Locator: 50639HOOVER.
In a long transcription like this, there will be typographical errors. I will correct them as I find them.
Chapter 2.3. Hooverville.
Drawing from his extraordinarily eventful life, Bert pulled together something like a political philosophy.
"Hoover in 1921 saw himself as the protagonist of a new and superior synthesis between the old industrialism ad the new, a way whereby America could benefit from scientific rationalization and social engineering without sacrificing the energy and creativity inherent in individual effort, 'grassroots' involvement, and private enterprise," writes writes historian Ellis Hawley in his classic 1974 study of the Commerce secretariat uder the Stanford engineer.
Hoover turned the fledgling department into Harding's agency for modernity, casting the mold for the relationship between the industries that made America into a superpower and state bureaucracy. Hawley calls it the "associate state" -- note the resonance with the four Sacramento Associates who talked Abe Lincoln into footing the bill for their public-private railroad partnership -- and that's what Hoover built, between his elevation to secretary with Harding's inauguration, in 1921, and his defeat at the hands of FDR in the presidential election of 1932.
And though historians have long portrayed Hoover's three terms (two at Commerce, under Harding, then Coolidge, and one in the presidency) as a bust after the corporatist Roaring Twenites, and indicted by the Great Depression and swept away by the New Deal, the country's turn toward corporate-cabal associative logic in the fourth quarter of the twentieth century suggests that they've understated the Chief's influence.
From our perspective a century later, the difference between the associatie state and the New Deal is subtler than we've been led to believe. In this section I'll trace the ways in which Hoover's associative model built the West Coast's twentieth-century agricultural and aeronautical industries, but that was just the beginning; Hoover's impact on the real estate and radio sectors was just as decisive and important. If most historians think FDR set the stage for American hegemony, the endurance of Bert's California suggests otherwise. By examining some specifics of the long Hoover adminsitration, we prepare to understand the following hundred years.
The largest uncontested achievement of Hoover's leadership is the one that still bears his name: the Hoover Dam.
By the time he got back to America, the plan to dam the Colorado river and thereby irrigate and power California's Los Angeles "Southland" already existed, but took an organizer of Hoover's skill to bring several state and municipal governments, federal agencies, and private firms into agreement on how to divide such a massive bounty. He needed the entire length of his Commerce terms, but the Chief finally got the damn dam built in his image. First he got representatives from the affected states into a room and hammered out the Colorado River Compact over the course of two weeks.
The interstate accord set the future irection of the river, but was a stacked deck, because the congressional (Senate and House) as well as White House representatives all came from California. That's where the lion's share of the water and power went, too, as well as the biggest construction contracts. After a few years of procedural delay -- a cynical reader might think some of the players involved needed time to secure a bunch of land titles -- the appropration passed, just as President Hoover installed his Stanford buddy Ray LymanWilbur at the Department of the Interior. This was engineering at the nation-building level; it's what the engineer in chief had prepared to do all this life.
Though it was finished in 1935, long after Bert had left Washington with his tail between his legs, the dam was his project, and it bore all the marks of the associative state. First off, it was a massive thing, the largest dam in human history and the biggest known construction project by volume since the Great Pyramids of Egypt. By1940 the turbine generators produced one-eighth of the country's electricity and, along with the aqueducts, made it possible for Los Angeles to rise as Califronia's second city.
Behind the massive wall of concrete was an ad hoc coalition of relatively petty West coast construction capital. They called themselves "the Six Companies" after the Chinese associations in San Franciso during the railroad days, but they were closer to the original Associates.
Most prominent among their number were Warren A. Bechtel and Henry J. Kaiser, and Hoover's dam turned them into famous industrials, The new Six Companies earned their place, building the project during the Depression with modern techniques and an all-American whtie male labor force -- no union required, but Asian workers were banned by contract. The companies kept costs comparativeley low in part by efficiently managing their workers' whole lives at the site, though it wasn't until a few years later that Kaiser figured out a way to incorporate health-care costs into his rationalized production equations by moving employees to a company medical plan. Until Roosevelt took over, the Six Companies paid partly in scrip, and in 1931 when the Industrial Works of the world came by to agitate, site managers rounded them up and shipped them to Vegas. It was, i the word so historian Kevin Starr, a "demanding, if vaguely benevolent, dictatorship," paralleling the insurgent right-wing industrial cultures of Germany and Japan.
