In November 1929, faced with the growing prospects for serious economic reverse, President Herbert Hoover gathered the heads of major American industrial businesses to confer at the White House. Primary on his agenda was wages. For workers, depression was simple. Work was hard to find but more than that what labor might be exchanged would be paid for at a much lower rate.

This was the pernicious final defect of a deflationary depression. The downward spiral would always begin elsewhere, but it was the labor class who paid the final bill.

Hoover, far from the do-nothing history has colored of him, wanted concessions from business leaders that at the very least they wouldn’t take that final step. In his memoirs, the President would later write of the conference:

…to maintain social order and industrial peace…a fundamental view (is) that wages should be maintained for the present…that the available work should be spread by shortening the work week…the industrial representatives expressed major agreement…the same afternoon I conferred with the outstanding labor leaders and secured their adherence to the program…this required the patriotic withdrawal of some wage demands…

It was a mutual pledge; businesses wanted some steady assurances knowing full well that depression would mean hardship on every front, including major and even general strikes as they pared back worker costs. The labor side wishing to alleviate some of the pain of downturn agreed to peace if it might mean holding the line on pay rates.

It wasn’t to be, however, as everyone underestimated the looming catastrophe. If Hoover should be blamed it wasn’t that he did nothing it was that he did what everyone else thought needed to be done.

By 1931, it was already too late. Ernest Weir, Chairman of National Steel, in February of that year condemned what had become widespread wage cuts for, in his view, delaying a recovery from the still-somehow unfolding contraction.

…modern thought … is that the standard of wages determines the standard of living.