My dear Senator Smoot:

I have given thought to your request that I should express to you and the Senate Finance Committee my views upon the bill passed by the House of Representatives, increasing the loans to World War veterans upon the so-called bonus certificates. In view of the short time remaining in this session for its consideration I shall comply with your request.

The proposal is to authorize loans upon these certificates up to 50% of their face value. And to avoid confusion it must be understood that the “face value” is the sum payable at the end of the 20 years period (1945) being based on the additional compensation to veterans of about $1,300,000,000 granted about six years ago, plus 25% for deferment, plus 4% compound interest for the 20 year period. As the “face value” is about $3,423,000,000, loans at 50% thus create a potential liability for the Government of about $1,172,000,000, and, less the loans made under the original Act, the total cash which might be required to be raised by the Treasury is about $1,280,000,000 if all should apply. The Administrator of Veterans’ Affairs informs me by the attached letter that he estimates that if present conditions continue, then 75% of the veterans may be expected to claim the loans, or a sum of approximately $1,000,000,000 will need to be raised by the Treasury.

I will not undertake to enumerate all of the grounds for objection to this proposal. There are a number of most serious objections, some of which are matters of method and some of which are matters of fundamental principle affecting the future of our country and the service men themselves.

I have supported, and the nation should maintain, the important principle that when men have been called into jeopardy of their very lives in protection of the Nation, then the Nation as a whole incurs a special obligation beyond that to any other groups of its citizens. These obligations cannot be wholly met with dollars and cents. But good faith and gratitude require that protection be given to them when in ill health, distress and in need. Over 700,000 World War Veterans or their dependents are today receiving monthly allowances for these reasons. The country should not be called upon, however, either directly or indirectly, to support or make loans to those who can by their own efforts support themselves.

By far the largest part of the huge sum proposed in this bill is to be available to those who are not in distress.

The acute depression and unemployment create a situation of unusual economic sensitiveness, much more easily disturbed at this time than in normal times by the consequences of this legislation, and such action may quite well result in a prolongation of this period of unemployment and suffering in which veterans will themselves suffer with others.

By our expansion of public construction for assistance to unemployment and other relief measures, we have imposed upon ourselves a deficit in this fiscal year of upwards of $500,000,000 which must be obtained by issue of securities to the investing public. This bill may possibly require the securing of a further billion of money likewise from the public. Beyond this, the Government is faced with a billion dollars of early maturities of outstanding debts which must be refunded aside from constant renewals of a very large amount of temporary Treasury obligations. The additional burdens of this project cannot but have damaging effect at a time when all effort should be for the rehabilitation of employment through resumption of commerce and industry.

There seems to be a misunderstanding in the proposal that the Government securities already lodged with the Treasury to the amount of over $700,000,000 as reserve against these certificates constitute available cash to meet this potential liability. The cash required by the veterans can only be secured by the sale of these securities to the public. The legislation is defective in that this $700,000,000 of Government securities is wholly inadequate to meed either a potential liability of $1,280,000,000 or approximately $1,000,000,000 estimated as possible by the Administrator of Veterans’ Affairs, and provision would need to be made at once for this deficiency.

The one appealing argument for this legislation is for veterans in distress. The welfare of the veterans as a class is inseparable from that of the country. Placing a strain on the savings needed for rehabilitation of employment by a measure which calls upon the Government for a vast sum beyond the call of distress, and so adversely affecting our general situation, will in my view not only mullify the benefits to the veteran but inflict injury to the country as a whole.

Yours faithfully,
Herbert Hoover

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The conferences of the President during the last few days with the representatives of the Building and Loan Associations and the members of the Finance Committee of the Housing Conference relate to the consideration of better longview financing of home ownership and the present emergencies in small mortgages upon urban and farm property used for homes. No conclusions have yet been reached but in any event the projects discussed do not look to replacing the functions of the National Credit Pool among the banks as has been reported in some quarters.

