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Herbert Hoover: Address to the Indiana Republican Editorial Association at Indianapolis.
Herbert
Herbert Hoover
226 - Address to the Indiana Republican Editorial Association at Indianapolis.
June 15, 1931
Public Papers of the Presidents
Herbert Hoover<br>1931
Herbert Hoover
1931
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United States
Indiana
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My dear fellow citizens:

It is difficult for me to find adequate expression for my appreciation of the reception given to me today by the people of Indiana. You have provided a marvelous occasion this evening, one in which I know you gentlemen join with me in gratitude to your committee. Never before have I known of 5,000 people sitting down to dinner--of Indiana food at least--so beautifully served, so capably managed, and with the assistance of the girls of a modern university.

It is a genuine pleasure to meet the Republican editors of the State of Indiana and their guests.

The editor in an American community has a most serious responsibility today. It is upon him, in a large measure, that the responsibility rests of molding and interpreting public opinion in his community. It is upon him also that we lean for leadership in every civic movement-political, economic, and social. And, above all, it is in you, the editors, that we must rest the first defense of American idealism. I can say in all fairness that our editors fulfill these responsibilities in a fashion which entitles them to the gratitude of the country.

You of this special association have a great responsibility as the representatives of the party to which we all belong. Many look upon the science of politics with suspicion. While ours is a government of, by, and for the people, it always has and it always must find its expression through organized political parties. Organization is essential to enable the people to express their will for the proper functioning of government in a democracy.

Without organized political parties, striving to serve the best interests of the American people, we would descend into political anarchy and be torn into political factions representing selfish, sectional, and group minorities. The purpose of party organization must be to promote the national welfare. Nothing is more certain than that good government is good politics.

I am glad to have this opportunity to meet with many old friends-Indiana's representatives in Washington--and to express to you, the editors of the State, the appreciation which we hold in Washington for the service which they have given the National Government. Your Senators, your Congressmen, and the many Indiana men who occupy places of high responsibility in Washington are an important part of our Federal system.

Your senior Senator--Senator Watson--has the high distinction of being the majority leader of the Senate. It is a great honor. You of Indiana all know the strength and quality of your junior Senator-Senator Robinson.

Your Congressmen have by ability and long service risen to leadership in the House of Representatives. We might be without any money in the Federal Treasury if it were not for the chairman of the Appropriations Committee, 1 who comes from your State. Mr. Vestal, Mr. Purnell, and your other Republican Representatives are all men who contribute to the unbiased and unselfish government of our country. I have a personal obligation to your able Governor 2 because of his many acts of cooperation with the Federal Government which have eased these many months.

1 Representative William R. Wood.

2 . Governor Harry G. Leslie.

I shall not take your time with encomiums. It it sufficient to say that Indiana always has and always will take a large and distinguished part in the government of our Republic.

The business depression is the dominant subject before the country and the world today. Its blight stretches from all quarters of the globe to every business place and every cottage door in our land. I propose to discuss it and the policies of the Government in respect to it.

Depressions are not new experiences, though none has hitherto been so widespread. We have passed through no less than 15 major depressions in the last century. We have learned something as the result of each of these experiences. From this one we shall gain stiffening and economic discipline, a greater knowledge upon which we must build a better safeguarded system. We have come out of each previous depression into a period of prosperity greater than ever before. We shall do so this time.

As we look beyond the horizons of our own troubles and consider the events in other lands, we know that the main causes of the extreme violence and the long continuance of this depression came not from within but from outside the United States. Had our wild speculation; our stock promotion with its infinite losses and hardship to innocent people; our loose and extravagant business methods; and our unprecedented drought, been our only disasters we would have recovered months ago.

A large part of the forces which have swept our shores from abroad are the malign inheritances in Europe of the Great War--its huge taxes, its mounting armament, its political and social instability, its disruption of economic life by the new boundaries. Without the war we would have no such depression. Upon these war origins are superimposed the over rapid expansion of production and collapse in price of many foreign raw materials. The demonetization of silver in certain countries and a score of more remote causes have all contributed to dislocation. Some particular calamity has happened to nearly every country in the world, and the difficulties of each have intensified the unemployment and financial difficulties of all the others. As either the cause or the effect, we have witnessed armed revolutions within the past 2 years in a score of nations, not to mention disturbed political life in many others. Political instability has affected three-fourths of the population of the world.

