Herbert Hoover-March Toward Reactionary
I've written a good bit about Herbert Hoover, including the recent, "Herbert Hoover: Good or Bad?" To view any of the articles where Hoover is more than just mentioned, go to the bottom of this article and click on "Herbert Hoover" in the "labels" section. This will take you to all of the other articles. In my opinion, Hoover, while not a successful president, was a very important president, because he was a transitional figure who tried using many of the old ways to combat the nation's most severe economic downturn, but who then turned to new ways, albeit with many self imposed limitations. Herbert Hoover lived more than three decades after he left the presidency and I remember his funeral in 1964, which was carried on television back then. He was the first former president to die in my lifetime and I took great interest in the events surrounding the death of the 90 year old Hoover and he was discussed in my school classes too. With his death coming only a year after the assassination of President Kennedy, I'm sure that focused a lot of attention too, as prior to that, the last president to die was Franklin Roosevelt in 1945.
As I noted, Hoover was something of a transitional president, finally willing to abandon tradition in favor of new ideas and programs, although often grudgingly doing so. The interesting thing is, Franklin Roosevelt, his successor, became renowned for his efforts to combat the Great Depression with his "New Deal," but Hoover was scorned by much of the American public and even out and out hated by some. Why the difference? For one thing, being in the "broad middle" of the American political spectrum at certain times can be a very dangerous place to be. The Great Depression tried the nation's patience with Hoover, as his methodical, often doctrinaire approach ignited strong animosity from a large part of an American public stricken by poverty or the fear of falling into poverty. On the other hand, arch conservatives felt he did too much. Hoover had come out of the progressive wing of the Republican Party (progressives were a fairly substantial element of the GOP in those times), but he wasn't a "true believer," he had limits to his progressivism, although he later abandoned some of those limits. Some saw him as a conservative as president, but he wasn't a "true believer" on that side either. With Americans split between those demanding bold, decisive action and those fearful of breaking new ground, Hoover was sort of trapped in between, although, as I mentioned, many saw him as a more conservative president. The reason is likely that "Hoover the conservative" was always trying to down play "Hoover the progressive." He never really jumped onto the bandwagon of change, even when he initiated it, as he preferred to try to link his change programs to some sort of continuity with the past, as if there were no real breaks in policy. FDR had no such reluctance about embracing change, although he and Hoover shared much the same basic philosophy (Hoover would later change, as I will note later on). Roosevelt publicly embraced change, but privately worried about some of the potential consequences of that change.
With Hoover so reluctant to admit to having changed anything, FDR and his advisers took some of Hoover's ideas and programs, tweaked and expanded them, and then claimed them as their own, leaving Hoover with no credit whatsoever. Hoover's personality made him a bit of an odd guy to be president, although that isn't quite fair. In an age when radio was a great means of communication with the public, and sound movies had replaced silent films, Hoover was shy and very serious. He was not a great communicator, especially when compared to FDR's jovial, inspirational personality. On the other hand, Hoover might look downright dashing compared to his predecessor Calvin Coolidge. When the dour Coolidge died and someone told one reporter who had covered him that the former president was dead, the reporter asked, "How can you tell?"
Hoover's really big change idea came with the Reconstruction Finance Corporation, known by its initials "RFC." First, a little background. Why were banks in trouble? You go to a bank for a loan and they want collateral. You give them property, jewelry, or some other valuable items sufficient to secure the loan. The problem was, the depression brought a big decline in the value of everything, leaving banks (and other financial institutions) exposed to losses. Further, financial institutions had loaned money for companies and individuals to buy stocks, with the stock used as collateral. When the stock market imploded the value of stocks dropped leaving the institutions with losses. Also, financial institutions and insurance companies invested in stocks and bonds, with the same resulting losses. Many banks were located in rural agricultural areas. With American agriculture already in dismal condition throughout much of the 1920s, many rural banks collapsed even prior to what is generally seen as the start of the Great Depression in 1929, an event that sent more rural banks into closure. In those times, there was no system of insurance for bank deposits, so when Americans got rattled, they headed to their bank and demanded their deposits in cash, fearful they otherwise would lose their money. With banks already strapped by losses for many of the above noted reasons, coming up with large cash sums to pay depositors off was difficult. Some assets they possessed could be turned into cash fairly quickly (this is called "liquidity"), but other items took longer to sell, if they could even be sold at the depressed prices then prevalent. In order to get help from the Federal Reserve, a bank had to belong to the Fed's system. In those times, many banks didn't belong and other financial institutions couldn't belong, so there was nowhere for them to turn for help.
