IIb. Hoover's predicament
In the atmosphere of Depression that followed the Wall Street Crash, Hoover was vexatiously divided between pursuing aims of intervention, and of propitiating the conservatives in congress. He was obviously eager to reinvigorate the economy, but was not disposed to achieve this through excessive intervention. This was partially because of his own trust in individual enterprise, and partially because of political opposition. Towards the end of his presidency particularly, Hoover was being denigrated for his interventionist attitude. Roosevelt used these accusations, and Hoover's guilt for having raised a budget deficit, to advance his own election campaign. Indeed, Hoover had almost utterly lost the cooperation of Congress; so deeply were its conservative inclinations aligned against him, that Hoover could not have been expected, in the final year of his presidency, to have undertaken anything effective to alleviate the discomfitures of the economy.
Hoover was induced to accept the need for direct relief, but only if administered by state governments, or by the private sector. Going farther would have entailed severe consequences. His opponents' disparagement of himself, and of his aims, would only be intensified by the evidence of conspicuous intervention; furthermore, Hoover's own idealogies conflicted with the construction of a welfare state. Hence, compelled by necessity and the force of his own convictions, yet withheld by detainments that he was incapable of overcoming, Hoover was only able to proceed a certain distance in the way of intervention. What he was able to accomplish, we will discover, was certainly not enough.
III. What Hoover did
It had long been established as Hoover's custom to encourage, but not to coerce, business leaders into agreement with his schemes. Among the first of Hoover's undertakings, was to persuade larger businesses not to renounce their employees, and not to reduce their wages, but to keep them as they were in spite of a plummeting market environment. His design and intention was to maintain purchasing power, since he believed that to kick-start the economy, there would need to be prevalent demand and consequent inflation; he initially introduced lower taxes to relieve disposable incomes, and his Agricultural Marketing Act afforded farmers a certain market with desirable prices.
However, as America descended deeper into privation, businesses began to disregard Hoover's exhortations. Workers were laid off and wages were reduced, as businesses simply could not be sustained under the burden of such expense. The economy was not reviving and demand was not increasing. People were becoming disenchanted with Hoover, and businesses especially would dubiously observe the incomprehensible policies and changes made by the federal government, notorious among which was the Smoot-Hawley tariff.
The Agricultual Marketing Act had considerable failings. It encouraged overproduction, such that the farmers could never truly withdraw themselves from their financial anxieties. High interest rates were introduced, allegedly on the basis of protecting banks, and discouraging unreasoned lending. When it was later determined that taxes would be raised, in contradiction to Hoover's previous intention of lowering them, it was concluded by many that sensible decisions could no longer be expected to emerge from the federal government. The inconsistency and incompetency of the government was disheartening to the motivating forces of the economy - the crucial resource that had generated and sustained the prosperity of the 1920s was lacking, and that resource was confidence.
In the absence of confidence, the characteristics of a lively economy could not exist. Business ventures, frequent lending, and enthusiastic consumerism, could not occur under circumstances in which Americans were dispirited. Hoover endeavoured to restore confidence through his perpetual reassurances; but his ceaseless assertion that prosperity was just, "Around the corner," constituted a frigid optimism that made him appear invidious to the people. His inability to publically acknowledge and lament the sheer extent of the Depression, convinced Americans that he was disconnected from their sentiments, and did not understand the desperation that was everywhere discernible in their lives.
The truth was much to the contrary. Hoover was distinctly aware of the downturn, and was perhaps the most enterprising, and certainly the most interventionist, president that had hitherto commanded the executive office of the White House. He initiated unexampled public work schemes, and his RFC (Reconstruction Finance Corporation) disseminated money across the nation, to sustain faltering banks and businesses. However, Hoover's actions have often been interpreted as insufficient. Hoover was only inclined to do what was necessarily to kick-start the economy; he then had faith that the fires of individualism would seize the American people, and the rest would be accomplished by their own independent enterprise and initiative, without the necessity of developing a welfare state. None of Hoover's ambitions, in this aspect, could be realised, unless confidence was planted within the mind and spirit of everybody. But it has already been observed the Hoover failed to do this.
It has also been contended that, had Hoover done less, the economy would have corrected itself, the agonies of the Depression would not have been continued for as long. Some have even ventured to propose, that Hoover's operations only extended the Depression, and that such organisations as the RFC only delayed the collapse of businesses, and so delayed the purging of the economy that would ultimately have allowed for recovery. Yet Hoover's humanitarian propensities caused him to abhorr this. He could not endure that things should get worse before they should get better; he was determined to do what would, if not accelerate recovery, at least rescue America from the deepest furrows of destitution.
