Part Eight
WHILE TRAPPERS in St. Bernard fought with New Orleans over reparations, upriver a different fight was going on. There the river had lingered for months, not leaving all the land until September. Then it finally fell back within its banks, languid once again, like a snake that had swallowed its prey and lay now digesting it. It left behind ruin and rot.
At the site of each crevasse it had dug out “blue holes,” pockets of deep water lakes where fishing was often best and that exist still, and deposited mountains of sand over thousands of acres. In the entire flooded region 50 percent of all animals—half of all the mules, horses, cattle, hogs, and chickens—had drowned. Thousands of tenant-farmer shacks had simply disappeared. Hundreds of sturdy barns, cotton gins, warehouses, and farmhouses had been swept away. Buildings by the tens of thousands had been damaged, and in towns whole blocks had become heaps of splintered lumber, like the leavings of a tornado. In some places great mounds of sand covered fields and streets. On the fields, in the forests, in streets and yards and homes and businesses and barns, the water left a reeking muck. It filled the air with stench, and in the sun it lay baking and cracking like broken pottery, dung-colored and unvarying to the horizon.
Throughout the flooded region, as people turned toward rebuilding, there was a surge of energy, activity, and determination. Looking at the desolation in Washington County on September 1, 1927, Alfred Stone declared bravely, “We shall weather the storm. We shall stay here and see it through.”
But the immensity of the rebuilding task was overwhelming. LeRoy Percy said: “Sometimes you find that you have overestimated a disaster. I see nothing to indicate that in this case. The road ahead of us is a long and very rocky one.” Percy Bell wrote his sister, “Whether we are going to come back or not, nobody knows.” After weeks of effort, even Stone confessed, “By and large we have quit.”
The situation was nearly as bleak outside of Mississippi. One Red Cross executive complained that throughout the flooded region “[n]o real concerted effort has been made…to obtain independence, but rather a spirit prevails of expecting substantial help in leadership and in wealth from the outside…. There is an inherent something in all of us that reaches out for relief and encouragement as long as distress continues. This urge is emphasized in this disaster because of the multiplicity of needs, the recurrent ills due to nature’s fickleness, and the all too prevalent desire to look on the dark side. It is just possible that there is a native indolence that fosters this latter spirit, which, in many places, is true not only of the individuals but of the whole community.”
In Arkansas in October, C. C. Neal, president of the black Haygood College and an aide to the Colored Advisory Commission, reported, “Yesterday I went to Arkansas City and spent the day: it presented the worst sight I ever witnessed, wreck and ruin by water everywhere in evidence. Very little in the way of crops is to be seen but plenty of work for the winter.”
In Louisiana it was the same. In October, LeRoy Percy visited New Orleans and observed, “The Boston Club was about as cheerful as a morgue.” Time was not healing. Even in February 1928, a Red Cross executive visited Melville, Louisiana, and reported: “The civic authorities and individuals have made no effort on their part in clearing the property [of collapsed buildings] or making an endeavor to level the lots. Even where the houses have been raised by us out of the sand and put on a firm foundation, owners have made no attempt to fill in with sand where the depression was made by the house.”
HOOVER HAD an odd reaction to the desolation. In one way he found it gratifying, for it presented him with his first great domestic challenge. He intended to meet it. Back in April in Memphis when Red Cross disaster chief Henry Baker had given him his first briefing, Baker had concluded by saying, “The public is insisting on some form of rehabilitation and our standing in the disaster field requires that we do this work.” But, he warned, the disaster was so great that any aid the Red Cross could possibly offer was “so meager that the word rehabilitation would not be justified.”
Hoover had other ideas. Earlier he had said that prosperity could be “organized,” that it was only a matter of “intelligent cooperative group effort” and “planning.” There were few places in America that seemed to offer a greater potential response to rational reorganization than the alluvial plain of the Mississippi; it had the richest soil in the world, yet it was the poorest part of the nation. The flood had put this land in his power, power such as no man in modern America had ever had. He commanded every government department, including the military, and had de facto control over state governments; martial law or a near equivalent existed in much of the flooded region; the railroads, the broadcast networks, and such companies as Standard Oil, had all volunteered to obey him; and he controlled millions of dollars. His power was only temporary, but he knew how to use it. He soon developed a plan for massive rehabilitation that reflected his sense of how the world worked, and it involved the then new concept of “human engineering.” He intended to apply such engineering to the nearly 1 million people in the region and change the way they lived.
