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The New Deal

Herbert Hoover Speeches

Challenge to Liberty

Homecoming Welcome, San Francisco, California


I am always glad to get back to the West.  It has certain outstanding advantages.  This spot is 7,200 miles from certain spots in Europe.  If your imagination is lively enough to imagine California under conditions on the Continent our advantages would be even more manifest to you.

If we had 500,000 troops and 2,000 aeroplanes looking at us hatefully from over the Oregon line, and another 400,000 men and 2,000 planes ready to march over the Nevada line, and another few hundred thousand being drilled in Arizona ready to pounce upon us, this would be a less comfortable place.  And if we had to pay taxes for about 400,000 men in our own State to make faces at these sister States, then it would be still more uncomfortable.  If each of us had by law to have a gas mask and we had by law to try them on all the kids once every little while, then it would be still more uncomfortable.  And if we had to continue all sorts of shifting alliances with our neighbors to balance off their powers for evil, it would be a still more anxious place to live.  And all that can happen to you even if you lived in a democratic state.

If we had an up-to-date authoritarian state, there are still other possibilities of discomfort.  Then your soul belongs generally to the state.  If you carry over the old idea that perhaps it belongs to you, then you go to a concentration camp to rest your nerves.  If you are a farmer you plant what the agricultural policeman tells you to plant.  And you raise the pigs and cows he thinks are good for the state.  If you are a worker you work where you are told.  And you work the hours you are told.  And you get the wages you are told.  Your trade union having been dissolved you can belong to a government recreation project.  You will also be taught to sing cheerful songs in the recreation hours and to march all about.  You have social security if you conform.  If you do not conform you get security in concentration camps.  You will be secure anyway.  So as not to have your doubts raised and your feelings harried by critics of this more redundant life they are just put away in the same concentration camps.  Your freedom of speech is a sort of a one-way street.  You do gain something by saving half the public speeches in the country by doing away with all those of the opposition. Your newspaper contains what the all-powerful thinks is good for your soul.  And your books are carefully chosen that your economic and romantic feelings shall not be polluted.  If you kick about the way the government does it you will be placed under protective arrest to prevent harm coming to you.

There are some forces in motion in the United States which might make California an uncomfortable place.  But we will at least deliver of lot of free speech before that time arrives.

There is one discomfort in California that is not a discomfort in Europe.  That is where to park your automobile.  Their slogan is, more guns and less automobiles.

Altogether I am glad Europe is still 72,000 miles from California.


My first purpose in visiting Europe was to accept a unique hospitality which seldom comes to men.

These hospitalities proved the occasion for great demonstration of affection and respect for America.  No American can remain unmoved when tens of thousands of school children line the streets with their cheerful yells of "Long live America,” with the frantic waving of thousands of America flags.  No American can remain unmoved when tens of thousands of the common people gather in city squares and remove their hats to the American National Anthem. No American can remain unmoved to the fervent expression by men of immense responsibilities of hope and almost prayer that America shall stand fast in liberty, that it shall not perish from the earth.

I have met some part of these demonstrations in a score of great cities and in many countries.


I wished also to observe the forces in motion which are reshaping human destiny.

While outwardly the incidents of life go on much the same everywhere, underneath Europe is seething with change which will yet affect the whole destiny of human institutions and the ways of human life.  Europe is giving birth to a new philosophy of government and of life.

That has happened at other periods in history.  Within the Christian Era we have seen the rise of Christianity, the rise of Mohammedanism, the rise of Feudalism, the rise of the Reformation, the rise of Liberalism and its philosophy of free men and the rise of Communism.  And each of these great ideas has carried a train of human conflict.

I am not going to take your time to discuss or describe this new European philosophy or what it means today or to the future.

But let no man underestimate the dangers to free men.  It not only represents the mobilization of racial instincts and racial yearnings for glory and power.  It not alone represents an upsurge of abhorrent brutality from which the Jews are helpless victims.  Its method is that any end justifies the means.  And that justifies every perversion of intellectual honesty and government morals.

My great interest was to learn more of the cause of this gigantic shift in human direction. I was to earn the steps by which fate has driven men to this defeat of intellectual and spiritual liberty.


And now let me return for a moment to the American scene.  The real, the immediate, the pressing problem of this country is unemployment.  When I went abroad we had 10 million or 11 million unemployed.  I return to find they have increased by another million or two.  Meantime Washington has employed most of its time debating a subject of no aid to these of our countrymen.

