When President Hoover sat at my desk

Have you heard the story about Ron Manners and Herbert Hoover? The two men share a connection through not just a workspace but a series of historical coincidences. Ron told this one at the 1992 WA School of Mines Geological Symposium in Kalgoorlie and it’s also published in Never a Dull Moment (a free eBook can be accessed here). Find out how Hoover became the 31st President of the US and his (debated) skills as a writer of erotic poetry. There are also lessons here for President Trump from Hoover’s era!

I see some familiar faces that I last saw in Broken Hill a couple of weeks ago…trying to stay awake through the technical sessions in the daytime but finding it difficult on a ‘full tank’ of red wine from the night before. Well, nothing technical tonight as we will touch on a little history whilst we discuss the circumstances of how President Hoover came to be sitting at my desk. For those who are not students of Goldfields history, let me quickly outline Herbert Hoover’s involvement here.

He left Stanford University in 1895 at the age of 21 and came to Australia the following year, employed by Bewick Moreing & Co to evaluate and manage mines. Hoover arrived in Western Australia on the SS Victoria, which berthed at Albany on May 13, 1887. A fellow passenger was the Polish geologist Modest Maryanski who was the first person to understand the geological significance of the telluride gold minerals identified by Holroyd on the Golden Mile.

Maryanski is said to have taught the young Hoover much during that voyage.

Hoover spent two periods in Australia, 1896-1898 and 1905-1907. The original Sons of Gwalia mine at Leonora was formed in January 1898 and Bewick Moreing took over on March 17, 1898. Hoover managed the mine from June to December that year, at age 24. He was only three years out of college, so he was obviously showing some talents, even at the beginning of his career.

When President Hoover Sat at My Desk may sound like a very presumptuous title and it reminds me of Harry Browne, the free market economist, whom I’ve met on several occasions. One of these occasions, in his introduction as a guest speaker, it was claimed that he had made $5 million by selecting gold as his prime investment before the dramatic price run up to $800 in 1980.

With an introduction like that naturally he received a standing ovation as he walked to the microphone. He hastened to point out several minor inaccuracies in the story:

1.  The investment hadn’t been in gold, it had been in silver.
2.  It wasn’t him, it was his brother.
3.  He hadn’t made $5 million, he’d actually lost it.

However, Harry Browne had accurately predicted the rise in the price of gold and had alerted readers of his newsletter to this possibility, so he still claimed to be a hero, but for a different set of reasons to those that outlined in the introduction. So you can say that apart from the minor inaccuracies the story was quite correct.

So it is equally correct to say that President Hoover sat at my desk. The minor variances are that President Hoover didn’t know that his mine manager’s desk at the Sons of Gwalia Mine would later be sold to Jack Boyland, the Senior Inspector of Mines, or that Jack would complain to me one night in the Hannans Club that he was retiring and moving to Perth, and that his new house in Perth was far too small to accommodate this magnificent, oak Cutler desk (not a roll-top), complete with those great deep drawers.

Hoover wasn’t to know that I took it off Jack Boyland’s hands, and that several visitors from the US during the nickel boom would offer me great sums for that desk, and that I would knock back these offers, much to my later regret after the nickel boom had collapsed. These contacts have also lead me to being a guest at the Hoover Institution at Stanford University in California, where Hoover subsequently became a benefactor and trustee.

As a matter of fact, Hoover didn’t even know that he would be elected to the US presidency during the times when he was comfortably seated at “my” desk.

So all that nonsense, of course, makes me a first-hand authority on Herbert Hoover, but my grandfather WG Manners knew him and worked with him, so that also helps. That means that any time a visiting American historian arrives, and that includes George Nash, Hoover’s official biographer, they head up to my place and pay homage to Hoover’s desk. They then return home and continue to bombard me with old newspaper cuttings and other memorabilia, knowing that it must be of great interest to me, due to my intimate relationship with the late President.

They all think they are obtaining some information on Hoover from me but of course it’s like a good joint venture – both parties win and they always contribute some little known facet of Hoover’s personality or his achievements and all this comes from being stuck with a desk that I could have turned into money instead of all these moments of great glory.