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My dear Mr. Senator:

I thought you would like to know that a re-examination of our fiscal situation for the next year by the Director of the Budget shows that upon the indicated income of the Government and the expenditures to which the Government is already committed through budget proposals and legislation which has been completed, we are faced with a deficit of some twenty or thirty millions of dollars. This, of course is not as yet a very material sum, but it is obvious that further large amounts of expenditures will jeopardize the primary duty of the Government, that is, to hold expenditures within our income.

Something over one hundred and twenty-five acts have been passed by either the Senate or the House or favorably reported by different committees, which sould authorize an additional expenditure of three hundred or three hundred 50 million dollars next year. A good many of these proposals, are of course, for comparatively small sums, and some of them are necessary for the functioning of the Government, but I know you will agree with me that there is cause for real alarm in the situation as we can not contemplate any such deficit.

I am writing a similar note to Representative Wood.

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I am glad to meet this assembly of representative bankers from every state in almost every county of our country. During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system but also the capacity of our bankers in an emergency.

We have had a severe shock and there has been disorganization in our economic system which has temporarily checked the march of prosperity. But the fundamental assets of the Nation, the education, intelligence, virility, and the spiritual strength of our 120,000,000 people have been unimpaired. The resources of our country in lands and mines are undiminished. Scientific discovery and invention have made further progress. The gigantic equipment and unparalleled organization for production and distribution are in many parts even stronger than two years ago.

Though our production and consumption have been slowed down to 85 or 90 percent of normal, yet by the very fact of the steady functioning of the major portion of our system do we have the assurance of our ability and the economic strength to overcome the decline. The problem today is to complete the restoration of order in our ranks and to intensify our efforts to prevent such interruptions for the future.

And it is not a problem in academic economics. It is a great human problem. The margin of shrinkage brings loss of savings, unemployment, privation, hardship, and fear, which are no part of our ideals for the American economic system.

This depression is world-wide. Its causes and its effects lie only partly in the United States. Our country engaged in overspeculation in securities which crashed a year ago with great losses. A perhaps even larger immediate cause of our depression has been the effect upon us from the collapse in prices following overproduction of important raw materials, mostly in foreign countries. Particularly had the planting of robber, coffee, wheat, sugar, and to a lesser extent cotton, expanded beyond world consumption even in normal times. The production of certain metals, such as silver, copper, and zinc, had likewise been overexpanded.

These major overexpansions have taken place largely outside of the United States. Their collapse has reduced the buying power of many countries. The prosperity of Brazil and Colombia has been temporarily affected from the situation in coffee; Chile, Peru, Mexico, and Australia from the fall in silver, zinc, and copper; Cuba and Java have been depressed by the condition of the sugar industry; East India generally has suffered from the fall in rubber. These and other causes have produced in some of the countries affected some political unrest. These economic disturbances have echoed in slowdown in demand for manufactured goods from Europe and ourselves, with inevitable contribution to unemployment. But the readjustments in prices, which were also inevitable, are far along their force. Most of these commodities are below the level at which sufficient production can be maintained for the world’s normal needs, and therefore sooner or later must recover.

Because the present depression is world-wide and because its causes were world-wide, does not require that we should wait upon the recovery of the rest of the world. We can make a very large degree of recovery independently of what may happen elsewhere.

I should like to remind you that we did precisely that thing in 1922. We were then experiencing the results of the collapse of war inflation in all commodities and in every direction. We had less organized cooperation between the business community in the government to help mitigate the situation. The rest of the world was in a chaos from the war far more menacing both to economic and political stability than anything confronting us today. Our difficulties at that time were far more severe than they are at present. The commercial banks particularly were sufferers from a large volume of frozen credits and enjoyed nothing to compare with comfortable liquidity that prevails today. We then had overexpansion and large stocks in most commodities; today with one or two exceptions we are free from this deterrent. But we led the world in recovery. It was our independent recuperation from that depression, and the economic strength which we so liberally and largely furnished to other countries, that was the basis for reconstruction of a war-demoralized world.

