One candidate was a natural politician, affable and gregarious, a true man-of-the-people who favored flashy suits and a trademark derby hat. Reporters loved him and admirers thronged his events.

The other contender could easily be classified a misanthrope. He was a miserable public speaker who hated crowds and disdained the campaign regimen of shaking hands and kissing babies. For months, even after secretly directing his staff to launch his campaign, he publicly disavowed interest in the presidency. He made a total of five major speeches in the course of the campaign, each time promptly retreating afterward to his home in Washington. He brushed off the press corps, speaking only to trusted correspondents.

And yet it was the misanthrope, Herbert Hoover, who won the 1928 presidential election in a landslide. The loser was Al Smith, a popular mayor of New York just as America was swinging from its rural past to its urban future. But in that moment, he didn’t fit the popular ideal of “presidential.”

It was the height of the Roaring ‘20s, and the electorate delivered a startling result that made sense only in a time that seemed to define itself by defying convention. In choosing their political leaders, the voters of the ‘20s appear to have decided that the decade’s fads were for the dance floor; that when it came to politics, sober and circumspect was the order of the day. Thus it was the famously quiet Calvin Coolidge who prevailed in 1924; thus it was Herbert Hoover, a dour and self-effacing Quaker, who was chosen his successor (in an election that bore all the marks of inevitability).

Certainly, it wasn’t policy that decided the election. There was little to distinguish, in those days, between the Republican and Democratic agenda. In fact, when Hoover first emerged as a public figure eight years before, both major parties recruited him as a prospective standard-bearer.

At that point, Hoover’s ambivalence got the best of him and he rebuffed all comers, preferring to accept a Cabinet position. He built his reputation from there, gaining public trust as secretary of commerce under successive Republican presidents.

Eight years later, he ran with the party he served under. But there was no great policy gulf between Republicans and Democrats at the time. Both parties voiced support for limited government, both sought alliance with big business, both supported arms control, and both decided, reluctantly, to abandon Woodrow Wilson’s League of Nations as politically unfeasible.

Even the sole longstanding division between the parties, over trade policy, was muted. In that day Republicans stood for tariff protection to foster domestic industry, while Democrats touted the benefits of free trade. During the campaign, however, Smith softened his opposition to tariffs, and emphasized his support for business, in part to meet the challenge of the Republican alliance with business, and in part because Smith fully subscribed to the idea that free enterprise meant opportunity for all.

The one real divide came over Prohibition. Hoover enjoyed an occasional martini, but true to his repressed character, he embraced the ban on drink as the will of the people. On the other hand, as a Catholic and an urbanite, Smith saluted Prohibition as the law of the land but acknowledged that he personally opposed it.

John Raskob, a financier with offices at both DuPont and General Motors, was a great friend of Smith’s and became his primary financial backer in 1928. He summed up the contest in a memo to a business colleague. “Governor Smith’s ideas of protecting big business are quite in accord with yours and mine,” Raskob wrote in July. “Personally, I can see no big difference between the parties except the wet and dry question.”

New York Gov. Alfred E. Smith, nearing the close of his campaign for president, addresses supporters in a packed house at the Academy of Music in Brooklyn, N.Y., Nov. 3, 1928.

 
Neither Hoover nor Smith focused on Prohibition in their personal appearances, but Hoover surrogates kicked up headlines by attacking Smith as a “wet” sympathizer who had fostered in New York “lawlessness and disregard for the Constitution.” At their national convention the Democrats adopted a plank supporting enforcement of the law, but Smith bridled, vowing in a telegram to seek “fundamental changes” in the ban on drink.

In the South, Prohibition mixed with race into a volatile electoral cocktail. The Ku Klux Klan led cultural attacks against Smith’s fellow Catholics as well as against blacks and Jews, while some Hoover speakers denounced Smith as “Romish,” code for foreign, immigrant, and wet—all anathema to white supremacists. But for all these efforts, Hoover and the Republicans couldn’t quite defeat the Democratic Party’s virtual monopoly on racist politics. While Hoover broke into the Democrats’ “Solid South” for the first time since the Civil War, taking Florida, Texas, and North Carolina, the South remained a Democrat stronghold, and delivered Smith six of his seven state victories.

In the end it wasn’t race or booze that decided the contest of 1928. It was the impulse to drive politics out of politics.