That 12,000,000 unemployed is obviously the indication of something terribly wrong in our own economic machine.  Let me say something perhaps elementary on this American economic machine and the way it starts and stops.  It moves forward and employs people only when there is confidence and hope.  A large part of its movement forward depends on confidence and hope.  A large part of its stoppage comes from fear.  When confidence breaks down fear seizes control and unemployment becomes rampant.  Prosperity and depression are greatly influenced by these two emotions.  There are other factors but of later years these emotions have become immensely more potent than ever before.

One reason for this is the increasing proportion of postponable goods in our standard of living.  If you will look over the country you will find that about 40 percent of what the American people consume can be postponed.  About 60 percent are absolute necessities and cannot be postponed.  A new pair of shoes can be postponed for three months; a suit of clothes six months; an automobile for a year.  What we call durable goods, such as houses, can be postponed longer than shoes.  If a shiver of fear comes over the country most people postpone the purchase of something.  And instantly somebody somewhere has lost a job making shoes or automobiles or houses.  In turn those out of a job have to postpone the purchase of even necessities.  And the fellow who has a job, seeing somebody lose a job, then also postpones something out of fear of losing his job.  Then we are on a downward spiral.

This danger does not arise in those Asiatic countries where people have only the bare necessities.  It existed to a much less extent in the Untied States fifty years ago.  In other words, when we built up the American standard of living and jobs of men to include an automobile, a radio, and extra suit of clothes, and a trip to the movies, we introduced a most delicate adjustment.

In the United States today everybody has lost some confidence and everybody has some fear.  It is nonsense to say that either big or little business is on a strike.  It is not so.  Business is yearning to sell automobiles and new suits of clothes.  It is the people who are scared.  Big business or little business is not scared to take on men if anybody will give them an order for goods.

With 12,000,000 people out of a job it is our business to explore the cause of these fears.  I was especially interested to find if any of them were coming from abroad.  One of the causes which sucked us into the whirlpool of worldwide depression in 1931 came from Europe.

There has been general recovery in Europe from that depression.  There is no financial panic brewing over there to pull down our credit structure as in 1931.  Their regained economic strength is even helping us now by purchasing our goods, whereas in 1931 they stopped their purchases abruptly.

In the democracies there is no unemployment at all comparable to ours.  They are indeed prosperous.  France is of course having trouble because she adopted the New Deal two years ago.

Even in the authoritarian states and the dictatorships there is less unemployment than we have per million of people even if we deduct those employed manufacturing arms.  It is true their standard of living is less than the democracies but the people are largely employed.

Nor is there immediate danger of general war in Europe. Certainly we have no fear of war against us.  There is no threat of any one pouring fire or explosives on our cities out of the sky.  There is not the remotest chance that our national independence will be challenged from abroad.

Certainly this great fear among the American people does not come from outside our borders.

We ought to explore for the sources of fear at home.  Today we have no inflated bubble of gambling credit or a weak banking system that we must be afraid of as there was in 1929.  The banks are full of surplus credit.  There is no over-expansion in industry in America.  In fact were are short of equipment.  There is no consequential over-stocking of goods.  In fact there are not enough good homes.  There is no crop failure or threatened shortage of food or clothes.  Every one of the factors and forces within our borders that ordinarily produce fear and its consequence in unemployment is absent.

Yet we are stark facing the fact of 12,000,000 people out of jobs.  Every one of those families is suffering some privation and worry.  And there is no anxiety on earth like that of not knowing where the next week's living for your family is to come from.  Some newspaper said the other day that I must get satisfaction out of human misery.

I do have a recollection of a bitter slogan used against us in the 1932 campaign.  They said often and harshly that it could not be worse.  But some one said that was about forty billion dollars ago.  And we must live in the present.

It is the first job of America to restore genuine self-respecting jobs in productive enterprises.  It transcends all other questions.  It transcends all party politics.  It must be met without flinching, whether it be government theories, taxes, waste, corruption, unmoral acts of men in high places.

And let me say that a confident, alert, alive and free people, enthused with incentive and enterprise, can quickly repair losses, repay debts, and bury mistakes.  It can build new opportunity and new achievement.  That can be restored in America.

And whence do these forces of destroying fear arise?

This country should sit down and think out every force, governmental, moral, and economic, that is causing this fear, and uproot that cause.  We should apply one test to the whole gamut of government action.  Does this action stifle initiative and enterprise?  Does it cost men their jobs?  I am well aware of the importance of reforms.  I am still more aware of the misery of 12,000,000 unemployed.  And there are dangers to the very institutions of free men from an economic machine dislocated in this fashion.


There is one phase of all this disturbance which we got from Europe.  That is the New Deal so-called Planned Economy.  At least we invented both the phrase and the methods subsequent to their discovery in Europe.  I have been interested to explore that idea in its European scene.  I wanted to see their experience and where it led in the end.