He did not understate the difficulties before him. On May 23, 1927, only hours before the final crevasse of the flood at McCrea, he told a luncheon audience in New Orleans: “We have before us perhaps the most difficult and discouraging of all periods. No longer is there the excitement of catastrophe, the stimulation of heroism and fine sacrifice. Reconstruction is always the most trying period of all disasters.” Yet he was more than simply optimistic, adding, “I have said the word ‘reconstruction’ advisedly because I believe we may give it a new significance in the relations of North and South.” Later he declared that the flood would prove “a blessing in disguise.”
His comment reflected his ambition and supreme confidence. I shall be the nominee, probably, he had said. It is nearly inevitable. Given the booming economy, it also seemed nearly inevitable that he become President of the United States. If his rehabilitation plan succeeded, as president he could use it as a model to apply to other of the nation’s problems.
And as grand as his goal of economic reconstruction was, he had another even more ambitious plan, one that involved race, and politics, and power.
HOOVER BEGAN by imposing his plans on the refugee camps, and he involved himself in extraordinary detail. It was almost as if, as an act of will, he intended to lift the entire region out of squalor. Most refugees, whether black Delta sharecroppers or white Cajuns, lived stunningly primitive lives amid epidemics of pellagra and venereal disease. He personally ordered the Red Cross to purchase hundreds of thousands of packets of vegetable seeds—beans, beets, squash, tomatoes—to give to refugees leaving camp so they could grow vegetable gardens, something few croppers did. He also saw to it that the refugee camps swarmed with home economists and agricultural extension agents who taught captive audiences how to sew, make soap, can vegetables, raise poultry, protect cistern water from mosquitoes, use a toothbrush, bathe, treat gonorrhea.
Hoover attended to even closer detail when it came to larger changes: he wanted to end the Delta’s dependence on cotton by introducing other crops. The thought was not new, but few Delta planters had paid attention to it. Cotton, however, has to be planted in the spring; just as the June rise was ending any hope of a cotton crop for 1927, Hoover was demanding from experts a “definite program of agriculture…stating the end of periods when different crops can be put in.” Even before getting definitive replies, he ordered the Red Cross to buy enough seed for 400,000 acres of soybeans. Agricultural scientists soon told him that planting soybeans so late was “positively contrary to not only our experience, but the leading planters of the Delta.” Despite the advice, he personally contacted banks to have them “undertake to loan money on a Soya bean crop.”
For the key to rebuilding, he believed, was credit. Delta cotton planters and Louisiana sugar growers had, as always, mortgaged nearly everything to plant the crops now submerged. Credit had disappeared. He was determined to supply it. Again almost as if by act of will, he began to create something out of nothing. While engineers were still fighting to hold the Bayou des Glaises levee, he was drafting a plan for private nonprofit “reconstruction corporations” in each flooded state that would loan money to planters on easier terms than would banks. He wired information on his idea to Treasury Secretary Andrew Mellon and Eugene Meyer, a financier soon to become head of the Federal Farm Loan Board (and later chairman of the Federal Reserve and owner of the Washington Post). To Meyer, a confidant, he said: “Am more impressed than ever with need for some kind of credit backing for situation. For your confidential information”—to guarantee confidentiality Hoover sent the telegram to Meyer’s home—“some outside banks are now refusing checks on flooded banks. If there is any failure of these banks the trouble will be vastly increased.”
As Hoover requested, Meyer immediately arranged for federal credit agencies to prevent any such failure. Meanwhile, Hoover himself proceeded to organize a separate reconstruction corporation in Arkansas, Louisiana, and Mississippi. Money would come not from the government but from, as he once said, those “strong men who …with definite purpose exert a greater influence on the situation from the outside than from in.” If his plan worked, then the flooded area would in fact be pulling itself up by its own bootstraps. And if it worked, he would have a model for economic change that could be used almost anywhere.
He wanted bankers and leading businessmen in each state to buy stock—$500,000 worth of stock each in Arkansas and Mississippi, $750,000 in Louisiana—in their state’s corporation. He expected national business leaders to buy an equal amount of stock in them. The reconstruction corporations would use the capital to make loans, sell these loans at a discount to the Federal Intermediate Credit Corporation, then use the money from this sale to make more loans, repeating the process until each corporation’s loan portfolio amounted to quadruple its capital.