I do not at all minimize the economic interdependence of the world, but despite this the potential and redeeming strength of the United States in the face of this situation is that we are economically more self-contained than any other great nation. This degree of independence gives assurance that with the passing of the temporary dislocations and shocks we can and will make a large measure of recovery irrespective of the rest of the world. We did so with even worse foreign conditions in 1921.

We can roughly indicate this high degree of self-containment. Our average annual production of movable goods before the depression was about $50 billion. We exported yearly about 5 billions, or 10 percent. The world disruption has temporarily reduced our exports to about 3 1/2 billions. In other words, the shrinkage of foreign trade by 1 1/2 billions amounts to only 2 or 3 percent of our total productivity. Yet as a result of all the adverse forces our production has been reduced by, roughly, 10 or 12 billions. This sharp contrast between a national shrinkage of, say, $12 billion and a loss of $1,500 million from export trade is an indication of the disarrangement of our own internal production and consumption entirely apart from that resulting from decreased sales abroad. Some of this enlarged dislocation is also due to the foreign effects upon prices of commodities and securities. Moreover, the repeated shocks from political disturbance and revolution in foreign countries stimulate fear and hesitation among our businessmen. These fears and apprehensions are unnecessarily increased by that minority of people who would make political capital out of the depression through magnifying our unemployment and losses. Other small groups in the business world make their contribution to distress by raids on our markets with purpose to profit from depreciation of securities and commodities. Both groups are within the law; they are equally condemned by our public and business opinion; they are by no means helpful to the Nation.

Fear and apprehension, whether their origins are domestic or foreign, are very real, tangible, economic forces. Fear of loss of a job or uncertainty as to the future has caused millions of our people unnecessarily to reduce their purchases of goods, thereby decreasing our production and employment. These uncertainties lead our bankers and businessmen to extreme caution, and in consequence a mania for liquidation has reduced our stocks of goods and our credits far below any necessity. All these apprehensions and actions check enterprise and lessen our national activities. We are suffering today more from frozen confidence than we are from frozen securities.

With no desire to minimize the realities of suffering or the stern task of recovery, we must appraise the other side of this picture. If we proceed with sanity, we must not look only at the empty hole in the middle of the doughnut.

We must bear in mind at all times our marvelous resources in land, mines, mills, manpower, brainpower, and courage. Over 95 percent of our families have either an income or a breadwinner employed. Our people are working harder and are resolutely engaged, individually and collectively, in overhauling and improving their methods and services. That is the fundamental method of repair to the wreckage from our boom of 2 years ago; it is the remedy to the impacts from abroad. It takes time, but it is going on. Although fear has resulted in unnecessary reduction in spending, yet these very reductions are piling up savings in our savings banks until today they are the largest in our history. Surplus money does not remain idle for long. Ultimately it is the most insistent promoter of enterprise and of optimism. Consumption of retail goods in many lines is proceeding at a higher rate than last year. The harvest prospects indicate recovery from the drought and increased employment in handling the crop. Revolutions in many countries have spent themselves, and stability is on the ascendancy. The underlying forces of recovery are asserting themselves.

For the first time in history the Federal Government has taken an extensive and positive part in mitigating the effects of depression and expediting recovery. I have conceived that if we would preserve our democracy this leadership must take the part not of attempted dictatorship but of organizing cooperation in the constructive forces of the community and of stimulating every element of initiative and self-reliance in the country. There is no sudden stroke of either governmental or private action which can dissolve these world difficulties; patient, constructive action in a multitude of directions is the strategy of success. This battle is upon a thousand fronts.

I shall not detain you by long exposition of these very extensive activities of our Government for they are already well known. We have assured the country from panic and its hurricane of bankruptcy by coordinated action between the Treasury, the Federal Reserve System, the banks, the Farm Loan and Farm Board system. We have steadily urged the maintenance of wages and salaries, preserving American standards of living, not alone for its contribution to consumption of goods but with the far greater purpose of maintaining social good will through avoiding industrial conflict with its suffering and social disorder.

We are maintaining organized cooperation with industry systematically to distribute the available work so as to give income to as many families as possible.