So how do I feel about this historic figure with which fate has joined me in this intimate fashion? It’s easier for me to judge how other people feel about Hoover. Most historians and contemporary Americans either hold him in low regard and blame him entirely for the Great Depression or they allude to him with reverence and dwell on his ‘heroic deeds’. With all the material that has been written about Hoover, much of which seems to have found its way into my collection, one could conclude that he is something of an enigma.

Tonight, let us examine the four questions hanging over Hoover and reach a conclusion on the questions that have concerned historians for the past 60 years.

How did Hoover get to become President of the US?

Did he cause the Great Depression?

Was he a scoundrel?

Did Hoover really write that erotic poem to the Kalgoorlie barmaid?

 

How did Hoover get to become President of the US?

His background was ideal. It read like the magic formula for a folk hero. He was born in a village called West Branch, Iowa and orphaned at age eight. He worked his way through Stanford University, graduated in 1895 when he left America to become involved with heroic ventures in Australia, China, Europe and Russia. At the age of 22, when he applied for the Australian position, which required an experienced mining engineer minimum age 36, Hoover is said to have grown a mustache and faked his age. All good stuff in growing a legend.

Because of his long residences outside the US, he was out of touch with American politics and not tied to either major party. He was thus untouched by the scandals of the former administration. All of which sounds as though he would make an ideal candidate for WA Premier or Australian Prime Minister.

One of Hoover’s key assets in his career and his politics was his wife, Lou Henry. They met at Stanford University, where Hoover was in his final year doing geology (not mining engineering), and Lou Henry was in her first year of geology. He was not a good student, being particularly poor in English.

In 1898 she subsequently became the first woman to graduate in geology at Stanford, and is claimed to be the first in America (her story is detailed in Norma King’s book Daughters of Midas). Lou Henry’s other strengths were English and languages, and she subsequently played a major part in collaborating with Hoover and a team of translators to produce the first English edition of De Re Metallica, published in 1912. This is said to be the world’s first mining textbook, originally published in Latin in 1556 by the eminent German scholar Georg Bauer, whose name in Latin was Georgius Agricola.

It was common knowledge locally that during the time Lou Henry spent with Hoover on the Goldfields, she was assisting with the preparation, typing and presentation of his reports.

There is a strong suspicion that Lou Henry had a major part to play in transforming her husband from a relatively weak student of the English language into a powerful and eloquent public speaker and author. It is also safe to say that Lou Henry may have been the magic ingredient that, together with his folk hero formula, led Hoover to the White House.

Did Hoover cause the Great Depression?

In 1930, President Hoover was asked if a panic existed. In true politician style, he tried to minimize it and replied, “No, it is just a depression”.

With the benefit of history and hindsight, we can at least clearly identify who and what did cause that depression. Like most depressions, before and since, it was caused by Government manipulation of the money supply. Government ballooned the quantity of money and credit in the economy. A boom resulted, followed later by the painful day of reckoning.

The Austrian School of Economics from Von Mises, to Hayek, Rothbard and Lawrence Reed, has long observed the close relationship between money supply and economic activity. When government expands the money and credit, interest rates at first fall. Businesses (or governments) invest the ‘easy money’ in new production projects and a boom takes place in capital goods. As the boom matures, business costs rise, interest rates re-adjust upward and profits are squeezed. The easy money effects then wear off, and the monetary authorities, fearing price inflation, may even contract the money supply. In any event, just altering its growth to a lower track is usually enough to blow over the house of cards. We have seen a similar scenario in our own country over the last few years.

Whilst President Herbert Hoover did not cause the Great Depression, he certainly perpetuated it, caused mainly by his “fatal conceit” of thinking that centralized decisions by a centralised Government could overcome all difficulties.