The great political event of the 1920s was not war, or peace, or faction, but scandal. Teapot Dome was the name given to an oil-lease kickback scheme that reached to the highest levels of the government in the administration of Warren G. Harding. Evidence suggests that Harding himself didn’t know about it—when he learned of the scam he was so unnerved that the distress it brought on is believed to have killed him. He died in a hotel in San Francisco, two-and-a-half years into his first term, in August 1923.

Allegations of misconduct first surfaced in 1922, but the hearings and trials that ensued dragged out for the rest of the decade. At the same time, America’s cities were dominated by political machines, none more corrupt than New York’s political organization Tammany Hall, where Al Smith had got his start.

Hoover presented himself as the antidote to politics as usual. He was a member of the Harding Cabinet but adroitly avoided the spreading stain of Teapot Dome. Instead he relied on his accomplishments as a mining engineer, as a business executive, and as administrator of major relief projects during World War I to claim the mantle of practical, prosaic competence. At a time when the public was disgusted with politics, he was the definitive anti-politician.

New York Times correspondent Anne O’Hare McCormick spoke for the electorate when she wrote, in 1929, “We had summoned a great engineer to solve our problems for us; now we sat back comfortably and confidently to watch the problems being solved. The modern technical mind was for the first time at the head of a government… Almost with an air of giving genius its chance, we waited for the performance to begin.”

What followed was the crash on Wall Street, and the Depression. Hoover was active, but he failed to connect with a suffering populace. His financial policies were innovative but they worked no miracles, and the idea of a politician allergic to the practice of politics quickly lost its charm.

There are few political maxims that serve in every circumstance, as the career of Herbert Hoover should demonstrate. But if the election of 1928 holds a lesson for today it might be this: Be careful what you wish for.

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This inclination is rooted in a sense of optimism, and the confidence that we learn as we go. But it can also reflect a degree of hubris, and the mistaken notion that those who came before were not so clever as we today. When that happens it can blind us to the obvious truth that our forebears possessed wisdom as well as ignorance, and can lead us to repeating mistakes that might well be avoided.

Take the case of Herbert Hoover, America’s 31st president but also considered an exemplar of economic mismanagement for his futile response to the onset of the Great Depression, which arrived to the fanfare of the famous stock market collapse of 1929.

Prior to my undertaking a study of Hoover’s single term in office, I shared that view of Hoover. I still see Hoover as a failed president, unable or unwilling to cultivate the personal bond with the electorate that is the ultimate source of power and influence for any elected official. The more I learned of Hoover’s policies, however, the more impressed I became with his insight, vision, and courage—particularly when it came to managing an economy turned hostile. I found, too, that time has done little to discredit his trepidation over the consequences of mounting debt.

When the crash hit the stock market, it set off a collapse in values not only of financial instruments like stocks, but also a global slump in commodity prices, trade, and, soon after, employment. In the White House, Hoover responded in what was for him typical fashion: a brief, terse statement of confidence, asserting “the fundamental business of the country … is on a very sound basis.” At the same time, but quietly, Hoover pressed the members of his cabinet to ramp up federal spending to provide work for the wave of unemployment that he privately predicted. Finally, he convened a series of “conferences” with business leaders urging them to maintain wages and employment through the months to come.

These conferences were derided at the time, and more sharply later, as indicative of Hoover’s subservience to the capitalist class, but that is unfair. Hoover’s overriding commitment in all his years in government was to prize cooperation over coercion, and jawboning corporate leaders was part of that commitment. In any event, the wages of American workers were among the last casualties of the Depression, a reversal of practice from the economic downturns of the past.

More telling was the evolution of Hoover’s response as the Depression progressed, spreading from a market crash to the worldwide economic disaster that it became. Peoples and leaders across the globe took the failure of markets, currencies, and policies to mark the death rattle of capitalism per se, and turned to systemic, centralized solutions ranging from communism, exemplified by Soviet Russia, to fascism.

Hoover never accepted the notion that capitalism was dead, or that central planning was the answer. He insisted on private enterprise as the mainspring of development and social progress, and capitalism as the one “ism” that would preserve individual liberty and initiative. It appeared as establishmentarian cant to many of Hoover’s contemporaries, but Hoover’s instincts look like insight today.

More than that, Hoover recognized what appeared a failure of the capitalist system for what it was: a crisis of credit. With asset values in collapse and large parts of their loan portfolios in default, banks stopped lending to farmers, businesses, and builders, stalling recovery, stifling consumer spending and throwing more people out of work. It was a vicious cycle, soon exacerbated by the failure of thousands of rural banks that only added pressure on the financial system.