We have reversed the traditional policy in depressions of reducing expenditures upon construction work. We are maintaining a steady expansion of ultimately needed construction work in cooperation with the States, municipalities, and industries. Over two billions of dollars is being expended, and today a million men are being given direct and indirect employment through these enlarged activities. We have sustained the people in 21 States who faced dire disaster from the drought. We are giving aid and support to the farmers in marketing their crops, by which they have realized hundreds of millions more in prices than the farmers of any other country. Through the tariff we are saving our farmers and workmen from being overwhelmed with goods from foreign countries where, even since our tariff was revised, wages and prices have been reduced to much lower levels than before. We are holding down taxation by exclusion of every possible governmental expenditure not absolutely essential or needed in increase of employment or .assistance to the farmers. We are rigidly excluding immigration until our own people are employed. The departures and deportations today actually exceed arrivals. We are maintaining and will maintain systematic voluntary organization in the community in aid of employment and care for distress. There are a score of other directions in which cooperation is organized and stimulation given. We propose to go forward with these major activities and policies. We will not be diverted from them.

By these and other measures which we shall develop as the occasion shall require, we shall keep this ship steady in the storm. We will prevent any unnecessary distress in the United States, and by the activities and courage of the American people we will recover from the depression.

I would be remiss if I did not pay tribute to the business, industrial, labor, and agricultural leaders for their remarkable spirit of cooperation. Their action is magnificent proof of the fundamental progress of American institutions, of our growth in social and economic understanding, of our sense of responsibility, and of human brotherhood.

Leaders of industry have cooperated in an extraordinary degree to maintain employment and sustain our standards of living. There have been exceptions, but they represent .a small percent of the whole. Labor has cooperated in prevention of conflict in giving greater effort and consequently in reducing unit costs. We have had freedom from strikes, lockouts, and disorder unequaled even in prosperous times. We have made permanent gains in national solidarity.

Our people can take justifiable pride that their united efforts have greatly reduced unemployment which would have otherwise been our fate; it is heavy but proportionally it is less than one-half that of other industrial countries. Great as have been our difficulties no man can contrast them with our experiences in previous great depressions or with the condition of other important industrial countries without a glow of pride in our American system and a confidence in its future.

While we are fostering the slow but positive processes of the healing of our economic wounds, our citizens are necessarily filled with anxiety, and in their anxiety there is the natural demand for more and more drastic action by the Federal Government. Many of their suggestions are sound and helpful. Every suggestion which comes within the proper authority and province of the Executive is given most earnest consideration. We are, of course, confronted with scores of theoretical panaceas which, however well intended, would inevitably delay recovery. Some timid people, black with despair, have lost faith in our American system. They demand abrupt and positive change. Others have seized upon the opportunities of discontent to agitate for the adoption of economic patent medicines from foreign lands. Others have indomitable confidence that by some legerdemain we can legislate ourselves out of a worldwide depression. Such views are as accurate as the belief we can exorcise a Caribbean hurricane by statutory law.

For instance, nothing can be gained in recovery of employment by detouring capital away from industry and commerce into the Treasury of the United States, either by taxes or loans, on the assumption that the Government can create more employment by use of these funds than can industry and commerce itself. While I am a strong advocate of expansion of useful public works in hard times, and we have trebled our Federal expenditure in aid to unemployment, yet there are limitations upon the application of this principle. Not only must we refrain from robbing industry and commerce of its capital, and thereby increasing unemployment, but such works require long engineering and legal interludes before they produce actual employment. Above all, schemes of public works which have no reproductive value would result in sheer waste. The remedy to economic depression is not waste but the creation and distribution of wealth.

It has been urged that the Federal Government should abandon its system of employment agencies and should appropriate large sums to subsidize their establishment in other hands. I have refused to accept such schemes, as they would in many places endow political organizations with the gigantic patronage of workmen's jobs. That would bring about the most vicious tyranny ever set up in the United States. We have instead expanded our Federal Government agencies which are on nonpolitical basis. They are of far greater service to labor.

