# Brother, Can You Spare a Dime? The Great Depression, 1929-1932

## President Hoover’s Response

President Hoover was unprepared for the scope of the depression crisis, and his limited response did not begin to help the millions of Americans in need. The steps he took were very much in keeping with his philosophy of limited government, a philosophy that many had shared with him until the upheavals of the Great Depression made it clear that a more direct government response was required. But Hoover was stubborn in his refusal to give “handouts,” as he saw direct government aid. He called for a spirit of volunteerism among America’s businesses, asking them to keep workers employed, and he exhorted the American people to tighten their belts and make do in the spirit of “rugged individualism.” While Hoover’s philosophy and his appeal to the country were very much in keeping with his character, it was not enough to keep the economy from plummeting further into economic chaos.
The steps Hoover did ultimately take were too little, too late. He created programs for putting people back to work and helping beleaguered local and state charities with aid. But the programs were small in scale and highly specific as to who could benefit, and they only touched a small percentage of those in need. As the situation worsened, the public grew increasingly unhappy with Hoover. He left office with one of the lowest approval ratings of any president in history.

### THE INITIAL REACTION

In the immediate aftermath of Black Tuesday, Hoover sought to reassure Americans that all was well. Reading his words after the fact, it is easy to find fault. In 1929 he said, “Any lack of confidence in the economic future or the strength of business in the United States is foolish.” In 1930, he stated, “The worst is behind us.” In 1931, he pledged federal aid should he ever witness starvation in the country; but as of that date, he had yet to see such need in America, despite the very real evidence that children and the elderly were starving to death. Yet Hoover was neither intentionally blind nor unsympathetic. He simply held fast to a belief system that did not change as the realities of the Great Depression set in.
Hoover believed strongly in the ethos of American individualism: that hard work brought its own rewards. His life story testified to that belief. Hoover was born into poverty, made his way through college at Stanford University, and eventually made his fortune as an engineer. This experience, as well as his extensive travels in China and throughout Europe, shaped his fundamental conviction that the very existence of American civilization depended upon the moral fiber of its citizens, as evidenced by their ability to overcome all hardships through individual effort and resolve. The idea of government handouts to Americans was repellant to him. Whereas Europeans might need assistance, such as his hunger relief work in Belgium during and after World War I, he believed the American character to be different. In a 1931 radio address, he said, “The spread of government destroys initiative and thus destroys character.”
Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment.
In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”
However, these modest steps were not enough. By late 1931, when it became clear that the economy would not improve on its own, Hoover recognized the need for some government intervention. He created the President’s Emergency Committee for Employment (PECE), later renamed the President’s Organization of Unemployment Relief (POUR). In keeping with Hoover’s distaste of what he viewed as handouts, this organization did not provide direct federal relief to people in need. Instead, it assisted state and private relief agencies, such as the Red Cross, Salvation Army, YMCA, and Community Chest. Hoover also strongly urged people of means to donate funds to help the poor, and he himself gave significant private donations to worthy causes. But these private efforts could not alleviate the widespread effects of poverty.
Congress pushed for a more direct government response to the hardship. In 1930–1931, it attempted to pass a $60 million bill to provide relief to drought victims by allowing them access to food, fertilizer, and animal feed. Hoover stood fast in his refusal to provide food, resisting any element of direct relief. The final bill of $47 million provided for everything except food but did not come close to adequately addressing the crisis. Again in 1931, Congress proposed the Federal Emergency Relief Bill, which would have provided $375 million to states to help provide food, clothing, and shelter to the homeless. But Hoover opposed the bill, stating that it ruined the balance of power between states and the federal government, and in February 1932, it was defeated by fourteen votes.
However, the president’s adamant opposition to direct-relief federal government programs should not be viewed as one of indifference or uncaring toward the suffering American people. His personal sympathy for those in need was boundless. Hoover was one of only two presidents to reject his salary for the office he held. Throughout the Great Depression, he donated an average of $25,000 annually to various relief organizations to assist in their efforts. Furthermore, he helped to raise $500,000 in private funds to support the White House Conference on Child Health and Welfare in 1930. Rather than indifference or heartlessness, Hoover’s steadfast adherence to a philosophy of individualism as the path toward long-term American recovery explained many of his policy decisions. “A voluntary deed,” he repeatedly commented, “is infinitely more precious to our national ideal and spirit than a thousand-fold poured from the Treasury.”
As conditions worsened, however, Hoover eventually relaxed his opposition to federal relief and formed the Reconstruction Finance Corporation (RFC) in 1932, in part because it was an election year and Hoover hoped to keep his office. Although not a form of direct relief to the American people in greatest need, the RFC was much larger in scope than any preceding effort, setting aside $2 billion in taxpayer money to rescue banks, credit unions, and insurance companies. The goal was to boost confidence in the nation’s financial institutions by ensuring that they were on solid footing. This model was flawed on a number of levels. First, the program only lent money to banks with sufficient collateral, which meant that most of the aid went to large banks. In fact, of the first $61 million loaned, $41 million went to just three banks. Small town and rural banks got almost nothing. Furthermore, at this time, confidence in financial institutions was not the primary concern of most Americans. They needed food and jobs. Many had no money to put into the banks, no matter how confident they were that the banks were safe.
Hoover’s other attempt at federal assistance also occurred in 1932, when he endorsed a bill by Senator Robert Wagner of New York. This was the Emergency Relief and Construction Act. This act authorized the RFC to expand beyond loans to financial institutions and allotted $1.5 billion to states to fund local public works projects. This program failed to deliver the kind of help needed, however, as Hoover severely limited the types of projects it could fund to those that were ultimately self-paying (such as toll bridges and public housing) and those that required skilled workers. While well intended, these programs maintained the status quo, and there was still no direct federal relief to the individuals who so desperately needed it.

