Hooverism is an ideology representing the beliefs of the 31st president of the United States, Herbert Clark Hoover. Hoover presided of the market crash that became the Great Depression, and though he was a man with free-market and individualist ideals, he implemented a lot interventionist policies that he thought would help. He sought to help the people but refused to implement a budjet deficit, even though a deficit became inevitable. Due the economic situation, a great many people, formerly rich and poor, had to move into poorer tenement homes that sprawled up around urban zones during his presidency, they became known as "Hoovervilles".
Herbert Hoover was born on August 10, 1874, in West Branch, Iowa. His father, Jesse Hoover, was a blacksmith and farm implement store owner of German, Swiss, and English ancestry. Hoover's mother, Hulda Randall Minthorn, was raised in Norwich, Ontario, Canada, before moving to Iowa in 1859. Like most other citizens of West Branch, Jesse and Hulda were Quakers. Around age two "Bertie", as he was called during that time, contracted a serious bout of croup, and was momentarily thought to have died until resuscitated by his uncle, John Minthorn. As a young child he was often referred to by his father as "my little stick in the mud" when he repeatedly got trapped in the mud crossing the unpaved street. Herbert's family figured prominently in the town's public prayer life, due almost entirely to mother Hulda's role in the church. As a child, Hoover consistently attended schools, but he did little reading on his own aside from the Bible. Hoover's father, noted by the local paper for his "pleasant, sunshiny disposition", died in 1880 at the age of 34. Hoover's mother died in 1884, leaving Hoover, his older brother, Theodore, and his younger sister, May, as orphans. Hoover lived the next 18 months with his uncle Allen Hoover at a nearby farm.
In November 1885, Hoover was sent to Newberg, Oregon, to live with his uncle John Minthorn, a Quaker physician and businessman whose own son had died the year before. The Minthorn household was considered cultured and educational, and imparted a strong work ethic. Much like West Branch, Newberg was a frontier town settled largely by Midwestern Quakers. Minthorn ensured that Hoover received an education, but Hoover disliked the many chores assigned to him and often resented Minthorn. One observer described Hoover as "an orphan who seemed to be neglected in many ways". Hoover attended Friends Pacific Academy (now George Fox University), but dropped out at the age of thirteen to become an office assistant for his uncle's real estate office (Oregon Land Company) in Salem, Oregon. Though he did not attend high school, Hoover learned bookkeeping, typing, and mathematics at a night school.
Hoover was a member of the inaugural "Pioneer Class" of Stanford University, entering in 1891 despite failing all the entrance exams except mathematics. During his freshman year, he switched his major from mechanical engineering to geology after working for John Casper Branner, the chair of Stanford's geology department. During his sophomore year, to reduce his costs, Hoover co-founded the first student housing cooperative at Stanford, "Romero Hall". Hoover was a mediocre student, and he spent much of his time working in various part-time jobs or participating in campus activities. Though he was initially shy among fellow students, Hoover won election as student treasurer and became known for his distaste for fraternities and sororities. He served as student manager of both the baseball and football teams, and helped organize the inaugural Big Game versus the University of California. During the summers before and after his senior year, Hoover interned under economic geologist Waldemar Lindgren of the United States Geological Survey; these experiences convinced Hoover to pursue a career as a mining geologist.
When Hoover graduated from Stanford in 1895, the country was in the midst of the Panic of 1893, and he initially struggled to find a job. He worked in various low-level mining jobs in the Sierra Nevada Mountains until he convinced prominent mining engineer Louis Janin to hire him. After working as a mine scout for a year, Hoover was hired by Bewick, Moreing & Co., a London-based company that operated gold mines in Western Australia. Hoover first went to Coolgardie, then the center of the Eastern Goldfields. Though Hoover received a $5,000 salary (equivalent to $162,860 in 2021), conditions were harsh in the goldfields. Hoover described the Coolgardie and Murchison rangelands on the edge of the Great Victoria Desert as a land of "black flies, red dust and white heat".
Hoover traveled constantly across the Outback to evaluate and manage the company's mines. He convinced Bewick, Moreing to purchase the Sons of Gwalia gold mine, which proved to be one of the most successful mines in the region. Partly due to Hoover's efforts, the company eventually controlled approximately 50 percent of gold production in Western Australia. Hoover brought in many Italian immigrants to cut costs and counter the labour movement of the Australian miners. During his time with the mining company, Hoover became opposed to measures such as a minimum wage and workers' compensation, feeling that they were unfair to owners. Hoover's work impressed his employers, and in 1898 he was promoted to junior partner. An open feud developed between Hoover and his boss, Ernest Williams, but company leaders defused the situation by offering Hoover a compelling position in China.