We have had one proposal after another which amounts to a dole from the Federal Treasury. The largest is that of unemployment insurance. I have long advocated such insurance as an additional measure of safety against rainy days, but only through private enterprise or through cooperation of industry and labor itself. The moment the Government enters into this field it invariably degenerates into the dole. For nothing can withstand the political pressures which carry governments over this dangerous border. The net results of governmental doles are to lower wages toward the bare subsistence level and to endow the slacker. It imposes the injustice of huge burdens upon farmers and other callings which receive no benefits. I am proud that so representative an organization as the American Federation of Labor has refused to approve such schemes.

There have been some complaints from foreign countries over the revision of our tariff and it is proposed that we can expedite recovery by another revision. Nothing would more prolong the depression than a session of Congress devoted to this purpose. There are no doubt inequities and inequalities in some of our tariff rates; that is inherent in any congressional revision. But we have for the first time effective machinery in motion through a Tariff Commission with authority for any necessary rectification. And that machinery is functioning.

An analysis indicates that the large majority of these foreign complaints are directed against added protection we have given to agriculture. I believe that some of these countries do not realize the profound hardship which they themselves--with no malevolent purpose--have imposed on the American farmer. Improved machinery, the development of refrigeration, and cheapening of sea transportation have created for them great resources from their virgin lands and cheaper labor. As a result these countries have taken profitable export markets from the American farmer. There have been complaints from older nations who import a portion of their food products and export another portion. Yet these nations look upon their own agriculture as a way of life and as vital to their national security, and have long since adopted protective tariffs against the special farm products of the United States. We do not reproach them, for we, too, look upon a healthy agriculture as indispensable to the Nation. The growth of our industrial population will ultimately absorb the production of our farmers, but our agriculture was attuned to the export business and is of necessity passing a prolonged crisis in its shift to a domestic basis. Our tariff had proved so low that our farmers were being crowded even from the domestic market in many products which by use as diversification they can substitute to take up the slack in export business. From that condition we have given him protection, and we stand upon it.

In this connection I noted with interest that the International Chamber of Commerce in its recent meeting in Washington in effect recommended to the world the adoption of this method of the American tariff, although it was not referred to by name. Our visitors found the American tariff act unique in the field of tariff legislation, as it defines the principle of our tariff by law. That is the difference in cost of production at home and abroad. They found in our new Tariff Commission the creation of a tribunal open to every interested party empowered and ready to deal with any variations from this principle. They found a tariff without discriminations among nations. They recommended universal adoption of similar principles. Indeed, such a course would greatly modify tariffs in general. It would promote the commerce of the world by removing discriminations, preferences, and uncertainties.

But it is not my purpose upon this occasion to discuss the relations of our many economic problems to the problems of other nations. I am not unmindful of our responsibilities or our vital interest in their welfare. The very first service to them must be to place our own house in order; to restore our own domestic prosperity. It is from increases in our reservoir of economic strength that has and must come our contribution to the development and recovery of the world. From our prosperity comes our demand for their goods and raw materials. A prosperous United States is the beginning of a prosperous world.

With :industry as well as agriculture we are concerned not merely in the immediate problems of the depression. From the experience of this depression will come not only a greatly sobered and more efficient economic system than we possessed 2 years ago but a greater knowledge of its weaknesses as well as a greater intelligence in correcting them. When the time comes that we can look at this depression objectively it will be our duty searchingly to examine every phase of it.

We can already observe some directions to which endeavor must be pointed. For instance, it is obvious that the Federal Reserve System was inadequate to prevent a large diversion of capital and bank deposits from commercial and industrial business into wasteful speculation and stock promotion. It is obvious our banking system must be organized to give greater protection to depositors against failures. It is equally obvious that we must determine whether the facilities of our security and commodity exchanges are not being used to create illegitimate speculation and intensify depressions. It is obvious that our taxes upon capital gains viciously promote the booms and just as viciously intensify depressions. In order to avoid taxes, real estate and stocks are withheld from the market in times of rising prices, and for the same reason large quantities are dumped on the market in times of depression. The experiences of this depression indeed demand that the Nation carefully and deliberately reconsider the whole national and local problem of the incidence of taxation. The undue proportion of taxes which falls upon farmers, homeowners, and all real-property holders as compared to other forms of wealth and income demands real relief. There are far wider questions of our social and economic life which this experience will illuminate. We shall know much more of the method of still further advance toward stability, security, and wider diffusion of the benefits of our economic system.

