The Great Depression made a laughing stock of ‘Great Engineer’ Herbert Hoover’s faith in efficiency
The October 1929 Wall Street collapse had left the American economy in ruins. After prolonged but ineffective optimism at the White House and robust debate on whether to tax imports to protect American farmers and manufacturers, on July 17, 1930, President Herbert Hoover signed the Smoot-Hawley tariff bill. More than 1,000 economists had petitioned Hoover not to do so, as had the greatest industrialist of the age, Henry Ford—in person—and sages from the world of finance. “I almost went down on my knees to beg Herbert Hoover to veto the asinine Smoot-Hawley Tariff,” Thomas Lamont, a partner at J.P. Morgan, said later. “That act intensified nationalism all over the world.” Current wisdom holds that Smoot-Hawley may have put the “great” in the Great Depression, exporting Wall Street’s woes globally, and raising the question of why one of the most intelligent men ever elected president of the United States made so colossal a blunder.
Simply put, Hoover was an engineer, and when things or systems break, engineers instinctively try to fix them. Amid the 1929 collapse, Herbert Hoover did what had always worked for him: attack a problem with cold logic and characteristic implacable efficiency. But logic and efficiency aren’t always reliable tools—especially in politics. As Hoover struggled to address the crisis, which bled into his re-election campaign, his engineer’s personality, once an indomitable asset, brought on his downfall.
Herbert Hoover was born to Quaker parents on August 10, 1874, in West Branch, Iowa. His father, the town blacksmith, died when the boy was five; Herbert’s mother died four years later. Relatives divvied the couple’s three orphans. Herbert ended up in Oregon with an uncle whose own son recently had died. His uncle’s household was one of hard work and self-reliance—traits the youth made his own. He took up fly fishing, an immersive solitary pastime emblematic of his personality; it became a hobby for life.
Upon earning a degree in geology in 1895 as a member of Stanford University’s inaugural class, Hoover spent years mining gold, zinc, and other metals in Australia, China, and Russia. Colleagues remarked on his fascination with efficiency. “We may say there is no cleverer engineer in the two hemispheres,” a colleague said. In 1908, Hoover started a consulting firm, a step he later said made him “as rich as any man has a right to be.” In 1912, as he was settling into life in the world’s financial capital, London, he wrote, “just making money isn’t enough.” He wanted to enter public service and, as he told an old friend, “get into the big game somewhere.”
Hoover got his chance at “the big game” when Europe went to war in 1914. Hoping for a knock-out punch at France, German forces trampled neutral Belgium on their push toward Paris. On Belgium’s behalf, ally Britain threw in against the Kaiser. An ensuing bloody stalemate included a British blockade that caused famines on the Continent. Hoover initially undertook to repatriate American citizens from Europe. His effectiveness at that task led the American ambassador in London, Walter Page, to enlist the mining engineer to try to save seven million Belgians left starving by the conflict.
Hoover organized a Commission for the Relief of Belgium and negotiated with the British to let foodstuffs and humanitarian supplies pass through their blockade. He persuaded the Germans to allow relief distribution across Belgium, exacting promises that the goods would not go to the German Army. Belgians nicknamed the program’s outlets “Hoover restaurants.” During 1914-18, Hoover’s operation raised almost $1 billion and fed nine million people daily in Belgium and northern France. Across the region street signs still bear his name.
At war’s end, President Woodrow Wilson, noting Hoover’s talents, named him national food administrator, assigned to coordinate domestic farm production. In 1919 Hoover founded the American Relief Administration, intended to combat starvation in combat-ravaged Europe. In 1922, four years after an armistice ended the First World War, that entity still was shipping provisions east, providing extensive famine relief in the civil war-torn Soviet Union, where Hoover’s people were feeding more than 10.5 million Russians daily. “You have saved from death three and one-half million children, five and one-half million adults,” Russian author Maxim Gorky wrote in a letter to Hoover. “I know of no accomplishment which in… magnitude and generosity can be compared to the relief that you actually accomplished.”