Upon arriving in China, Hoover developed gold mines near Tianjin on behalf of Bewick, Moreing, and the Chinese-owned Chinese Engineering and Mining Company. He became deeply interested in Chinese history, but gave up on learning the language to a fluent level. He publicly warned that Chinese workers were inefficient and racially inferior. He made recommendations to improve the lot of the Chinese worker, seeking to end the practice of imposing long-term servitude contracts and to institute reforms for workers based on merit. The Boxer Rebellion broke out shortly after Hoover arrived in China, trapping the Hoovers and numerous other foreign nationals until a multi-national military force defeated Boxer forces in the Battle of Tientsin. Fearing the imminent collapse of the Chinese government, the director of the Chinese Engineering and Mining Company agreed to establish a new Sino-British venture with Bewick, Moreing. After Hoover and Bewick, Moreing established effective control over the new Chinese mining company, Hoover became the operating partner of Bewick, Moreing in late 1901.
As operating partner, Hoover continually traveled the world on behalf of Bewick, Moreing, visiting mines operated by the company on different continents. Beginning in December 1902, the company faced mounting legal and financial issues after one of the partners admitted to having fraudulently sold stock in a mine. More issues arose in 1904 after the British government formed two separate royal commissions to investigate Bewick, Moreing's labor practices, and financial dealings in Western Australia. After the company lost a suit Hoover began looking for a way to get out of the partnership, and he sold his shares in mid-1908.
After leaving Bewick, Moreing, Hoover worked as a London-based independent mining consultant and financier. Though he had risen to prominence as a geologist and mine operator, Hoover focused much of his attention on raising money, restructuring corporate organizations, and financing new ventures. He specialized in rejuvenating troubled mining operations, taking a share of the profits in exchange for his technical and financial expertise. Hoover thought of himself and his associates as "engineering doctors to sick concerns", and he earned a reputation as a "doctor of sick mines". He made investments on every continent and had offices in San Francisco, London, New York City, Paris, Petrograd, and Mandalay, British Burma. By 1914, Hoover was a very wealthy man, with an estimated personal fortune of $4 million (equivalent to $108.21 million in 2021).
He co-founded the Zinc Corporation to extract zinc near the Australian city of Broken Hill, New South Wales. The Zinc Corporation developed the froth flotation process to extract zinc from lead-silver ore and operated the world's first selective ore differential flotation plant. Hoover worked with the Burma Corporation, a British firm that produced silver, lead, and zinc in large quantities at the Namtu Bawdwin Mine. He also helped increase copper production in Kyshtym, Russia, through the use of pyritic smelting. He also agreed to manage a separate mine in the Altai Mountains that, according to Hoover, "developed probably the greatest and richest single body of ore known in the world".
In his spare time, Hoover wrote. His lectures at Columbia and Stanford universities were published in 1909 as Principles of Mining, which became a standard textbook. The book reflects his move towards progressive ideals, as Hoover came to endorse eight-hour workdays and organized labor. Hoover became deeply interested in the history of science, and he was especially drawn to the De re metallica, an influential 16th century work on mining and metallurgy by Georgius Agricola. In 1912, Hoover and his wife published the first English translation of De re metallica. Hoover also joined the board of trustees at Stanford, and led a successful campaign to appoint John Branner as the university's president.
Marriage and family
During his senior year at Stanford, Hoover became smitten with a classmate named Lou Henry, though his financial situation precluded marriage at that time. The daughter of a banker from Monterey, California, Lou Henry decided to study geology at Stanford after attending a lecture delivered by John Branner. Immediately after earning a promotion in 1898, Hoover cabled Lou Henry, asking her to marry him. After she cabled back her acceptance of the proposal, Hoover briefly returned to the United States for their wedding. They would remain married until Lou Henry Hoover's death in 1944.
Though his Quaker upbringing strongly influenced his career, Hoover rarely attended Quaker meetings during his adult life. Hoover and his wife had two children: Herbert Hoover Jr. (born in 1903) and Allan Henry Hoover (born in 1907). The Hoover family began living in London in 1902, though they frequently traveled as part of Hoover's career. After 1916, the Hoovers began living in the United States, maintaining homes in Palo Alto, California, and Washington, D.C.
November Conferences in 1929
In Friday, October 25th, Hoover made a formal statement indirectly addressing the stock market situation, he said "The fundamental business of the country, that is, the production and distribution of commodities, is on a sound and prosperous basis."
In Friday, November 15th, President Hoover announced he was calling a conference of the nation's business leaders to meet with government departmental heads to discuss the economy.
In Tuesday, November 19th, Hoover held a conference in Washington with twelve American railway executives. Upon its conclusion Hoover announced that he had received assurances from the railway presidents that they would "proceed with full programs of construction and betterments without any reference to recent stock exchange fluctuations."
In Thursday, November 21st, Hoover held a conference with representatives of business and organized labor in which he received pledges of peace from both sides in order to maintain business progress. Industries promised to make no wage reductions and labor groups likewise promised to make no wage increase demands.
In Saturday, November 23rd, President Hoover sent a telegram to every U.S. governor saying that "It would be helpful if road, street, public building, and other construction of this type could be speeded up and adjusted in such fashion as to further employment."
