Hoover, Herbert (Administration)

HERBERT CLARK HOOVER was born in Iowa in 1874, but the death of his father led him to live with his uncle in Oregon. Initially he was a highly successful engineer. He secured a partnership in Bewick, Moreing, and Company in 1901. By 1908 he had worked on mining projects around the world. In 1909 he lectured on mining at Stanford University and these lectures were published as a book. He went into public service during World War I. Hoover became well-known for his work on famine relief. He organized a relief program for Belgium, which had been invaded by Germany.

After the United States entered the war, President Woodrow Wilson appointed Hoover as head of the Federal Food Administration. After the war Hoover organized food shipments to central Europe as head of the American Relief Council. This included food shipments to Bolshevik Russia. Some objected, but Hoover insisted that politics must not interfere with relief.

Hoover was also a member of the Supreme Economic Council. He proposed a reconstruction plan for America, which included construction of public dams, promotion of unions and collective bargaining, regulation of the stock market, a federal home loan bank, and direction of capital by the Federal Reserve Bank. These plans did not go into effect.

President Warren Harding appointed Hoover as secretary of commerce. As commerce secretary he advised Harding to intervene in the depression of 1920. Hoover pushed for public works spending and high wages. The idea behind this policy was that high wages would keep household income high, in turn keeping consumer spending high and helping business conditions. Harding resisted most of Hoover's recommendations, so his policies never went into effect. The Harding administration tended to do the opposite of what Hoover wanted. The depression ended in 1921.

President Calvin Coolidge kept Hoover on as commerce secretary. Hoover played a role in the formation of the Federal Radio Commission (now known as the Federal Communications Commission). Coolidge decided not to run for another term. Hoover ran for president instead, and won.

While the Coolidge administration had presided over widespread prosperity, Hoover's administration would endure perhaps the worst economic period in U.S. history. Upon entering office Hoover declared that “we in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.” Yet the Hoover years were marked by increasing poverty for millions.

Amid this hardship, some prospered as never before. The economy began to slow after Hoover entered office. Few recognized the deterioration of economic conditions until the stock market crash on October 29, 1929. Hoover's initial reaction indicated that he did not appreciate how serious the situation was. On October 25, 1929, he said, “The fundamental business of the country, that is, the production and distribution of commodities, is on a very sound and prosperous basis.” Hoover reacted to this crash by organizing conferences [Page 504]of industrial and labor leaders during November and December 1929. Hoover urged industrial leaders to avoid cutting wage rates and many industrialists pledged to maintain wages. He thought that maintaining wages would spur economic recovery because these wages would also maintain consumer spending. His program did not deliver its intended effect.

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