ANYONE WHO WASN’T ALIVE at the depths of the Great Depression is at an empathetic disadvantage when considering it, like a mentally healthy person trying to imagine what it must feel like to be clinically depressed. Americans were flat on their backs, hit with something worse than job loss or poverty. They began to think this convulsive change in their lives was permanent. Fifteen percent fewer children were born in 1933 than in 1929, a reflection of severely diminished expectations. Suicide rates tripled. Almost no one dared start a business or try something new in life, except when forced by circumstance.
The job losses were unfathomable by today’s standards. By 1932, unemployment had tripled in three years. More than 16 million Americans—25 percent of the workforce—found themselves without jobs, many with three or more dependents. Of the remaining 75 percent, more than a third were working only part time. That left less than half of the workforce employed full time. Because few women worked in that era (and those who did often gave up their jobs to breadwinning men), only a little more than one quarter of all able-bodied adults were fully employed, and most of them at reduced wages.
Amid our mental images of stock tickers and dust bowls, the true origins of this misery have been obscured. Few Americans owned stocks, so neither the October 1929 Crash, nor the partial recovery at the end of that year, nor the plunge in the months that followed hit most of them directly.
Soon enough, deflation reverberated through the economy and restrictive money supply, the Smoot-Hawley tariff and adherence to the gold standard proved disastrous. But the most direct cause of the problem—the disease that threw millions out of work and paralyzed the country on the eve of FDR’s 1933 Inaugural—was the culture of American banking. The simple, critical fact was that the United States in the early 20th century had far too many mom-and-pop banks; an astonishing ten thousand banks eventually failed, almost all of them capitalized at well under $100,000. It was part of the American frontier ethos that every small town must have its own saloon and bank, even if it couldn’t afford a general store. In Canada, where nationwide branch banking was the rule, only one bank went under during the entire period, which made that country’s economic troubles much less severe.
The small American banks fell into trouble after their biggest customers—farmers—lost their markets. In the early 1920s, well before the Crash, a farm crisis developed when European countries recovered from World War I and no longer needed to import food from the United States to feed their people. By the early 1930s, demand slackened further, stretching farmers to the breaking point and imperiling the banks that lent them the money to plant their crops. With half of the American population dependent on agriculture, credit for other businesses dried up, which led to liquidation and rampant unemployment. Prices plummeted, but purchasing power fell even faster.
Of all the leading members of the American establishment at the time, President Herbert Hoover was, on paper, the best equipped for the job of fighting the Depression. He was a fertile problem solver and master of detail, with a history of calmly coping with World War I adversity. Later, Hoover organized the chaotic aviation and broadcasting industries as a powerhouse secretary of commerce under Presidents Harding and Coolidge. In 1927, Coolidge designated him to oversee relief of the flooding of the Mississippi River, which left 700,000 homeless. Secretary Hoover, “The Great Humanitarian,” did such a good job (and put out so many self-congratulatory press releases) that he won the Republican nomination for president in 1928. “I am 100 percent for him,” Supreme Court Justice Louis Brandeis announced. So were such hard-headed luminaries as Ida Tarbell, Robert Benchley, and Dorothy Parker.
Economic management was Hoover’s specialty. He was known around the world for being unflappable, indefatigable, and extraordinarily bright. Assessing the president’s brain, his secretary of state, Henry Stimson, who served every president from Theodore Roosevelt to Franklin Roosevelt, said Hoover had “the most unceasing mental energy with which I have ever come into contact.” The financier Bernard Baruch, another adviser to several presidents, said, “Facts [for Hoover] are as water to a sponge…absorbed into every tiny interstice.”
But facts don’t help if they are rendered in such a monotone that nobody wants to hear them. Even Stimson said Cabinet meetings were “like sitting in a bath of ink.” Hoover, described by one acquaintance as “clammy,” had his greatest trouble with the presentational part of the job, just where Roosevelt would excel. While FDR knew how to say “My friends” in several different languages and appear to mean it in every tongue, Hoover could seem as if he were addressing strangers even in a roomful of friends. He talked endlessly about “confidence” but couldn’t seem to exude it. Because most earlier economic collapses in American history had been labeled “panics,” Hoover thought it would help to call this one something less inflammatory. In late 1929, he settled on reviving the word “depression,” which immediately took on a much graver connotation.
Hoover claimed until his dying day that if he had been reelected, everything would have been fine soon enough. International negotiations and the natural recuperative powers of the economy would have restored prosperity, he wrote. But the business cycle has never been an immutable economic truth and recovery was far from inevitable. His prescription of balanced budgets, tax increases, and strict adherence to the gold standard certainly would not have brought it about.
Breaking through the gloom required an extra dimension that Hoover never possessed. As a mining executive and large-scale relief organizer, he could bark orders without worrying about the give-and-
take of politics. But the presidency required supple skills that were beyond him. Years after he left office, he continued confirming the impression that he was hopelessly miscast in the job. One of the most memorable images of the Depression was of apple sellers on the street. Hoover insisted in his memoirs that this was the result of a marketing campaign by Oregon and Washington State apple growers, who shrewdly set up a new kind of distribution network to raise prices and dispose of their surpluses. Perhaps so. But when the ex-president added the falsehood that “many persons left their jobs for the more profitable one of selling apples,” he reminded readers of how out of touch he was.
Hoover was not a do-nothing president. When his Treasury secretary, Andrew Mellon, told him to “leave it alone” and “purge the rottenness out of the system” by allowing the liquidation of everything in sight, he didn’t go along. Instead, the president returned to what had brought him success in famine relief—people of goodwill voluntarily collaborating to solve a problem. When voluntary efforts failed, he finally responded, launching a fifteen-point plan in late 1931 to combat the Depression. “We didn’t admit it at the time,” Rexford Tugwell, a top FDR aide, said much later. “But practically the whole New Deal was extrapolated from programs that Hoover started.” Public works, agricultural price stabilization, bank restructuring, and even a bit of federally supported relief were begun under Hoover. But the initiatives were mostly small and lightly funded, and Hoover remained largely in the grip of laissez-faire conservatism, which dictated that the federal government had no statutory role in relieving local suffering.
To humanize him, his aides put Hoover in high boots fishing near his Virginia cabin. But he posed standing in a river in a buttoned collar and tie.* Later he took a special train to Philadelphia to throw out the first ball at a baseball game. The photographers clicked away as the president posed in the stands with the ball in his outstretched arm for so long that the game began without him. Reporters later learned that Hoover had dropped the baseball into his pocket, forgotten about it, and never thrown out the first ball at all.
To strike a positive note, Hoover personally asked the singer Rudy Vallee for a song that would make people feel better, which he hoped might also be used in his campaign. The crooner came up with Yip Harburg and Jay Gorney’s “Brother, Can You Spare a Dime?”—a melancholy tune about a panhandler that hardly conveyed what Hoover intended. The sculptor Gutzon Borglum, who carved Mount Rushmore, quipped that “if you put a rose in Hoover’s hand, it would wilt.”
But as the 1932 campaign began, there was no assumption on the part of the American public that a rose would blossom in the hands of Franklin Roosevelt.
*Four decades later, President Richard Nixon would be photographed wearing wing tips on the beach. And President Jimmy Carter, who was often belittled as “Jimmy Hoover,” was lampooned on vacation when his fishing boat was attacked by a “killer rabbit.”