### PUBLIC REACTION TO HOOVER

Hoover’s steadfast resistance to government aid cost him the reelection and has placed him squarely at the forefront of the most unpopular presidents, according to public opinion, in modern American history. His name became synonymous with the poverty of the era: “Hoovervilles” became the common name for homeless shantytowns () and “Hoover blankets” for the newspapers that the homeless used to keep warm. A “Hoover flag” was a pants pocket—empty of all money—turned inside out. By the 1932 election, hitchhikers held up signs reading: “If you don’t give me a ride, I’ll vote for Hoover.” Americans did not necessarily believe that Hoover caused the Great Depression. Their anger stemmed instead from what appeared to be a willful refusal to help regular citizens with direct aid that might allow them to recover from the crisis.

### FRUSTRATION AND PROTEST: A BAD SITUATION GROWS WORSE FOR HOOVER

Desperation and frustration often create emotional responses, and the Great Depression was no exception. Throughout 1931–1932, companies trying to stay afloat sharply cut worker wages, and, in response, workers protested in increasingly bitter strikes. As the Depression unfolded, over 80 percent of automotive workers lost their jobs. Even the typically prosperous Ford Motor Company laid off two-thirds of its workforce.
In 1932, a major strike at the Ford Motor Company factory near Detroit resulted in over sixty injuries and four deaths. Often referred to as the Ford Hunger March, the event unfolded as a planned demonstration among unemployed Ford workers who, to protest their desperate situation, marched nine miles from Detroit to the company’s River Rouge plant in Dearborn. At the Dearborn city limits, local police launched tear gas at the roughly three thousand protestors, who responded by throwing stones and clods of dirt. When they finally reached the gates of the plant, protestors faced more police and firemen, as well as private security guards. As the firemen turned hoses onto the protestors, the police and security guards opened fire. In addition to those killed and injured, police arrested fifty protestors. One week later, sixty thousand mourners attended the public funerals of the four victims of what many protesters labeled police brutality. The event set the tone for worsening labor relations in the U.S.
Farmers also organized and protested, often violently. The most notable example was the Farm Holiday Association. Led by Milo Reno, this organization held significant sway among farmers in Iowa, Nebraska, Wisconsin, Minnesota, and the Dakotas. Although they never comprised a majority of farmers in any of these states, their public actions drew press attention nationwide. Among their demands, the association sought a federal government plan to set agricultural prices artificially high enough to cover the farmers’ costs, as well as a government commitment to sell any farm surpluses on the world market. To achieve their goals, the group called for farm holidays, during which farmers would neither sell their produce nor purchase any other goods until the government met their demands. However, the greatest strength of the association came from the unexpected and seldom-planned actions of its members, which included barricading roads into markets, attacking nonmember farmers, and destroying their produce. Some members even raided small town stores, destroying produce on the shelves. Members also engaged in “penny auctions,” bidding pennies on foreclosed farm land and threatening any potential buyers with bodily harm if they competed in the sale. Once they won the auction, the association returned the land to the original owner. In Iowa, farmers threatened to hang a local judge if he signed any more farm foreclosures. At least one death occurred as a direct result of these protests before they waned following the election of Franklin Roosevelt.
One of the most notable protest movements occurred toward the end of Hoover’s presidency and centered on the Bonus Expeditionary Force, or Bonus Army, in the spring of 1932. In this protest, approximately fifteen thousand World War I veterans marched on Washington to demand early payment of their veteran bonuses, which were not due to be paid until 1945. The group camped out in vacant federal buildings and set up camps in Anacostia Flats near the Capitol building ().
Many veterans remained in the city in protest for nearly two months, although the U.S. Senate officially rejected their request in July. By the middle of that month, Hoover wanted them gone. He ordered the police to empty the buildings and clear out the camps, and in the exchange that followed, police fired into the crowd, killing two veterans. Fearing an armed uprising, Hoover then ordered General Douglas MacArthur, along with his aides, Dwight Eisenhower and George Patton, to forcibly remove the veterans from Anacostia Flats. The ensuing raid proved catastrophic, as the military burned down the shantytown and injured dozens of people, including a twelve-week-old infant who was killed when accidentally struck by a tear gas canister ().
As Americans bore witness to photographs and newsreels of the U.S. Army forcibly removing veterans, Hoover’s popularity plummeted even further. By the summer of 1932, he was largely a defeated man. His pessimism and failure mirrored that of the nation’s citizens. America was a country in desperate need: in need of a charismatic leader to restore public confidence as well as provide concrete solutions to pull the economy out of the Great Depression.