A couple of years into the Great Depression, Hoover tried one of his voluntary cooperative programs, this one to shore up the banking system. Hoover called together a number of the country's bank executives and got them to pool some money to loan to other banks that were experiencing difficulty. The bankers were reluctant to do so and really seem to have preferred government intervention, but they gave a lukewarm effort to satisfy the President. The thing was, they were so fearful of losing their money to the troubled banks, they set tough criteria for borrowing banks to meet and more banks failed. It wasn't long before Hoover saw that voluntary cooperation doesn't always work and he got Congress to approve the RFC. Hoover had been a businessman, he had appealed to business people for humanitarian aid during and after World War I, he was involved with business as Secretary of Commerce, so he had a strong connection to business giving him a business point of view, which coupled with his engineering mindset, gave him a zealousness for "efficiency," which then hampered the success of the RFC program. The RFC took government directly into economic matters. It was set up to loan government money directly to troubled banks and other financial institutions and to railroads and to farm boards for seed loans. The idea was, if financial institutions were stabilized, the public would gain confidence, the run on banks by depositors would cease and such institutions would then lend money to business people and the economy would recover. The problem was, many in the public were broke, so lack of demand stood in the way of any strong recovery, plus, banks took the RFC loans to stabilize themselves, but NOT to then loan money out in the troubled economy.* One of the problems was, that the Hoover mindset, and it seems even more so the mindset of the business people running the RFC, made qualifying for a loan a bit difficult, when the program was set up to make loans that were intended to be a bit risky and that would not be made by private business. Further, by making loans to banks and railroads, but NOT to states and local entities to feed and help the masses of unemployed and destitute families, Hoover was seen, correctly, as being for "trickle down" economics. During the period leading up to this point, Hoover had fretted and lectured Americans about maintaining their individualism and their commitment to self help, a sense he noted that would be damaged if Americans took government money. As the bank and railroad loans were handed out, many Americans took notice that their president had no such worries that bankers and railroad execs would have their individualism and sense of self help damaged, only the poor and unemployed, as well as many small banks and financial institutions. Money provided to the lower end likely would have helped the economy much more, as it would have created demand for goods, as the recipients were going to spend that money, not hoard much of it.
More in "Part Two" ...
* This should sound somewhat familiar, as the bank bailouts a few years ago helped banks recover, but the banks then maintained very high credit standards so that few companies or people qualified for loans, which left the economy to very slowly recover.
WORD HISTORY:
Lust (List)-This word, closely related to the "list" of "listless" (see below), goes back to Indo European "las," which had the notion of "be eager, want to do, desire." This gave its Old Germanic offspring "lustuz," with the same general meanings, but also "pleasure," likely from the notion that "things you are eager to do give you pleasure." This gave Old English (Anglo-Saxon) "lust," with the same meanings. Later, as religious writings began to be translated into English, "lust" took on the foremost meaning of "sexual desire," which remains its primary meaning to this day. The verb later developed from the noun. The same Old Germanic source also produced a verb "lustijanan," a verb which meant "to please, to bring pleasure, to cause desire." This then gave Old English "lystan," with those same meanings. This later became "liste" and then "list" (not related to "list," as in grocery list), an archaic word by itself now, but still used as the first part of the compound "listless;" that is, "lacking in desire or pleasure." The other Germanic languages have: German has various forms of "lust/list," some of which are, "Lust," a noun meaning "desire/have an inclination to do something," used frequently like, "Hast du Lust Karten zu spielen?" (literally, "Do you have the desire to play cards?"), and it also means "take pleasure in doing something; enjoy doing," but it can also have the "sexual desire" meaning. German also has "lustig," which, like its close English relative "lusty," doesn't necessarily carry the sexual connotation, but rather generally means "happy, merry," as in "Die Lustige Witwe," "The Merry Widow." The German verb "gelüsten" means "to crave, to covet;" that is, "have strong desire for." The German noun "Lüstling," however, carries the sexual appetite idea and means "lecher." Low German Saxon has both "Lust," meaning "desire," and the noun "Lüst" ("appetite;" that is, of course, "desire for food") and the verb "lüsten" ("to have an appetite, or craving") Dutch has "lust," which means "be inclined to do something, desire, like/relish doing." West Frisian once had "lust," but apparently it is now little used, if not outright archaic. Danish and Norwegian have "lyst" (desire, inclination, strong desire, pleasure). Icelandic has "losta," which seems to carry both the general meaning "desire," but also of the sexual type. Swedish has "lust" (desire, yearning).
