February 1933 was an uncertain time for the United States as Franklin Delano Roosevelt (FDR) prepared to take office as president in March, and Herbert Hoover, who had been voted out of office by a substantial majority, was still trying to ward off what seemed to be an imminent banking collapse. In this letter, sent less than three weeks before Roosevelt's inauguration, Hoover asks the president-elect to reassure the American people that he would not inflate currency and would balance the budget. Roosevelt had his own plans, however, and he had no wish to be seen publically or privately taking Hoover's advice. The nation waited anxiously for Roosevelt to unveil his plans, which he did immediately upon taking office. Though it was denied by the Roosevelt administration for years, the president's first major move to stabilize the banks, a four-day holiday when all banks and the Federal Reserve were closed, was based on a plan drafted by the Treasury during Hoover's administration. The Emergency Banking Act, signed on March 9, was also drafted while Hoover was in office. Though Roosevelt sought to distance himself from the Republican administration of his predecessor, which he and the nation blamed for the economic crisis, several of Hoover's ideas were implemented in some measure during Roosevelt's first days in office.

February 1933 was an uncertain time for the United States as Franklin Delano Roosevelt (FDR) prepared to take office as president in March, and Herbert Hoover, who had been voted out of office by a substantial majority, was still trying to ward off what seemed to be an imminent banking collapse. In this letter, sent less than three weeks before Roosevelt's inauguration, Hoover asks the president-elect to reassure the American people that he would not inflate currency and would balance the budget. Roosevelt had his own plans, however, and he had no wish to be seen publically or privately taking Hoover's advice. The nation waited anxiously for Roosevelt to unveil his plans, which he did immediately upon taking office. Though it was denied by the Roosevelt administration for years, the president's first major move to stabilize the banks, a four-day holiday when all banks and the Federal Reserve were closed, was based on a plan drafted by the Treasury during Hoover's administration. The Emergency Banking Act, signed on March 9, was also drafted while Hoover was in office. Though Roosevelt sought to distance himself from the Republican administration of his predecessor, which he and the nation blamed for the economic crisis, several of Hoover's ideas were implemented in some measure during Roosevelt's first days in office.

In 1929, the United States stock market crashed, sending the nation into the worst economic depression it had ever seen. Under Republican leadership, the 1920s had experienced unprecedented financial and industrial growth as presidents with free-market ideals loosened regulations and unapologetically pursued pro-business policies. Deposit insurance did not exist, nor did unemployment assistance, and in the fallout from the stock market crash, corporations went bankrupt, banks failed, and by 1932, over a quarter of the nation's workforce was unemployed and many more were working part-time for low wages. In some industrial cities, unemployment reached 80 or 90 percent. President Herbert Hoover and many others in government saw the crash as part of a recession that would quickly right itself. He preached “rugged individualism,” and he urged patience and private assistance to the poor, believing that it was not the government's job to interfere with business and the economy.

By 1932, however, even Hoover could see that the Great Depression was not a short-lived economic correction. The election that year pitted Hoover, a Republican, against the popular governor of New York, Democrat Franklin Delano Roosevelt. Hoover was blamed for the economic crisis, and his popularity had fallen precipitously. Roosevelt won the 1932 election by a landslide, extending Democratic control over the House and Senate as well.

Hoover had taken some steps to respond to the looming crisis by imposing high tariffs on imports, raising taxes for the very wealthy, and by initiating public works projects. He was unable to turn the economic tide, however, and after Roosevelt won the election, Hoover repeatedly asked for meetings so they could work jointly on slowing the downward economic plunge and reassuring jittery investors. Roosevelt refused, arguing that it would associate him with the administration many perceived as having caused the problem. He also had a plan of his own.

The national banking system was teetering on the edge of total collapse when Roosevelt was sworn in on March 4, 1933. By that evening, thirty-two states had shut down their banks. Roosevelt blamed greedy bankers and selfish businessmen for the crisis, and he immediately took the reins of the national banking system. The day after his inauguration, Roosevelt called a special session of Congress and declared a four-day bank holiday when all of the nation's banks would be closed and then reopened when they were declared to be financially stable. On March 9, Congress passed the Emergency Banking Act, which allowed the Federal Reserve Banks to issue additional currency and gave the president broad regulatory power. In the first of his many “fireside chats,” Roosevelt asked the American people to return their money to banks, and many did just that when solvent banks reopened on March 13.