Hoover threw all his personal force into raising money. In mid-May, even before the river had finished its war dance through Louisiana, he met with Mississippi bankers in Jackson. He explained the plan and asked every bank and large business to subscribe 1 percent of its capital. Governor Murphree reminded everyone, “You are not called upon to donate, but to invest some of your money in the integrity of these people, and I know that you will do that.” Will Whittington, the congressman from the Delta, said, “The best help that can be given any people is that help which enables them to help themselves.” Then, with all the fervor of a revival meeting, to cheers and foot-stomping, one pledge after another was announced. But there was a hollowness to the meeting; pledges were soon broken and few new ones made. Hoover met a second time with Mississippi bankers and this time was more emphatic: “You are upon the firing line! We are discussing economic questions but in fact we are discussing the problems of men, women, and children…. We have in our charge the responsibility of the welfare of these thousands of people. It is the duty of leadership!” Yet he could not move them. Out of 500 banks in Mississippi, only 115 gave anything at all. Less than half the quota he had set was actually subscribed. In Arkansas the numbers were worse.
He would not be thwarted. On May 24, he called a meeting of thirty Memphis bankers and businessmen at the Peabody and told them their quota was $200,000, half for the Arkansas corporation, half for Mississippi’s. Those assembled shifted uncomfortably. One man protested. Suddenly, Hoover began to curse, his words as rough as those he had used decades before to miners a thousand miles from civilization. Then he made a simple promise. About 25,000 black refugees were in camps in Memphis. It was 2 P.M.He gave them to 5 P.M. that day to deliver pledges for the money. “If not,” he warned, “I’ll start sending your niggers north, starting tonight.”
Immediately after the meeting he told the head of the Mississippi reconstruction corporation, “Have talked with Memphis people and I am sure they will assist.” He was right. By five o’clock he had his $200,000.
Forty-eight hours later Hoover was in Washington to raise more money, only now he was unwilling to risk the humiliation of public failure. Before proceeding, he asked for help from Lewis Pierson, president of New York’s Irving Trust Company and the U.S. Chamber of Commerce. Pierson, intensely interested in the flooded region, had already created a committee to develop a Chamber position on how to prevent any future Mississippi River disaster. The committee had thirteen members, including steel executives, bankers, and manufacturers spread from Los Angeles to New York, but it would be dominated by four men who had been friends for decades: LeRoy Percy; John Parker; Jacob Dickinson, the former secretary of war and Illinois Central executive; and Alfred Stone. Three of those four had joined Teddy Roosevelt in that bear hunt of so long ago. Now, at Hoover’s request, Pierson sent out a handful of telegrams about his plan, noting: “This telegram for yourself only until you phone Hoover…or phone me. We must have psychology of situation right before making any announcements.”
Once the response guaranteed success, Hoover acted quickly. On May 30, Coolidge signed a letter Hoover had drafted asking “the business interests of America under the leadership of the Chamber of Commerce of the United States…to secure to these loan corporations subscriptions of capital.” Only four days later, on June 3, Pierson brought together forty-eight of the most powerful men in America. Some were Hoover’s enemies, such as Judge E. H. Gary of U.S. Steel, who resented Hoover’s earlier use of the press to force him to grant steelworkers an eight-hour day. More were Hoover’s friends, such as Owen Young, the president of General Electric, who shared much of Hoover’s engineering-based philosophy; Julius Rosenwald of Sears, a great benefactor to blacks whose son-in-law was president of the New Orleans Cotton Exchange; and L. A. Downs, president of the Illinois Central, who was allowing Hoover to use his road’s finest private car. Also present were the most senior executives of such companies as Proctor & Gamble, Kennecott Copper, Allied Chemical, General Motors, Ford, Dodge, Standard Oil of New Jersey, Marshall Field & Company, the Pennsylvania Railroad, and the leading banks of New York, Boston, Philadelphia, and Chicago.
These men were powerful indeed, and their companies represented a significant percentage of the national economy. Hoover assured them that businessmen in the flooded region were generously buying stock in the reconstruction corporations. He also reminded them that the situation was desperate, and warned, “We cannot afford nationally to have a business or financial prairie fire starting from here after the flood.” Then he read a telegram from Red Cross Vice Chairman James Fieser to the head of the Arkansas Reconstruction Corporation, noting, “[L]arge planters who have been able to supply tenants and sharecroppers so far are finding credit exhausted and are unable to secure loans from the [Federal] Intermediate Credit Bank…. [There is] growing alarm.” Finally, he told them that if men like themselves cooperated with the blessing of the government, they could achieve nearly anything. He easily raised his goal: $1.75 million.
