Inside Story

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Washington’s winter war

A national crisis, an acrimonious election, a recalcitrant president — how Herbert Hoover delayed America’s recovery from the Great Depression

Eric Rauchway 17 November 2020 1785 words

Uneasy handover: after fighting a four-month rearguard action, Herbert Hoover (left) congratulates his successor Franklin D. Roosevelt at his inauguration on 4 March 1933. Imagno/Getty Images

Even though he was defeated decisively on 3 November, Donald Trump remains president of the United States until noon on 20 January 2021. He retains all the powers of the office, including the ability to deny Joe Biden the funds lawfully afforded the president-elect. In refusing to permit a smooth transition to his successor, he is almost certainly costing lives and jobs; his mismanagement of the Covid-19 pandemic lost him the election, and voters are entitled to benefit from the Biden policy they chose instead.

The outgoing president’s intransigence also reveals the seams in the patchwork of American laws governing presidential transitions. Despite numerous amendments, they evidently remain as vulnerable to mischief as they were the last time a defeated incumbent sought to stymie his successor by prolonging a crisis, in that case in the depths of the Great Depression.

Herbert Hoover lost the presidency to Franklin Roosevelt by a landslide in the election of 1932, winning majorities in just six of the then forty-eight US states. He conceded in a telegram sent before election day was over on the Pacific coast, where he was monitoring results. But he would remain president until 4 March, and he planned to use those four months to win in substance what he had lost in the canvass: the argument over how to manage the Depression.

Hoover would be the last president to spend so much time in office after voters chose his successor. Earlier in 1932, Congress had asked the states to ratify a constitutional amendment moving the presidential inauguration to 20 January and the first meeting of the newly elected Congress to 3 January. Those shifts would first apply in 1937, and in the meantime the old rules prevailed. The constitution prescribed a fixed four-year term for a president, so Hoover’s time in office would end on 4 March 1933, four years to the day after he had been sworn in.

As soon as Hoover conceded, the constitutional machinery devoted to presidential elections — built in the eighteenth century and modified by statute — creaked into its quadrennial action, as it still does today. The president is elected by a college of electors chosen by the states, but the states delegate the choice of electors to citizens. Voters therefore cast their ballots not for a presidential candidate but for a slate of electors who have pledged to vote for that candidate. Those electors then vote by sending their ballots to the president of the Senate (who is also the vice-president of the United States). Once they are counted, a special session of both houses of Congress accepts the result of the vote as the official basis of the new president’s election.

The months of transition allow time for these proceedings to unfold. Until the process is complete, the outgoing president and members of Congress retain the authority of their positions — even if it might embarrass the more conscientious of them or give the more opportunistic a chance for mischief.

The hard-fought 1932 election turned on the question of how to manage the Depression. For nearly four full years the economy had got steadily worse. Unemployment rose to somewhere around 25 per cent. The jobless drew down their savings, then depended on their families, and then turned to charities and local governments, each of which failed them in turn. People began to die of starvation — not because the land could produce no food but because the mechanism for distributing it had somehow broken down. Crops fetched so little at market that farmers couldn’t afford to harvest them; food rotted on the stalk and vine even as Americans went hungry.

The Hoover administration had supplied some assistance, if too little, to suffering Americans. Hoover believed that his fellow citizens, lacking in confidence, simply needed to think positive thoughts and then go out and buy things. His encouragement failed. He tried to persuade businesses to band together voluntarily to try to limit wage cuts and keep prices up. This blandishment failed as well. Banks began to fail as people took out their savings and stopped repaying their loans.

Hoover supported modest employment creation through public works projects, and in 1931 announced with apparent satisfaction that 700,000 Americans were employed on such federal worksites. By that time, though, the ranks of the unemployed had swelled to more than seven million. He also remained opposed in principle to large-scale public works. They would “break down the enterprise and initiative of the American people,” he believed, and result in the “destruction of equality of opportunity amongst our people.” Private enterprise must hire Americans if the American system were to continue.

Opposing Hoover, Roosevelt campaigned on a program he called the New Deal, which drew on a Depression-era employment scheme he had instituted as governor of New York state. But the New Deal went beyond such emergency measures. As he said, the crisis made it clear that Americans must not only “restore” but “remodel.”

