The Great Depression
The Roosevelt Years
Franklin Delano Roosevelt – won the Presidential Election of 1932, and took the oath of office on March 4, 1933 He will be the last President to take office so late after being elected, and the first President to have the effects of the 20th Amendment. 20th Amendment – ratified on Feb. 6, 1933, states that the President must take office on Jan. 20, & that Congress must take office on Jan. 3.
FDR used the WWI mobilization as a model to deal with the “War on Depression” Most of the Cabinet appointees were involved with the wartime mobilization. Francis Perkins – the 1st woman cabinet member, appointed as the Sec. Of Labor by FDR. Another great step for the women’s movement. The 1st order of business was to deal with the “Channels of Finance”
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The 1st 100 Days – March 9 – June 16, 1933. FDR enabled & Congress enacted 15 major proposals, faster than any other time in US history. He told the American population that we are all in this together, & that we were going to try to work our way out of this situation. It would take everyone, & if something did not work, we would try something else. These were his famous “fireside chats”. The 1s t one was on March 12 – urging people that it was safer to put their money in the re-opened banks, than under their mattress.
The New Deal
March 9 – Emergency Banking Relief Act – declared a 4 day banking holiday & only allowed the financially sound banks to reopen, gave Federal managers to those banks that were in trouble, & took the US off the gold standard. March 20 – Economy Act – gave the Executive branch the power to cut salaries (again), reduce payments to veterans for non-service connected disabilities, & reorganize Federal agencies in the interest of reducing Federal expenses.
The Beer & Wine Revenue Act – amended the Volstead Act & permitted the sale of alcohol up to 3.2%. 21st Amendment – Dec. 5, 1933 – ended the “noble experiment” that was Prohibition. This was done to try & increase the money circulating in the economy. No matter how “poor” someone may claim, they will always have the money for alcohol.
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March 31 – Civilian Conservation Corps or the CCC. This was the 1st attempt at work relief & to help those who have very little. The CCC hired young, single men, from 18-25 yrs. Old. Over 3 million men signed on. They worked in forests, built parks & recreational areas, soil conservation areas, built bridges, planted trees, fought forest fires, etc. They were paid $30/month, of which $25 had to be sent home to their families & they kept the remaining $5 for spending money. Camps were set up & ran by Army officers.
So military discipline was instilled in the men. They slept in army tents, on army cots, wore army surplus clothes & equipment. They were up at 5am, did PT, “GI’d” their areas, held formation for their work assignments, etc. Very well structured. Those that could read & write would teach the men who could not. They would also teach in the schools they would build in the rural areas. Depends on were the camps were at, as to what their primary assignment would be. In north GA., the CCC worked with the TVA, in NY they built swimming pools, in the mid-west soil conservation, etc. Many of these men went right into the military in 1941-1942.
May 12 – Federal Emergency Relief Act – was authorized $500 million to use to expand on Hoover’s RFC. It gave grants, instead of loans, to the states for unemployment. May 12 – Civil Works Administration – the 1st large scale experiment with work relief, Nov. 1933. Jobs included anything manual, i.e. ditch digging, raking leaves, building highways, schools, airports, laying water & sewage lines, etc. Only lasted 4 months, ending in March 1934, but over $900 million, most of which went to wages, was spent on the program. Now 4 million were out of work again.
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May 12 – Agricultural Adjustment Act-tried to control farm production by paying farmers to cut back on growing certain crops. This was an attempt to restore farm prices, but was later declared unconstitutional. May 12 – Emergency Farm Mortgage Act – refinanced farm mortgages so farmers could keep their farms & hopefully work their way out of debt.
May 18 – Tenn. Valley Authority Act – the unification of hydro-electric power in the Tenn. Valley. Brought electrical power to parts of the upper south & one of the largest undertakings of the New Deal. The 1st TVA power plant was located at Muscle Shoals, Ala. (1916). The 1 st rural cooperative was located in Corinth, Miss. (1934). The Rural Electrification Administration (REA) was established in 1935. This facilitated the expansion of electricity into rural areas.
May 27 – Federal Securities Act – required full disclosure of information on new stocks & bonds. Set up the Securities & Exchange Commission to regulate the stocks & bonds markets. June 5 – Gold Repeal Joint Resolution – abolished the gold clause in contracts, since the US government had already abandoned the gold standard. June 13 – Home Owners Loan Act – similar to the EFMA, it refinanced mortgages for those living in the cities & towns.
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June 16 –National Industrial Recovery Act – dealt with economic recovery & public works projects, to put people to work. It utilized the FERA & established a system of selfregulation for industry. Public Works Administration – created by the NIRA, was authorized $3.3 billion for public buildings, highways, flood control, and many other improvement projects. Also, it served in the role of work relief, in cooperation with the NRA, TVA, WPA, etc.
National Recovery Administration – another part of the NIRA, headed by Gen. Hugh S. Johnson, it had 2 main purposes.
1st - to stabilize business by reducing competition. It would set up codes for wages & prices to reduce the lack of standardization that existed in business. 2nd – to generate more purchasing power by providing jobs, defining labor standards, job descriptions, & increasing wages.
The NRA used the “Blue Eagle Stamp” to show that the stores & businesses that placed it in the windows were in compliance with the “war effort”. The slogan “We Do Our Part” was the catch phrase of the day. Those stores that did not have the “Blue Eagle” were not to be patronized by the consumers, forcing them to take part or close up. It worked for a while. The Supreme Court stated the NRA was unconstitutional & shut it down by May 1935.
