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Saturday, July 07, 2007

When "Depression" Sounded less Frightening than "Panic" or "Crisis"

President Herbert Hoover in the Oval Office with Theodore Joslin, 1932 - US National Archives, Herbert Hoover Presidential Library and Museum, West Branch, Iowa

William Manchester (1922 – 2004), author of popular biographies on Winston Churchill and Douglas MacArthur and the controversial chronicler of President Kennedy's assassination, had his book The Glory and the Dream: A Narrative History of America 1932-1974, published in 1974.

It's an excellent read and presents a sense of the times starting with the Depression, through extensive use of contemporaneous newspaper and magazine reports, combined with sharp analysis.

Here is a sample on President Herbert Hoover:

Riffling through Hoover's papers, one sometimes has the strange feeling that the President looked upon the Depression as a public relations problem -- that he believed the nightmare would go away if only the image of American business could be polished up and set in the right light.

Faith was an end in itself; "lack of business confidence" was a cardinal sin. Hoover's first reaction to the slump which followed the Crash had been to treat it as a psychological phenomenon. He himself had chosen the word "Depression" because it sounded less frightening than "panic" or "crisis."

In December 1929 he declared that "conditions are fundamentally sound." Three months later he said the worst would be over in sixty days; at the end of May he predicted that the economy would be back to normal in the autumn; in June the market broke sharply, yet he told a delegation which called to plead for a public works project, "Gentleman, you have come sixty days too late. The Depression is over."

Already his forecasts were bring flung back to him by critics, but in his December 2, 1930, message to Congress -- a lame duck Republican Congress; the Democrats had just swept the off-year elections -- he said that "the fundamental strength of the economy is unimpaired."

At about the same time the International Apple Shippers Association, faced with a surplus of apples, decided to sell them on credit to jobless men for resale at a nickel each. Overnight there were shivering apple sellers everywhere.

Asked about them, Hoover replied, "Many people have left their jobs for the more profitable one of selling apples."

Reporters were caustic, and the President was stung. By now he was beginning to show signs of the most ominous trait of embattled Presidents; as his secretary Theodore Joslin was to note in his memoirs, Hoover was beginning to regard some criticism "as unpatriotic."

Nevertheless, he persevered, pondering new ways of waging psychological warfare. "What this country needs," he told Christopher Morley, "is a great poem." To singer Rudy Vallee, he said in the Spring of 1932, "If you can write a song that will make people forget the Depression, I will give you a medal."

Vallee did not get a medal but released a record of the song Brother, can you spare a dime? which was also recorded by Bing Crosby and became the anthem of the times.

The following is an extract from Theodore Joslin's diary, written in the dying days of the Hoover Administration, when the banking system was collapsing across the United States. :

Monday, Feb. 27, 1933

The Commercial did open this morning and although I felt unpatriotic in doing so, I drew out most of the money in my checking account and had Rowena come in and withdraw her savings account. And I told the President what I had done.

"Don't hoard it, Ted," was his only comment. "Put it in another bank that is safe. I would suggest the Riggs. It is the most liquid."

But I am "hoarding" temporarily. No bank is really liquid today and won't be until this panic is over. The daily hoarding figures from the Treasury are ghastly. That of yesterday was $165,000,000 bring the total to in excess of $2,200,000,000.

I had a conference with Charles Scribner this noon and may be able to arrange for the publication of a book on the last four years. The President inquired most anxiously as to all the details of our conversation and expressed the hope we could reach an agreement. "I shall think you could give Scribner's a good book," he remarked. "I hope it will work out."

The final entry for the diary is March 3, 1933, the day before Franklin D. Roosevelt was sworn into office. The final line quotes the President (described by Joslin as “angry and depressed,” ) saying “'We are at the end of our string.’”

On Sunday March 5, 1933, a day after his inauguration, President Roosevelt began the first full day of his dramatic inaugural 100 Days, by issuing an order closing every bank in the country for four days.

Harry Truman who became President on the death of FDR in April 1945, said that it's a recession when your neighbour loses his job; it's a depression when you lose yours!

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