We are able in considerable degree to free ourselves of world influences and make a large measure of independent recovery because we are so remarkably self-contained. Because of this, while our economic system is subject to the shock of world influences, we should be able, in large measure, to readjust ourselves. Our national production is over one-third of the total of the whole commercial world. We consume an average of about 90 percent of our own production of commodities. If, for example, we assumed a restored normal home consumption and held even our present reduced basis of exports, we should be upon a 97 percent of normal business basis. Even this illustration does not represent all of our self-contained strength.

We shall need mainly to depend upon our strong arm for recovery, as other nations are in greater difficulty than we. We shall need again to undertake to assist and cooperate with them. Our imports of commodities in the main depend upon our domestic prosperity. Any forward movement in our recovery creates a demand for foreign raw materials and goods and thus instantly reacts to assist other countries the world over.

I wish to take your time to discuss some of the pivotal relationships of the bankers not only to the immediate problem of recovery but to the wider problem of long-view business stability. Any discussion of one involves the other.

Before I enter upon that subject, however, I wish to say that no one can occupy the high office of President and conceivably be other than completely confident of the future of the United States. Perhaps as to no other place does the cheerful courage and power of a confident people reflect as to his office. There are a few folks in business and several folks in the political world who resent the notion that things will ever get better and who wish to enjoy our temporary misery. To recount to these persons the progress of cooperation between the people and the government in amelioration of this situation, or to mention that we are suffering far less than other countries, or that savings are piling up in the banks, or that are people are paying off installment purchases, that abundant capital is now pressing for new ventures and employment, only inspires the unkind retort that we should fix our gaze solely upon the unhappy features of the decline. And above all, to chid the pessimism of persons who have assumed the end of those mighty forces which for 150 years have driven this land further and further tiward that great human goal—the abolition of intellectual and economic poverty—is perhaps not a sympathetic approach. Nevertheless, I have always been, and I remain, an unquenchable believer in the resistless, dynamic power of American enterprise. This is no time—an audience of American leaders of business is no place—to talk of any surrender. We have known a thousand temporary setbacks, but the spirit of this people will never brook defeat.

Our present situation is not a new experience. These interruptions to the orderly march of progress have been recurrent for a century. And apart from recovery from the present depression, the most urgent undertaking in our economic life is to devise further methods of preventing the storms. We must assure a higher degree of business stability for the future.

The causes advanced for these movements are many and varied. There is no simple explanation. This is not an occasion for analysis of the many theories such as to little gold or the inflexible use of it. Whatever the remote causes may be, a large and immediate cause of most hard times is inflationary booms. These strike some segment of economic life somewhere in the world, and their re-echoing destructive results bring depression and hard times. These inflations in currency or credit, in land or securities, or overexpansion in some sort of commodity production beyond possible demand—even in good times—may take place at home or abroad; but they all bring retribution.

The leaders of business, of economic thought, and of government have for the last decade given earnest search into cause and remedy of this sort of instability. Much has already been accomplished to check the violence of the storms and to mitigate their distress. As a result of these efforts the period of stable prosperity between storms is longer, the period of storm is shorter, and the relief work far more effective. But we need not go beyond our situation today to confirm the need for further effort.

The economic fatalist believes that these crises are inevitable and bound to be recurrent. I would remind these pessimists that exactly the same thing was once said of typhoid, cholera, and smallpox. If medical science has said down in a spirit of weak-kneed resignation and accepted these scourges as uncontrollable visitations of Providence, we should still have them with us. This is not the spirit of modern science. Science girds itself with painstaking research to find the nature and origin of disease and to devise methods for its prevention. That should be our attitude toward these economic pestilences. They are not dispensations of Providence. I am confident in the faith that their control, so far as the causes lie within our own boundaries, is within the genius of modern business.

