Evolution of Relief
PRESIDENT HOOVER'S statement, on the heels of the great stock market collapse, is naturally the best remembered of many made by business and governmental leaders, intended to forestall economic depression. He said ( October 25, 1929): "The fundamental business of the country, that is, production and distribution, is on a sound and prosperous basis." 1 At this critical juncture, when the country needed to be reassured, the statement was inevitable, and, besides, was undoubtedly sincere. Though strongly solicited, Hoover refused to urge on the public the purchase of stocks.
Within three weeks, the President knew his error of optimism. A confidential report from federal reserve officials had said: "The situation is far from liquidated . . . it is honeycombed with weak spots . . . it will take perhaps months before readjustment is accomplished." 2 On November 15 Hoover announced a series of meetings with business leaders designed to expand construction, maintain employment, and sustain wages. His reliance was on voluntary, but concerted, action of industry and finance, in which government—federal, state, and local—would aid with building projects. He regretted that "one of the results of the speculative period through which we have passed in recent months has been the diversion of capital into the security market, with consequent____________________