Humanitarianism made Herbert Hoover a household name worldwide. He became known as the “Great Engineer.” America’s political parties vied to enlist him as a candidate. In 1920, talk arose among Democrats of teaming Hoover with young Franklin D. Roosevelt. “Hoover is certainly a wonder,” Roosevelt said. “I wish I could make him president of the United States. There could not be a better one.” But Hoover embraced the GOP, and in 1920 Republicans Warren Harding and Calvin Coolidge defeated the Democratic ticket of James Cox and Roosevelt. In 1921 Harding appointed the Great Engineer his secretary of commerce. That summer poliomyelitis laid Franklin Roosevelt low.
In public highly reserved, even shy, Hoover was ill-equipped for the political side of public service. In private he could be warm and considerate, but his relentlessness and intensity could make him appear aloof. If during a conversation a compelling thought came to him, he might stand and walk away, leaving his companion in mid-sentence.
As the nation was industrializing in the early 1920s, a vogue developed for the theories of Frederick Taylor, the “father of industrial engineering.” Harding’s presidency was all about business, exemplified by banker Andrew Mellon serving as treasury secretary. At Commerce, once a bureaucratic backwater, Hoover recast the agency. In contrast to the Wilson administration’s quarrelsome approach to business, Hoover pursued partnership, enthusiastically taking up Taylor’s recommendations regarding streamlining regulations and developing standards to help American businesses run better, especially abroad.
Hoover worked ceaselessly to make government and industry more efficient. He jumpstarted the Bureau of Standards, which dated to the nation’s founding, into a business-friendly juggernaut, orienting the venerable office toward standardizing products to achieve simplicity in manufacturing, inventory control, and distribution. As an example of a sector needing simplification, he pointed out that American stone works were marketing paving stone in 66 sizes, creating a jumble of molds, handling methods, and inventory management. The commerce secretary had his staff comb industry for similar inefficiencies. The next step was to set standards to erase redundancies, such as in nails and tacks (428 sizes), shovels (4,460 types), bolts (1,500), sheet steel (1,819 sizes and gauges), files and rasps (1,351 styles), wire fencing (552 styles), hot water tanks (120 models), plumbing traps (1,114), paintbrushes (480), and milk bottles (49), among thousands of overburdened product lines.
The seven western states fed by the Colorado River had long disagreed on how best to harness that huge stream as a source of water and power. Hoover negotiated a deal to dam the Colorado, ending the decades-long dispute. Years in the making, the dam from the start was named for him. In the spring of 1927, the Mississippi River flooded catastrophically, inundating 27,000 square miles and displacing hundreds of thousands of people; 250 died. Hoover was called upon to mount a gargantuan relief effort.
The Great War propelled America into the Roaring Twenties—a decade of Prohibition and ebullience bordering on mania. From 1922 on, the largely unregulated American stock market grew annually almost 20 percent. Many investors were buying on margin, acquiring shares for a down payment of as little as 10 percent.
In August 1923, President Warren G. Harding died suddenly. Vice President Calvin Coolidge, a small-government advocate, succeeded him. In 1928, Coolidge surprised his party and the nation by declining to seek a second term of his own. Hoover never had run for office, but his name was coming up more and more often as a possible candidate. Many Republican bosses doubted his laissez-faire credentials, but sheer popularity made the Great Engineer the party’s logical selection. Accepting the nomination in Kansas City, Hoover hailed American individualism and voiced trust that engineering efficiency would mean a “final triumph over poverty.”
Despite his paucity of political experience, in November 1928 Hoover took 58 percent of the popular vote against Democrat Al Smith, an unprecedented margin. Speaking at his inauguration, the victor revealed an unexpected streak of progressive thinking. “Regulation of private enterprise and not government ownership or operation is the course rightly to be pursued in our relation to business,” the new president declared, endorsing “rigid enforcement” of laws addressing industry and public utilities as “the very base of equal opportunity and freedom from domination for all our people…I have no fears for the future of our country. It is bright with hope.”
