During the presidential campaign of 1932, President Herbert
Hoover tried to counter Roosevelt’s argument that the HawleySmoot Tariff had created the Great Depression. He pointed out
that protectionist measures had been implemented by the
newly formed countries of Europe years before the passage of
Hawley-Smoot. He eloquently argued that the cause of the
depression remained rooted in Europe. But voters did not
listen to his message and Franklin D. Roosevelt was elected
that year. With Roosevelt’s election the United States shifted to
a period of deficit spending that continues to this day.
I spoke at Des Moines about agriculture. My remarks this
evening will be largely directed to employment and to the
wage and salary earners. I propose to review what the
Administration has done and the measures and policies it has
in action together with the relation of these policies to those
of our opponents. As President of the United States, I have
the duty to speak to workers, but I also have a certain personal right to speak.
When I talk to you tonight about labor I speak not out of
academic imaginings but from sharp personal experience. I
have looked at these human problems, not only from the fireside of one who has returned from a day’s work with his own
hands but I know the problem that haunts the employer
through the night, desperate to find the money with which to
meet the week’s pay roll. In public service during years I have
had to look at these problems from the point of view of the
national welfare as a whole.
The people of a free nation have a right to ask their government,“Why has our employment been interrupted? What
measures have been taken in our protection? What has been
done to remove the obstacles from the return of our work to
us?” They not only have a right to ask these questions but to
have an answer. I am here tonight to give that answer.
During the past three years our economic system has
received the most terrific shock and dislocation which, had
not strong action been taken by your government, would
have imperiled the Republic and the whole hope of recovery.
It has affected business, industry, employment, and agriculture alike. It is appropriate to report that while many of our
measures are directed to the protection and assistance of particular groups, yet all are in the same boat and all must come
to shore together. And how are they to get to shore? By listening to those who manifestly display a lack of knowledge of
the character of the storm and of the primary problems of
navigation? By boring holes in the bottom of the boat? By
throwing overboard the measures designed to meet the storm
and which are proving their effectiveness?
Our opponents have been going up and down the land
repeating the statement that the sole or major origins of this
disruption of this world-wide hurricane came from the
United States through the wild floatation of securities and
the stock market speculation in New York three years ago, together with the passage of the Smoot-Hawley tariff bill,
which took place 9 months after the storm broke.
I proposed to discuss this assertion.
First. Because it can be proved absolutely untrue.
Second. Because the United States did not bring this
calamity upon the world. The United States is not the oppressor of the world.
Third. Because it can be demonstrated to be founded
upon a complete misunderstanding of what has happened in
Fourth. Because any party which exhibits such a lack of
economic understanding upon which to base national politics should not be trusted with the fate of 25,000,000
American families. They should not be trusted to command
the battle against the most gigantic economic emergency
with which our people have ever been confronted, and to
bring that battle to victorious issue in the reestablishment of
the functioning of our economic machine.
This thesis of the opposition as to the origin of our troubles is a wonderful explanation for political purposes. I would
be glad, indeed, if all the enormous problems in the world
could be simplified in such a fashion. If that were all that has
been the matter with us, we could have recovered from this
depression two years ago instead of fighting ever since that
time against the most destructive force which we have ever
met in the whole history of the United States—and I am glad
to say fighting victoriously.
Nowhere do I find the slightest reference in all the statements of the opposition party to the part played by the greatest war in history, the inheritances from it, the fears and
panics and dreadful economic catastrophes which have
developed from these causes in foreign countries, or the idea
that they may have had the remotest thing to do with the
calamity against which this administration is fighting day
The leaders of the Democratic Party appear to be entirely
in ignorance of the effect of the killing or incapacitating of
40,000,000 of the best youth of the earth, or of the stupendous cost of war—a sum of $300,000,000,000, or a sum
nearly equal to the value of all the property in the United
States, or the stupendous inheritance of debt, with its subsequent burden of taxes on scores of nations, with their stifling
effect upon recuperation of industry and commerce or paralyzing effect upon world commerce by the continued instability of currencies and budgets.
Democratic leaders have apparently not yet learned of the
political instability that arose all over Europe from the harsh
treaties which ended the war from time to time paralyzed confidence. They have apparently never heard of the continuing
economic dislocation from the transfer on every frontier of
great masses of people from their former economic setting.
They apparently have not heard of the continuing dislocation of the stream of economic life which has been caused by
the carving of 12 new nations from 3 old empires. These
nations have a rightful aspiration to build their own separate
economic systems; they naturally have surrounded themselves with tariffs and other national protections and have
thereby diverted the long-established currents of trade. I presume, however, that if our Democrat leaders should hear of
these nine new tariff walls introduced into the world some 14
years ago they would lay them at the door of the SmootHawley bill passed 12 years later.
They apparently have not heard of the increase of standing armies of the world from two to five million men, with
consequent burdens upon the taxpayer and the constant
threat to the peace of the world.
