Herbert Hoover: Annual Message to Congress

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If we lift our vision beyond these immediate emergencies we find fundamental national gains even amid depression.… For the first time in the history of our major economic depressions there has been a notable absence of public disorders and industrial conflict.… Business depressions have been recurrent in the life of our country and are but transitory. The nation has emerged from each of them with increased strength and virility because of the enlightenment they have brought, the readjustments and the larger understanding of the realities and obligations of life and work which come from them.…

The emergencies of unemployment have been met by action in many directions. The appropriations for the continued speeding up of the great Federal construction program have provided direct and indirect aid to unemployment upon a large scale.… Immigration has been curtailed by administrative action.… The expansion of Federal employment agencies under appropriations by the Congress has proved most effective. Through the President’s organization for unemployment relief, public and private agencies were successfully mobilized last winter to provide employment and other measures against distress.… The evidence of the Public Health Service shows an actual decrease of sickness and infant and general mortality below normal years. No greater proof could be adduced that our people have been protected from hunger and cold and that the sense of social responsibility in the nation has responded to the need of the unfortunate.…

The fundamental difficulties which have brought about financial strains in foreign countries do not exist in the United States. No external drain on our resources can threaten our position, because the balance of international payments is in our favor; we owe less to foreign countries than they owe to us; our industries are efficiently organized; our currency and bank deposits are protected by the greatest gold reserve in history.…

We must have insistent and determined reduction in government expenses. We must face a temporary increase in taxes. Such increase should not cover the whole of these deficits or it will retard recovery. We must partially finance the deficit by borrowing. It is my view that the amount of taxation should be fixed so as to balance the Budget for 1933 except for the statutory debt retirement. Such government receipts would assure the balance of the following year’s budget including debt retirement.…

A method should be devised to make available quickly to depositors some portion of their deposits in closed banks as the assets of such banks may warrant. Such provision would go far to relieve distress in a multitude of families, would stabilize values in many communities, and would liberate working capital to thousands of concerns.

I recommend the establishment of a system of home-loan discount banks as the necessary companion in our financial structure of the Federal Reserve Banks and our Federal Land Banks. Such action will relieve present distressing pressures against home and farm property owners.…

In order that the public may be absolutely assured and that the government may be in position to meet any public necessity, I recommend that an emergency Reconstruction Corporation of the nature of the former War Finance Corporation should be established.… The very existence of such a bulwark will strengthen confidence.…

Our people have a right to a banking system in which their deposits shall be safeguarded and the flow of credit less subject to storms. The need of a sounder system is plainly shown by the extent of bank failures.…

As an aid to unemployment the Federal Government is engaged in the greatest program of public building, harbor, flood control, highway, waterway, aviation, merchant and naval ship construction in all history.…

We must avoid burdens upon the government which will create more unemployment in private industry than can be gained by further expansion of employment by the Federal Government. We can now stimulate employment and agriculture more effectually and speedily through the voluntary measures in progress, through the thawing out of credit, through the building up of stability abroad, through the home loan discount banks, through an emergency finance corporation and the rehabilitation of the railways and other such directions.

I am opposed to any direct or indirect government role. The breakdown and increased unemployment in Europe is due in part to such practices. Our people are providing against distress from unemployment in true American fashion by a magnificent response to public appeal and by action of the local governments.…

I have referred in previous messages to the profound need of further reorganization and consolidation of Federal administrative functions to eliminate overlap and waste, and to enable coordination and definition of government policies now wholly impossible in scattered and conflicting agencies which deal with parts of the same major function.…

I recommend that all building and construction activities of the government now carried on by many departments be consolidated into an independent establishment under the President to be known as the “Public Works Administration” directed by a Public Works Administrator.…

I am opposed to any general congressional revision of the tariff. Such action would disturb industry, business, and agriculture. It would prolong the depression.…

In reaching solutions we must not jeopardize those principles which we have found to be the basis of the growth of the nation.… If the individual surrenders his own initiative and responsibilities, he is surrendering his own freedom and his own liberty. It is the duty of the national government to insist that both the local governments and the individual shall assume and bear these responsibilities as a fundamental of preserving the very basis of our freedom.