The Consequences of the Proposed New Deal

What did Hoover regard as the primary cause of the Depression? Why did he believe it more important to focus on the past thirty years rather than on the last three? Why did he believe that Roosevelt’s New Deal would be dangerous for the country?
How does Hoover’s account of the origins of the Depression compare with that of Roosevelt, as seen in Campaign Address on Progressive Government at the Commonwealth Club? Was Hoover accurate in what he said about the Founding, as represented in Autobiography, Virginia Declaration of Rights and Constitution, Memorial and Remonstrance, Brutus I, Federalist 10, First Inaugural Address?

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Herbert Hoover (1874–1964) was elected president in 1928 while the country was still experiencing the economic boom of the 1920s. A year after his election, the stock market crashed. A full-scale economic depression followed. The Hoover administration’s efforts to deal with the economic crisis and its effects had little success, diminishing Hoover’s support. As the 1932 presidential campaign drew to a close, Hoover took the opportunity to explain what he thought was at stake in the election. In a speech at Madison Square Garden in New York City, he fired back at his Democratic challenger, Governor of New York Franklin Roosevelt (1882–1945), who had announced “a new deal for the American people” in his acceptance speech at the Democratic convention. Hoover seized on proposals made by Democratic leaders in Congress, and Roosevelt’s own words from the Commonwealth Club address, to portray Roosevelt and the Democrats as dangerously irresponsible and committed to a philosophy at odds with that of the American Founders. The president reminded his listeners of the progress the nation had made in the previous thirty years, and while he admitted that the previous three years had brought considerable distress, he asserted that the system established by the Founders in the Constitution had proven capable of weathering the worst of the crisis. Roosevelt won the popular vote with 57 percent versus Hoover’s 39 percent, and won the electoral college vote 472 to 59.

—David Tucker

Source: Gerhard Peters and John T. Woolley, The American Presidency Project,

This campaign is more than a contest between two men. It is more than a contest between two parties. It is a contest between two philosophies of government.

We are told by the opposition that we must have a change, that we must have a new deal. It is not the change that comes from normal development of national life to which I object or you object, but the proposal to alter the whole foundations of our national life which have been builded through generations of testing and struggle, and of the principles upon which we have made this nation. The expressions of our opponents must refer to important changes in our economic and social system and our system of government; otherwise they would be nothing but vacuous words. And I realize that in this time of distress many of our people are asking whether our social and economic system is incapable of that great primary function of providing security and comfort of life to all of the firesides of 25 million homes in America, whether our social system provides for the fundamental development and progress of our people, and whether our form of government is capable of originating and sustaining that security and progress.

This question is the basis upon which our opponents are appealing to the people in their fear and their distress. They are proposing changes and so-called new deals which would destroy the very foundations of the American system of life.

Our people should consider the primary facts before they come to the judgment—not merely through political agitation, the glitter of promise, and the discouragement of temporary hardships—whether they will support changes which radically affect the whole system which has been builded during these six generations of the toil of our fathers. They should not approach the question in the despair with which our opponents would clothe it.

Our economic system has received abnormal shocks during the last three years which have temporarily dislocated its normal functioning. These shocks have in a large sense come from without our borders, and I say to you that our system of government has enabled us to take such strong action as to prevent the disaster which would otherwise have come to this nation. It has enabled us further to develop measures and programs which are now demonstrating their ability to bring about restoration and progress.

We must go deeper than platitudes and emotional appeals of the public platform in the campaign if we will penetrate to the full significance of the changes which our opponents are attempting to float upon the wave of distress and discontent from the difficulties through which we have passed. We can find what our opponents would do after searching the record of their appeals to discontent, to group and sectional interest. To find that, we must search for them in the legislative acts which they sponsored and passed in the Democratic-controlled House of Representatives in the last session of Congress. We must look into both the measures for which they voted and in which they were defeated. We must inquire whether or not the presidential and vice presidential candidates have disavowed those acts. If they have not, we must conclude that they form a portion and are a substantial indication of the profound changes in the new deal which is proposed.

