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If the business of
America was business, then business meant much more to Americans than
making money. In the words of one official, there had been an
"amazing transformation in the soul of business; it had become a thing
of morals." In the process, business had purged itself of
the gross and greedy aspects of its earlier existence. Capitalism
had transcended its individualism and materialism, becoming social and
spiritual. Yet it had miraculously retained the spur of
profit. Others had imaged a society where the desire for private
gain might serve a social function, but few had imagined that it could
pay.
The new
faith
permeated the churches, the courts, the colleges, the press.
It created a literature of complacency, an economics of success,
and a metaphysics of optimism. As Calvin Coolidge demonstrated,
the process could be extended further and made into a new
religion. The theologian of this new religion was Bruce Barton, a New
York ad man who wrote The Man Nobody Knows in 1925. This
best seller incorporated Jesus Christ into the new cult, describing him
as one who had "picked up twelve men from the bottom ranks of business
and forged them into an organization that conquered the world."
Salvation was
to be measured in success; and success became the visible evidence
of spiritual merit. The individuals who made good deserved
the gratitude of all mankind--they were the benefactors of the
masses. And, if individual effort was the road to success, then
resort to government was a lure of the devil. Things like a
minimum wage, a closed-union shop, and progressive income taxes
("Socialistic redistribution of
wealth") were downright evil.
The Darwinian
concept of character forged in the competitive struggle underwent
modification in the Twenties; it began to include new sentiments
of business responsibility. The public was no longer to be
altogether damned; it was to be pleased and served. Emphasis
was shifting from production and competition to distribution,
consumption and cooperation. The self-reliant manufacturer was
less the cultural hero than the promoter, the traveling salesman, or
the business statesman.
The most influential of all the
new business leaders was Henry Ford . Ford
was a producer in the old tradition, but
he led the way in teaching the business community to think in terms of
promotion, of distribution, and of statesmanship. A man of
genius, he was also narrow, ignorant, and mean-spirited. He
carried
a gun, believed in reincarnation, and hated bankers, doctors, Jews,
Catholics, fat men, liquor, tobacco, prisons, and capital
punishment. Yet, for all Ford's eccentricity, he had a compelling
vision of a new age. He was convinced that modern mass production
had created an economy capable of anything. High output, low
prices, and high wages must be the new objectives. Only by
steadily raising wages and reducing prices could the business community
maintain the buying power of the people. "These fundamentals
[could be] summed up in the single word `service'." If business
did not serve, it could not survive.
Ford's spotlighting of purchasing
power brought a whole new element into business economics. For
businessmen of an earlier era, buying power had "just happened"; in the
New Era, businessmen had the responsibility of producing it--or the
system would break down. The task was to keep the demand
flowing. Now that the problem of production had been solved,
people might ruin themselves by saving too much instead of
spending. The nation must realize, on economist said, that thrift
in a consumer-based economy is disastrous.
This was the official philosophy
of the New Era--character, service, and high wages;
the desire for private gain yielding to the idea of social function,
with the profits still rolling in. But the new faith did not
carry total conviction. Somehow the new business idealism, which
sounded so sincere, had not wholly transmuted the acquisitive impulse
underneath.
Perhaps it was the gap between
principle and action: the men who talked of
character in their clubs also plotted to get on preferred lists and
into insiders' pools; or those who spoke eloquently at the Rotary
privately cursed farmers, workers, foreigners, and intellectuals.
Despite the noble words and lofty hopes, to many, the New Era seemed at
heart only a stampede to make money.
To men
like Joseph Eastman, Wilson's appointee to the Interstate Commerce
Commission, the prevalent philosophy seemed a fraud. To him, the
pursuit of private gain did not seem to be the only impelling force in
human beings (as it did to Coolidge) which could produce desirable
results. But few listened to men like Eastman. The whole
nation was caught up in "money madness"--churches, schools, homes,
everything. Instead of trying to help their fellow men, Americans
were trying to make money out of them. George Norris, the
progressive
Senator, said: "It is scarcely metaphorical to say that we had
become Children in the Wilderness." He could not recall having
met one happy man since the end of the war. "Europe was
devastated by war," observed Louis Brandeis, "We by the aftermath."
