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Hoover Offers FDR Advice on the Banking Crisis

Bank_Run_c1933_USAToday, we’re reprinting a document introduction written several years ago by John Moser, Professor of history and co-chair of the Master of Arts in History and Government at Ashland University. Moser comments on a letter Herbert Hoover wrote to Franklin Roosevelt three weeks before Roosevelt’s inauguration as president in March 1933:

In early 1933 Americans waited anxiously in the midst of economic crisis for a new president to begin his term of office.  In this light, Herbert Hoover’s letter to Franklin D. Roosevelt of February 18, 1933, makes for fascinating reading.  During the fall of 1932 the economy had shown signs of recovery, but by February overall unemployment stood at 25 percent and the nation’s banking system stood on the brink of collapse.  Hoover believed—not without reason—that uncertainty over Roosevelt’s intended policies was contributing to the general atmosphere of “fear and apprehension.”  He called on the incoming president to issue a public statement giving “prompt assurance that there will be no tampering or inflation of the currency” and “that the budget will be unquestioningly balanced even if further taxation is necessary.”

Roosevelt chose to ignore Hoover’s request, privately calling it “cheeky.”  No doubt he saw little reason to associate himself with the seemingly discredited economic policies of his predecessor.  But Roosevelt’s key economic policy adviser, Rexford G. Tugwell, admitted that same month that he and the president-elect “were wholly aware of the bank situation and that it would undoubtedly collapse in a few days, which would place the responsibility in the lap of President Hoover.”

– Professor John Moser

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