And we must look still further than this as to what revolutionary changes have been proposed by the candidates themselves.

We must look into the type of leaders who are campaigning for the Democratic ticket, whose philosophies have been well known all their lives and whose demands for a change in the American system are frank and forceful. I can respect the sincerity of these men in their desire to change our form of government and our social and our economic system, though I shall do my best tonight to prove they are wrong. I refer particularly to Senator Norris,1 Senator La Follette,2 Senator Cutting,3 Senator Huey Long,4 Senator Wheeler,5 William Randolph Hearst,6 and other exponents of a social philosophy different from the traditional philosophies of the American people. Unless these men have felt assurance of support to their ideas they certainly would not be supporting these candidates and the Democratic Party. The zeal of these men indicates that they must have some sure confidence that they will have a voice in the administration of this government.

I may say at once that the changes proposed from all these Democratic principals and their allies are of the most profound and penetrating character. If they are brought about, this will not be the America which we have known in the past. . . .

Now, our American system is founded on a peculiar conception of self-government designed to maintain an equality of opportunity to the individual, and through decentralization it brings about and maintains these responsibilities. The centralization of government will undermine these responsibilities and will destroy the system itself.

Our government differs from all previous conceptions, not only in the decentralization but also in the independence of the judicial arm of the government.

Our government is founded on a conception that in times of great emergency, when forces are running beyond the control of individuals or cooperative action, beyond the control of local communities or the states, then the great reserve powers of the federal government should be brought into action to protect the people. But when these forces have ceased there must be a return to state, local, and individual responsibility.

The implacable march of scientific discovery with its train of new inventions presents every year new problems to government and new problems to the social order. Questions often arise whether, in the face of the growth of these new and gigantic tools, democracy can remain master in its own house and can preserve the fundamentals of our American system. I contend that it can, and I contend that this American system of ours has demonstrated its validity and superiority over any system yet invented by human mind. It has demonstrated it in the face of the greatest test of peacetime history—that is the emergency which we have passed in the last three years.

When the political and economic weakness of many nations of Europe, the result of the World War and its aftermath, finally culminated in the collapse of their institutions, the delicate adjustments of our economic and social and governmental life received a shock unparalleled in our history. No one knows that better than you of New York. No one knows its causes better than you. That the crisis was so great that many of the leading banks sought directly or indirectly to convert their assets into gold or its equivalent with the result that they practically ceased to function as credit institutions is known to you; that many of our citizens sought flight for their capital to other countries; that many of them attempted to hoard gold in large amounts you know. These were but superficial indications of the flight of confidence and the belief that our government could not overcome these forces.

Yet these forces were overcome—perhaps by narrow margins—and this demonstrates that our form of government has the capacity. It demonstrates what the courage of a nation can accomplish under the resolute leadership of the Republican Party. And I say the Republican Party because our opponents, before and during the crisis, proposed no constructive program, though some of their members patriotically supported ours for which they deserve on every occasion the applause of patriotism. Later on in the critical period, the Democratic House of Representatives did develop the real thought and ideas of the Democratic Party. They were so destructive that they had to be defeated. They did delay the healing of our wounds for months.

Now, in spite of all these obstructions we did succeed. Our form of government did prove itself equal to the task. We saved this nation from a generation of chaos and degeneration; we preserved the savings, the insurance policies, gave a fighting chance to men to hold their homes. We saved the integrity of our government and the honesty of the American dollar. And we installed measures which today are bringing back recovery. Employment, agriculture, and business—all of these show the steady, if slow, healing of an enormous wound.

As I left Washington, our government departments communicated to me the fact that the October statistics on employment show that since the first day of July, the men returned to work in the United States exceed one million.

I therefore contend that the problem of today is to continue these measures and policies to restore the American system to its normal functioning, to repair the wounds it has received, to correct the weaknesses and evils which would defeat that system. To enter upon a series of deep changes now, to embark upon this inchoate new deal which has been propounded in this campaign would not only undermine and destroy our American system but it will delay for months and years the possibility of recovery. . . .

