The President’s Conference on Unemployment – 1921

cartoon1921

Cartoon from 1921 by William Morris

When President Harding was inaugurated in 1921, a sharp recession was underway that had begun the year before. By mid-1921, some five million people were out of work – perhaps 12% of the workforce. Concerns arose about the possibility of widespread hardship through the coming winter, and it was Harding’s Secretary of Commerce, Herbert Hoover, who suggested that a national conference was necessary to address the problem.

On August 12, 1921, Hoover sent a letter to President Harding proposing a national conference on the unemployment crisis. After Harding endorsed the idea, Hoover assembled an Economic Advisory Committee that prepared a preliminary report and recommendations for the conference. The President’s Conference on Unemployment convened September 26, 1921. After opening speeches by Harding and Hoover urging voluntary, cooperative solutions and warning that Federal funds were off limits, the Conference divided into ten subcommittees and began their work.

Over the next two-and-a-half weeks, the subcommittees essentially rubber-stamped Hoover’s recommendations. The final report of the Conference called for local Emergency Committees that would encourage and coordinate hiring by private businesses, and asked private businesses, and state and local governments to move forward any planned construction projects in order to generate short term jobs. The long-term recommendation of the Conference was to use public works projects to dampen the extremes of unemployment: during good times, state and local governments (the Federal government spent very little on public works at that time) could stockpile projects for implementation during economic downturns to reduce unemployment.

At the end of the Conference, Hoover created a Bureau of Unemployment in the Department of Commerce, which sent forth a deluge of reports, publications and press releases promoting the recommendations of the Conference. Local committees sprang up around the country, and businesses and government authorities dutifully scraped together funds to start new construction projects. As the winter approached, unemployment began to decline, rather than increase as would have been expected due to seasonal layoffs. Local charities were able to assist those who remained in need. The next spring, the economy was on the rebound, and Hoover declared the Unemployment Conference a complete success. Eight years later, after the 1929 stock market crash, President Hoover’s economic policies were based on the lessons learned in 1921.

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