CHAPTER II

PRESIDENT HOOVER ACTS

IT was but natural to expect that so stupendous a
crash, with a reduction in listed values of twentysix
 billions of dollars, would deal a tremendous blow
to business. But business was more scared than hurt.
By convocation of the President, and under the
auspices of the United States Chamber of Commerce,
four hundred leading business men set up in Washington,
 December 5, 1929, a committee of seventytwo
 “key” men called the National Business Advisory
Council. This committee set about devising means
for a continuing organization to stabilize business.
At its meeting President Hoover defined three possible
 lines of emergency action.
The first step, Mr. Hoover said, was to recover
business confidence by the powerful aid of the Fed.
eral Reserve System and the strong position of the
banks. These were working steadily to diminish interest
 rates. Money released by the deflation of
securities would thus be returned into business. The
President noted the effect of this action in making
money more abundant in all parts of the country and
in strengthening the bond market, in which public
issues that had been postponed were beginning to
appear.
The second step was taken by the President him-