Now, to go back to my major thesis—the thesis of the longer view. Before we enter into courses of deep-seated change and of the new deal, I would like you to consider what the results of this American system have been during the last 30 years—that is, a single generation. For if it can be demonstrated that by this means, our unequaled political, social, and economic system, we have secured a lift in the standards of living and the diffusion of comfort and hope to men and women, the growth of equality of opportunity, the widening of all opportunity such as had never been seen in the history of the world, then we should not tamper with it and destroy it, but on the contrary we should restore it and, by its gradual improvement and perfection, foster it into new performance for our country and for our children.

Now, if we look back over the last generation we find that the number of our families and, therefore, our homes, has increased from about 16 to about 25 million, or 62 percent. In that time we have builded for them 15 million new and better homes. We have equipped 20 million out of these 25 million homes with electricity; thereby we have lifted infinite drudgery from women and men. The barriers of time and space have been swept away in this single generation. Life has been made freer, the intellectual vision of every individual has been expanded by the installation of 20 million telephones, 12 million radios, and the service of 20 million automobiles. Our cities have been made magnificent with beautiful buildings, parks, and playgrounds. Our countryside has been knit together with splendid roads. We have increased by 12 times the use of electrical power and thereby taken sweat from the backs of men. In the broad sweep real wages and purchasing power of men and women have steadily increased. New comforts have steadily come to them. The hours of labor have decreased, the 12-hour day has disappeared, even the 9-hour day has almost gone. We are now advocating the 5-day week. During this generation the portals of opportunity to our children have ever widened. While our population grew by but 62 percent, yet we have increased the number of children in high schools by 700 percent, and those in institutions of higher learning by 300 percent. With all our spending, we multiplied by six times the savings in our banks and in our building and loan associations. We multiplied by 1,200 percent the amount of our life insurance. With the enlargement of our leisure we have come to a fuller life; we have gained new visions of hope; we are more nearly realizing our national aspirations and giving increased scope to the creative power of every individual and expansion of every man’s mind.

Now, our people in these 30 years have grown in the sense of social responsibility. There is profound progress in the relation of the employer to the employed. We have more nearly met with a full hand the most sacred obligation of man, that is, the responsibility of a man to his neighbor. Support to our schools, hospitals, and institutions for the care of the afflicted surpassed in totals by billions the proportionate service in any period in any nation in the history of the world.

Now, three years ago there came a break in this progress. A break of the same type we have met 15 times in a century and yet have recovered from. But 18 months later came a further blow by the shocks transmitted to us from earthquakes of the collapse of nations throughout the world as the aftermath of the World War. The workings of this system of ours were dislocated. Businessmen and farmers suffered, and millions of men and women are out of jobs. Their distress is bitter. I do not seek to minimize it, but we may thank God that in view of the storm that we have met that 30 million still have jobs, and yet this does not distract our thoughts from the suffering of the 10 million.

But I ask you what has happened. This 30 years of incomparable improvement in the scale of living, of advance of comfort and intellectual life, of security, of inspiration, and ideals did not arise without right principles animating the American system which produced them. Shall that system be discarded because vote-seeking men appeal to distress and say that the machinery is all wrong and that it must be abandoned or tampered with? Is it not more sensible to realize the simple fact that some extraordinary force has been thrown into the mechanism which has temporarily deranged its operation? Is it not wiser to believe that the difficulty is not with the principles upon which our American system is founded and designed through all these generations of inheritance? Should not our purpose be to restore the normal working of that system which has brought to us such immeasurable gifts, and not to destroy it?

Now, in order to indicate to you that the proposals of our opponents will endanger or destroy our system, I propose to analyze a few of them in their relation to these fundamentals which I have stated.

First: A proposal of our opponents that would break down the American system is the expansion of governmental expenditure by yielding to sectional and group raids on the public treasury. The extension of governmental expenditures beyond the minimum limit necessary to conduct the proper functions of the government enslaves men to work for the government. If we combine the whole governmental expenditures—national, state, and municipal—we will find that before the World War each citizen worked, theoretically, 25 days out of each year for the government. In 1924, he worked 46 days out of the year for the government. Today he works, theoretically, for the support of all forms of government 61 days out of the year.

