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This Week in History

October 28 - November 3, 1932:
Roosevelt and Hoover Close the 1932 Presidential Campaign

October 2012

FDR Library
Outgoing President Herbert Hoover (left), with Franklin D. Roosevelt, March 4, 1933. Hoover had tried to use the RFC to bail out the banking system. But his policy was a disaster, since instead of extending credit to build infrastructure and create jobs, he slashed expenditures, declaring, on May 5, 1931, that a balanced Federal budget “was the most essential factor to economic recovery.”.

On Nov. 5, 1932, Franklin Delano Roosevelt closed his campaign for President with a speech at Madison Square Garden in New York City. His opponent, the incumbent President Herbert Hoover, had spoken in the same location five days earlier. The difference in philosophical outlook between the two men was striking, and offered a clear choice to the American people.

Hoover had become an American celebrity after World War I, praised as the "Great Engineer," who had overseen relief efforts in war-torn Belgium. Although he was orphaned early in life, he had managed to accumulate a small fortune, by means of what he viewed as hard work and individual responsibility. His perspective on the "American System," which he cited often in his speeches, was that the greatness of America depended on rugged individualism and decentralized government.

Therefore, Hoover did not believe that government action could or should be used to end economic depressions. By "letting nature take its course," he had greatly magnified the effects of the stock-market crash of 1929. This policy was more than agreeable to his murderous Secretary of the Treasury, Andrew Mellon, who advised Hoover: "Let the slump liquidate itself. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.... It will purge the rottenness out of the system."[1]

Therefore, in his State of the Union address on Dec. 2, 1930, President Hoover had told the Congress and the country that

"Economic depression can not be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body—the producers and consumers themselves. Recovery can be expedited and its effects mitigated by cooperative action. That cooperation requires that every individual should sustain faith and courage; that each should maintain his self-reliance; that each and every one should search for methods of improving his business or service; that the vast majority whose income is unimpaired should not hoard out of fear but should pursue their normal living and recreations; that each should seek to assist his neighbors who may be less fortunate; that each industry should assist its own employees; that each community and each state should assume its full responsibilities for organization of employment and relief of distress with that sturdiness and independence which built a great Nation."

Hoover insisted that relief for the unemployed must be locally and privately financed.

By 1932, local municipalities and states were finding it absolutely impossible to organize enough employment, or to relieve the distress of millions of undernourished and homeless American citizens. Joseph Heffernan, the Mayor of Youngstown, Ohio, wrote a magazine article in May of 1932 which described that city's battle to help its citizens and called for Federal intervention to restore the economy:

"Never had Youngstown suffered such a shock to the spirit which had made it one of the great industrial centres of the world.... Another winter was approaching. The numbers of the unemployed had increased and suffering had grown acute. Many heads of families had not earned a penny in two years. Landlords clamored for their rents and sought evictions.... Thousands of the city's water bills were unpaid, and officials were torn between their desire to be charitable, their fear of disease if the water were cut off, and the city's urgent need of money. Property owners could not pay their taxes, and delinquencies became appalling.... As in Cleveland, we adopted the slogan, 'Pay your taxes, so the hungry can be fed,' and the words meant just what they said, for by this time the private charities were swamped, desperate, and bankrupt."

Yet despite the widespread suffering, President Hoover transformed the Constitutional principle of promoting the general welfare into a call for "self-help." In his speech at Madison Square Garden, Hoover claimed that "our opponents ... are proposing changes and so-called new deals which would destroy the very foundations of our American System." Continuing his microscopic view of humanity, he dropped his earlier reference to people as "the cells of the economic body," in favor of talking about a society that was "absolutely fluid in freedom of the movement of its human particles." The President claimed that any expansion of government expenditure to reverse the depression and relieve suffering was nothing but "yielding to sectional and group raids on the Public Treasury," and announced proudly, "This I stopped."