We have all been much engaged with measures of relief from the effect of the collapse of a year ago. At that time I determined that it was my duty, even without precedent, to call upon the business of the country for coordinated and constructive action to resist the forces of disintegration. The business community, the bankers, labor, and the Government have cooperated in wider spread measures of mitigation than have ever been attempted before. Our bankers and the reserve system have carried the country through the credit storm without impairment. Our leading business concerns have sustained wages, have distributed employment, have expedited heavy construction. The Government has expanded public works, assisted in credit to agriculture, and has restricted immigration. These measures have maintained a higher degree of consumption than would otherwise have been the case. They have thus prevented a large measure of unemployment. They have provided much new employment. Our present experience in relief should form the basis of even more amplified plans and future. But in the long view the equally important thing is prevention. We would need have less concern about what to do in bad times if we discovered and erected in good times further safeguards against the excesses which lead to these depressions.

American business has proved its capacity to solve some great human problems in economics. The relation between employer and employee has here reached a more stable and satisfactory basis than anywhere else in the world. We have largely solved the problem of how to secure the consumption of the gigantic increase of goods produced through that multiplication of per capita production by the application of science and the use of labor-saving devices. That solution has been attained by sharing the savings in production costs between labor, capital, and consumer, through increased wages and salaries to the worker, and decreased prices to the consumer with consequent increased buying power for still more goods. Every step in that solution is a revolution from the older theories of business.

We may safely assume that our economic future is safe so far as it is dependent upon a competent handling of problems of productivity. But one result is to render further advance toward stability even more urgent, because with higher standards of living the whole system is more sensitive and the penalties of instability more widespread.

There is no one group of which the public expects so much in assuring stability as the bankers, because in the vortex of these storms many values lose their moorings. Nor can any other group contribute so much in constructive thought and action to solve the problem either today or in the long run.

Three most important relationships to these business movements lie in the banker’s field. The first is what, for lack of better terms, we call psychology—both that contagious overoptimism which accelerates the inflation of the boom and those depths of fear and pessimism which deepen and prolong the depression. The American banker has come to occupy a unique position in the strategy of stability, for he is the economic adviser of American business. He is the listing post of economic movement. He in large measure makes or tempers its psychology .

I do not suppose the banker has consciously sought this new function of general adviser, but such he has become. His business is no longer the simple function of discounting commercial bills and lending money on first mortgages. That is today but part of his work. These days, when he establishes a line of credit to a business, or furnishes loans upon securities of a business, or advises investments in a business, he must know the elements which make for success and failure of that business. And he must form judgment as to the future trend of business in general. On the other side, the American business man, big and little, the farmer, and the labor leader are coming more and more to consult with the banker on problems of his business. Whatever the origin of his position may be, the banker is now the economic guide, philosopher, and friend of his customers, and his philosophy can dampen our enthusiasm and equally it can lift our courage and hope.

The second point of the banker’s unique position in relation to business trends lies in the part which credit plays in the whole business process. Obviously during the inflationary period the use of credit for unwise expansion and speculation draws away the supply of credit from normal business. It imposes upon normal business an interest rate which strangles the orderly commerce of the country. Commerce sickens under this pressure, its pace slackens and contributes to collapse. Therefore, I wish to emphasize what has long been recognized—that is, that the flow of credit can accelerate and it can retard such movments. Equally a wise direction of credit provides a large contribution to recovery from depressions.

The third reason why this is so much a banker’s problem is that banking is the one great line of business activity that is in itself interconnected. Each credit institution shares the credit burdens of of others and all are largely coordinated through national organization—the Federal reserve system.

The reserve system and its member banks and the Treasury participation in fact form a widespread cooperative organization, acting in the broad interest of the whole people. To a large degree it can influence the flow of credit. Bankers themselves are represented at each stage of management. And, in addition, the various boards and advisory committees represent also industry, agriculture, merchandising, and the Government. The reserve system therefore furnishes an admirable center for cooperation of the banking business with the production and distribution industries and the Government in the development of broad and detached policies of business stability.

You have gained much experience from the two great crises of recent years. I trust you will seriously and systematically consider what further effective measures can be taken either in the business world or in cooperation with the Government in development of such policies, both for the rpesent depression and for the future. I know of no greater public service. It is a service to every business man, to every farmer, to every worker, whether at a desk or bench. I am not assuming you can do it all, or that all disturbance, domestic or foreign, can be wholly prevented or cured.