No nation can conscript its citizens for this proportion of men’s and women’s time without national impoverishment and without the destruction of their liberties. Our nation cannot do it without destruction to our whole conception of the American system. The federal government has been forced in this emergency to unusual expenditure, but in partial alleviation of these extraordinary and unusual expenditures the Republican administration has made a successful effort to reduce the ordinary running expenses of the government. . . .

Second: Another proposal of our opponents which would destroy the American system is that of inflation of the currency. The bill which passed the last session of the Democratic House called upon the Treasury of the United States to issue $2,300 million in paper currency that would be unconvertible into solid values. Call it what you will, greenbacks or fiat money. It was the same nightmare which overhung our own country for years after the Civil War. . . .

The use of this expedient by nations in difficulty since the war in Europe has been one of the most tragic disasters to equality of opportunity and the independence of man. . . .

Third: In the last session of the Congress, under the personal leadership of the Democratic vice presidential candidate, and their allies in the Senate, they enacted a law to extend the government into personal banking business. I know it is always difficult to discuss banks. There seems to be much prejudice against some of them, but I was compelled to veto that bill out of fidelity to the whole American system of life and government. . . .

They failed to pass this bill over my veto. But you must not be deceived. This is still in their purposes as a part of the new deal, and no responsible candidate has yet disavowed it.

Fourth: Another proposal of our opponents which would wholly alter our American system of life is to reduce the protective tariff to a competitive tariff for revenue. . . .

Fifth: Another proposal is that the government go into the power business. . . .

I have stated unceasingly that I am opposed to the federal government going into the power business. I have insisted upon rigid regulation. The Democratic candidate has declared that under the same conditions which may make local action of this character desirable, he is prepared to put the federal government into the power business. He is being actively supported by a score of senators in this campaign, many of whose expenses are being paid by the Democratic National Committee, who are pledged to federal government development and operation of electrical power. . . .

Sixth: I may cite another instance of absolutely destructive proposals to our American system by our opponents, and I am talking about fundamentals and not superficialities.

Recently there was circulated through the unemployed in this city and other cities, a letter from the Democratic candidate in which he stated that he would support measures for the inauguration of self-liquidating public works such as the utilization of water resources, flood control, land reclamation, to provide employment for all surplus labor at all times.

I especially emphasize that promise to promote “employment for all surplus labor at all times”—by the government. I at first could not believe that anyone would be so cruel as to hold out a hope so absolutely impossible of realization to those 10 million who are unemployed and suffering. But the authenticity of that promise has been verified. And I protest against such frivolous promises being held out to a suffering people. It is easy to demonstrate that no such employment can be found. But the point that I wish to make here and now is the mental attitude and spirit of the Democratic Party that would lead them to attempt this or to make a promise to attempt it. That is another mark of the character of the new deal and the destructive changes which mean the total abandonment of every principle upon which this government and this American system are founded. If it were possible to give this employment to 10 million people by the government—at the expense of the rest of the people—it would cost upward of $9 billion a year.

The stages of this destruction would be first the destruction of government credit, then the destruction of the value of government securities, the destruction of every fiduciary trust in our country, insurance policies and all. It would pull down the employment of those who are still at work by the high taxes and the demoralization of credit upon which their employment is dependent. It would mean the pulling and hauling of politics for projects and measures, the favoring of localities and sections and groups. It would mean the growth of a fearful bureaucracy which, once established, could never be dislodged. If it were possible, it would mean one-third of the electorate would have government jobs, earnest to maintain this bureaucracy and to control the political destinies of the country. . . .

I have said before, and I want to repeat on this occasion, that the only method by which we can stop the suffering and unemployment is by returning our people to their normal jobs in their normal homes, carrying on their normal functions of living. This can be done only by sound processes of protecting and stimulating recovery of the existing system upon which we have builded our progress thus far—preventing distress and giving such sound employment as we can find in the meantime. . . .

In order that we may get at the philosophical background of the mind which pronounces the necessity for profound change in our economic system and a new deal, I would call your attention to an address delivered by the Democratic candidate in San Francisco early in October.