In Tuesday, December 3rd, President Hoover delivered his first State of the Union message to Congress. It was presented in the form of a written message rather than a speech. The message asserted that "during the past year the Nation has continued to grow in strength" and that the country's problems were "problems of growth and of progress." Of the economic situation, Hoover stated that he had "instituted systematic, voluntary methods of cooperation with the business institutions and with State and municipal authorities to make certain that fundamental businesses of the country shall continue as usual, that wages and therefore consuming power shall not be reduced, and that a special effort shall be made to expand construction work in order to assist in equalizing other deficits in employment ... I am convinced that through these measures we have reestablished confidence."
Smoot–Hawley Tariff Act
In 1922, Congress passed the Fordney–McCumber Tariff Act, which increased tariffs on imports.
The League of Nation's World Economic Conference met at Geneva in 1927, concluding in its final report: "the time has come to put an end to tariffs, and to move in the opposite direction." Vast debts and reparations could be repaid only through gold, services, or goods, but the only items available on that scale were goods. However, many of the delegates' governments did the opposite, in 1928, France was the first by passing a new tariff law and quota system.
By the late 1920s, the US economy had made exceptional gains in productivity because of electrification, which was a critical factor in mass production. Also, horses and mules had been replaced by motorcars, trucks, and tractors. One sixth to one quarter of farmland, which had been devoted to feeding horses and mules, was freed up, contributing to a surplus in farm produce. Although nominal and real wages had increased, they did not keep up with the productivity gains. As a result, the ability to produce exceeded market demand, a condition that was variously termed overproduction and underconsumption.
Senator Smoot contended that raising the tariff on imports would alleviate the overproduction problem, but the United States had actually been running a trade account surplus, and although manufactured goods imports were rising, manufactured exports were rising even faster. Food exports had been falling and were in trade account deficit, but the value of food imports were a little over half of the value of manufactured imports.
As the global economy entered the first stages of the Great Depression in late 1929, the main goal of the US was to protect its jobs and farmers from foreign competition. Smoot championed another tariff increase within the United States in 1929, which became the Smoot–Hawley Tariff Bill. In his memoirs, Smoot made it abundantly clear:
The world is paying for its ruthless destruction of life and property in the World War and for its failure to adjust purchasing power to productive capacity during the industrial revolution of the decade following the war.
Smoot was a Republican from Utah and chairman of the Senate Finance Committee. Willis C. Hawley, a Republican from Oregon, was chairman of the House Ways and Means Committee.
During the 1928 presidential election, one of Herbert Hoover's promises was to help beleaguered farmers by increasing tariffs on agricultural products. Hoover won, and Republicans maintained comfortable majorities in the House and the Senate during 1928. Hoover then asked Congress for an increase of tariff rates for agricultural goods and a decrease of rates for industrial goods.
The House passed a version of the act in May 1929, increasing tariffs on agricultural and industrial goods alike. The House bill passed on a vote of 264 to 147, with 244 Republicans and 20 Democrats voting in favor of the bill. The Senate debated its bill until March 1930, with many members trading votes based on their states' industries. The Senate bill passed on a vote of 44 to 42, with 39 Republicans and 5 Democrats voting in favor of the bill. The conference committee then unified the two versions, largely by raising tariffs to the higher levels passed by the House. The House passed the conference bill on a vote of 222 to 153, with the support of 208 Republicans and 14 Democrats.
Reconstruction Finance Corporation
Less Notable Policies
Revenue Act of 1932
After a decade of budget surpluses, the federal government experienced a budget deficit in 1931. Though some economists, like William Trufant Foster, favored deficit spending to address the Great Depression, most politicians and economists believed in the necessity of keeping a balanced budget. In late 1931, Hoover proposed a tax plan to increase tax revenue by 30 percent, resulting in the passage of the Revenue Act of 1932. The act increased taxes across the board, rolling back much of the tax cut reduction program Mellon had presided over during the 1920s. Top earners were taxed at 63 percent on their net income, the highest rate since the early 1920s. The act also doubled the top estate tax rate, cut personal income tax exemptions, eliminated the corporate income tax exemption, and raised corporate tax rates. Despite the passage of the Revenue Act, the federal government continued to run a budget deficit.
On taking office, Hoover urged Americans to obey the Eighteenth Amendment and the Volstead Act, which had established Prohibition across the United States. To make public policy recommendations regarding Prohibition, he created the Wickersham Commission. Hoover had hoped that the commission's public report would buttress his stance in favor of Prohibition, but the report criticized the enforcement of the Volstead Act and noted the growing public opposition to Prohibition. After the Wickersham Report was published in 1931, Hoover rejected the advice of some of his closest allies and refused to endorse any revision of the Volstead Act or the Eighteenth Amendment, as he feared doing so would undermine his support among Prohibition advocates. As public opinion increasingly turned against Prohibition, more and more people flouted the law, and a grassroots movement began working in earnest for Prohibition's repeal. In January 1933, a constitutional amendment repealing the Eighteenth Amendment was approved by Congress and submitted to the states for ratification. By December 1933, it had been ratified by the requisite number of states to become the Twenty-first Amendment.
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