During his second term as secretary of commerce, Herbert Hoover repeatedly warned Calvin Coolidge about wild stock market speculation and counseled a slowdown in domestic investment. 1 Coolidge disagreed; in fact, in the spring of 1927 the Federal Reserve Board actually dropped its discount rate to 3.5 percent, fueling more speculation. 2 Weeks after entering the White House, Hoover met privately with newspaper and magazine editors and publishers and asked them to initiate a campaign against dangerous stock manipulation. Many responded with editorials, but eager investors just kept pushing the value of stocks higher. Readers were more fascinated by Hoover's call for a war against bootlegging gangsters than by a campaign against reckless stock speculation. 3
Hoover's proposals for restraint were also brushed aside by business leaders. Walter Trohan, Chicago Tribune Washington bureau reporter during the Franklin D. Roosevelt years and a long-time Hoover associate, remembered: "He [ Hoover] told me that in the summer of 1929 he called the Wall Street people in and told them the market was due to crash. I asked him why he didn't publicize that. He said that wasn't his way." 4 About the same time, Hoover told his friend and personal financial manager, Edgar Rickard, to liquidate much of Hoover's personal holdings. 5 Despite the strong market, Hoover was nervous.