### Section Summary

President Hoover’s deeply held philosophy of American individualism, which he maintained despite extraordinary economic circumstances, made him particularly unsuited to deal with the crisis of the Great Depression. He greatly resisted government intervention, considering it a path to the downfall of American greatness. His initial response of asking Americans to find their own paths to recovery and seeking voluntary business measures to stimulate the economy could not stem the tide of the Depression. Ultimately, Hoover did create some federal relief programs, such as the Reconstruction Finance Corporation (RFC), which sought to boost public confidence in financial institutions by ensuring that they were on solid footing. When this measure did little to help impoverished individuals, he signed the Emergency Relief Act, which allowed the RFC to invest in local public works projects. But even this was too little, too late. The severe limits on the types of projects funded and type of workers used meant that most Americans saw no benefit.
The American public ultimately responded with anger and protest to Hoover’s apparent inability to create solutions. Protests ranged from factory strikes to farm riots, culminating in the notorious Bonus Army protest in the spring of 1932. Veterans from World War I lobbied to receive their bonuses immediately, rather than waiting until 1945. The government denied them, and in the ensuing chaos, Hoover called in the military to disrupt the protest. The violence of this act was the final blow for Hoover, whose popularity was already at an all-time low.

### Review Questions


# Brother, Can You Spare a Dime? The Great Depression, 1929-1932

## The Depths of the Great Depression

From industrial strongholds to the rural Great Plains, from factory workers to farmers, the Great Depression affected millions. In cities, as industry slowed, then sometimes stopped altogether, workers lost jobs and joined breadlines, or sought out other charitable efforts. With limited government relief efforts, private charities tried to help, but they were unable to match the pace of demand. In rural areas, farmers suffered still more. In some parts of the country, prices for crops dropped so precipitously that farmers could not earn enough to pay their mortgages, losing their farms to foreclosure. In the Great Plains, one of the worst droughts in history left the land barren and unfit for growing even minimal food to live on.
The country’s most vulnerable populations, such as children, the elderly, and those subject to discrimination, like African Americans, were the hardest hit. Most White Americans felt entitled to what few jobs were available, leaving African Americans unable to find work, even in the jobs once considered their domain. In all, the economic misery was unprecedented in the country’s history.