The Government should cooperate. It plays a large part in the credit structure of the country. Its fiscal system has most important bearings. For instance, I believe an inquiry might develop that our system of taxes upon capital gains directly encourages inflation by strangling the free movement of land and securities.

The regulatory functions of the Federal and state governments also have a bearing on this subject through there effect upon the financial strength of the railways and utilities. During a period of depression the soundest and most available method of relief is expansion of public works and construction in the utilities, railways, and heavy industries. The volume of possible expansion of construction in these private industries is about four or five times that in public works. During the present depression these industries have done their full part, but especially the railways have been handicapped by some provisions of the Transportation Act of 1920. With wider public vision the railways could be srengthened into a greater balance wheel of stability. We have need to consider all of our economic legislation, whether banking, utilities, or agriculture, or anything else, from the point of view of its effect upon business stability.

I have never believed that our form of government could satisfactorily solve economic problems by direct action—could successfully conduct business institutions. The Government can and must cure abuses. What the Government can do best is to encourage and assist in the creation and development of institutions controlled by our citizens and evolved by themselves from their own needs and their own experience and directed in a sense of a trusteeship of the public interest. The Federal Reserve is such an institution.

Without intrusion the Government can sometimes give leadership and serve to bring together divergent elements and secure cooperation in development of ideas, measures, and institutions. That is a reenforcement of our individualism. It does not cripple the initiative and enterprise of our people by the substitution of government.

Proper cooperation among our people in public interest, and continuation of such institutional growths, strengthen the whole foundation of the Nation, for self-government outside of political government is the truest form of self-government. It is in this manner that these problems should be met and solved.

I wish to revert to the influence of the bankers, through encouragement and leadership, in expedition of our recovery from the present situation. You have already done much, and at this juncture the responsibility of those in control of money and credit is very great. Without faith on your part and without your good offices, the early return to full prosperity can not be accomplished. This depression will be shortened largely to the degree that you feel that you can prudently, by counsel and specific assistance, instill into your clients from industry, agriculture, and commerce a feeling of assurance.

We know that one of the prerequisites of ending a depression is an ample supply of credit at low rates of interest. This supply and these rates are now available through the cooperation of the banks and the Federal reserve system.

The income of a large part of our people is not reduced by the depression but is afected by unnecessary fears and pessimism, the result of which is to slacken the consumption of goods and discourage enterprise. Here the very atmosphere of your offices will affect the mental attitude and, if you please, courage, of the individuals who depend upon you for both counsel and money. Many, perhaps all of you, have been through other periods of depression. Those of you who have had occasion to review the experience of the past will, I believe, join in the thought that there comes a time in every depression when the changed attitude of the financial agencies can help the upward movement in our economic forces.

I started with the premise that this question of stability was much more than a problem in academic economics—it is a great human problem, for it involves the happiness of millions of homes. A continued unity of effort, both in our present situation and in establishing safeguards for the future, is the need of today. No one can contribute more than our banking community.

It appears from the press that someone suggested in your discussion that our American standards of living should be lowered. With that I emphatically disagree. I do not believe it represents the views of this association. Not only do I not accept such a theory, but on the contrary, the whole purpose and ideal of this economic system which is distinctive of our country, is to increase the standard of living by the adoption and the constant widening diffusion of invention and discovery amongst the whole of our people. Any retreat from our American philosophy of constantly increasing standards of living becomes a retreat into perpetual unemployment and the acceptance of a cesspool of poverty for some large part of our people.

Our economic system is but an instrument of the social advancement of the American people. It is an instrument by which we add to the security and richness of life of every individual. It by no means comprises the whole purpose of life, but it is the foundation upon which can be built the finer things of the spirit. Increase in enrichment must be the objective of the Nation, not decrease.

In conclusion I would again profess my own undaunted faith in those mighty spiritual and intellectual forces of liberty, self-government, initiative, invention, and courage, which have throughout our whole national life motivated our progress, and driven us ever forward. These forces, which express the true genius of our people, are undiminished. They have already shown their ability to resist this immediate shock. Any recession in American business is but a temporary halt in the prosperity of a great people.

