IV.

Hoover as President

Nominated for president by the Republicans in 1928, Hoover defeated Governor Alfred E. Smith of New York, the Democratic candidate, in a campaign marred by partisan use of the issue of religion (Smith was a Roman Catholic), a controversy in which Hoover, to his credit, did not participate.

A.

The Depression

Inaugurated in March 1929, Hoover enjoyed only half a year of the economic prosperity with which the country had become familiar during the 1920s. In the autumn, after the stock market had crashed on 29 October, he took unprecedented measures to deal with the depression that followed. In the interest of maintaining consumer purchasing power, he urged business leaders not to cut wages, as had been their usual custom during hard times. The policy was only temporarily successful; production declined, unemployment grew, and eventually wages for those still employed were cut after all. In addition, the government's own policies, leading to a drastic decline in the money supply, may have hastened the slide into the depression.

Hoover sanctioned increasing government expenditure for useful public works, and after some prodding, government loans to business firms through a Reconstruction Finance Corporation. As the economy continued in stagnation, however, private and local relief funds became exhausted; against his own voluntaristic principles, therefore, Hoover reluctantly turned to direct federal spending for welfare purposes. Politically, it was too late; Hoover's Democratic opponents had fashioned an image of him as a reactionary unwilling to do anything to help people in distress. Unfair though it was, in light of Hoover's previous record, this stereotype haunted him, and his party, for the rest of his life, even though his opponents, when they came to power in 1933, wrestled with the same intractable problems until wartime production and employment came to their rescue.

Hoover believed that the causes of the Great Depression were international and that the remedy for it must be sought in the same fashion. He therefore sponsored a moratorium in 1931 on inter-allied war debts. He was planning an international monetary conference in London when his election defeat intervened.

B.

Foreign Affairs

Hoover's foreign policy was also based on voluntary cooperation. His overtures to Latin America, in contrast to the traditional US imperialism in that area, foreshadowed the good neighbour policy of Franklin D. Roosevelt and his secretary of state, Cordell Hull. He opposed retaliation against Japan for its invasion of Dongbei (1931), rejecting the idea that the United States had a responsibility to police the world.