### STARVING TO DEATH

By the end of 1932, the Great Depression had affected some sixty million people, most of whom wealthier Americans perceived as the “deserving poor.” Yet, at the time, federal efforts to help those in need were extremely limited, and national charities had neither the capacity nor the will to elicit the large-scale response required to address the problem. The American Red Cross did exist, but Chairman John Barton Payne contended that unemployment was not an “Act of God” but rather an “Act of Man,” and therefore refused to get involved in widespread direct relief efforts. Clubs like the Elks tried to provide food, as did small groups of individually organized college students. Religious organizations remained on the front lines, offering food and shelter. In larger cities, breadlines and soup lines became a common sight. At one count in 1932, there were as many as eighty-two breadlines in New York City.
Despite these efforts, however, people were destitute and ultimately starving. Families would first run through any savings, if they were lucky enough to have any. Then, the few who had insurance would cash out their policies. Cash surrender payments of individual insurance policies tripled in the first three years of the Great Depression, with insurance companies issuing total payments in excess of $1.2 billion in 1932 alone. When those funds were depleted, people would borrow from family and friends, and when they could get no more, they would simply stop paying rent or mortgage payments. When evicted, they would move in with relatives, whose own situation was likely only a step or two behind. The added burden of additional people would speed along that family’s demise, and the cycle would continue. This situation spiraled downward, and did so quickly. Even as late as 1939, over 60 percent of rural households, and 82 percent of farm families, were classified as “impoverished.” In larger urban areas, unemployment levels exceeded the national average, with over half a million unemployed workers in Chicago, and nearly a million in New York City. Breadlines and soup kitchens were packed, serving as many as eighty-five thousand meals daily in New York City alone. Over fifty thousand New York citizens were homeless by the end of 1932.
Children, in particular, felt the brunt of poverty. Many in coastal cities would roam the docks in search of spoiled vegetables to bring home. Elsewhere, children begged at the doors of more well-off neighbors, hoping for stale bread, table scraps, or raw potato peelings. Said one childhood survivor of the Great Depression, “You get used to hunger. After the first few days it doesn’t even hurt; you just get weak.” In 1931 alone, there were at least twenty documented cases of starvation; in 1934, that number grew to 110. In rural areas where such documentation was lacking, the number was likely far higher. And while the middle class did not suffer from starvation, they experienced hunger as well.
By the time Hoover left office in 1933, the poor survived not on relief efforts, but because they had learned to be poor. A family with little food would stay in bed to save fuel and avoid burning calories. People began eating parts of animals that had normally been considered waste. They scavenged for scrap wood to burn in the furnace, and when electricity was turned off, it was not uncommon to try and tap into a neighbor’s wire. Family members swapped clothes; sisters might take turns going to church in the one dress they owned. As one girl in a mountain town told her teacher, who had said to go home and get food, “I can’t. It’s my sister’s turn to eat.”

### BLACK AND POOR: AFRICAN AMERICANS AND THE GREAT DEPRESSION

Most African Americans did not participate in the land boom and stock market speculation that preceded the crash, but that did not stop the effects of the Great Depression from hitting them particularly hard. Subject to continuing racial discrimination, Black people nationwide fared even worse than their hard-hit White counterparts. As the prices for cotton and other agricultural products plummeted, farm owners paid workers less or simply laid them off. Landlords evicted sharecroppers, and even those who owned their land outright had to abandon it when there was no way to earn any income.
In cities, African Americans fared no better. Unemployment was rampant, and many White people felt that any available jobs should first go to them. In some Northern cities, White employees would conspire to have African American workers fired to allow White workers access to their jobs. Even jobs traditionally held by Black workers, such as household servants or janitors, were now going to White people. By 1932, approximately one-half of all Black Americans were unemployed. Racial violence also began to rise. In the South, lynching became more common again, with twenty-eight documented lynchings in 1933, compared to eight in 1932. Since communities were preoccupied with their own hardships, and organizing civil rights efforts was a long, difficult process, many resigned themselves to, or even ignored, this culture of racism and violence. Occasionally, however, an incident was notorious enough to gain national attention.
One such incident was the case of the Scottsboro Boys (). In 1931, nine Black boys, who had been riding the rails, were arrested for vagrancy and disorderly conduct after an altercation with some White travelers on the train. Two young White women, who had been dressed as boys and traveling with a group of White boys, came forward and said that the Black boys had raped them. The case, which was tried in Scottsboro, Alabama, illuminated decades of racial hatred and illustrated the injustice of the court system. Despite significant evidence that the women had not been raped at all, along with one of the women subsequently recanting her testimony, the all-White jury quickly convicted the boys and sentenced all but one of them to death. The verdict broke through the veil of indifference toward the plight of African Americans, and protests erupted among newspaper editors, academics, and social reformers in the North. The Communist Party of the United States offered to handle the case and sought retrial; the NAACP later joined in this effort. In all, the case was tried three separate times. The series of trials and retrials, appeals, and overturned convictions shone a spotlight on a system that provided poor legal counsel and relied on all-White juries. In October 1932, the U.S. Supreme Court agreed with the Communist Party’s defense attorneys that the defendants had been denied adequate legal representation at the original trial, and that due process as provided by the Fourteenth Amendment had been denied as a result of the exclusion of any potential Black jurors. Eventually, most of the accused received lengthy prison terms and subsequent parole, but avoided the death penalty. The Scottsboro case ultimately laid some of the early groundwork for the modern American civil rights movement. Alabama granted posthumous pardons to all defendants in 2013.