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I have authorized the Attorney General to undertake an exhaustive investigation into the whole question of bankruptcy law and practice. It will be a most extensive and vigorous investigation. The work will be under the direction of the Solicitor General and he will be assisted by the Department of Commerce.The losses through bankruptcy in the past five years exceed $3,000,000,000 and are now averaging $750,000,000 per annum. The purpose of the investigation is, of course, to propose to Congress some essential reforms in the bankruptcy law and practice.

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We have canvassed the information secured by state and national surveys as to drought conditions. While the extent of the damage cannot yet be determined, it is certain that there are at least 250 counties most acutely affected where some degree of relief must be provided. It was the view of the conference that the burden of effective organization to meet the situation over the winter in the acutely affected counties rests primarily upon the counties and the states themselves, supplemented by such cooperation and assistance as may be found necessary on the part of the Federal Government.

The objective of such relief is:

1. To assist families over the winter who are deprived of means of support for failure of their crops.
2. To prevent unnecessary sacrifice of livestock.
3. Protection to public health.

This is to be accomplished by:

1. Placing of loans privately or where necessary with assistance of State or national agencies.
2. Red Cross assistance.
3. Employment.
4. Reduced railway rates for food, feed and livestock to the distressed districts.

This relief can be achieved justly and effectively only upon first determination of the counties where such assistance is required, and second, upon an accurate determination of the needs of each family. In order that such determinations may be made and assistant supplied as each case may require, the following organization is agreed upon:

1. Each governor who considers that a situation requiring emergency relief exists within the state shall create a Drought Relief Committee under the chairmanship of a leading citizen, and embracing in its membership a state agricultural official, a leading banker, a Red Cross representative, a railway representative, and such farmers and others as the situation may require. This committee to take general charge of relief measures within the state.

2. The State Committee to determine the drought counties where there is need for organized relief and to organize a committee in each county, likewise under the chairmanship of a leading citizen, and embracing the county agricultural agent, a leading banker, county Red Cross leader, farmers and others.

3. The county committees will receive individual applications for relief and recommend the method of treatment, and coordinate the various agencies in service thereto by way of loans, Red Cross assistance, employment, etc. The state committees, in cooperation with the county committees, to determine which counties are in need beyond the resources of the people of the county and in what direction, i. e. whether loans are required beyond the ability of the local banks, or Red Cross assistance beyond the resources of the county chapter; what quantities of imports of feed or food are required, etc. The State Committee to cooperate with national agencies if these requirements are beyond the state resources.

4. The President will set up a committee comprising representatives of the Department of Agriculture, the Federal Farm Board, the Federal Farm Loan Board, the Red Cross, the American Railway Association, the Public Health Service. This committee, through its chairman, will coordinate national activities and national support to the state and county committee.

5. The methods for provision of credit beyond local or state resources for the purchase of feed, seed, movement of livestock, or support of families over the winter will be developed by state committees in cooperation with the Federal Farm Board, the Federal Farm Loan Board, the Intermediate Credit System, and other Federal agencies.

6. The Red Cross will organize its own committees in each drought county, the chairman of which will be a member of the County Drought Relief Committee. The National Red Cross has made a preliminary allocation of $5,000,000 pending determination of the aggregate need.

7. The railways have already generously reduced rates by 50% on food and feed inward to the drought counties and livestock movement outward, to dealers and persons who are entitled to relief and so designated by the county agents or the committees created above.

8. The Department of Agriculture will secure and disseminate information as to sources of feed supply and localities to which livestock may be shipped. It will examine the possibilities of advancing state road allotments to drought areas in order to increase employment.

9. In the states of Iowa, Nebraska, Kansas, and others having a surplus of feed, it is recommended that a state committee be set up to cooperate with the committees in the states of surplus livestock.

