5 - Preliminary readings of the results of the stabilization strategy

Summary

The novel experiment in constructive industrial statesmanship had been set in motion in late 1929 and early 1930 with high hopes that it would cushion the most serious shocks to the economy and accelerate its return to normal levels of activity. As 1930 drew to a close, signs of recovery remained elusive. It could still be argued that the situation would have been much worse if Hoover had not acted as he did. Even so, the immediate prospect was far from bright. Hoover acknowledged as much when he wrote to the secretary of commerce on October 1, 1930, “it seems to me that any hope of industrial recovery between now and winter is rapidly vanishing and that we will need to face a very serious problem of unemployment.”

By autumn of 1930 it was pertinent to ask whether new departures in economic policy were called for and, if so, what form they should take. The attempt to find answers to these questions required, in the first instance, a review of the accomplishments and shortcomings of the original strategy in light of the preceding year's experience. Had the stabilization plan failed? Or had it simply not had enough time to work? Was more vigorous intervention in order? Or should the system's alleged natural powers of recuperation be allowed freer scope to assert themselves? Both inside and outside official circles, opinion diverged widely on the course of policy for the next phase of depression.