Herbert Clark Hoover was born in Iowa in 1874 to a Quaker farming family. He was orphaned by age nine and was raised by his uncle. He entered Stanford University in 1891, its first year of operation, and graduated with a degree in geology. Following graduation, he labored in a California gold mine for two years and then, in 1897, moved to Australia, where he worked for a mining company as a geologist and mining engineer, eventually being promoted to mine manager. In 1899, he went to China to work as chief engineer for the Chinese Bureau of Mines, working for various mining companies and arranging for Chinese labor to work in mines abroad. By 1908, he was an independent mining consultant with investments all over the world. He lectured at Columbia and Stanford Universities and was a multimillionaire by 1914.

At the outbreak of World War I, Hoover helped to organize the evacuation of 120,000 Americans stranded in Europe. He also worked with the Commission for Relief in Belgium, a public–private partnership that supplied food relief to occupied Belgium and France, eventually feeding over ten million civilians daily. When the United States entered the war in 1917, Woodrow Wilson appointed Hoover to head the US Food Administration, which oversaw rationing and the food supply chain. After the war ended, Hoover was a household name, and in 1920, he unsuccessfully pursued the Republican nomination for the presidency. Warren Harding, who won the election, named Hoover to his cabinet as secretary of commerce. In 1927, when then-president Calvin Coolidge announced he would not run again for office, Hoover ran successfully and was elected president the following year, taking office just months before the stock market crashed in October 1929. Hoover was voted out of office in 1932 in the midst of precipitous economic decline. He continued to write and lecture after his retirement and was appointed to various commissions by subsequent presidents, though Roosevelt never engaged him in public service during his administration. Hoover died in 1964 at age ninety in New York City.

Hoover's letter begins with a statement of urgency. He wishes to inform Roosevelt personally of a “most critical situation” and so has sent a private letter through the Secret Service so as not to inflame the hopes or fears of skittish investors; a letter concerning monetary policy would feed the “steadily degenerating confidence in the future which has reached the height of general alarm.” Hoover is gravely concerned that public uncertainty about the future in the critical months between presidencies could cause a total collapse of the financial system. If Roosevelt would reveal some of his plans, it would soothe the fearful public. “I am convinced that a very early statement by you upon two or three policies of your administration would serve greatly to restore confidence and cause a resumption of the march of recovery.”

Hoover goes on to describe how Congress has inflated the public distrust of the financial system. He lays out what he sees as the causes and ensuing result of this mistrust: “The breakdown in balancing the budget by the House of Representatives; the proposals for inflation of the currency and the wide spread discussion of it;… failure of the Congress to enact banking, bankruptcy and other vital legislation; unwillingness of the Congress to face reduction in expenditures; proposals to abrogate constitutional responsibility by the Congress with all the chatter about dictatorship, and other discouraging effects upon the public mind.” The frightened public was hoarding their money, collecting gold, and threatening the stability of the entire system.

Hoover acknowledges that as president, Roosevelt will do as he pleases, but Hoover asks that Roosevelt share his plans with the public. “It is obvious that as you will shortly be in position to make whatever policies you wish effective, you are the only one who can give these assurances. Both the nature of the cause of public alarm and experience give such an action the prospect of success in turning the tide.” In particular, Hoover feels that investors and the public need “prompt assurance that there will be no tampering or inflation of the currency; that the budget will be unquestionably balanced even if further taxation is necessary; that the government credit will be maintained.” In the end, Roosevelt does not respond to this plea. He does, however, enact legislation initially crafted during Hoover's administration.

Hoover's letter conveys a sense of urgency about the state of the nation in 1933 as he prepared to leave office and Roosevelt to enter it. Hoover believes that his experience will be of use to the incoming president, who seems, however, to have disagreed. Hoover identified fear as the primary cause of the economic instability in the country, and he begged Roosevelt to reassure the American people by giving them some insight into his plans for balancing the budget, maintaining credit, and not inflating the country's currency. Although publically and privately, Roosevelt dismissed Hoover as overreaching, he did incorporate some of Hoover's ideas into his own policy upon taking office.

• Fuller, Robert Lynn.Phantom of Fear: The Banking Panic of 1933. Jefferson: McFarland, 2012. Print.
• Hamby, Alonzo L.For the Survival of Democracy: Franklin Roosevelt and the World Crisis of the 1930s. New York: Free, 2004. Print.
• Parrish, Michael E.Anxious Decades: American in Prosperity and Depression 1920–1941. New York: Norton, 1994. Print.
• Shlaes, Amity.The Forgotten Man: A New History of the Great Depression. New York: Harper Perennial, 2008. Print.