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Lot 109
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President Herbert Hoover Signed Letter to Bank President Involved in Fraud During the Depression
President Herbert Hoover Signed Letter to Bank President Involved in Fraud During the Depression
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Hoover Herbert

President Herbert Hoover Signed Letter to Bank President Involved in Fraud During the Depression

 

Bi-fold typed letter signed, 7" x 9," on White House, Washington letterhead. Dated "September 22, 1931," and boldly signed by Herbert Hoover with a large 3" signature "Herbert Hoover." Typed to recto of first page, balance of pages blank. Near fine with a few faded handling marks.

 

A simple thank you letter with incredible foreboding undertones. Herbert Hoover writes to Joseph Harriman, President of Harriman National Bank while in the middle of the Great Depression, and in the midst of the run on the banks. Hoover writes "I want to thank you most sincerely for your heartening letter of September 17th …" The stock market crash of October 1929 left the American public highly nervous and extremely susceptible to rumors of impending financial disaster. Consumer spending and investment began to decrease, which would in turn lead to a decline in production and employment. Another phenomenon that compounded the nation’s economic woes during the Great Depression was a wave of banking panics or “bank runs,” during which large numbers of anxious people withdrew their deposits in cash, forcing banks to liquidate loans and often leading to bank failure. The bank runs of 1930 were followed by similar banking panics in the spring and fall of 1931 and the fall of 1932. In some instances, bank runs were started simply by rumors of a bank’s inability or unwillingness to pay out funds.  By December 1931, New York's Bank of the United States collapsed. The bank had more than $200 million in deposits at the time, making it the largest single bank failure in American history.

 

During the first years of the Great Depression, the Harriman Bank was part of a clearing house committee of nine New York banks that vowed to provide each other with financial support. In July 1932, as the condition of the Harriman bank deteriorated, Joseph Harriman was eased out of his position as the bank’s president, but remained chairman of the board. While most other banks were given licenses from the Federal Reserve Bank to re-open after the "bank holiday" of 1933, Harriman’s bank was not so fortunate. In October 1933, the U.S. Department of Treasury placed the Harriman Bank in a receivership. The bank’s liabilities, including to depositors, exceeded its assets by $3.3 million to $5 million. The federal government would sue banks that were members of the clearing house committee, in an attempt to recover on behalf of depositors the Harriman Bank's losses. Harriman was arraigned on March 14, 1933,and  was charged with causing falsification of the bank’s books, making unauthorized charges against the accounts of depositors (such as the owners of the New York Giants baseball team so that he could finance his own purchases of the bank’s stock. His motive, it was alleged, was to maintain the value of the bank's stock at the same level it had achieved before the stock market crash of 1929, even as earnings plummeted.

 

Hoover's letter to Harriman thanked him for his heartening letter. Although we will never know exactly what transpired between the two men, given the economy, the date of Hoover's letter and its intended recipient, we can only conclude the two were discussing the state of the banking crisis. It took until Franklin Roosevelt's administration before confidence was restored to the Nations financing industry.


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