Even devotees
of the business cult showed traces of misgiving. They were
starved for something; their idealism needed an outlet--some fairer
object of adoration than the complacent Coolidge or the capricious
Ford. How profound this need was became evident in 1927, when the
hopes and fears of a nation suddenly centered with devout intensity on
one young man who had been unknown only days earlier--a kid who, by
himself, flew a lonely monoplane across the Atlantic Ocean.
Millions wept
or prayed as they hung by their radios for news of the flight.
When the young man landed in paris, the whole nation went wild.
Nothing seemed more fitting than that President Coolidge should
dispense a destroyer to bring him back home. At last the Twenties
had a hero.
Charles A. Lindbergh, Jr.,
was a symbol of redemption. He personified all that the Twenties
passionately wanted to admire--adventure in time of calculation, faith
in a time of expediency, youth in a time of gross middle age. He
carried people away from the furies that consumed them back to motives
deeper and higher than the pursuit if private
gain. For a moment, Americans were merchants no longer.
They did not know whether to be proud of themselves or ashamed.
They wanted to leap into adventures that might mean disaster for the
individual but everything for humanity. "People set down their
glasses in country clubs and speak-easies," said Scott Fitzgerald,
"and thought of their old best dreams."
But Lindbergh
alone could not satisfy the need for national leadership--for a
man who could elicit the potentialitities for spiritual good which
people believed were locked away in the excitement of prosperity.
Americans searched more than ever for the man who could transform the
money madness into the benevolent order of service they dreamed
of.
And as the decade drew near its end, the man most people felt
personified all of these qualities was the man who had been the hero of
the First
World War, the man who had saved Europe by managing the nation's food
resources--Herbert Clark Hoover.
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Herbert Hoover and American
Individualism
Herbert Hoover
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More and more in the
Twenties,
Herbert Clark Hoover increasingly emerged as the one man who might
bridge the gap between the ideals and the realities of the New
Era. He was
both Secretary of Commerce and a Quaker. His job placed him at
the very center of economic life, while his faith identified him with
the highest aspirations of service. His whole life seemed a
realization of the American dream. More than anyone else in this
decade, he articulated--as his career already exemplified--the ethic of
American individualism--not the savage individualism of the ruthless
past, but the
hopeful individualism of the cooperative future.
Hoover was born
in Iowa and grew up in a small town, and his early years were idyllic,
but by the time he was eight years old, both his parents were dead and
he was sent to live with relatives in Oregon. As a teenager he
decided to become an engineer and attended Stanford University in
California. After getting his degree, he set out to make his
fortune. He
joined a British mining firm and went to Australia to help build
goldmines. The Australian adventure was the first in a long
string of overseas jobs. He was in China during the Boxer
Rebellion in 1902. He also went to Mandalay and South Africa,
Egypt, the Malay States,
and even helped with a turquoise mine on Mount Sinai.
Such a peripatetic life seemed
glamorous to some, but to Hoover, it was simply business.
Hoover's character--contained, wary, capable, and efficient--rendered
him less able to see the heroic or adventurous aspects of his travels,
but of course, this is what you would want in an engineer if you
wanted to get the job done. Hoover had an engineer's
dispassionate
intelligence, more concerned with solving problems than relieving
feelings. Even friends found him somewhat cold and aloof, and
one could not recall ever having seen Hoover laugh out loud.
As Hoover's reputation grew, he
spent less and less time on actual engineering projects and more time
as an organizer and promoter of companies. His rise during this
time was spectacular. He traversed the globe, building up
business connections, and by 1908, he had amassed a personal
fortune. He then struck out on his own as a consulting engineer,
advising dozens of companies around the globe. he confessed in
1914 that he was
probably worth more in money and experience than any other American
engineer.
He was not particularly active in
politics during these years. In 1909 he had joined the Republican
club, and in 1912 he contributed to Teddy Roosevelt's presidential
campaign. But most of all, he kept himself happily occupied with
engineering, where his skills at solving concrete problems had served
him so well. As his testimony in 1914 reveals, Hoover was
financially solid, and at last, the orphaned boy from Iowa seemed to
have attained the security for which he'd worked so long. But
Hoover's future, and that of the entire world, was to change
drastically with the guns of August that year.