Added to the money raised in the South, and with rediscounting by federal credit agencies, Hoover had created $13 million in credit. Even though Arkansas and Mississippi had not met their quotas, he considered this total sufficient. By comparison, the Red Cross would spend less than $17 million to rescue, house, feed, and clothe nearly 700,000 people, many of them for as long as ten months, and rebuild and furnish several thousand homes as well.
Hoover was certain these reconstruction corporations would succeed, but his vision soon collided with financial and political realities. One was the reality of capitalism itself, for his plan was flawed at its core. The other was the fact that it ran the length of a fault line in American thought about the role of government and how much responsibility it had for its citizens—and it helped move that line.
FORTY YEARS earlier President Grover Cleveland, a Democrat, had vetoed an emergency appropriation of $10,000 for drought victims in Texas, declaring that the government had no “warrant in the Constitution…to indulge a benevolent and charitable sentiment through the appropriation of public funds…[for] relief of individual suffering which is in no manner properly related to the public service.” Twenty years earlier, during Teddy Roosevelt’s presidency, the federal government had required New Orleans banks to give that $250,000 guarantee before the surgeon general would help fight the yellow fever epidemic.
Since then the role of the federal government had expanded enormously, yet it had still stopped short of large-scale direct aid to suffering individuals. Nor did Hoover believe in direct aid. He had seen the new Soviet state, knew of its mass murders, and flatly rejected the idea that “any economic or social system will function and last if founded upon altruism alone.”
But Hoover had also said, “The most potent force in society is its ideals,” and that “no civilization based upon unrestrained self-interest could endure.” He had repeatedly predicted, as in a speech to the U.S. Chamber of Commerce, that the country was “in the midst of a great revolution,” that extreme individualism was giving way to what he called “associational activities” and “voluntary organization” that would mitigate the harshness of society.
He believed that government should help individuals indirectly, by providing leadership without coercion. He believed that society’s strong men—outside of government—had a responsibility to gather together and create good, and that they had the leverage to move a society. He believed in aggressive and structured voluntarism. He once said that government could “best serve the community by bringing about cooperation in a large sense between groups. It is the failure of groups to respond to their responsibilities to others that drives government more and more into the lives of the people.”
The nation’s response to the flood disaster seemed to confirm his beliefs—initially. Of the 33,849 people in the Red Cross flood effort, only 2,438 were paid. He later said: “I made ninety-one local committees to look after the Mississippi flood. You say, ‘A couple of thousand people are coming. They’ve got to have accommodations. Huts, watermains, sewers. Streets. Dining halls. Meals. Doctors. Everything.’…So you go away and they simply go ahead and do it. Of all those ninety-one committees there was just one that fell down.” In the nation at large, the outpouring of sympathy and contributions was overwhelming. Every movie theater chain in the country hosted benefits, and 17,000 theaters took collections at performances for weeks. The Elks, Masons, American Legion, and virtually every other fraternal group in the country raised money. The National Congress of Parents and Teachers sought donations from 18,000 chapters. A toothbrush manufacturer donated 4,500 toothbrushes. The Singer sewing-machine company offered its products at 50 percent discount with free shipping. Hollywood stars, especially Will Rogers, gave dozens of benefits. A Polish-American society raised money from several thousand schoolchildren in Poland. NBC radio and individual stations across the country gave free time to Hoover and repeatedly urged listeners to give to the Red Cross. The New York Times wrote, “[Radio’s] possibilities have often been discussed, but never before had it been asked to tap this field and exploit its possibilities to [this] extent.” Ultimately, tens of millions of Americans donated money for relief. The Red Cross and Hoover also performed magnificently during the initial stages of the flood.