Entering office in March 1929, Hoover went to work with characteristic speed. Internationally, he moved to improve relations with Latin America, which had been bruised by a century of American policy rooted in “manifest destiny,” a secular faith in American triumphalism. Domestically, concern about financial inequality led Hoover to close tax loopholes and create the Farm Board to “establish for our farmers an income equal to those of other occupations.” Soon after he was sworn in, Hoover and wife Lou bought a parcel 100 miles south of the capital on the Rapidan River in Virginia’s Blue Ridge Mountains on which to build a vacation retreat. The Hoovers, who had lived in many a rough mining camp, paid $1,045 for the 109-acre site and another $23,000 for materials to erect a rustic cabin and outbuildings constructed by crews of U.S. Marines overseen by Mrs. Hoover; in time, the couple arranged construction of a schoolhouse to serve the area’s children. At Camp Rapidan, away from Washington’s bustle and clamor, Hoover could interact with locals and wade into the river and do what he loved most—fly fish in a setting whose remoteness reminded him of his days as an anonymous mining engineer in the Outback.
On Tuesday, October 29, the stock market collapsed, triggering national, then international chaos. By November 2 investors had lost a sum equivalent to what the United States had spent fighting World War I. As Hoover’s term ground on, American industrial production shrank by more than half. Stocks lost 90 percent of their value, erasing millions of households’ life savings.
Disposable income dropped nearly a third. One American in four had no job—13 million families lacked a paycheck.
Treasury Secretary Mellon counseled that Black Tuesday was but an overdue correction; the market soon would rebalance itself, he predicted. Hoover disagreed. As an engineer, he saw the world in binary terms; when a mechanism broke, you fixed it. He urged companies not to lay off workers or cut wages, despite staggering loss of demand. He deported more than 500,000 migrant workers to Mexico, hoping incorrectly that Americans would step into their jobs. On principle, he refused to use federal dollars for public relief. Wanting Americans to return to work rather than grow dependent on handouts, Hoover encouraged state and federal public works projects like the great dam under construction on the Colorado River. Terrified Americans, caught in an unprecedented economic storm, sought leadership that steered not with cold technical expertise, but with an air of optimism, compassion, and warmth—the opposite of Herbert Hoover.
Hoover’s mostly ill-advised stab at intervention, the Smoot–Hawley Act, imposed tariffs on most imports. Hoover defended this “progressive advance” as a way to “remedy inequalities.” Rather than reinforcing the economy, the protectionist law sapped it.
Other nations retaliated. Sales of American goods abroad withered. Tariffs worsened domestic woes and exported the Depression.
Hoover began to act more forcefully to address the sagging economy only after years of businesses dying and farms falling into foreclosure. In January 1932, with his first term running out, he undertook a series of stimuli. In hopes of increasing employment by encouraging construction, forestalling a wave of farm foreclosures, and reinforcing banks, he established the Reconstruction Finance Corporation to make loans to financial institutions, railroads, and other businesses. A month later, he signed the Glass-Steagall Act, a banking reform measure. He released $750 million in gold reserves to underwrite additional business loans. In July, he signed the Emergency Relief and Construction Act, which funded public works and infrastructure projects nationwide. The act also provided loans to private companies to build low-cost housing for the poor—the debut of federal low-income housing. Hoover pressed the Farm Board to create the Grain Stabilization Corporation, a government mechanism that would attempt to strengthen the grain market by paying above-market prices. However, that program had the opposite effect. Farmers hoping to cash in planted and grew more grain, further sapping agricultural commodity prices.
Ever the engineer, Hoover sought to balance every equation, including the federal budget. In signing the Revenue Act of 1932, he raised taxes on all incomes; the top rate soared from 25 percent to 63 percent. But he was raising rates in an environment of scarce profits. In 1931 federal tax revenue had been $834 million. The 1932 figure was $427 million; 1933, $353 million.
The Twenties and their prosperous optimism now seemed a dream. In summer 1932 more than 17,000 World War I veterans marched on Washington, DC, demanding that bonuses promised for army service, set to be distributed in 1945, be paid immediately. Protesters camped around the capital. Tension over the former doughboys’ presence led to violence in which city police and U.S. Army troops, using armored vehicles, rousted the veterans from their ragtag habitats. Amid images of this unrest, Hoover’s air of aloofness played very badly. Others nationwide emulated the Bonus Army, erecting “Hoovervilles”—makeshift tent cities populated by the legions of the unemployed and homeless families.
Hoover, avatar of maximum efficiency, was now struggling to hold the nation together, a task compounded by his seeming inability or unwillingness to relate to people on a personal level.