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FDR’s 2nd Year in Office
FDR was extremely popular during his 1 st year in office. Democrats began to win back offices they had lost years before. By the end of the Depression, only 7 Republicans were in office, across the US. By FDR’s 2nd year, critics of him & his plans began to surface. Also, his affair with Ms. Lucy Mercer, his wife’s secretary was found out. Causing him to lose a lot of women voters.
Huey P. Long, Jr. – (The Kingfish) named after the multi-colored, bird of prey. Was the Governor & political boss of Louisiana. A very strutting, flamboyant, loud, & charismatic politician, who once advocated that LA. Break away for the US. A very sneaky lawyer, he could make the laws of the state & nation work for him. He improved his state by the use of bribes, blackmail & sometimes violence.
FDR’s Critics
Share the Wealth Program – Long’s attempt at economic reform. Wanted to do away with large, personal fortunes (except his), give every family $5,000 & every worker $2,500/yr., issue elderly pensions, cut work hours, pay veteran’s bonuses, & guarantee a college education to qualified students. It was very popular with all but the upper class, almost communistic in theory. Never really worked, but it addressed some issues that FDR had not dealt with yet.
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Francis E. Townsend – a Calif. doctor who was upset at the sight of elderly women digging in the trash for food, proposed the Townsend Plan of 1934. This plan would pay $200/mo. to everyone over 60 who had retired, as long as they promised to spend the money that month. This provided financial security for the elderly & job openings for the young.
Father Charles E. Coughlin – a Roman Catholic priest who was called the “radio priest” (he had a radio program). He founded the National Union for Social Justice in 1934. he promoted the coinage of silver & attacks on bankers, with anti-Semitic feelings. All 3 of these critics had a large following from the lower-middle class, with Long being the most popular.
Their popularity threatened FDR’s chances for re-election. Roosevelt stated that he was “fighting Communism, Longism, Coughlinism, & Townsendism” & that he needed to “save our capitalist system from such crackpot ideas.”.
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FDR’s 2nd New Deal -1935
July 5- National Labor Relations Act, aka, the Wagner Act – gave workers the right to bargain through unions of their own choice & stopped employers from interfering in union activities. Aug. 14 – Social Security Act – established pensions for retired people over 65 & their survivors. Designed to supplement other incomes, not to provide a comfortable retirement. The 1 st payments issued out in 1940 were only around $22/mo.
Social Security was the most far reaching of FDR’s New Deal plans. SSI set up a Fed.-State unemployment insurance program, contributed to by a payroll tax on employers. Established a social welfare program for those who were unable to work. Works Progress Administration – it replaced the earlier FERA. Paid people to work by working on buildings, monuments, bridges, airports, schools, & pave roads.
The WPA lasted until WWII (1943). It also established programs for those with artistic ability. Federal Theatre Project – actors Federal Art Project – painters/artists Federal Music Project – musicians Federal Writers’ Project – authors National Youth Administration – gave part-time jobs to students, set up tech. training programs & assisted with the unemployed youth.
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Aug. 23 – The Banking Act of 1935 – strengthened the Federal Reserve System to regulate member banks & lessen the power of the private banks, increased the Reserve Board control over the entire monetary system. Aug. 30 – Revenue Act of 1935 – increased taxes on incomes over $50,000, raised estate & gift taxes, & corporate tax on all but the very small corporations (less than $50,000/yr. income). It was also called the Wealth Tax Act. This was the last of the major laws passed during the 2nd New Deal.
Dust Bowl
By the end of the 1930’s, almost 10 million people were out of work. Those especially hard hit were the farmers, ranchers & agribusinesses in the mid-west. After several years of drought, lack of proper soil conservation & the removal of the natural wind-breaks, many farms were literally blown away. Sand storms were rampant in the midwest & would completely cover farms & towns. Almost biblical in it’s size & scale, & many thought it was a punishment from God.
Many packed up and move west to California. These migrants were from all over, but mainly from the mid-west. Commonly called “Okies”, the term really meant someone from Oklahoma, but became synonymous with “white trash”. Those living in Calif. did not want them setting up shanty-towns & competed with the local Hispanics, Blacks, & Asians for farm work. Most did not assimilate into Calif. way of life, & maintained their own culture.
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Do to the hostility, most returned back to their states of origin. Many minorities, i.e. Black, Indian, Asian, Hispanic, etc. fell through the crack when it came to receiving jobs or any of the benefits of the New Deal programs. The US was still a segregated society and therefore the programs catered to those in power. The culture of the times reflected the hardships faced by all. “Of Mice & Men”, “The Grapes of Wrath”. Movies tried to keep their escapism quality, but few could waste the time or money.
FDR’s 2nd term as President would be quite a bit harder for him than the 1s t. His critics were increasing, the Depression was still going strong. Most of his plans were working, but slowly, & the population was becoming dissatisfied. But he was able to keep the largest amount of people on his side, the lower & middle class. Most of the New Deal plans helped them out greatly at the cost of the upper class. (of which FDR belonged)
FDR had a new problem on the horizon. During the 1930’s a great deal of upheaval was taking place in Europe, and it had made it’s way to the US.
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