From the start of the war,
Hoover's talent for organization was in great demand. First, he
took care of the Americans stranded in Europe, then he
set out to administer the relief to Belgium. His management
of the Belgian situation involved a great deal of patience and
diplomacy
to successfully organize food, transportation, and financial backing
for the whole thing. His success with the Belgian relief
operation made his name back in Washington, but even as new
acquaintances were impressed by the magnitude of his achievements, they
were curiously disappointed in the man. Josephus Daniels,
Secretary of the Navy, talked with Hoover about his relief work, and
Daniels found him to be oddly "impersonal":
He
told me of the big work in Belgium as coldly as if he were giving
statistics of production. From his words and his manner he seemed
to regard human beings as so many numbers. Not once did he show
the slightest feeling or convey to me a picture of the tragedies that
went on.
Daniels felt that either Hoover had no heart or that his heart had been
atrophied by his experiences. After all,
Hoover had been operating for years now in parts of the globe where
human misery was often greatest, and if he had suffered any feelings on
their behalf, his task as an engineer would have been to shut them out
and focus on the job at hand. But no one, not even Daniels,
could question Hoover's abilities. Hoover was soon appointed to
be War Food Administrator in Washington, and he mastered the job
well.
By 1918, Hoover
was a household name across America, but his responsibilities had
not ended with the war. He was sent to Paris to help with the
relief situation there. But Hoover, who had spent most of his
engineering career based in London, found that war had changed Europe
into a "furnace of hate." He tried in vain at the Conference to
make ministers forget their national interests and concentrate on the
immediate needs of the population, but ran up against endless amounts
of selfishness, prejudice, and greed. In the end, he found
himself caught up in the pervasive atmosphere of pessimism and
gloom.
The whole experience, together with the defeat of the Treaty back home,
convinced him that American alone was the future, that Europe was too
corrupt. America had to separate her destiny from that of Europe
and show the other nations the way to redemption. For years
afterwards,
he would never speak of Europe without loathing, and it was twenty
years
before he would ever again set foot on the European continent.
Back in America, Hoover found himself
to be a national political figure. Men of political power
everywhere now looked to him as someone who had the vision
and character to pull the country together for the transition to
peace. Republicans and Democrats alike were impressed by Hoover,
including a young Assistant Secretary of the Navy, Franklin D.
Roosevelt, who
enthused: "He is certainly a wonder and I wish we could make him
President of the United States. There could not be a better
one."
But Hoover, after some vacillation, decided to return to the
Republicans
after his wartime stint with the Democrats.
Whatever Hoover's political
sentiments were, he had no trouble supporting Harding,
and Harding rewarded his support by giving him the choice of two
commerce posts, either Agriculture or Commerce. Hoover chose
Commerce on the condition that he have a voice in all important
economic policies, whether in the field of business or labor,
agriculture, finance, or
foreign affairs.
Historians question Hoover's
motives for return to the Republican Party, since he did flirt with
Democratic possibilities after the war, but his pre-war
associations had been Republican, and in reality, his personal
philosophy
was more in line with Republican ideals. Hoover's philosophy was
reflected in the title of a book he published in 1922 called American Individualism ; it was
a philosophy he felt needed
expression throughout the national government, and it was a philosophy
which animated the rest of his political career.
American Individualism
had its roots in Hoover's wartime disillusionment with Europe. He
wanted to repudiate the selfish and caste-ridden individualism of
Europe which he felt had brought on the war, but he wished equally to
repudiate the philosophy of socialism which had arisen in Europe
as a response to arrogant individualism. Hoover felt
that the cause of socialism had made gains during the war, but felt
that it would eventually wreck itself by destroying production.
Given the example of Bolshevist Russia, Hoover warned especially of
rule by the majority: Beware the crowd. "The crowd only
feels....[it] is credulous, it destroys, it consumes, it hates, and it
dreams--but
it never builds."
Hoover said that America must
reject both European reaction and European radicalism. What he
offered instead was a new American "progressive individualism."
American individualism, he wrote, did not have as its end "the
acquisition and preservation of private property--the selfish snatching
and hoarding of the common product." He felt we had neutralized
the selfish tendencies in individualism because we had affirmed two
great moral principles--the principles of equality and of
service. Equality of opportunity meant that people rose in
society on their own merits. As for his vision of service, he
felt that this great mystical force had risen during the war and had
now infused society with a new sense of cooperation. Together
these principles gave American individualism its spiritual setting and
its moral purpose.