He said:

Our industrial plant is built. The problem just now is whether under existing conditions it is not overbuilt. Our last frontier has long since been reached. There is practically no more free land. There is no safety valve in the western prairies where we can go for a new start. . . .The mere building of more industrial plants, the organization of more corporations is as likely to be as much a danger as a help. . . .Our task now is not the discovery of natural resources or necessarily the production of more goods, it is the sober, less dramatic business of administering the resources and plants already in hand . . . establishing markets for surplus production, of meeting the problem of under-consumption, distributing the wealth and products more equitably and adopting the economic organization to the service of the people.7

Now, there are many of these expressions with which no one would quarrel. But I do challenge the whole idea that we have ended the advance of America, that this country has reached the zenith of its power and the height of its development. That is the counsel of despair for the future of America. That is not the spirit by which we shall emerge from this depression. That is not the spirit which has made this country. If it is true, every American must abandon the road of countless progress and countless hopes and unlimited opportunity. I deny that the promise of American life has been fulfilled, for that means we have begun the decline and the fall. No nation can cease to move forward without degeneration of spirit.

I could quote from gentlemen who have emitted this same note of profound pessimism in each economic depression going back for 100 years. What the governor has overlooked is the fact that we are yet but on the frontiers of development of science and of invention. I have only to remind you that discoveries in electricity, the internal-combustion engine, the radio—all of which have sprung into being since our land was settled—have in themselves represented the greatest advances made in America. This philosophy upon which the governor of New York proposes to conduct the presidency of the United States is the philosophy of stagnation and of despair. It is the end of hope. The destinies of this country cannot be dominated by that spirit in action. It would be the end of the American system.

I have recited to you some of the items in the progress of this last generation. Progress in that generation was not due to the opening up of new agricultural land; it was due to the scientific research, the opening of new invention, new flashes of light from the intelligence of our people. These brought the improvements in agriculture and in industry. There are a thousand inventions for comfort and the expansion of life yet in the lockers of science that have not yet come to light. We are only upon their frontiers. As for myself, I am confident that if we do not destroy our American system, if we continue to stimulate scientific research, if we continue to give it the impulse of initiative and enterprise, if we continue to build voluntary cooperation instead of financial concentration, if we continue to build into a system of free men, my children will enjoy the same opportunity that has come to me and to the whole 120 million of my countrymen. I wish to see American government conducted in that faith and hope. . . .

My countrymen, the proposals of our opponents represent a profound change in American life—less in concrete proposal, bad as that may be, than by implication and by evasion. Dominantly in their spirit they represent a radical departure from the foundations of 150 years which have made this the greatest nation in the world. This election is not a mere shift from the ins to the outs. It means the determining of the course of our nation over a century to come.

Now, my conception of America is a land where men and women may walk in ordered liberty, where they may enjoy the advantages of wealth not concentrated in the hands of a few but diffused through the opportunity of all, where they build and safeguard their homes, give to their children the full opportunities of American life, where every man shall be respected in the faith that his conscience and his heart direct him to follow, and where people secure in their liberty shall have leisure and impulse to seek a fuller life. That leads to the release of the energies of men and women, to the wider vision and higher hope. It leads to opportunity for greater and greater service not alone of man to man in our country but from our country to the world. It leads to health in body and a spirit unfettered, youthful, eager with a vision stretching beyond the farthest horizons with a mind open and sympathetic and generous. But that must be builded upon our experience with the past, upon the foundations which have made this country great. It must be the product of the development of our truly American system.

  1. 1. George W. Norris (R-NE).
  2. 2. Robert M. La Follette Jr. (R-WI).
  3. 3. Bronson M. Cutting (R-NM).
  4. 4. Huey Long (D-LA).
  5. 5. Burton K. Wheeler (D-MT).
  6. 6. William Randolph Hearst was a Democratic politician from New York, a subscriber to Progressive politics, and a newspaper publisher.
  7. 7. Franklin D. Roosevelt’s Commonwealth Club Address, September 23, 1932.
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