Ohio History Journal

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A Hoover Vignette



Fifty years after his defeat for reelection by Franklin D.

Roosevelt, Herbert Hoover remains one of America's most tragic

presidents. For many, if not most, his name continues to conjure up

an aura of depression, of frustration, of failure. Arthur M. Schlesin-

ger, Jr., historian of "The Age of Roosevelt," recalls one of the

myriad jokes that fixed a nation's scorn upon FDR's unhappy prede-

cessor in the early 1930s. It has Hoover asking Andrew Mellon for

the loan of a nickel to call up a friend, with Mellon replying, "Here's

a dime, call up all your friends."1

The centennial of Roosevelt's birth, the controversy over Ronald

Reagan's "New Federalism," and the deepening recession of our

time have combined to rekindle interest in both Hoover and

Roosevelt as well as the election of 1932, out of which emerged the

"New Deal" and a half-century of dramatic growth of federal power.

Ironically, though Hoover and FDR were poles apart in political

philosophy, a significant part of the Hoover economic program of

1931 and 1932 was carried over into the New Deal of 1933 and

beyond. Included was one of the very first of the "alphabet agen-

cies," the Reconstruction Finance Corporation, regarded by many as

perhaps the single most important weapon in Hoover's fight against

the depression.2 In the midst of the banking crisis of July 1932 and



Phillip R. Shriver is President Emeritus and Professor of History at Miami Uni-



1. Arthur M. Schlesinger, Jr., The Crisis of the Old Order, 1919 - 1933 (Boston,

1957), 244-45.

2. In what was called "the most important economic message he delivered to Con-

gress," Herbert Hoover on December 8, 1931, called for the establishment of a Recon-

struction Finance Corporation to restore confidence by furnishing "necessary credit

otherwise unobtainable" through loans aggregating up to $1,800,000,000 for "repro-

ductive public and semi-public and industrial works, slum clearance, etc., to states

and municipalities." There was great opposition to this proposal, particularly in the

Senate, and when it finally cleared Congress on January 16, 1932, the loan powers of

the RFC were effectively limited in the main to banks, building and loan associa-

tions, insurance companies, and railroads. The new agency began to function on

February 3, 1932, and continued to function throughout the Hoover and Roosevelt

administrations, though with significantly broader lending authority beginning with