### ENVIRONMENTAL CATASTROPHE MEETS ECONOMIC HARDSHIP: THE DUST BOWL

Despite the widely held belief that rural Americans suffered less in the Great Depression due to their ability to at least grow their own food, this was not the case. Farmers, ranchers, and their families suffered more than any group other than African Americans during the Depression.
From the turn of the century through much of World War I, farmers in the Great Plains experienced prosperity due to unusually good growing conditions, high commodity prices, and generous government farming policies that led to a rush for land. As the federal government continued to purchase all excess produce for the war effort, farmers and ranchers fell into several bad practices, including mortgaging their farms and borrowing money against future production in order to expand. However, after the war, prosperity rapidly dwindled, particularly during the recession of 1921. Seeking to recoup their losses through economies of scale in which they would expand their production even further to take full advantage of their available land and machinery, farmers plowed under native grasses to plant acre after acre of wheat, with little regard for the long-term repercussions to the soil. Regardless of these misguided efforts, commodity prices continued to drop, finally plummeting in 1929, when the price of wheat dropped from two dollars to forty cents per bushel.
Exacerbating the problem was a massive drought that began in 1931 and lasted for eight terrible years. Dust storms roiled through the Great Plains, creating huge, choking clouds that piled up in doorways and filtered into homes through closed windows. Even more quickly than it had boomed, the land of agricultural opportunity went bust, due to widespread overproduction and overuse of the land, as well as to the harsh weather conditions that followed, resulting in the creation of the Dust Bowl ().
Livestock died, or had to be sold, as there was no money for feed. Crops intended to feed the family withered and died in the drought. Terrifying dust storms became more and more frequent, as “black blizzards” of dirt blew across the landscape and created a new illness known as “dust pneumonia.” In 1935 alone, over 850 million tons of topsoil blew away. To put this number in perspective, geologists estimate that it takes the earth five hundred years to naturally regenerate one inch of topsoil; yet, just one significant dust storm could destroy a similar amount. In their desperation to get more from the land, farmers had stripped it of the delicate balance that kept it healthy. Unaware of the consequences, they had moved away from such traditional practices as crop rotation and allowing land to regain its strength by permitting it to lie fallow between plantings, working the land to death.
For farmers, the results were catastrophic. Unlike most factory workers in the cities, in most cases, farmers lost their homes when they lost their livelihood. Most farms and ranches were originally mortgaged to small country banks that understood the dynamics of farming, but as these banks failed, they often sold rural mortgages to larger eastern banks that were less concerned with the specifics of farm life. With the effects of the drought and low commodity prices, farmers could not pay their local banks, which in turn lacked funds to pay the large urban banks. Ultimately, the large banks foreclosed on the farms, often swallowing up the small country banks in the process. It is worth noting that of the five thousand banks that closed between 1930 and 1932, over 75 percent were country banks in locations with populations under 2,500. Given this dynamic, it is easy to see why farmers in the Great Plains remained wary of big city bankers.
For farmers who survived the initial crash, the situation worsened, particularly in the Great Plains where years of overproduction and rapidly declining commodity prices took their toll. Prices continued to decline, and as farmers tried to stay afloat, they produced still more crops, which drove prices even lower. Farms failed at an astounding rate, and farmers sold out at rock-bottom prices. One farm in Shelby, Nebraska was mortgaged at $4,100 and sold for $49.50. One-fourth of the entire state of Mississippi was auctioned off in a single day at a foreclosure auction in April 1932.
Not all farmers tried to keep their land. Many, especially those who had arrived only recently, in an attempt to capitalize on the earlier prosperity, simply walked away (). In hard-hit Oklahoma, thousands of farmers packed up what they could and walked or drove away from the land they thought would be their future. They, along with other displaced farmers from throughout the Great Plains, became known as Okies. Okies were an emblem of the failure of the American breadbasket to deliver on its promise, and their story was made famous in John Steinbeck’s novel, The Grapes of Wrath.

