Thursday, April 9, 2009

So Mr. President, What Did You Do During Your Term In Office? (6)

Topic: The Hoover Administration-Year 1931 #3

December 8, 1931
The President's annual message to Congress calls for increased taxation to make up for the deficit of $902,000,000 for the fiscal year 1930-1931. The message also asks Congress to set up an agency to make emergency loans to banks, railroads, and other businesses.

December 8, 1931
(These are selected excerpts from President Hoover's Annual Message to Congress)

"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."

"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…."

"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. By organized unity of action, the states and municipalities have also maintained large programs of public improvement. Many industries have been prevailed upon to anticipate and intensify construction. Industrial concerns and other employers have been organized to spread available work amongst all their employees instead of discharging a portion of them. A large majority have maintained wages at as high levels as the safe conduct of their business would permit. "

"Although some of the causes of our depression are due to speculation, inflation of securities and real estate, unsound foreign investments, and mismanagement of financial institutions, yet our self-contained national economy, with its matchless strength and resources, would have enabled us to recover long since but for the continued dislocations, shocks and setbacks from abroad…."

"Our first step toward recovery is to reestablish confidence and thus restore the flow of credit which is the very basis of our economic life. We must put some steel beams in the foundations of our credit structure. "

"The first requirement of confidence and of economic recovery is financial stability of the United States Government. We must have insistent and determined reduction in government expenses. We must face a temporary increase in taxes. Even with increased taxation, the government will reach the utmost safe limit of its borrowing capacity by the expenditures for which we are already obligated and the recommendations here proposed.

" 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. It will relieve pressures upon and give added strength to building and loan associations, savings banks, and deposit banks, engaged in extending such credits. Such action would further decentralize our credit structure. It would revive residential construction and employment. It would enable such loaning institutions more effectually to promote home ownership. "

To be continued: The Hoover Administration Year 1932


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