See footnote on page 152.
At the end of this win-win dam were California's landowners and speculators, whose job in the whole scheme was to get rich. Behind the Six Companies (Kaiser in particular) wth a big sack of money was A. P. Giannini, whose bank stood to gain the most from an increase in California land values. Hoover's private associates were up and down the project, especially the Southern California Edison chairman Henry Robinson, to whose firm Secretary Wilbur originally appropriated 25 percent (!) of the Hoover dam power output, before criticism forced him to reduce it to 9 percent. Harry Chandler -- conservative publisher of the Los Angeles Times, Stanford dad, and Hoover's confederate on the university board -- became the city's most important capitalist by riding the Hoover real estate and manufacturing boom into the 1930s. These men poured the concrete foundation for what was shaping up to be California's century.
In his last full-time job before committing to public service and passive income, hoover went around reviving "sick" mines with a rationalized approach-- or at least convincing investors that's what he was doing. As a national leader, he endeavored to perform the same function but for whole industries. America was supposed to be the land of dynamism, but number of th country's advanced economy sectors were languishing, especially compared to how quickly Germany andJapan were developing under Neo-imperial systems. Hoover understood that government had to establish a base level of coordination and standardization around novel technologies. Capital was stuck in Yogi Berra's "Nobody goes there, it's too clowded" contradiction: Investors were scared off by reasonable fears of free-riding on research and development, price competition, and a lack of standardization. No one waned to be stuck holding the bag when the new rules come down. This is where the associate model came in: Hoover could provide not just physical infrastructure with water and power, bu also the informational infrastructure new industries needed to become investable. He had a third gift for California, too a gift that would soon provide Palo Alto technologlists with their new frontier.
When Hoover formally entered the cabinet, the American airplane industry was severely underdeveloped. The first US passenger had yet to fly, and there was no commercial air sector to speak of. When World War I ended, production cratered by over 98 percent as the market flooded with surplus war planes. Independent pilots "barnstormed" the country and wowed crowds with stunts; flight was more or less an entertainment medium during peacetime. The Europeans, however, turned World War I into an air war by the end, and Hoover was convinced that the country had an existential need for a healthy domestic air industry. At the same time, he believed the government couldn't just build the planes itself efficiently without a profit movie. This sick sector was Hoover's first priority at Commerce, and a solid success for his strategy.
Bert's model was to get the federal government to set flight paths, research weather patterns, license pilots, and otherwise facilitate development in a general way. After some hemming and hawing about the "Air Dictator," Congress gave him the go-ahead in 1926 with the Air Commerce Act. He worked witht the Guggenheim family -- Hoover had almost turned down the cabinet seat offered by Harding to join them in a mining partnership -- after patriarch Daniel Guggenheim offered a $2.5 million fund to train aeronautical engineers, improve the technology, and push the industry as a whole forward in full cooperation with the Commerce Department in light of the agency's new powers.
They were the aiplane Giannini's, bankrolling the industry's shared expenses out of combination of public and private interest, no government coercion necessary. Stanford and MIT (along a few others) got new engineering programs, but Caltech in burgeoning Los Angeles ended up benefiting most, become home to a Guggenheim aeronautics lab that helped make the region into he world's plane and rocket headquarters.
The associative state didn't work without capitalists, and thankfully Los Angeles had its own Associates, among them Henry Robinson of Southern California Edison -- he was also the head of the Security First National banking combine in LA, the only part of the state where Gianninni found himself on the outside looking in -- and Harry Chandler of the Times, who also owned half the cit's best real estate and a large swath of the agricultural Southland. In 1920, Chandler led the financing for an ambitious pilot and aspiring airplane builder who found his way to his office and, like Theodore Judah with his railroad plan, couldn't get any other capitalists interested in his designs. Donald Doublas proved as able as Judah, and Douglas Aircraft won a number o familiar contracts. The experience mast have favorably disposed Chandler toward the industry, and he underwrote pilot Pop Honshu and his Western Air Express a few years later. Another pillar in Hoover' air plan was to spur the industry by awarding lucrative and exclusive mail delivery contracts; Western won the western contract and when the Daniel and Florence Guggenheim Foundation sought a firm to run the first experiment in passenger travel, they picked Western, too.
