased credit at artificially low rates. The
1920's saw an enormous growth of debt on all levels, but the massive
level of consumer credit debt was going to be a particular problem:
eventually, consumers can't or won't borrow any more, demand will fall
and profits will be in trouble.
What all this meant was that the country was mortgaged to the hilt and
the bankruptcies created by the stock market crash touched off a chain
reaction of other finance problems. Businesses found revenue
down, and they needed to cut expenses. You *can't* lay off your
expensive machines (though you might wish you could), so you lay off
people. but as more people lose there jobs, they reduce their
spending further. Businesses have to cut expenses more, and they
lay off more workers. By 1930, there were 4,000,000 unemployed
workers, and the country was in the midst of a full-scale depression.
Enter the man who Coolidge called "the Wonder Boy," Herbert
Hoover--another of those controversial 1920-1932 figures. To
some, Hoover is an arch villain, the man chiefly responsible for the
depression. Contemporaries called the "Hoover depression."
Some say Hoover created this depression by continuing the laissez-faire
economic policies of his Republican predecessors Harding and
Coolidge. Others argue that Hoover is unfairly blamed for the
depression, that he was a capable man, and that the circumstances that
led to the depression were beyond his control--or anyone else's
control. And there are others who say that Hoover *did* create
(or aggravate) the depression, but *not* by laissez-faire
policies. Instead, Hoover made the bad mistake of trying to fix
the economy through government intervention, a practice that invariably
makes things worse rather than better.
Well, the fact that Hoover was a capable man is indisputable. A
poor Iowa farm boy orphaned at a young age, he managed to work his way
through Stanford, picking up an engineering degree. His
engineering achievements helped him become a self-made
millionaire. After WWI, he directed relief efforts in Europe,
efforts that saved millions of lives. No wonder no less than FDR
called Hoover a wonder and said, "You couldn't ask for a better
Back to 1930. The country was heading into a recession.
What should Hoover do? Well, ten years previously, Harding had
decided to do nothing--and, soon, enough, the recession ran its course.
But Hoover decided this was a situation that called for....an
engineer. Plan one: cut taxes to stimulate investment and
economic growth, inflate credit to create more spending, and, last but
not least, jack up the tariff to protect American business from foreign
competition. Hoover signed into law
the Smoot-Hawley tariff, a 60% tariff on imported goods.
Now this really wasn't Hoover's baby, but he did sign the bill, and he
should have known better. Foreign countries retaliated by
slapping tariffs on American-made goods (think cars!), and world-wide
trade plummeted--leading to world -wide depression.
Things are getting worse, not better. So lets go to plan two, the
RFC (Reconstruction Finance Corporation). The RFC bails out the
banks, insurance, companies, state and local government,
railroads. It bankrolls huge public works programs, e.g., what
comes to be called Hoover Dam.
What was the result? Hard to say. Some argue Hoover should
have left well enough alone and the country would have been back to
normal far more quickly. Others say Hoover hadn't done enough,
that his "stimulus package" was too meager to do the job. Whichever
view is right, it's clear that the Hoover presidency was a
disaster. Unemployment went from 3.2% to 24.9%. Landlords
couldn't collect rents, so they couldn't pay taxes, so there were no
money for government services. Schools closed--including 1,500
universities. Book sales fell 50%. Many children suffered
And who got the blame? Well, "Hoo but Hoover?" and, with him the
Republicans. The 1932 election year promised great things for the
Democrats if not necessarily for the country as a whole.