ON MARCH 4, 1929, Herbert Hoover took the oath of office as the thirty-first president of the United States. America, its new leader told the rain-soaked crowd of 50,0000 around the Capitol and countless more listening to the radio, was "filled with millions of happy homes; blessed with comfort and opportunity." He spoke in a monotone, but his words were oracular. "We are steadily building a new race, a new civilization great in its own attainments," he claimed. "I have no fears for the future of the country. It is bright with hope." One assertion more than any other articulated the theme of his inaugural address: "In no nation are the fruits of accomplishment more secure."
Through much of his term, critics would fling those words back in his face. He had been, in the phrase of the day, asking for it. "Never in American history," observed a journalist in 1932, "did a candidate so recklessly walk out on a limb and challenge Nemesis to saw it off."
But at the time, most Americans had found Hoover's assertions altogether reasonable. For years, they had seen the manifestations of the consumer culture burgeoning around them: Fords, Studebakers, and Pierce-Arrows; refrigerators, electric toasters, and rayon frocks; the surging stock market, soaring skyscrapers, and rising real wages. In 1929 unemployment bottomed at 3 percent. "The more or less unconscious and unplanned activities of business men," wrote Walter Lippmann, "are for once more novel, more daring, and in general more revolutionary than the theories of the progressives."
Hoover's entry into the White House lifted the Great Bull Market still higher. "Messages from virtually every city in the country, from Maine to California and from Washington State to Florida, have directed brokers in New York to buy stocks, indicating a conviction that the Hoover Administration is to inaugurate a period of unparalleled prosperity," reported the New York Herald Tribune, the country's foremost Republican newspaper. A maverick South Dakota senator wrote, "The President is so immensely popular over the country that the Republicans here are on their knees and the Democrats have their hats off." By September, General Electric was trading at $396, three times what it had gone for in the spring of 1928.
But such elation and prosperity wouldn't last. A month after GE rode so high, the New York Stock Exchange opened quietly on Thursday, October 24, 1929. Soon, however, volume grew heavy, and prices plunged at such a pace that the ticker could not keep up. "By eleven o'clock," John Kenneth Galbraith would write later, "the market had degenerated into a wild, mad scramble to sell. By eleven-thirty the market had surrendered to blind, relentless fear." October 29, "Black Tuesday," was far worse: $30 billion in securities evaporated. The next morning the New York Times reported: "Stock prices virtually collapsed yesterday, swept downward with gigantic losses in the most disastrous trading day in the stock market's history." By mid-November, industrials were worth only half what they had commanded 10 weeks before.
A number of Hoover's predecessors had confronted financial crises, but none had left him a usable legacy. In previous depressions--from 1837 to 1894--Martin Van Buren, James Buchanan, and Ulysses S. Grant had done nothing, and Grover Cleveland had taken a hard line against aid to the unfortunate. In later years Hoover, too, would be categorized as a "do-nothing" president. In fact, as might have been expected of a man who had been so active a secretary of commerce, he moved with commendable alacrity to arrest the decline.
Over nine days, starting in mid-November, the president summoned leaders of industry, finance, construction, public utilities, agriculture, labor, and the Federal Reserve System to the White House. At this Conference for Continued Industrial Progress, as Hoover designated the meetings, he implored manufacturers to maintain wage rates--a policy that he believed would not only benefit workers but also bolster the economy by sustaining consumer purchasing power. …