He played a part in suppressing the free market. He forced businessmen to keep wage rates high in the face of falling prices, creating unemployment. He adopted deficit spending as a deliberate policy. He spent billions on public works and created a Reconstruction Finance Corporation to prop up shaky big businesses and thus prevent a quick and orderly adjustment of the economy. He also championed the nation’s first Federal Welfare Legislation. Much as Australia’s Prime Minister Billy McMahon paved the way for Whitlam in his money supply and spending patterns, so did Hoover pave the way for Franklin D Roosevelt in the 1932 election, by spending and taxing too much, by boosting the national debt, choking off trade, and putting millions of workers out of work.

The crowning folly of the Hoover administration was the Smoot-Hawley Tariff Act of June 1930. It was the most protectionist law in US history. It virtually closed the borders to foreign goods and ignited a vicious international trade war. Then when farming went to pieces, rural banks failed in record numbers, dragging down hundreds of thousands of their customers.

Having regained half the ground it had lost since the previous October, the stock market tumbled on the day Hoover signed the Act, and fell almost without respite for the next three years.

With the economy flat on its back and millions in despair, Congress then passed, and Hoover signed, the incredible Revenue Act of 1932. This doubled the income tax for most Americans and the top bracket went from 24 per cent to 65 per cent. Corporate and estate taxes were raised, new gift, petrol and motor vehicle taxes were imposed and postal rates were savagely increased. Economics Professor Murray Rothbard estimated that the combined fiscal burden of federal, state and local government taxes nearly doubled during the period, rising from 16 per cent to 29 per cent of net private product.

Under the weight of all this Government intervention, it’s no wonder that the second phase of the Great Depression saw conditions worsen dramatically, which set the pattern for Roosevelt’s new deal, where he proposed spending $10 billion (although revenues stood only at $3 billion).

Among the other things Roosevelt passed was the Agricultural Adjustment Act, which levied a new tax on agriculture and then used the revenue to supervise the wholesale destruction of valuable crops and cattle. In their bureaucratic wisdom US federal agents supervised perfectly good fields of cotton, wheat, and corn being ploughed and healthy cattle, sheep and pigs being slaughtered and buried in mass graves. Roosevelt’s Secretary of Agriculture personally gave the order to slaughter six million baby pigs before they grew to full size. It seems that one of the biggest problems in ploughing this cotton under, was convincing the mules to trample the crop, as they had been trained to walk between the rows. Does that indicate that the mules were in fact smarter than the politicians?

Roosevelt’s next disaster was the National Recovery Act of 1933 which was passed on the urging of big business. It cartelized industry and put Government in control of production and pricing. All that the National Recovery Act achieved was to boost business costs by 40 per cent.

Roosevelt then threw thousands into unemployment lines by enacting a Minimum Wage Law, which boosted business costs further and priced the least-skilled workers out of the job market.

In 1935 the Supreme Court outlawed both the National Recovery Act and the Agricultural Adjustment Act, but just as the economy was lifting again, Roosevelt brought in the National Labor Relations Act of 1935. This gave such privileges to labour unions that they ballooned their membership by a factor of five. This brought in an era of boycotts, strikes, seizure of plants and widespread violence, pushing labour productivity sharply down and unemployment dramatically up. On the eve of World War II, 10 million Americans were jobless.

All of this demonstrates that without Hoover’s initiatives, the damage caused by Roosevelt’s new deal policies would not have been so devastating. Hoover himself said in 1933:

“In the end the President has become increasingly the depository of all national ills, especially if things go wrong”.

The June 22, 1992, edition of The West Australian alluded to the Australian economic similarity under the headline ‘Caution, ostrich in charge’ and stated:

“Politicians always try to talk up a bad economy. Witness PM Keating’s repeated announcements that the recession is over, the upturn has begun, and so on”.

Here’s how Herbert Hoover reacted to the onset of the Great Depression. As the market began to fall in October 1929, the US President described business as “fundamentally sound”, and that a great revival of prosperity was “just around the corner”. In January 1930, he declared the trend of business was “upward” and in March “the crisis will be over in 60 days”. By May, he said the country had “passed the worst” and would rapidly recover.

Perhaps the Hoover experience is telling us what can go wrong if we put a geologist in charge of the economy?