But the rehabilitation effort highlighted a hole in the fabric of the society. Refugees leaving camps who were totally destitute and who owned farms or rented them outright, or who sharecropped on plantations smaller than two hundred acres, were to receive some household and farming equipment, seed for crops, and, if their home had been destroyed, their tents and camp bedding. They were also given two weeks’ supply of food and seed for a vegetable garden. Then they were on their own. Sharecroppers on large plantations would not get even that much from the Red Cross; planters were supposed to provide for them. Oscar Johnston, who ran the huge Delta & Pine Land Company, was asked for a list of what a tenant family of four who had lost absolutely everything would need. He provided a detailed nine-page inventory that reveals much about how sharecroppers lived: “1 dipper 1 baking pan 4 forks 4 spoons 1 large spoon…4 joints of stove pipe 1 elbow for stove pipe 1 cooking stove…1 suit overalls 4 pair shoes…two beds and springs.” Johnston estimated that replacing an entire household’s clothes, furniture, and effects for a family of four would cost $77.42, but suggested that most families would get less. In fact, the total value of goods refugees took out of camp averaged only $27 in Arkansas (no figures are available for Louisiana and Mississippi). It would hardly rebuild the lives of even sharecroppers.
The government itself would do nothing to help flood victims recover. The Treasury that year collected a record surplus of $635 million, yet in a disaster that affected almost 1 percent of the nation’s population, the government would not even create a loan-guarantee program. Indeed, the War Department dunned the Red Cross for months to pay for blankets refugees had kept and the cost of cleaning supplies that were returned. (Hoover finally ordered the War Department to desist, reminding it, “The supplies and services of the Government Departments were placed at my disposal…and are not chargeable to the Red Cross.”)
Hoover’s reconstruction corporations amounted to the only organized program for rehabilitation. The approach epitomized his beliefs. Many agreed that the government should do nothing. Direct aid had always been considered charity, and charity stigmatized recipients. In 1922 as governor, John Parker had refused all outside help—even national Red Cross help—in dealing with 35,000 flood refugees. Now Tennessee Governor Austin Peay rejected Red Cross rehabilitation aid in his state. “He felt that the people in the local communities should be expected to provide for themselves, rather than depend on outside assistance,” reported a disgusted Red Cross official.
But the immensity of this disaster and the government’s lack of response marked a dividing line, a watershed. The debate over aid crystallized over two questions: the adequacy of Hoover’s program, and the separate but related issue of calling a special session of Congress, which would be expected to appropriate money for flood victims.
Congress was not scheduled to meet until January 1928. Members of both parties from every geographical region pushed Coolidge to call a special session. Coolidge refused. Democratic Senator James Reed of Missouri wired: “I feel warranted in asking whether you will not reconsider your decision now that nearly one half million people”—the number was then still increasing—“have been driven from their homes…. With the utmost deference I ask you to give further consideration to this grave situation.” Coolidge refused. Reed Smoot, of Coolidge’s own party and chairman of the Senate Finance Committee, met with him and told the press he believed Coolidge had changed his mind. Coolidge denied it. Critics pointed out that, three years out of five, the river rose enough in the fall, even though short of flood stage, to pour through existing gaps in the levees, leaving the region helpless. The Red Cross refused to spend money on levees, and Coolidge’s chief budget official ruled that the Army, with its funds exhausted, could not legally spend a penny to repair them. Legally, Congress had to pass an appropriations bill. Coolidge illegally ordered the Mississippi River Commission to spend money.
The New York Times applauded Coolidge’s refusal to convene Congress and deemed Hoover’s program sufficient: “Fortunately, there are still some things that can be done without the wisdom of Congress and the all-fathering Federal Government.” The San Antonio Expresswrote: “Frequent demands that Congress be called into special session to deal with the problems of relief and rehabilitation have been heard. [Hoover’s financing plan] conclusively shows that such a step is not necessary. Private capital can supply the needed credit and is displaying an encouraging readiness to do so.” The Fall River (Massachusetts) Globe, added, “The new spirit in which the master business minds of the day associate themselves with the public welfare is illustrated in the recent action of the officials of the Chamber of Commerce of the United States…an excellent example of enlightened selfishness.” And the Chicago Journal of Commerce warned: “If the federal government were to set aside funds to be used for disaster relief…the appropriations might climb to appalling heights…. If relief of sufferers were to become a government task, the self-respect of the recipients of funds would be decidedly damaged. And the moral injury would have definite effects on the material fortunes of a recipient in after life…[causing] a rapid sapping of his initiative and [he] may spend the rest of his life demanding more aid as his right.”