'People Aren't Cattle'

And there were many so-called economists who agreed with him. Ray Vance, an investment counselor and chairman of several investment firms, was more forthright when he laid out, in an article in June of 1932, how the depression could be "managed." He reported favorably that, "Wage rates and the general overhead of business concerns have been curtailed to a point where profits could be made on relatively small volumes of business." However, there were still things to be accomplished. "With the exception of Great Britain, no large nation has readjusted its budget to current conditions. To do this does not require an exact balancing of the budget but does require the drastic cutting of expenses built up through long years of free spending, the placing of heavy taxes, and the distribution of taxes over practically all classes and sections of the country." When faced with a cold-blooded economist in the mold of Vance, advising him that austerity policies were necessary, Franklin Roosevelt angrily informed him that "People aren't cattle, you know."

At his final speech in Madison Square Garden, candidate Franklin Roosevelt summed up his commitment to saving the nation and uniting the country.

"Tonight we close the campaign. Our case has been stated and made. In every home, to every individual, in every part of our wide land, full opportunity has been given to hear that case, and to render honest judgment on Tuesday next.

"From the time that my airplane touched ground at Chicago [to accept the nomination—ed.], up to the present, I have consistently set forth the doctrine of the present-day democracy. It is the program of a party dedicated to the conviction that every one of our people is entitled to the opportunity to earn a living, and to develop himself to the fullest measure consistent with the rights of his fellow men....

"There can be only one great principle to guide our course in the coming years. We have learned the lesson that extravagant advantage for the few ultimately depresses the many. To our cost we have seen how, as the foundations of the false structure are undermined, all come down together. We must put behind us the idea that an uncontrolled, unbalanced economy, creating paper profits for a relatively small group, means or ever can mean prosperity.... There is an interdependence in economics, just as there is a brotherhood in humanity. Loss to any is loss to all.

"Today we struggle against the inevitable result of wandering after false gods. Confident in the sinew and fiber of American life, we know that our losses are not beyond repair. We know that we can apply to the great structure we have built, our power of organization, our fertility of mind and the intelligence and the foresight needed to make that structure more serviceable. We refuse to be oppressed by baseless fears that our firesides are to become cold or that our civilization will disappear. We know that by the united effort of us all, our fear can be dissipated, our firesides protected, our economic fabric reconstituted, and our individual lives brought to more perfect fulfillment.

"The next Administration must represent not a fraction of the United States, but all of the United States. No resource of mind or heart or organization can be excluded in the fight against what is, after all, our real enemy. Our real enemies are hunger, want, insecurity, poverty, and fear. Against these, there is no glory in a victory only partisan.

"The genius of America is stronger than any candidate or any party. This campaign, hard as it has been, has not shattered my sense of humor or my sense of proportion. I still know that the fate of America cannot depend on any one man. The greatness of America is grounded in principles and not on any single personality. I, for one, shall remember that, even as President. Unless by victory we can accomplish a greater unity toward liberal effort, we shall have done little indeed....

"Today, there appears once more the truth taught two thousand years ago that 'no man lives to himself, and no man dies to himself; but living or dying, we are the Lord's and each other's'.... We can and will bring to the problem of the individual the maturity of the united effort of a Nation come of age. America, mature in its power, united in its purpose, high in its faith, can come and will come to better days."


 1. EIR Founding Editor Lyndon LaRouche has often commented on the role of Hoover's policies in bringing on the Great Depression. In "The Great Crisis of 2005: End-Game 2005" (EIR Oct. 14, 2005), he wrote:

"What cut the U.S. economy in half under President Herbert Hoover, was not the '29 Crash. What collapsed the U.S. economy by half, were the "free will policies" which Andrew Mellon and President Herbert Hoover continued after that '29 Crash, when the measures to be taken should have been successful policies of recovery like those introduced by President Franklin Roosevelt beginning the day of Roosevelt's March 1933 inauguration. George W. Bush's policies are like those of the famous "Crazy Eddie": insane. They are far, far worse, and more dangerous to mankind than those of the Coolidge, Hoover, and Andrew Mellon, who gave us the Great Depression of the 1930s."


The original article was published in the EIR Online’s Electronic Intelligence Weekly, as part of an ongoing series on history, with a special emphasis on American history. We are reprinting and updating these articles now to assist our readers in understanding of the American System of Economy.