Hoover “had these great skills,” historian Jonathan Alter said. “He was probably one of the three or four brightest American presidents in terms of his IQ, but in terms of what they call EQ, his emotional intelligence, his ability to relate to people, and to intuit what they were thinking and respond to them, he was in the bottom group.”
Hoover ran for reelection in 1932 beset by an economy in freefall and a forlorn population, facing an opponent of unprecedented personal style and political shrewdness. A Hudson Valley patrician, former assistant Navy secretary, failed vice-presidential candidate, governor of New York, and polio survivor, Franklin Delano Roosevelt ran a clever and hyperbolic campaign. He jabbed at Hoover as the candidate of profligacy and big government, accusing the incumbent not only of “reckless and extravagant spending,” but of weakening local and state power to concentrate “control of everything in Washington as rapidly as possible.” Deriding Hoover’s efforts at recovery, FDR’s running mate, Texas congressman John Nance Garner, claimed Hoover was “leading the country down the path of socialism.”
Roosevelt dismissed the incumbent’s professional background. “The presidency…is more than an engineering job, efficient or inefficient,” the Democrat told The New York Times. “It is pre-eminently a place of moral leadership.” Declaring himself “no engineer,” the jovial New Yorker, who had chosen as his campaign theme song “Happy Days Are Here Again,” vowed if elected to apply “simple rules of human conduct.”
Hoover on the hustings delivered a drone of seemingly endless monologues, a refugee in the political wilderness far from his career comfort zone. Trying to soften his rigid delivery, aides begged him to lighten up but Hoover, oblivious to the nuances of political life, believed his message to be more important than his performance as a messenger. After visiting the president to seek funds for his stone sculpture under way at Mount Rushmore, sculptor Gutzon Borglum said, “If you put a rose in Hoover’s hand, it would wilt.”
As Americans went to the polls on November 8, 1932, Hoover was expecting the nation to reward his direct approach to and hard work on the economic crisis and spurn the rival he regarded as glib and shallow. To Hoover’s utter astonishment, Roosevelt defeated him by a landslide that was greater than Hoover’s own record-setting win of four years earlier.
A final indignity awaited. With Roosevelt’s swearing-in weeks away, hordes of nervous bank customers began emptying savings accounts, imperiling the financial system. On February 17, 1933, a desperate Hoover wrote Roosevelt urging that they jointly declare a bank “holiday” temporarily closing banks to calm the populace. FDR, who later claimed that his response must have gotten lost, did not answer for 12 days. When he did, the president-elect called a bank holiday needless. On March 4, Roosevelt took the oath of office; on March 6, he declared a bank holiday. Furious and feeling publicly betrayed, Hoover could only stew in private.
Roosevelt followed Hoover’s cues until, seeing little progress, he took more radical steps, albeit in the same vein. “I once made a list of New Deal ventures begun during Hoover’s years as secretary of commerce and then as president,” economist and FDR adviser Rexford Tugwell wrote. “The New Deal owed much to what he had begun.”
After his defeat, Hoover doggedly attempted to claw his way out of ignominy. Greatly annoying Roosevelt, he took to the speaking circuit assailing New Deal “radicalism.” In a stream of essays and books, he predicted that Roosevelt’s foreign policy would bring on another world war. The world did go to war again, though not in the way that Hoover had anticipated.
Hoover remained in the wilderness until 1945 when, with Europe again in rubble, President Harry Truman asked for and got his help organizing famine relief for the Continent as well as Hoover’s advice on rebuilding the former Axis nations’ shattered economies.
In 1947, realizing the mammoth bureaucracy created by the New Deal and another world war had to adapt to peace and prosperity, Truman also enlisted Hoover to make the executive branch more efficient. Amid fierce infighting between New Dealers wanting to preserve FDR’s legacy and conservatives bent on erasing it, Hoover chaired the Commission on Organization of the Executive Branch. The “Hoover Commission” achieved bipartisan reforms Truman claimed were among his most significant accomplishments. Years later, speaking at the dedication of the Hoover Presidential Library in West Branch, Iowa, Truman said, “I feel that I am one of his closest friends and he is one of my closest friends.”
When Herbert Hoover, 90, died in 1964, his early achievements got their due. The New York Times wrote, “He fed more people and saved more lives than any other man in history.”