We have many citizens insisting that we produce an advance "plan" for the future development of the United States. They demand that we produce it right now. I presume the "plan" idea is an infection from the slogan of the "5-year plan" through which Russia is struggling to redeem herself from the 10 years of starvation and misery. I am able to propose an American plan to you. We plan to take care of 20 million increase in population in the next 20 years. We plan to build for them 4 million new and better homes, thousands of new and still more beautiful city buildings, thousands of factories; to increase the capacity of our railways; to add thousands of miles of highways and waterways; to install 25 million electrical horsepower; to grow 20 percent more farm products. We plan to provide new parks, schools, colleges, and churches for this 20 million people. We plan more leisure for men and women and better opportunities for its enjoyment. We not only plan to provide for all the new generation, but we shall, by scientific research and invention, lift the standard of living and security of life to the whole people. We plan to secure a greater diffusion of wealth, a decrease in poverty, and a great reduction in crime. And this plan will be carried out if we just keep on giving the American people a chance. Its impulsive force is in the character and spirit of our people. They have already done a better job for 120 million people than any other nation in all history.

Some groups believe this plan can only be carried out by a fundamental, a revolutionary change of method. Other groups believe that any system must be the outgrowth of the character of our race, a natural outgrowth of our traditions; that we have established certain ideals over 150 years upon which we must build rather than destroy.

If we analyze the ideas which have been put forward for handling our great national plan, they fall into two groups. The first is whether we shall go on with our American system which holds that the major purpose of a state is to protect the people and to give them equality of opportunity, that the basis of all happiness is in development of the individual, that the sum of progress can only be gaged by the progress of the individual, that we should steadily build up cooperation among the people themselves to these ends. The other idea is that we shall directly or indirectly regiment the population into a bureaucracy to serve the state, that we should use force instead of cooperation in plans and thereby direct every man as to what he may or may not do.

These ideas present themselves in practical questions which we have to meet. Shall we abandon the philosophy and creed of our people for 150 years by turning to a creed foreign to our people? Shall we establish a dole from the Federal Treasury? Shall we undertake Federal ownership and operation of public utilities instead of the rigorous regulation of them to prevent imposition? Shall we protect our people from the lower standards of living of foreign countries? Shall the Government, except in temporary national emergencies, enter upon business processes in competition with its citizens? Shall we regiment our people by an extension of the arm of bureaucracy into a multitude of affairs?

The future welfare of our country, so dear to you and to me for ourselves and our children, depends upon the answer given.

Our immediate and paramount task as a people is to rout the forces of economic disruption and pessimism that have swept upon us. The exacting duty of government in these times is by use of its agencies and its influence to strengthen our economic institutions; by inspiring cooperation in the community to sustain good will and to keep our country free of disorder and conflict; by cooperation with the people to assure that the deserving shall not suffer; and by the conduct of government to strengthen the foundations of a better and stronger national life. These have been the objectives of my administration in dealing with this, the greatest crisis the world has ever known. I shall adhere to them.

If, as many believe, we have passed the worst of this storm, future months will not be difficult. If we shall be called upon to endure more of this period, we must gird ourselves to steadfast effort, to fail at no point where humanity calls or American ideals are in jeopardy.

Our transcendent momentary need is a much larger degree of confidence among our business agencies and that they shall extend this confidence in more than words. If our people will go forth with the confidence and enterprise which our country justifies, many of the mists of this depression will fade away.

In conclusion, whatever the immediate difficulties may be, we know they are transitory in our lives and in the life of the Nation. We should have full faith and confidence in those mighty resources, those intellectual and spiritual forces, which have impelled this Nation to a success never before known in the history of the world. Far from being impaired, these forces were never stronger than at this moment. Under the guidance of Divine Providence they will return to us a greater and more wholesome prosperity than we have ever known.


Note: The President spoke at 8:30 p.m. to an audience of approximately 5,000 people assembled in Manufacturers Hall on the Indianapolis Fair Grounds, following a dinner given in his honor by the Indiana Republican Editorial Association. The National Broadcasting Company and the Columbia Broadcasting System radio networks carried the address.

A reading copy of this item with holograph changes by the President is available for examination at the Herbert Hoover Presidential Library.


Citation: Herbert Hoover: "Address to the Indiana Republican Editorial Association at Indianapolis.," June 15, 1931. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=22706.
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