Democratic leaders apparently ignore the effect upon us of
the revolution among 300,000,000 people in China or the
agitations amongst 160,000,000 people in Russia. They have
ignored the effect of Russia’s dumping into the world the
commodities taken from its necessitous people in a desperate
effort to secure money with which to carry on—shall I call
it—a new deal.
The Democratic leaders apparently have never heard that
there has been gigantic over-production of rubber in the
Indies, of sugar in Cuba, of coffee in Brazil, of cocoa in
Ecuador, of copper in the Congo, of lead in Burma, overproduction of zinc in Australia, overproduction of oil from new
discoveries in the United States, Russia, Sumatra, and
Venezuela; and likewise the effect of the introduction into the
world of gigantic areas of new wheatlands in the Argentine
and in Canada; new cotton lands in Egypt. In each and every
case these enormous overproductions, far beyond consumption even in boom times, have crashed into the immutable
law of supply and demand and brought collapse in prices and
with it a train of bankruptcies and destruction of buying
power for American goods.
They appear not to recognize that these forces finally
generated economic strangulations, fears, and panic, the
streams of which precipitated another long series of worldwide disasters.
The Democratic leaders apparently never heard that there
followed revolutions in Spain and Portugal, Brazil, the
Argentine, Chile, Peru, Ecuador, Siam, with attempts at revolution in a dozen other countries, resulting in their partial or
practical repudiation of debt and the constant decrease in
buying power for our goods.
They seem not to know that the further accumulation of
all these causes and dislocations finally placed a strain upon
the weakened economic systems of Europe until one by one
they collapsed in failure of their gold standards and the partial or total repudiation of debts. They would hold the
American people ignorant that every one of these nations in
their financial crises imposed direct or indirect restrictions
on the import of goods in order to reduce expenditures of
their people. They call these “reprisals” against the SmootHawley tariff bill.
They apparently have never heard of the succeeding jeopardy in which our Nation was put through these destructions
of world commerce, or the persistent dumping of securities
into the American market from these panic-stricken countries; the gigantic drains upon our gold and exchange; or the
consequent fear that swept over our people, causing them to
draw from our bank resources $1,500,000,000, all of which
contracted credit, resulted in demand for payment of debts
right and left, and thwarted our every effort for industrial
Yet in the face of all these tremendous facts, our Democratic friends leave the impression with the American people
that the prime cause of this disaster was the boom in flotations and stock prices and a small increase in American tariffs.
Such an impression is unquestionably sought by the
Democratic candidate when he says:
“That bubble burst first in the land of its origin—the
United States. The major collapse abroad followed. It was not
simultaneous with ours.”
I do not underrate the distressing losses to millions of our
people or the weakening of our strength from the mania of
speculation and flotation of securities, but I may incidentally
remark that the state governments have the primary responsibility to protect their citizens in these matters and that the
vast majority of such transactions originated or took place in
the State of New York.
But as to the accuracy of the statement I have quoted I
may call your attention to a recent bulletin of the highly
respected National Bureau of Economic Research, in which it
is shown that this depression in the world began in 11 countries, having a population of 600,000,000 people, before it
even appeared in our country, instead of the bubble having
Herbert Hoover’s Response to Franklin D. Roosevelt 611
“first burst in the United States.” Their report shows that the
depression in eight other countries, with a population of
another 600,000,000 people, started at the same time with
ours. In fact, the shocks from the continued economic earthquakes in these other countries carried our prices far below
the values they would otherwise have sunk to, with all its
train of greatly increased losses, perils, and unemployment.
Our opponents demand to know why the governmental
leaders of business men over the world did not foresee the
approach of these disintegrating forces. That answer is simple. The whole world was striving to overcome them, but
finally they accumulated until certain countries could no
longer stand the strain, and their people, suddenly overtaken
by fear and panic, through hoarding and exporting their capital for safety, brought down their own houses and these disasters spread like a prairie fire through the world. No man
can foresee the coming fear or panic, or the extent of this
effect. I did not notice any Democratic Jeremiahs.
So much for the beginnings and forces moving in this
I now come to the amazing statements that the tariff bill of
1930 has borne a major influence in this debacle.
I quote from the Democratic candidate:
“The Hawley-Smoot tariff is one of the most important
factors in the present world-wide depressions.”
“The tariff has done so much to destroy foreign trade as to
make foreign trade virtually impossible.”
I shall analyze the accuracy of these statements not only
because I should like to get before my countrymen a picture
of the lack of understanding which the Democratic Party has
of world trade, but also for the further reasons that it is of
vital importance to labor that, as our opponents have this
obsession, it means that if they are intrusted with control of
our government they intend to break down the protective
tariff which is the very first line of defense of the American
standard of living against these new forces.
It requires a collection of dull facts to demonstrate the
errors in these bald assertions by Democratic leaders.
At the beginning I may repeat that this tariff bill was not
passed until nine months after the economic depression
began in the United States and also not until 20 other countries had already gone into the depression.
The Democratic Party seldom mentions that 66 per cent
of our imports are free of duty, but that is the fact. From half
to two-thirds of the trade of the world is in nondutiable
goods—that is, mostly raw materials; another part is in luxuries, upon which all nations collect tariffs for revenue; another part, and probably less than one-third of the whole, is
in competitive goods so far as the importing nation is concerned and therefore subject to protective tariffs.