### CHANGING VALUES, CHANGING CULTURE

In the decades before the Great Depression, and particularly in the 1920s, American culture largely reflected the values of individualism, self-reliance, and material success through competition. Novels like F. Scott Fitzgerald’s The Great Gatsby and Sinclair Lewis’s Babbit portrayed wealth and the self-made man in America, albeit in a critical fashion. In film, many silent movies, such as Charlie Chaplin’s The Gold Rush, depicted the rags-to-riches fable that Americans so loved. With the shift in U.S. fortunes, however, came a shift in values, and with it, a new cultural reflection. The arts revealed a new emphasis on the welfare of the whole and the importance of community in preserving family life. While box office sales briefly declined at the beginning of the Depression, they quickly rebounded. Movies offered a way for Americans to think of better times, and people were willing to pay twenty-five cents for a chance to escape, at least for a few hours.
Even more than escapism, other films at the close of the decade reflected on the sense of community and family values that Americans struggled to maintain throughout the entire Depression. John Ford’s screen version of Steinbeck’s The Grapes of Wrath came out in 1940, portraying the haunting story of the Joad family’s exodus from their Oklahoma farm to California in search of a better life. Their journey leads them to realize that they need to join a larger social movement—communism—dedicated to bettering the lives of all people. Tom Joad says, “Well, maybe it's like Casy says, a fella ain’t got a soul of his own, but on’y a piece of a soul—the one big soul that belongs to ever’body.” The greater lesson learned was one of the strength of community in the face of individual adversity.
Another trope was that of the hard-working everyman against greedy banks and corporations. This was perhaps best portrayed in the movies of Frank Capra, whose Mr. Smith Goes to Washington was emblematic of his work. In this 1939 film, Jimmy Stewart plays a legislator sent to Washington to finish out the term of a deceased senator. While there, he fights corruption to ensure the construction of a boy’s camp in his hometown rather than a dam project that would only serve to line the pockets of a few. He ultimately engages in a two-day filibuster, standing up to the power players to do what’s right. The Depression era was a favorite of Capra’s to depict in his films, including It’s a Wonderful Life, released in 1946. In this film, Jimmy Stewart runs a family-owned savings and loan, which at one point faces a bank run similar to those seen in 1929–1930. In the end, community support helps Stewart retain his business and home against the unscrupulous actions of a wealthy banker who sought to bring ruin to his family.
Finally, there was a great deal of pure escapism in the popular culture of the Depression. Even the songs found in films reminded many viewers of the bygone days of prosperity and happiness, from Al Dubin and Henry Warren’s hit “We’re in the Money” to the popular “Happy Days are Here Again.” The latter eventually became the theme song of Franklin Roosevelt’s 1932 presidential campaign. People wanted to forget their worries and enjoy the madcap antics of the Marx Brothers, the youthful charm of Shirley Temple, the dazzling dances of Fred Astaire and Ginger Rogers (), or the comforting morals of the Andy Hardy series. The Hardy series—nine films in all, produced by MGM from 1936 to 1940—starred Judy Garland and Mickey Rooney, and all followed the adventures of a small-town judge and his son. No matter what the challenge, it was never so big that it could not be solved with a musical production put on by the neighborhood kids, bringing together friends and family members in a warm display of community values.
All of these movies reinforced traditional American values, which suffered during these hard times, in part due to declining marriage and birth rates, and increased domestic violence. At the same time, however, they reflected an increased interest in sex and sexuality. While the birth rate was dropping, surveys in Fortune magazine in 1936–1937 found that two-thirds of college students favored birth control, and that 50 percent of men and 25 percent of women admitted to premarital sex, continuing a trend among younger Americans that had begun to emerge in the 1920s. Contraceptive sales soared during the decade, and again, culture reflected this shift. Blonde bombshell Mae West was famous for her sexual innuendoes, and her flirtatious persona was hugely popular, although it got her banned on radio broadcasts throughout the Midwest. Whether West or Garland, Chaplin or Stewart, American film continued to be a barometer of American values, and their challenges, through the decade.