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The drought situation has been the subject of several conferences between Secretary Hyde, Chairman Legge and myself. The Department of Agriculture has undertaken a detailed survey of the situation. They will report next Monday upon the condition in each area of the country. The information so far indicates great variation in the effect of the drought, both as between states, between counties in those states, and even between farms in the same counties. There can be no doubt as to its most serious character in many localities, and that unless relieved there will be real suffering. The maximum intensity seems to lie in a belt roughly following the Potomac, the Ohio, and the Mississippi Rivers.The measures of assistance that the Farm Board and other agencies of the Federal Government can and should undertake are being determined. It is evident already that large measures of food movement to livestock in the drought areas or movement of animals out of the worst areas will need to be undertaken later in the fall. It is too early to determine the precise character of relief; but no stone will be left unturned by the Federal Government in getting assistance to local authorities. I have asked the railways to investigate the situation from a transportation point of view.

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There must be a very material increase in the resources of the American Red Cross to enable it to bear the burden which it has undertaken in the drought area and smaller communities over twenty-one states during this winter. Within the last ten days the Red Cross has had to increase the rate of expenditure to an amount greater than during the entire preceding four months.

The American Red Cross is the Nation’s sole agency for relief in such a crisis; it is meeting the demand and must continue to do so during the remainder of the winter.

The disaster reserve of the Red Cross which was pledged to this emergency last August is not sufficient to meet the increased demands. It is imperative in the view of the experienced directors of the Red Cross that a minimum of at least ten million dollars be contributed to carry the relief program to completion.

The familiarity of this situation, due to months of press reports of its progress, should not blind us to the fact that it is an acute emergency, nor dull our active sympathies toward our fellow-countrymen, who are in actual want and in many cases will lack the bare necessities of life unless they are provided for.

As President of the United States and as President of the American Red Cross, I, therefore, appeal to our people to contribute promptly and most generously in order that the suffering of thousands of our fellow-countrymen may be prevented. I am doing so with supreme confidence that in the face of this great humanitarian need your response will be immediate.

Herbert Hoover

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My dear Mr. Chairman:

In accordance with our conference during the past week I am glad, as President of the American Red Cross, to approve an appeal for public assistance to the Association in the relief work it has undertaken in the rural section.

Last fall the Red Cross undertook the burden of personal relief throughout the drought states. At that time you set aside $5,000,000 of the Association’s funds and established a vigorous and active organization throughout the drought area. In our discussions then it was considered that further funds might be required and it was contemplated that at an appropriate time an appeal should be made to the generosity of the American people to assist the Red Cross in its burden. It was felt then that it would not be possible to measure the volume of requirement until we had reached the early stages of winter and that, in any event, it was desirable that the Red Cross postpone any appeal until such time as the Community Chests and committees on Unemployment Relief in the larger cities should have further advanced the raising of their funds.

The problem as now developed, requries more than the available funds and is not wholly one of food, clothing, and other personal care among farmers who have suffered from the drought. There is also difficulty in the smaller rural and industrial towns as a double reaction from the drought and depression. I understand that these towns are unable to organize to effectively meet their problems as are the municipalities.

The arrangement made by Secretary Hyde and yourself by which a representative of local Red Cross Chapters will sit upon the local committees created by the Department of Agriculture for administration of the crop relief will assure that every one truly deserving will be looked after with care and without waste.

I am confident you will command the never failing generous instincts of our people toward those who are less fortunate. I remain,

Yours truly,
Herbert Hoover

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Our greatest economic problem is regular and stable employment. To secure it is the assurance of comfort and happiness to millions of men, women and children. Wages sustain not only workers and their families, but also industry and agriculture, whose products they buy.

Therefore, in this present period of unemployment you can render a high service to your own community, and to the whole country by cooperating with all movements to accelerate building constructions, especially of family dwellings, new roads, and local and state public works. These measures will provide employment, enlarge buying power, increase the circulation of money, create markets for farms and factories, and assure prosperity and contented homes.

Your Order, which since its inception has identified itself with the interests of the Nation, can play an invaluable part in bringing about this happy result.

Herbert Hoover