Hoover’s answer was to stage an unprecedented government foray into the nation’s credit markets. He conceived of a new Federal Home Loan Bank system that would offer affordable loans at a time when mortgages generally covered only half the cost of home building, and ran for terms of just three to five years. Such a novel proposal naturally bogged down in Congress, and it took most of Hoover’s term to get an agency up and running; in the meantime, Hoover fostered similar moves in agriculture, channeling more funds to the existing Federal Land Bank System. In 1932, for instance, Hoover’s agriculture secretary supervised $40 million in small loans—$400 and under—that helped 200,000 farmers get their crops in the ground.

As the crisis deepened, Hoover turned his attention to the banking system itself. First he called to a secret conference a clutch of the nation’s most powerful bankers and browbeat them into creating a “voluntary” credit pool to backstop the balance sheets of the more fragile institutions; when that effort failed, the president launched a new federal agency to make direct loans to ailing banks, railroads, and other major corporations. Authorized to issue up to $2 billion in credit—more than half the federal budget at the time—the Reconstruction Finance Corp was the first time the federal government took direct, systemic action to shore up the country’s private finance markets. It anticipated TARP, the Troubled Asset Relief Program, by roughly 80 years.

Hoover broke ground on still another financial front, and that was monetary policy. Venturing onto the turf of the Federal Reserve, Hoover pressed to expand the money supply by increasing the kinds of financial paper that would qualify for Fed reserves, thus increasing the amount of funds available to lend, and by advocating Fed purchase of large quantities of debt. Such purchases are termed “open market operations” and are a means of expanding the money supply, thereby (theoretically) lowering interest rates and easing credit. Carried out on large scale they are what today we call “quantitative easing.”

Here, however, Hoover ran up against one of his core beliefs—that the currency should be convertible to gold. He felt that maintaining easy convertibility for the dollar, based on the gold standard, was critical to trade and business confidence, and so opposed every measure that might be considered inflationary. At the same time, he understood that low interest rates and easy credit markets could foster investment and recovery.

Torn between his allegiance to sound money and his insights into the state of the economy, Hoover was unable to push his credit plans to the hilt. That is, he backed off from mass bond purchases before the credit markets had a chance to respond, and set too high the collateral requirements for the Reconstruction Finance Corp. loans for banks.

Hoover wanted high collateral requirements because he did not want to assist insolvent banks, just those with liquidity problems. Banks needed to show that, in the end, they could cover the loans. Hoover was also pressured on the same grounds by lawmakers on his left and his right to make sure he wasn’t throwing good (public) money after bad (private) money. It’s worth noting that none of those in government at the time had seen lending to private parties—let alone banks—on such a scale before. So they adopted a very conservative approach, which they loosened after gaining some experience, and after a new president had entered the White House.

Indeed, it was left for Franklin Roosevelt to pick up where Hoover left off. That is not to say that FDR did not represent a change in course for the country; his New Deal was a distinct point of departure. But it’s also true, as FDR advisor Rex Tugwell put it later, that “practically the whole New Deal was extrapolated from programs Hoover started.”

That Hoover failed in the White House is a matter of accepted wisdom, and in certain fundamental ways true beyond doubt. Far less known are the nuances of what he did right—his insights into capitalism, what makes it work, and how to answer its setbacks. But in a larger sense Americans are living with Hoover’s legacy. For better or worse we remain the global citadel of capitalism, the leader in economic growth and income disparity. To those wondering how we got to this point, some measure of credit has to go to Hoover, an unpopular president who followed his core beliefs at a time when many abandoned theirs.

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Great Depression? Not here, at least not as reported by the local press. Hollywood was where Jean Harlow, Clark Gable, Carole Lombard, Douglas Fairbanks, Gary Cooper, Lana Turner, Errol Flynn, and Ginger Rogers frolicked at the Coconut Grove. Hollywood was where Busby Berkeley made extravaganza movies with long-legged showgirls sashaying down curving, white staircases with hats the size of chandeliers balanced on their heads.

So who gave that Depression much thought? In Los Angeles, veterans of World War I did; veterans all over America did.

With 25 percent unemployment nationwide, many vets and their families were homeless, riding the rails or huddled in Hoovervilles. They sold apples on street corners and scrounged for food. They were hungry, and it didn’t make sense–because in 1924 Congress had passed the Adjusted Service Certificate Act, under which World War veterans were awarded a bonus for their wartime service.