As I noted, Hoover was something of a transitional president, finally willing to abandon tradition in favor of new ideas and programs, although often grudgingly doing so. The interesting thing is, Franklin Roosevelt, his successor, became renowned for his efforts to combat the Great Depression with his "New Deal," but Hoover was scorned by much of the American public and even out and out hated by some. Why the difference? For one thing, being in the "broad middle" of the American political spectrum at certain times can be a very dangerous place to be. The Great Depression tried the nation's patience with Hoover, as his methodical, often doctrinaire approach ignited strong animosity from a large part of an American public stricken by poverty or the fear of falling into poverty. On the other hand, arch conservatives felt he did too much. Hoover had come out of the progressive wing of the Republican Party (progressives were a fairly substantial element of the GOP in those times), but he wasn't a "true believer," he had limits to his progressivism, although he later abandoned some of those limits. Some saw him as a conservative as president, but he wasn't a "true believer" on that side either. With Americans split between those demanding bold, decisive action and those fearful of breaking new ground, Hoover was sort of trapped in between, although, as I mentioned, many saw him as a more conservative president. The reason is likely that "Hoover the conservative" was always trying to down play "Hoover the progressive." He never really jumped onto the bandwagon of change, even when he initiated it, as he preferred to try to link his change programs to some sort of continuity with the past, as if there were no real breaks in policy. FDR had no such reluctance about embracing change, although he and Hoover shared much the same basic philosophy (Hoover would later change, as I will note later on). Roosevelt publicly embraced change, but privately worried about some of the potential consequences of that change.
With Hoover so reluctant to admit to having changed anything, FDR and his advisers took some of Hoover's ideas and programs, tweaked and expanded them, and then claimed them as their own, leaving Hoover with no credit whatsoever. Hoover's personality made him a bit of an odd guy to be president, although that isn't quite fair. In an age when radio was a great means of communication with the public, and sound movies had replaced silent films, Hoover was shy and very serious. He was not a great communicator, especially when compared to FDR's jovial, inspirational personality. On the other hand, Hoover might look downright dashing compared to his predecessor Calvin Coolidge. When the dour Coolidge died and someone told one reporter who had covered him that the former president was dead, the reporter asked, "How can you tell?"
Hoover's really big change idea came with the Reconstruction Finance Corporation, known by its initials "RFC." First, a little background. Why were banks in trouble? You go to a bank for a loan and they want collateral. You give them property, jewelry, or some other valuable items sufficient to secure the loan. The problem was, the depression brought a big decline in the value of everything, leaving banks (and other financial institutions) exposed to losses. Further, financial institutions had loaned money for companies and individuals to buy stocks, with the stock used as collateral. When the stock market imploded the value of stocks dropped leaving the institutions with losses. Also, financial institutions and insurance companies invested in stocks and bonds, with the same resulting losses. Many banks were located in rural agricultural areas. With American agriculture already in dismal condition throughout much of the 1920s, many rural banks collapsed even prior to what is generally seen as the start of the Great Depression in 1929, an event that sent more rural banks into closure. In those times, there was no system of insurance for bank deposits, so when Americans got rattled, they headed to their bank and demanded their deposits in cash, fearful they otherwise would lose their money. With banks already strapped by losses for many of the above noted reasons, coming up with large cash sums to pay depositors off was difficult. Some assets they possessed could be turned into cash fairly quickly (this is called "liquidity"), but other items took longer to sell, if they could even be sold at the depressed prices then prevalent. In order to get help from the Federal Reserve, a bank had to belong to the Fed's system. In those times, many banks didn't belong and other financial institutions couldn't belong, so there was nowhere for them to turn for help.