We must not confuse true liberal reforms with Planned Economy.  Constant reform is a necessity of growth.  Reforms directed to cure business abuses, to remedy social ills, to provide old age needs, housing, to end sweated labor, etc., are right.  Nor is Planned Economy necessary to bring them about.

First let us examine the central ideas of New Deal Planned Economy.

No one will deny that our government is today increasingly controlling prices, wages, volume of production and investment.  Its methods include politically managed currency, managed credit, huge expenditure, deficits, debts, pump priming, and inflation of bank deposits.  Further weapons are relief funds to build the government into competitive business.  They are used to influence the electorate.  The taxing powers have been stretched deep into the control of business conduct.  Regulation to prevent abuse has been stretched into instruments of dictation.  The policeman on the streets of commerce to expedite the traffic, to keep order and stop robbery, now orders our destination and tells us what to do when we get there.  It was a depressing day for America when the farmer could be put in jail for failure to obey the dictates of Washington.

The very forces of Planned Economy involve constantly increasing delegation of discretionary power to officials.  They involve constantly greater centralization of government.  They involve conflicts with the Constitution.  They involve minimizing the independence of the Congress and the Judiciary.

Certainly there is a gigantic shift of government from the function of umpire to the function of directing, dictating, and competing in our economic life.

We have now had nearly five years' experience with these ideas.  They were put forward as only for an emergency.  And yet every session of Congress faces demands for more and more.

No more heartening news ever came to the American people than today when the House of Representatives regardless of party again halted these methods.  To these men we owe a debt of gratitude.

There are her fundamental conflicts with free men in which there is no compromise, no middle ground.


If we again return to the European scene, we find seven or eight Democracies which refused to adopt these courses of Planned Economy.  They are today the most prosperous nations in the world despite the dangers under which they live.  One other great Democracy, France, did adopt these ideas.  They are today also in deep trouble.  The other gigantic fact of European experience is that some twelve or fourteen nations belonging to Western civilization, embracing nearly three hundred millions of people, have moved from the foundations of popular government and free men to the foundations of authoritarian government where personal liberty is extinguished in the state.

And at one stage in this transformation they compromised between true liberalism and socialism or with attempts at government dictation of business, farming, and labor.  That is the common denominator when democracy has fallen.  They tried various breeds of Planned Economy.  They tried to mix social philosophies.  These attempts at mixture generated their own hates and fears.

They paralyzed with fear the delicate confidence and hope of the future with which all business moves and revives in a free system.  They undermined the initiative and enterprise of men which is the sole mainspring of progress to free institutions.  Out of fear they produced more and more deeper depressions and panics which finally reached chaos where men surrendered all liberty to the State to save themselves.

Western civilization does not turn to socialism or communism.  They turn invariably to fascism.  The only contribution of socialism and communism is disorder which leads to fascism.


I was at the very seat of fascism when one of our important government officials broadcasted over Europe an attack upon Fascism itself.  It was received with great amusement.  And I was compelled to listen to a relation of the uncanny parallel of steps taken in the United States under so-called Planned Economy with those which had bred the sort of chaos in Europe from which Fascism sprang.

I do not say that our economic system has been brought to this dangerous point where fascism is its destination.  But with all the solemnity I can command I do say that the direction that we are going in today is precisely that which in the end creates the demoralization from which Fascism invariably springs.

Whether our Planned Economy is an infection from Europe of creeping collectivism or whether it is a Native American product is less important than its actual results upon us and where it leads to.

And where have we arrived?  At a discouraged and fearful people, with 12,000,000 unemployed.  Is not the very system itself making the one-third ill fed and ill clothed?

The primary objective of our system must be to eliminate poverty and the fear of it.

Men cannot be free until the minds of men are free from insecurity and want.  But security and plenty can be builded only upon a release of the productive energies of men from fear and handicap.  That America must have.

May I say a word in conclusion?  Despite the fears and gravity of our home problems I stepped on to the shores of our country with a great release of spirit.  I found release from the subconscious dread that haunts all Europe.  I found again that greater freedom of human mind, a wider spread of kindliness, a more general sense of individual responsibility, a stronger assertion of personal liberty than anywhere abroad.

One long-held conviction has been greatly hardened.  That is that we have grown a long way from Europe in our century and a half of national life.  A new race with its own soul has grown on this continent.  The life-stream of this nation is the generations of millions of human particles acting under impulses of freedom and advancing ideas gathered from a thousand native springs.  These springs and rills have gathered into steams which have nurtured and fertilized the spirit of this great people over centuries.

These streams are the imponderables which differentiate the races of men.  Of one thing we may be sure.  When a great race has been refreshed over centuries with the waters of liberty, those living waters will not be denied it.