Most of the country’s newspapers, however, disagreed. Hoover had created $13 million in credit; that worked out to less than $20 for each victim. The Ames (Iowa) Tribune & Times argued: “The total amount is but a bagatelle…. It is rather difficult to understand why the president refuses to avail himself of the sole agency through which either adequate measures of relief or of financing rehabilitation credits can be accomplished—an extra session of Congress.” The Camden (New Jersey) Courier, said, “[Hoover’s plan] is good—yes, but it is nothing remarkable…. It is a makeshift move.” Norfolk’s Virginian Pilot wrote that the appeal to private capital “is a worthy one that deserves to succeed, but it is impossible to contemplate this arrangement without wondering whether the situation might be more effectively met by government action.” The Providence (Rhode Island) Tribune declared, “The indifference of the Government does not coincide with the ideals which it frequently pronounces and for which it is exalted.” The Jackson Clarion-Ledger asked: “Why make a charity out of plain duty?…Not a dime has the government appropriated. The truth of the matter is that it has been necessary to school President Coolidge day by day a bit more towards the realization of the immensity of the catastrophe…. This new demand for aid from private citizens and corporations comes at a time when Secretary Mellon is announcing a surplus of millions in the Treasury. Why then should this tremendous burden be saddled on the people when the government has ample means to bear it?” The Sacramento Bee called for a special session “without delay, even if it spoils President Coolidge’s plans for a care-free summer vacation.” The Houston Chronicle asked, “Why should we ask the United States Chamber of Commerce to become responsible for flood relief?” The Paducah (Kentucky) News-Democrat observed: “It is hardly possible that this private credit arrangement will be sufficient to put the refugee population of 700,000 back at work…. Either [President Coolidge] has the coldest heart in America or the dullest imagination, and we are about ready to believe he has both.”
All over the country, newspapers were rocking the administration with criticism. Every Scripps-Howard paper ran an editorial insisting Congress be called. Every Hearst paper did the same. Franklin Roosevelt received much press for saying, “With due deference to Mr. Hoover I cannot believe that he really means that [the Red Cross fund] is adequate to meet more than the demands for the next few weeks.”
The St. Louis Star, the New York Evening World, the Birmingham News, and dozens of others were echoing the demand. Papers that backed both political parties demanded it. Hoover’s staff warned him: “At least four-fifths of the editorials coming in advocate such a session,” and again, “Editorial comment on the question of a special session continues heavily favorable to a special session…. There continues to be considerable criticism of the attitude of the President.”
The sentiment defined a watershed, when the nation first demanded that the federal government assume a new kind of responsibility for its citizens. But the government was not yet prepared to accept such responsibility.
LEROY PERCY had been among those calling for Congress to meet, and his voice had resonated throughout the Mississippi valley. On May 19, Hoover met with him in Baton Rouge and said that Coolidge was adamant. No amount of pressure would get him to convene Congress. Hoover promised that the Red Cross would care for the Delta’s immediate needs. More important, he also promised major legislation in which the federal government assumed responsibility for the Mississippi River. He then asked Percy to mute his criticism. Percy had sought such legislation for years. Hoover accompanied his promises with a veiled threat: if Percy did not restrain his attacks, Hoover could not promise that the legislation would ever become law. Coolidge might veto it, and by the time a new president entered the White House, Congress might have lost its sense of urgency. After the meeting Percy told the Associated Press, “We regard as settled that there will be no extra session of Congress called at this time and we would deem continued agitation of the question extremely hurtful.”
The next day in New Orleans, Hoover asked Butler to publicly oppose a special session. Butler agreed and saw to it that the city’s leaders joined in that opposition. Soon after, the New York Times wired thirty men in the flooded area—including Percy and nine New Orleans leaders—to “send us collect your opinion on…[an] extra session of Congress.” All were men of prominence, men like Percy and Butler, men who dealt with Hoover. Overwhelmingly, they opposed it. The Times printed their opinions prominently, and the administration used them as ammunition. Meanwhile, L. O. Crosby, the flood “dictator” in Mississippi, reported to Hoover, “Since Senator Percy has seen the light…sentiment is growing much stronger in support of your plans.” As a result, Hoover advised Coolidge, “[I] seem to have at least temporarily stopped the press campaign for an immediate session for relief purposes.”
He was correct. The push for an extra session dissipated, along with the criticism of the reconstruction corporations. Then Hoover simply declared success. Rebuking Sinclair Lewis, he told a Rotary club in New Orleans: “We rescued Main Street with Main Street…. The cooperative spirit of Main Street is what is putting the Mississippi Valley back on its feet after the flood. The people of the valley are settling their own problems of rehabilitation without a great deal of outside help. It is upon such independence and self-government that is based the greatness of the United States.”