Emergency public works programs would be accompanied by a drastic overhaul of the nation’s economy. Rural life would become more sustainable, with a rationalised use of the land. Constructing dams and power plants would not only create jobs but also bring the benefits of modern machinery to chronically poor areas. City life would become more bearable, with factory work regulated to provide higher wages and shorter hours. The United States would at last catch up with other industrial nations, adopting programs for unemployment insurance and old-age pensions. The New Deal would fit the engines of capitalism with new governors to prevent them running too hot.

Roosevelt wanted to balance the budget, he assured voters, but not at the expense of the New Deal: “if starvation and dire need on the part of any of our citizens make necessary an appropriation of additional funds which would keep the budget out of balance, I shall not hesitate to… recommend to them the expenditure.” He also promised inflation of the currency — although that he did off the record, lest publicising the intention ruin the effect of the policy.

Roosevelt made these pledges not only to meet the needs of the economic moment but also to tackle what he saw as an existential challenge to democracy in the United States and around the world. Nazism was on the rise in Germany, and he worried it could take hold in the Americas. He wanted the New Deal to create a more active state “to help restore the close relationship with its people which is necessary to preserve our democratic form of government.”

For his part, Hoover regarded the New Deal as close kin to Bolshevism. He smelled on Roosevelt’s proposals the same “fumes of the witch’s cauldron which boiled over in Russia.” No public works program could dispel Depression levels of unemployment, he said, and if it tried it would “crack the timbers of our constitution” and “destroy the very foundations of the American system of life.” Voters should be grateful for him and all he had done: “Let’s be thankful for the presence in Washington of a Republican administration.” An apparently unimpressed electorate voted him out, choosing Roosevelt and the New Deal instead.

Hoover might have conceded the election in substance as graciously as he had conceded it in form. Some observers suggested he appoint Roosevelt his secretary of state and then resign together with his vice-president; under the law as it then was, Roosevelt would immediately have become president. Hoover dismissed the notion as “silly.” Still, short of quitting the office, he could have cooperated with his successor, helping to smooth the transition and start the New Deal.

So Roosevelt set about getting his program for fighting the Depression under way by other means. Intending first to relieve the nation’s farmers, he directed his aides to meet the leaders of agricultural groups and have them endorse a policy for raising commodity prices by subsidy. The Roosevelt team then worked with legislators to propose this measure in Congress.

But rather than let the infant New Deal proceed, Hoover blocked it, threatening to veto this law or anything similar that might make it through Congress. “I don’t want them to do anything,” he told an aide. “Whatever they do will be bad legislation from our point of view.”

Moreover, Hoover decided on principle that he would not attempt to stop the bank panics that were reaching a new pitch of terror in the last months of his presidency. Mistrustful of the wobbly financial sector, Americans had begun to withdraw money even from sound banks — thus rendering them unsound. Lawyers advised the president that he had the authority to use an enforced bank holiday to order inspections of their books, allowing only those certified as healthy to reopen. But Hoover refused. The panic, he believed, was a necessary if regrettably uncomfortable purging of the system. “I felt,” he said, “our effort should be to keep banks open, not closed.”

He did do one thing, vigorously and repeatedly: he tried to get the incoming president to swear off implementing the New Deal. Roosevelt must promise, Hoover said, to stay on the gold standard, balance the budget, and abandon the massive program of public works that had been the centrepiece of his campaign. As he admitted privately, “I realise that if these declarations be made by the president-elect… he will have ratified the whole program of the Republican administration; that is, it means abandonment of ninety per cent of the so-called new deal.”

Roosevelt declined to abandon the program on which he had been elected. As he told one of his staffers, his “most important task was to revive the confidence of the people in their government.” If he wanted to do that, he had to keep his promises. So he spent the months of the transition reassuring his supporters that he would do as he had pledged. He assembled a cabinet of devoted New Dealers and continued to develop the policies he would implement upon his inauguration: closing the banks and stopping the panic; taking the nation off the gold standard to inflate the currency and induce spending; and securing employment legislation from Congress to put Americans to work.

Recovery from the Depression began the very month of his inauguration, and continued apace during the New Deal. And that is the cost of Hoover’s intransigence: for the recovery might have begun sooner had the outgoing president accepted the results of the election. Jobs and — in a time of starvation — lives could have been saved. But as one newspaperman wrote then, even “with the world on fire,” there was no “extinguisher until after March 4.” The handover date might now be earlier, but the problem persists: a poor loser can make a nation suffer grievously. •

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