In brief, the Hoover Administration doubled the income tax rate, pushed tariff rates to ruinous levels, attempted to cartelize industry and the agricultural sector and sought to keep both prices and wages far above market levels.

Any one of these actions following the stock market crash would have seriously impaired business recovery, but together they acted in concert to bring the economy to its knees, and in the process, threw nearly a quarter of the American workforce into the unemployment queues. I have dwelt on this topic in some detail because it is so relevant to Australia in 1992.

Was Hoover a scoundrel?

Early comments from my grandfather don’t seem to stack up with George Nash’s official biography, one volume of which covered his life as an engineer. Many of the articles about Hoover are in direct conflict with one another, and it has been suggested to me that the financially well-endowed Herbert Hoover Presidential Library Association has a brief to acquire and destroy all copies of a book printed in 1932 called Hoover’s millions and how he made them, written by James O’Brien. I understand that I have one of only three copies of this volume in Australia.

I cannot vouch for the complete accuracy of this book, but it is well researched and cross referenced, and it does provide a balance to many other books on Hoover which generally tend to concentrate on distancing Hoover from the Great Depression. O’Brien’s book covers in great detail Hoover’s involvement with the local mines:

Sons of Gwalia

Golden Horseshoe

Lancefield

Oroya Brown Hill

Lake View Consols

Great Boulder Perseverance.

It also contains a summary of the 98 corporations and 35 syndicates promoted and managed by Bewick Moreing under Hoover’s leadership. In total they appear to have lost £64 million for their investors, an incredible sum in those days.

Very few of these companies paid a dividend, at a time when it was not unusual for local gold companies to pay healthy dividends. This is in conflict with Hoover’s own 1948 definition of mining, which he describes as: “the art and practice of operating mines profitably”.

The book (p 20) tells us of some hostility from the local Mine Manager’s Institute when Hoover took over as manager of Sons of Gwalia, because the Institute refused to recognize, as a mine manager, anyone who had not had three years practical experience in the management of a mine. The book also tells of a repeated pattern of Hoover’s management style when he went on to greater things after leaving Australia for the last time.

To quote one section of the book where O’Brien refers to an article in Australia’s Bulletin magazine from April 13, 1911 (this is the same Bulletin that features Trevor ‘Pierpont’ Sykes’ articles on mining and investment and is in surprisingly similar style).

“We give an extract from the Sydney Bulletin. It is illuminating insofar as it shows how the people of Australia, who knew Hoover and his methods well during his seven years in that colony, sized him up.

“At the Oroya Exploration meeting in London lately, held with the object of inducing shareholders to put up £100,000 more cash to develop five mines, because the market was not favorable for floating them at once, Chairman HC Hoover was in great form.

“The Youanmi mine in WA covered 4,000ft along the proved ore-body. At the 80ft level (down to which a wildcat might fall from the windlass without hurting its spine), the reef was 1,156ft long, 5ft. 6in. wide and worth 50s a ton.

“This body for every 100ft in depth would yield a profit of £60,002. At the 170ft level, the shoot was 480ft long and worth 50s, showing a profit of £40,000. They wanted to open cut at 300ft and if the ore-body didn’t lose its character (sounds like the lapse of a servant girl), the mine was worth over £300,000! (Prolonged applause.)

“The Meekatharra was another phenomenal property. Above the 160ft level (the wildcat might crack his spine or break his legs falling this far), there were 47,000 tons of ore, which would give a profit of £42,000 and every 100ft of extension in depth would mean another £30,000. If the 250ft level was as good as the 150ft, the profit above that depth would be £72,000! (Applause.)

“Hoover then transported the shareholders to the Babilonia and Los Angeles mines in Mexico, where the revolution is coming from. The Babilonia was worth £45,000 and the Los Angeles £20,000 per 100ft of depth. Another wave of the hand, and the Oroya illusionist took his spell-bound hearers to the Maikop oil field in Russia, where —. 

“But, anyhow, the total profit was £252,000 (on paper) and with an expenditure of £25,000, another £120,000 could easily be earned, or £372,000 in all. After there was only one dissentient, a deaf man, and the shareholders upriously agreed to subscribe for 200,000 new shares at 10s, making the capital of the Oroya Exploration Company £250,000. Nobody thought of asking what the directors meant to do with the balance of £75,000 of new capital. Possibly it will be deposited with the Birbeck Bank.

