The Demoncrats haven't changed tactics in 75 years. So why does
the Public keep falling for it?
Warning! This is long, but full of parallels with todays
situation.
It describes the sabotage of the economy by the Dems in the
30s.
Recall that the the world had a depression in the 20-30s, but in
the US it was turned into a "Great Depression", never really
recovering until WW II.
You may not be able to find this in Wikipedia. But listen to the
words of a very significant eye witness with a front row seat.
The Honorable Simeon D. Fess United States Senate
My Dear Mr. Senator:
I am glad to respond to your request that I put in writing for
your records, the statement I made to you yesterday as to the
economic situation at the moment, and the causes thereof.
Today we are on the verge of financial panic and chaos. Fear for
the policies of the new administration has gripped the country.
People do not await events, they act. Hoarding of currency, and of
gold, has risen to a point never before known; banks are suspending
not only in isolated instances, but in one case an entire state.
Prices have fallen since last autumn below the levels which debtors
and creditors can meet. Men over large areas are unable or are
refusing to pay their debts. Hundreds of millions of orders placed
before election have been cancelled. Unemployment is increasing,
there are evidences of the flight of capital from the United States
to foreign countries, men have abandoned all sense of new
enterprise and are striving to put their affairs in defense against
disaster.
Some days before election the whole economic machine began to
hesitate from the upward movement of last summer and fall. For some
time after election it continued to hesitate but hoped for the
best. As time has gone on, however, every development has stirred
the fear and apprehenshion of the people. They have begun to
realize what the abandonment of a successful program of this
administration which was bringing rapid recovery last summer and
fall now means and they are alarmed at possible new deal policies
indicated by the current events. It is this fear that now dominates
the national situation. It is not lack of resources, currency, or
or dit.
The incidents which have produced this fear are clear. There was
a delay by the President-elect of over two months in willingness to
cooperate with us to bring about order from confusion in our
[illegible] economic relations. There have been a multitude of
speeches, bills, and statements of democratic members of Congress
and others proposing inflation or tinkering with the currency. My
proposals for reduction of expenditures have been ignored to the
extent of over $200,000,000 by the Democratic House of
Representatives. The differences between Democratic leaders and the
President-elect over the basis of taxation with which to balance
the budget caused them to reject the balancing of the budget. The
publication by Democratic leaders of the House of the
Reconstruction Corporation loans has caused runs on hundreds of
banks, failures of many of them, and hoarding on a wide scale.
There have been proposed in Congress by Democratic leaders and
publicly even by the President-elect, projects involving federal
expenditure of tremendous dimensions which would obviously lie
beyond the capacity of the federal government to borrow without
tremendous depreciation in government securities. Such proposals as
the bills to assume Federal responsibility for billions of mortgage
loans to municipalities for public works, the Tennessee improvement
and Muscle Shoals, are all of this order. The proposals of Speaker
Garner that constitutional government should be abandoned because
the Congress, in which there will be an overwhelming majority, is
unable to face reduction of expenses, has started a chatter of
dictatorship. The President-elect has done nothing publicly to
disavow any of these proposals.
The Democratic House has defeated a measure to increase tariffs
so as to prevent invasion of goods from depreciated currency
countries, thus estopping increased unemployment from this source.
There have been interminable delays and threatened defeat of the
Glass Banking Bill, and the Bankruptcy bill.
How much of this whole situation is the result of fear of the
policies of the new administration is further indicated by a short
review of the five distinct periods in recent economic history.
The first period began with the financial and monetary collapse
of Europe in the last half of 1931 culminating in October, bringing
contractions of credit and reduction of exports, falling prices of
both commodities and securities, followed by great fear and
apprehension in the people which was promptly represented by
hoarding, bank failures, flight of capital, withdrawal of foreign
gold balances with final interpretation in decreased employment,
demoralization of agriculture and general stagnation.
The second period following the approval of Congress of our
measures of reconstruction in early February 1932 was a period of
sharp recovery over a period between 60 and 90 days; during this
period public confidence was restored, prices of commodities and
securities rose, currency began to return from hoarding, gold
shipments abroad were greatly lessened, bank failures practically
ceased and the whole country moved upward.
The third period began in April and continued through July. This
was a period of sharp debacle which was brought about by the
Democratic House by the same character of proposals we now see
again, that is by the original failure of the revenue bill, the
failure to reduce expenditures recommended by the Executive with
consequent fear that the movement toward balancing the budget would
not be successful; the passage of a group of inflationary measures
including the Patman Bill, the Goldsborough Bill, etc. The passage
of a series of projects which would have required greater issues of
government securities than the Treasury could support including the
Garner Bills for gigantic public works and unlimited loans by the
Reconstruction Corporation, etc. Public confidence was destroyed;
hoarding, withdrawal of foreign gold, decrease in employment,
falling prices and general economic demoralization took place.
The fourth period began about the adjournment of Congress when
it was assured that these destructive measures were defeated and
that constructive measures would be held. This period extended from
July until October and was a period of even more definite march out
of the depression. Employment was increasing at the rate of half a
million men a month, bank failures ceased, hoarded currency was
flowing back steadily and gold was returning from abroad, car
loadings, commodity and security and all the other proofs of
emergence from the depression were visible to every one. Fear and
despair had again been replaced by hope and confidence.
The fifth period began shortly before the election when the
outcome became evident, and has lasted until today. I have already
recited its events.
The causes of this terrible retrogression and fear in this fifth
period have an exact parallel in the third period of last spring.
The fact that there was no disavowal of the actions of last spring
by the Democratic candidates during the campaign lends added color
and alarm that the same actions and proposals which are now
repeated in this period positively represent the policies of the
new administration—and the people are seeking to protect themselves
individually but with national damage. The movement forward in
recovery of our people is again defeated by precisely the same
factors as last spring and again emanating from the Democratic
leaders.
In the interest of every man, woman, and child, the
President-elect has, during the past week, been urged by the saner
leaders of his own party such as Senator Glass and othes, by
myself, and by Democratic bankers and economists whom he has called
on for advice, to stop the conflagration before it becomes
uncontrollable, by announcing firmly and at once (a) that the
budget will be balanced even if it means increased taxation; (b)
new projects will be so restricted that government bond issues will
not in any way endanger stability of government finances; (c) there
will be no inflation or tampering with the currency; to which some
have added that as the Democratic party coming in with an
overwhelming majority in both houses, there can be no excuse for
abandonment of Constitutional processes.
The President-elect is the only man who has the power to give
assurances which will stabilize public mind as he alone can execute
them. Those assurances should have been given before now but must
be given at once if the situation is to be greatly helped. It would
allay some fear and panic whereas delay will make the situation
more acute.
The present administration is devoting its days and nights to
put out the fires and localize them. I have scrupulously refrained
from criticism which is well merited but have instead been giving
repeated assurances to the country of our desire to cooperate and
help the new administration.
What is needed, if the country is not to drift into great grief,
is the immediate and emphatic restoration of confidence in the
future. The resources of the country are incalculable, the
available credit is ample but lenders will not lend, and are
withdrawing their resources and their energies. The courage and
enterprise of the people still exist and only wait release from
fears and apprehension.
The day will come when the Democratic party will endeavor to
place the responsibility for the events of this Fifth period on the
Republican Party. When that day comes I hope you will invite the
attention of the American people to the actual truth.
Yours faithfully, (signed) Herbert Hoover
"Those who cannot remember the past are condemned to repeat it."
-Santayana
Letter unedited, typos present in source material preserved as
found.
Regards
Papers collected by Wm Starr Myers
http://www.geocities.com/mb_williams/hooverpapers/1933/paper1933022