Remember that Hoover was writing
this at the dawn of the Twenties. The economic boom was just
beginning and had not yet expanded beyond the gains of productivity to
the speculative rage which would later subsume everything in an orgy of
greed. Hoover had joined the Republican party just after the
Progressive heyday of Teddy Roosevelt, and had supported Roosevelt's
Progressive candidacy against his own party in 1912. Moreover,
Hoover had served a highly Progressive Democratic administration during
the war. So Hoover's idealization of individualism represents a
hybridization of old Republican individualism and new Democratic
cooperation-- cooperative
individualism. He thought he had found evidence of this new
cooperative individualism in the fact that companies were now selling
stocks to individual owners, thus making ownership a cooperative
affair. And if ownership were diffused, then companies would
naturally take more interest in community affairs and be more
responsible.
This was just what the
Republicans were after--a moral and philosophical framework in which to
interpret current tendencies toward economic concentration, increase in
securities flotation, indifference to social reform, and the repression
of radicalism. As a social philosopher, Hoover had gone far to
reconcile practice and principle in the business community in the
Twenties. As Secretary of Commerce,
he now put these principles into practice.
Hoover moved into the Commerce
Deptartment as he might have moved into a bankrupt mining
company a decade earlier At a time when the rest of government
was languishing and withering away, Commerce burst with activity.
One banker said that Hoover was "Secretary of Commerce and
Under-Secretary
of all other departments."
His greatest activity was in the
foreign field. He turned the Department into a
machine for promoting American sales abroad; and, with private American
loans funneling dollars into foreign countries, American export trade
was able for a few years to the give the impression of
prosperity.
In the domestic field, he tried wherever he could to give substance to
his vision of service. He felt that a revolution was taking place
in our economic life--a passing from a period of "extremely
individualistic action into a period of associational
activities." In this vein, he encouraged trade associations and
other mobilizations of the business community against things like
unfair trade practices.
Hoover's boldest expression of
his "cooperative individualism" came in his approach to the business
cycle. The accepted economic wisdom of the time
was that boom-and-bust cycles were inevitable, and that any government
action taken to avert the inevitable depressions would only worsen the
problem. Particular aspects of depressions, like unemployment,
were dismissed as "community problems." Despite the belief that
government could and should do nothing to change the business cycle,
the
Harding administration, and in particular Herbert Hoover, experimented
with ways of using government to level out the business cycle.
One popular theory proposed using
government funds in construction projects to promoted economic growth
in times of economic recession. This was a plan supported by both
Franklin Roosevelt and Herbert Hoover. In 1921 and 1923, Hoover
tried with moderate success to use government construction for
contra-cyclical purposes, accelerating public works in the period of
depression, and postponing them in periods of inflation. In the
meantime, Congress was calling for expansion of public works as a
remedy for periodic unemployment, and Hoover supported this, too,
though the
measures failed to pass.
Hoover later backed a similar
plan in 1928. This plan was hatched at the Governors' Conference
in New Orleans in November of 1928. Governor Ralph Owen Brewster
of
Maine, announcing that he was speaking on Hoover's behalf, unfolded a
state-federal-municipal program for the use of public works as a
balance wheel in the economy. The
Brewster--or "Hoover" plan, as it came to be known--differed from
earlier proposals in the fact that it proposed not only using public
works to spur economic growth during recession, but also proposed a $3
billion reserve fund in conjunction with public works--an amount larger
than anything before. Also, unlike earlier plans, revenues for
raising
public works or the reserve fund were not to come from public revenue,
i.e. taxes, but from government borrowing. The plan was much
debated,
but was eventually vetoed by the governors.
Hoover's private attitude towards
these ideas is hard to estimate. He gave them nominal support,
but his active interest seems to have declined after the nation
recovered from postwar recession. For example, he never
used his Department to fully develop the statistical data needed to
back such an ambitious plan, so it seems that he was merely letting his
name be used without actively campaigning for the later plan. But
the fact that his name was associated with such an ambitious plan is
significant,
because they seemed to present evidence of a growing maturity in his
business thought, and because the public now associated him all the
more
with the idea of wisdom and foresight.
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