“For the information of our readers the reference to the Birbeck Bank applies to a bank of this name in London, which had failed some little time previously, and in which the depositors had lost all their funds, having been robbed by the directors.

“The reader may think that we have not quoted correctly from the speech of the Great Engineer, rest easy. The writer has not the capacity to put so many false statements and promises into a whole volume that Hoover put into that short speech, even if we had the desire to do so, so we give a copy of his speech, taken from the Mining Journal, London, exactly as Hoover had it published in that paper.”

All this material from his early day’s contrasts greatly with his writing style from his books dating from 1935. In his Challenge to Liberty I find that his definition of fascism matches up with our recent WA Inc (state government) and federal government experiences. Does this sound familiar?

“Fascism, as distinguished from socialism, preserves private property and enterprise as implements of bureaucracy…which is frankly interpreted to mean government dictation of economic life. This whole, openly represents a regimented economy dictated by government through bureaucracy.” 

So for those who think we are suffering under the heavy hand of socialism in West Australia, by Hoover’s definition, the problem may instead be fascism.

George Nash, when asked about Hoover’s “marked sensitivity to criticism”, which may include minimizing some of his early escapades, commented: “Hoover would go to extraordinary lengths…throughout his life, to rebut alleged misrepresentations”.

In Australia we have seen scoundrels become heroes, and more recently, heroes become scoundrels. There is often a blur between being a hero and being a scoundrel. Perhaps if a man is cast as either a scoundrel or a hero, he does not necessarily have to exhibit this same quality in every act.

Perhaps there are similarities between Herbert Hoover and Claude de Bernales, where it is possible to be a hero close to Kalgoorlie and Australia where we received the direct benefits of various capital raisings, whilst from the English investors viewpoint, they may feel quite differently. So from where we sit, let’s remember Hoover kindly as one of our early mining legends.

Did Hoover really write that erotic poem to the Kalgoorlie barmaid?

Perhaps this is the most intriguing question haunting the historians. Did Hoover pen those erotic verses, recalling his time with a Kalgoorlie barmaid whilst poor Lou Henry, his fiancee, was alone in Sacramento. The poem is well known and I will only quote one stanza.

“…and I clasped you close my sweetheart, kissed you, strained you to my breast…

And a tide of bliss swept surging through the currents of our blood”.

This poem was also put to music and published in Great Australian Folk Songs by John Lahey. Our own local historian, Norma King, can’t accept it as Hoover’s. As she says: “he was such a straightforward fellow; this is so unlike him”.

The poem also mentioned the bougainvillea’s in Kalgoorlie’s then-famous Victoria Park, and Norma King suspects that these bougainvillea’s were not even planted at the time of Hoover’s periods in Kalgoorlie.

George Nash, Hoover’s official biographer mentioned this poem to me in a 1988 letter, where he said: “I am skeptical about the attribution of this love poem to Herbert Hoover. In fact, I have found no corroborating evidence and have concluded that the story is apocryphal”.

Lionel Bowen, our former Deputy Prime Minister also wrote to me, presumably having received an official inquiry from the US, asking specifically about Hoover’s desk and the poem.

My only comment about the authenticity of the poem was that our barmaids have been known to inspire visitors, and if Hoover could only see our present crop of barmaids he may have been inspired to write a whole book of poetry.

Now that we have dealt with the four great questions overhanging the life and career of President Hoover let me conclude by explaining how the Hoover connection has affected my life. I think all of us appreciate having a range of choices. Having Hoover’s great big desk has given me the opportunity to exercise my freedom of choice.

My wife Jenny tells me that by looking at someone’s desk you can get a clear impression of the state of their mind. Having Hoover’s desk has enabled me to choose between having my mind in a small or a large mess.

So at last I have someone to blame for me having an enormous messy desk. It’s all President Hoover’s fault!

Ron and the desk, 1982.