Many desperate veterans needed the money, but the bonuses weren’t due to be paid out until 1945. In early 1932, U.S. Representative Wright Patman of Texas introduced a bill to pay the veterans’ bonuses immediately, but President Hoover threatened a veto. Hoover, a Quaker, believed that the soul’s salvation depended on hard work and self-sacrifice, and, as he put it, “paying an enormous sum of money to a vast majority of those who were able to take care of themselves would break down the barriers of self-reliance and self-support of our people.” The bonus bill stalled in the Senate, although the biggest banks, thanks to bailouts, did all right.

That spring, a small group of destitute veterans from Oregon, impatient with Congress, began a march across the country to lobby peacefully for payment of their wartime bonuses. They called themselves the Bonus Expeditionary Force, the BEF. News of the event rocketed through the country. More than 22,000 veterans, many with their families, joined them.

In Hollywood, a sometime actor, Royal Robertson, a disabled veteran with a steel brace to support his neck, made the rounds of the Veterans of Foreign Wars posts to promote a dramatic plan to lead a delegation of fellow vets to Washington. He knew nothing moved Tinseltown like high drama and called his plan a “hero’s journey.” All the veterans who were now out-of-work bit actors, cameramen, writers, electricians, and best boys ate it up. Robertson became their leader.

On the morning of June 10, more than a thousand Los Angeles veterans gathered at the corner of Washington and Hill and eventually assembled into a ragged parade line. Four Los Angeles motorcycle cops pulled out in front to escort them. Robertson, behind the wheel of a car, led the parade. A drum and bugle corps set the cadence, stepping out smartly, and the parade moved out onto Hill Street. Behind them came a Disabled American Veteran color guard, two ambulances, a commissary truck, and an old hearse festooned with picks, shovels, spare tires, and cans of gasoline.

Fourteen men marched in step with a large American flag stretched between them, spread open so that donations could be thrown upon it. Behind the flag bearers, 200 men marched in close formation. A caravan of 104 sputtering cars and trucks farting exhaust fumes brought up the rear.

Thousands of Angelenos clogged the sidewalks along the parade route; they cheered and applauded, shouting, “Good luck!” and “Go get ’em!” and “Godspeed!” The marchers, ballsy, full of hell, strutted along, gave thumbs-up, waved their American flags. Confetti and ticker tape showered down from high windows.

Mayor John C. Porter, standing on City Hall steps with a bunch of cronies, waved them on and shouted, “Good luck! Do us proud!”

The L.A. heroes were on their way.

My father was one of those marchers. Two weeks after he left, my mother and a friend hitchhiked across the country to join their men in Washington. They all were there six weeks later, when an ill-advised President Hoover, convinced that the bonus marchers were communists out to overthrow the government, ordered General Douglas MacArthur to use U.S. Army troops to evict the veterans. On the afternoon of July 28, the troops assembled at the Ellipse. Thousands of Bonus Marchers, many with their families, jammed Pennsylvania Avenue to watch what they thought would be a grand parade, never suspecting that the U.S. Army would attack American veterans.

MacArthur personally led the assault. At his side were his aides, Majors George Patton and Dwight Eisenhower. At MacArthur’s order, 200 mounted cavalry soldiers charged into the crowd with swinging sabers. Then they launched tear gas canisters. Five Whippet tanks followed close behind to keep the crowd at bay. Four hundred armed infantrymen and machine gunners brought up the rear.

The veterans, lost in clouds of tear gas, ran. The attack ended that night, after the Army torched the veterans’ camps along with all their possessions. Two veterans were killed, and dozens were injured. Also dead were two children, from tear gas inhalation.

During the weeks that followed, the L.A. heroes limped home. Some, including my parents, moved in with family. Some slept on the beach, picked oranges, and scrounged for jobs. That fall, after newsreels showed the attack of the veterans in graphic detail, shocked American voters ousted Hoover and elected Franklin Delano Roosevelt in a landslide.

My parents stayed with my grandmother in Hermosa Beach until 1936, when a new bonus bill finally passed. They moved to Glendale in 1940, where I grew up. They never forgave President Hoover and the Republican Party for the Great Depression, nor did they forgive Douglas MacArthur, who had swaggered in his bemedaled uniform as he led the attack against American veterans. And, one April day in 1945, I came home from school to find them at the kitchen table, holding hands, both of them in tears. FDR was dead, an era ended.

Georgia Lowe is the author of The Bonus, a novel based on her parents’ experience as Bonus Marchers.

Buy the book: Skylight Books, Amazon, Powell’s, Lucky Dime Press.

*Photo courtesy of Georgia Lowe.

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