A couple of years into the Great Depression, Hoover tried one of his voluntary cooperative programs, this one to shore up the banking system. Hoover called together a number of the country's bank executives and got them to pool some money to loan to other banks that were experiencing difficulty. The bankers were reluctant to do so and really seem to have preferred government intervention, but they gave a lukewarm effort to satisfy the President. The thing was, they were so fearful of losing their money to the troubled banks, they set tough criteria for borrowing banks to meet and more banks failed. It wasn't long before Hoover saw that voluntary cooperation doesn't always work and he got Congress to approve the RFC. Hoover had been a businessman, he had appealed to business people for humanitarian aid during and after World War I, he was involved with business as Secretary of Commerce, so he had a strong connection to business giving him a business point of view, which coupled with his engineering mindset, gave him a zealousness for "efficiency," which then hampered the success of the RFC program. The RFC took government directly into economic matters. It was set up to loan government money directly to troubled banks and other financial institutions and to railroads and to farm boards for seed loans. The idea was, if financial institutions were stabilized, the public would gain confidence, the run on banks by depositors would cease and such institutions would then lend money to business people and the economy would recover. The problem was, many in the public were broke, so lack of demand stood in the way of any strong recovery, plus, banks took the RFC loans to stabilize themselves, but NOT to then loan money out in the troubled economy.* One of the problems was, that the Hoover mindset, and it seems even more so the mindset of the business people running the RFC, made qualifying for a loan a bit difficult, when the program was set up to make loans that were intended to be a bit risky and that would not be made by private business. Further, by making loans to banks and railroads, but NOT to states and local entities to feed and help the masses of unemployed and destitute families, Hoover was seen, correctly, as being for "trickle down" economics. During the period leading up to this point, Hoover had fretted and lectured Americans about maintaining their individualism and their commitment to self help, a sense he noted that would be damaged if Americans took government money. As the bank and railroad loans were handed out, many Americans took notice that their president had no such worries that bankers and railroad execs would have their individualism and sense of self help damaged, only the poor and unemployed, as well as many small banks and financial institutions. Money provided to the lower end likely would have helped the economy much more, as it would have created demand for goods, as the recipients were going to spend that money, not hoard much of it.
More in "Part Two" ...
* This should sound somewhat familiar, as the bank bailouts a few years ago helped banks recover, but the banks then maintained very high credit standards so that few companies or people qualified for loans, which left the economy to very slowly recover.
WORD HISTORY:
Lust (List)-This word, closely related to the "list" of "listless" (see below), goes back to Indo European "las," which had the notion of "be eager, want to do, desire." This gave its Old Germanic offspring "lustuz," with the same general meanings, but also "pleasure," likely from the notion that "things you are eager to do give you pleasure." This gave Old English (Anglo-Saxon) "lust," with the same meanings. Later, as religious writings began to be translated into English, "lust" took on the foremost meaning of "sexual desire," which remains its primary meaning to this day. The verb later developed from the noun. The same Old Germanic source also produced a verb "lustijanan," a verb which meant "to please, to bring pleasure, to cause desire." This then gave Old English "lystan," with those same meanings. This later became "liste" and then "list" (not related to "list," as in grocery list), an archaic word by itself now, but still used as the first part of the compound "listless;" that is, "lacking in desire or pleasure." The other Germanic languages have: German has various forms of "lust/list," some of which are, "Lust," a noun meaning "desire/have an inclination to do something," used frequently like, "Hast du Lust Karten zu spielen?" (literally, "Do you have the desire to play cards?"), and it also means "take pleasure in doing something; enjoy doing," but it can also have the "sexual desire" meaning. German also has "lustig," which, like its close English relative "lusty," doesn't necessarily carry the sexual connotation, but rather generally means "happy, merry," as in "Die Lustige Witwe," "The Merry Widow." The German verb "gelüsten" means "to crave, to covet;" that is, "have strong desire for." The German noun "Lüstling," however, carries the sexual appetite idea and means "lecher." Low German Saxon has both "Lust," meaning "desire," and the noun "Lüst" ("appetite;" that is, of course, "desire for food") and the verb "lüsten" ("to have an appetite, or craving") Dutch has "lust," which means "be inclined to do something, desire, like/relish doing." West Frisian once had "lust," but apparently it is now little used, if not outright archaic. Danish and Norwegian have "lyst" (desire, inclination, strong desire, pleasure). Icelandic has "losta," which seems to carry both the general meaning "desire," but also of the sexual type. Swedish has "lust" (desire, yearning).
Labels: banks, conservatives, Democrats, English, etymology, Franklin D. Roosevelt, Germanic languages, Herbert Hoover, Reconstruction Finance Corporation, Republicans, the Great Depression, the New Deal
posted by Randy at 10:03 PM
4 Comments:
Very interesting
So the WPA was from FDR?
The Works Progress Administration or WPA was formed a year or two after Roosevelt became president to help build roads and highways, as well as other public projects. It expanded to include work for artists and such a little later.
U R very good at these kinds of historical articles & tying them to more current events. I always learn things & U explain things instead of rushing thru. So glad I found this site a few years ago.
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