The trade of the world has distressingly diminished under
the impact of these successive dislocations abroad. But the
decrease is almost exactly the same in the free goods everywhere as in the dutiable goods. That is the case in the United
If the Smoot-Hawley tariff reduced our imports of
dutiable goods, what was it that reduced the two-thirds of
If we explore a little further, we would find from the Tariff
Commission that the total duties collected in a comparable
year represent 16 per cent of the total imports, this being an
increase from 13.8 per cent of the previous tariffs. In other
words, the effect of the new tariff shows an increase of 2.2 per
cent. This is the margin with which they say we have pulled
down foreign governments, created tyrannies, financial
shocks, and revolutions.
I may mention that upon the same basis the McKinley
duties were 23 per cent; the Dingley duties were 25.8 per cent;
the Payne-Aldrich duties were 19.3 per cent of the whole of
our imports—all compared with the 16 per cent of the present tariff—and yet they produced in foreign countries no
revolutions, no financial crises, and did not destroy the whole
world, nor destroy American foreign trade.
And I may explore the facts further. The 5-year average of
the import trade of the United States before the depression
was about 12 per cent of the whole world import trade. This
they would say that 2.2 per cent increase applied to oneeighth of the world’s imports has produced this catastrophe.
I can explore this in still another direction. I remind you
that we levy tariffs upon only one-third of our imports. I also
remind you that the actual increases made in the SmootHawley Act covered one-quarter of the dutiable imports. I
may also remind you that our import trade is only oneeighth of the import trade of the world. So they would have
us believe this world catastrophe and this destruction of foreign trade happened because the United States increased tariffs on one-fourth of one-third of one-eighth of the world’s
imports. Thus we pulled down the world, so they tell us, by
increased on less than 1 per cent of the goods being imported
by the world.
And I may explore the responsibility of the tariffs still further. My opponent has said that it—
“Started such a drain on the gold reserves of the principal
countries as to force practically all of them off the gold standard.”
At Des Moines I defended the American people from this
guilt. I pointed out that it happens there had been no drain of
gold from Europe, which is the center of this disturbance, but
on the contrary, that Europe’s gold holdings have increased
every year since the Smoot-Hawley tariff was passed.
My fellow citizens, I could continue for hours in an analysis
of mistaken statements and misinformation from the opposition. But I assure you that this country is not to blame for the
catastrophes that have come on the world. The American people did not originate the age-old controversies of Europe. We
did not inaugurate the Great War or the panics in Europe.
No, my friends, the increase of duties collected by the
United States by 2.2 per cent calculated on all the goods we
import did not bring about the debacle in the world. If every
country in the world were to increase the duty upon their
imports by 2.2 per cent tomorrow, but if at the same time
they would also adopt domestic policies which would bring
about release of the energies and progress of their people—if
they would support confidence in the world, then the world’s,
as well as our own, international commerce would thrive and
boom beyond any dimensions that we ever dreamed of.
I dwell on this point, not only because I believe it is important to correct current misstatements of our opponents but
because the policies of our opponents are founded upon misconceptions of the utmost gravity for the future of the United
States. If it were not a matter of such utter gravity for the
future of the United States, I should treat them not in a sense
of seriousness but in a sense of humor. There is a vital determination before the American people as to whether there
shall be placed in power over the destinies of 120,000,000 of
people a party which so lacks a penetration into the forces
active in the world and the dangers and responsibilities that
arise from them….
I wish for a moment to return to the tariff. There is no
measure in the whole economic gamut more vital to the
American workingman and the farmer today than the maintenance of the protective tariff. I stand on that principle of
protection. Our opponents are opposed to that principle.
They propose “a competitive tariff for revenue.” They propose to do this in the face of the fact that in the last year currencies of competing nations have depreciated by going off
the gold standard and consequently wages have been lowered
in 30 competing countries. This is a flat issue which every
farmer and workman in the United States should consider
from the point of view of his home and his living.
That it is the intention of the Democratic candidate to
reduce the tariffs—on all commodities—must be clear from
these typical expressions in respect to the present tariff used
in this campaign—“Wicked and exorbitant tariff,”“its outrageous rates,” “almost prohibitive tariffs,” “the notorious and
indefensible Smoot-Hawley tariff,”“the excessive rates of that
bill must come down,” “until the tariff is lowered,” “our policy calls for lower tariffs.”
Do you want to compete with laborers whose wages in his
own money are only sufficient to buy from one-eighth to
one-third of the amount of bread and butter which you can
buy at the present rate of wages? That is the plain question. It
does not require a great deal of ingenious argument to support its correct answer. It is true we have the most gigantic
market in the world today, surrounded by nations clamoring
to get in. But it has been my belief—and it is still my belief—
that we should protect this market for our own labor; not
surrender it to the labor of foreign countries as the
Democratic party proposes to do.
During the presidential campaign of 1932, President Herbert