The press moved on. Hoover did not. First he rebutted even indirect criticism of his actions. No newspaper had criticized him personally; to the contrary, many papers that had demanded a special session and attacked Coolidge had also, like those in the Scripps-Howard chain, pointedly offered him “unstinted praise.” Yet Hoover let nothing pass unanswered. To every newspaper that called his plan inadequate, and to dozens of individuals who had criticized it as well, he wrote identical but personalized lengthy responses which often ran as special articles. No paper was too small for his attention. Even weeklies in such places as Bowie, Arizona; Bremen, Indiana; Blaine, Washington; Electra, Texas; and Hartwood, Nebraska, received his rebuttal. To each editor he insisted that each individual victim had been cared for, that he had personally sat in on meetings when the reconstruction corporations had decided to loan enormous amounts to large planters, sawmill owners, manufacturers, and concluded, “I have thought upon explanation you would perhaps be willing to correct any misapprehension.”
To the country he was a hero, reclaiming the title he had earned in his European relief efforts, the Great Humanitarian. When he returned to Washington after one trip through the flood states, Will Rogers joked, “Bert’s just resting between disasters.”
BUT HOOVER’S PROCLAMATION of success did not equal success, and he had failed to address the real problem. He had only created credit. Credit involved risk. Private capital demanded either collateral enough to mitigate that risk or return enough to compensate for it. The devastated areas could not pay a high return, and planters had no collateral, since they had already mortgaged their land to plant the crop destroyed by the waters. Therefore, ironically, the reconstruction corporations had greater difficulty loaning money than they had had raising it.
In Greenville, Hoover’s program came under direct attack. Billy Wynn criticized the plan publicly: “We challenge the statement in the press that it will meet the need.” While Percy himself said nothing publicly, his refusal to defend the plan did not go unnoticed. Privately, W. H. Negus, president of the First National Bank of Greenville on whose board LeRoy Percy sat, described the situation clearly to the head of Mississippi’s reconstruction corporation: “There is, in fact, a super-abundance of bank funds. What this section is short of is banking collateral and that is the reason and necessity for ‘rehabilitation.’ Unless your corporation can furnish such need, which appears unlikely, it will do very little business, if any.”
Once again Hoover, refusing to be thwarted, intervened. First he convinced the St. Louis Intermediate Credit Bank to ignore its regulations and discount new crop mortgages even if a prior lien existed, so long as the lien holder agreed not to foreclose before the new crop was harvested. To further ease credit he also had the Red Cross promise to reimburse the reconstruction corporations for half of any losses. Percy, after the New Orleans bankers Hecht and Pool asked for assistance, and Alfred Stone also helped; they convinced Percy’s old friend and college classmate Tom Davis, head of the New Orleans Federal Intermediate Credit Bank, to suspend payments due on flooded land.
Meanwhile, Crosby answered criticism by lying to reporters. He said the Mississippi Reconstruction Corporation had, only two weeks after being organized and while flood water still covered nearly all the Delta, loaned out $100,000. In fact, months after his assertion, it had loaned only $50,000—and half of that went to the State of Mississippi to pay the National Guard. There was simply no demand for the loans, because there was no collateral available. Privately, Crosby informed Hoover: “It has been a source of much worry to me that an appreciation…[of] the great service you are rendering…has not been made manifest in as strong degree as I should like to see it…. For some reason the people in the flooded area have been difficult to arouse to their opportunities.” Nor was there much demand for loans in Arkansas and Louisiana.
Hoover could admit neither error nor failure. Earlier he had proceeded with massive soybean plantings despite scientific advice against it. Now he told Butler, “I have the feeling that while there is not much demand for [the credit corporation’s] services…yet its very existence has accomplished two-thirds of what we set out to do.”
In fact, his massive financing effort accomplished next to nothing. In the end, the Mississippi corporation made loans amounting to barely 5 percent of what Hoover had envisioned, and the Arkansas and Louisiana corporations did little better. The experience was pregnant with implications regarding the ability of the private sector alone to meet a crisis, but Hoover paid little attention to them. Instead, having declared success, Hoover was advancing to something far more ambitious than simple economic rehabilitation, something that would directly advance his own ambitions as well.