When the bubble broke, Americans expressed relief that Herbert Hoover resided in the White House. Not surprisingly for a man who had been such an active secretary of commerce, Hoover acted quickly to arrest the decline. In November 1929, to keep the stock market collapse from ravaging the entire economy, Hoover called a White House conference of business and labor leaders. He urged them to join in a voluntary plan for recovery: Businesses would maintain production and keep their workers on the job; labor would accept existing wages, hours, and conditions. Within a few months, however, the bargain fell apart. As demand for their products declined, industrialists cut production, sliced wages, and laid off workers. Poorly paid or unemployed workers could not buy much, and their decreased spending led to further cuts in production and further loss of jobs. Thus began the terrible spiral of economic decline.

But with each year of Hoover’s term, the economy weakened. Tariffs did not end the suffering of farmers because foreign nations retaliated with increased tariffs of their own that crippled American farmers’ ability to sell abroad. With the establishment of the Reconstruction Finance Corporation (RFC), Hoover employed the theory of trickle-down economics: Pump money into the economy at the top, and in the long run the people at the bottom would benefit. Or as one wag put it, “Feed the sparrows by feeding the horses.” In the end, very little of what critics of the RFC called a “millionaires’ dole” trickled down to the poor.

Meanwhile, hundreds of thousands of workers lost their jobs each month. By 1932, an astounding one-quarter of the American workforce — nearly thirteen million people — were unemployed. There was no direct federal assistance, and state services and private charities were swamped. The depression that began in 1929 devastated much of the world, but no other industrialized nation provided such feeble support to the jobless. Cries grew louder for the federal government to give hurting people relief.

Hoover’s response revealed the limits of his conception of the government’s proper role in fighting the economic disaster. He compared direct federal aid to the needy to the “dole” in Britain, which he thought destroyed the moral fiber of the chronically unemployed. The poor, he said, could rely on their neighbors to protect them “from hunger and cold.” In 1931, he allowed the Red Cross to distribute government-owned agricultural surpluses to the hungry. In 1932, he relaxed his principles further to offer small federal loans, not gifts, to the states to help them in their relief efforts. But Hoover’s circumscribed notions of legitimate government action proved vastly inadequate to address the problems of restarting the economy and ending human suffering.

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