MORE REMINISCING ABOUT THE 1920s and 1930s
PART III
HOOVER AND HIS CREW IN DENIAL

“When the war closed the most vital of all issues, both in our own country and throughout the world, was whether governments should continue their wartime ownership and operation of many instrumentalities of production and distribution. We were challenged with a peacetime choice between between the American system of rugged individualism and a European philosophy of dramatically of dramatically opposed doctrines–doctrines pf paternalism and state socialism. The acceptance of these ideas would have meant the destruction of self-government through centralization of government. It would have meant the undermining of individual initiative and enterprise through which our people have grown to unparalleled greatness.

“The Republican Party from the beginning resolutely turned its face away from these ideas and these war practices.

“By adherences to the principles of decentralized self-government, ordered liberty, equal opportunity, and freedom to the individual, our American experiment in human welfare has yielded a degree of well-being unparalleled in all the world. It has come nearer to the abolition of poverty, to the abolition of fear of want, than humanity has ever reached before. Progress of the past seven years is proof of it. This alone furnishes the answer to our opponents who ask us ti introduce destructive elements into the system by which this has been accomplished.”

From a speech given by Herbert Hoover in New York City in 1928. [14]

In September, 1929 the Stock Market revealed definite signs of instability. On the morning of 24 October, prices began to plunge downward. by 11:30 A.M. a general climate of panic had set in as more and larger blocks of stocks were thrown on the market. Sales were taking place at such an accelerated rate that the ticker tape, which reported on prices outside the Exchange, began to fall increasingly behind. In an attempt to counter the wave of panic selling, a group of investment bankers meeting at J.P. Morgan purchased millions of dollars worth of key stocks, eventually stemming the tide and stabilizing prices. The next day stability continued on the Stock Exchange. But three days later, on 28 October, 1929, a new wave of panic selling struck the Exchange. This time the investment bankers made no attempt to stem the tide. The next day, 29 October, 1929. saw an increase in panic selling. This time the ticker tape ran two and a half hours behind. When the day was through, 16,410,030 shares had been sold (A record at that particular time); but more importantly, there had been a total loss in value of 880 issues which the New York Times estimated at more than $800,000,000. Thousands of investors lost their shirts. This however did not concern Secretary of the Treasury, Andrew Mellon, who maintained that the crash was only a temporary illness, that it would soon runt its course. Refusing to accept the fact that the crash was an economic debacle, members of the Hoover Administration insisted that the crash was little more than a correction that would soon remedy itself without any serious governmental intervention. [15]

The very conservative print media of the era often agreed. Here in Wisconsin (as in other states) various media outlets had a difficult time grasping the serious nature of the crash and certainly did not anticipate what would follow. Wisconsin newspaper editors frequently repeated government officials and the delusional optimists on Wall Street who were in a deep state of denial. The LaCrosse Tribune argued that the crash had been a psychological event and that there was no economic justification for “either a business panic or a business depression.” That same paper went so far as to argue that the economy stood a great deal to gain from the crash, because the crash might actually lead to “sound industrial and commercial development.” Another paper, the Beloit Daily News, assumed that the decline in stocks might actually stimulate the economy while other publications were fanatical in their support of Hoover era Robber Barons, going so far as to blame small investors, insisting that the small investor had been “reprehensible” for getting into the market in the first place and equally reprehensible for waiting to get out. Only a few Wisconsin publications had the audacity to suggest that the rich should also have been condemned for the same practices. [16]

“Ah yes,” Abe sighed. “The bended knee of the right wing media. Is this not what we see today with the corporate media? Is this not what we saw during the run up to the war? A very acquiescent media which openly and blindly accepts what right wing ‘experts’ spew as the truth? A corporate media that refuses to ask questions or to push back against dishonest rhetoric from corporate and political spokes persons? ”
Attitudes such as the ones above were short-lived, however. As the ensuing Depression widened and deepened it quickly became obvious that the crash had been a a lot more than a brief illness or a slight correction, and virtually no one believed that the crash would provide a stimulus for the ailing economy. How bad was it? Consider the following statistics.

* From 1929 to 1932, national income dropped from $87 billion to $42 billion.

* From 1929 to 1933 more than 100,000 businesses failed.

*In 1932 approximately 25 percent of thr working population was unemployed. Unemployment tose from 7 million in the fall of 1931 to 12.6 million in the spring of 1933.

*Private charities ran out of money in 1930

*By 1932 local government relief efforts were over extended. By late 1932 New York City’s poor drew $2.39 in weekly support. In Toledo, Ohio, the poor only received two cents a day for food. Across the country, unemployed minorities were often removed from the roles to better serve unemployed white males. [17[

*As many as two million homeless were wandering the country by the summer of 1932. Of these, the Children's Bureau estimated that 200,000 were young boys or girls. In 1932 the Southern Pacific (Railroad) ejected 683,000 trespassers, mostly young men from 16 to 25. [18]

*Personal consumption of durable goods dropped from $9.2 billion in 1929 to $3.5 billion in 1933.

*Domestic investment in producers’ durable equipment dropped from $6.9 billion to $1.6 billion.

*Investment in residential non farm construction dropped from $3.6 billion to $0.5 billion.

*GNP dropped from $104.4 billion in 1929 to $56 billion. [19]

And yet the Hoover Administration, especially Secretary Mellon, was unable to comprehend the devastating nature of the Depression. Hoer continued to issue meaningless, indeed, irrational, platitudes about imminent recovery. “Any lack of confidence in… the basic strength of business…is foolishness.” “We have now passed through the words. “Business and industry have turned the corner.” Mellon was even more delusional, if not heartless. “People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from the less competent people.” Even Secretary of Labor, James J. Davis, got in on the act. “Courage and resource are already swinging us back on the road to recovery. And we are fortunate in having a president who is a shining example of that courage and initiative. ” [20]

To which Abe responded, “I think that would qualify as ‘compassionate conservatism of the late 1920s. Let us remember, Abe continues, “that ‘W’, like Mellon, is a fanatical believer in small government–at least wen it comes to using the power of the federal government to help the lower classes. Bush in this regard, is a great deal more like Mellon than Hoover. Bush, like Mellon, came from an extremely privileged background. Both were. or are, dyed in the wool class warriors who see or saw poor people as little more than animals. Did you catch the line where Mellon talks about the Depression creating people–people meaning the lower and middle classes–with better morals? Do you remember the shrub’s line about how all poor people aren’t killers? Both lines reveal a basic contempt for people who these elitist class warriors consider inferior, below them. And while we’re on the subject, is there any real difference between Mellon’s attitude towards the victims of the Great Depression and the Hundfott’s attitude towards the victims of hurricane Katrina? Again, I say, these are both examples of ‘compassionate conservatism.’ An oxymoron if ever there was one.”

To Be continued..

Crossposted at Coalition for a Democratic America

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