### Section Summary

The Great Depression affected huge segments of the American population—sixty million people by one estimate. But certain groups were hit harder than the rest. African Americans faced discrimination in finding employment, as White workers sought even low-wage jobs like housecleaning. Southern Black people moved away from their farms as crop prices failed, migrating en masse to Northern cities, which had little to offer them. Rural Americans were also badly hit. The eight-year drought that began shortly after the stock market crash exacerbated farmers’ and ranchers’ problems. The cultivation of greater amounts of acreage in the preceding decades meant that land was badly overworked, and the drought led to massive and terrible dust storms, creating the region’s nickname, the Dust Bowl. Some farmers tried to remain and buy up more land as neighbors went broke; others simply fled their failed farms and moved away, often to the large-scale migrant farms found in California, to search for a better life that few ever found. Maltreated by Californians who wished to avoid the unwanted competition for jobs that these “Okies” represented, many of the Dust Bowl farmers were left wandering as a result.
There was very little in the way of public assistance to help the poor. While private charities did what they could, the scale of the problem was too large for them to have any lasting effects. People learned to survive as best they could by sending their children out to beg, sharing clothing, and scrounging wood to feed the furnace. Those who could afford it turned to motion pictures for escape. Movies and books during the Great Depression reflected the shift in American cultural norms, away from rugged individualism toward a more community-based lifestyle.

### Review Questions


# Brother, Can You Spare a Dime? The Great Depression, 1929-1932

## Assessing the Hoover Years on the Eve of the New Deal

As so much of the Hoover presidency is circumscribed by the onset of the Great Depression, one must be careful in assessing his successes and failures, so as not to attribute all blame to Hoover. Given the suffering that many Americans endured between the fall of 1929 and Franklin Roosevelt’s inauguration in the spring of 1933, it is easy to lay much of the blame at Hoover’s doorstep (). However, the extent to which Hoover was constrained by the economic circumstances unfolding well before he assumed office offers a few mitigating factors. Put simply, Hoover did not cause the stock market crash. However, his stubborn adherence to a questionable belief in “American individualism,” despite mounting evidence that people were starving, requires that some blame be attributed to his policies (or lack thereof) for the depth and length of the Depression. Yet, Hoover’s presidency was much more than simply combating the Depression. To assess the extent of his inability to provide meaningful national leadership through the darkest months of the Depression, his other policies require consideration.

### HOOVER’S FOREIGN POLICY

Although it was a relatively quiet period for U.S. diplomacy, Hoover did help to usher in a period of positive relations, specifically with several Latin American neighbors. This would establish the basis for Franklin Roosevelt’s “Good Neighbor” policy. After a goodwill tour of Central American countries immediately following his election in 1928, Hoover shaped the subsequent Clark Memorandum—released in 1930—which largely repudiated the previous Roosevelt Corollary, establishing a basis for unlimited American military intervention throughout Latin America. To the contrary, through the memorandum, Hoover asserted that greater emphasis should be placed upon the older Monroe Doctrine, in which the U.S. pledged assistance to her Latin American neighbors should any European powers interfere in Western Hemisphere affairs. Hoover further strengthened relations to the south by withdrawing American troops from Haiti and Nicaragua. Additionally, he outlined with Secretary of State Henry Stimson the Hoover-Stimson Doctrine, which announced that the United States would never recognize claims to territories seized by force (a direct response to the recent Japanese invasion of Manchuria).
Other diplomatic overtures met with less success for Hoover. Most notably, in an effort to support the American economy during the early stages of the Depression, the president signed into law the Smoot-Hawley Tariff in 1930. The law, which raised tariffs on thousands of imports, was intended to increase sales of American-made goods, but predictably angered foreign trade partners who in turn raised their tariffs on American imports, thus shrinking international trade and closing additional markets to desperate American manufacturers. As a result, the global depression worsened further. A similar attempt to spur the world economy, known as the Hoover Moratorium, likewise met with great opposition and little economic benefit. Issued in 1931, the moratorium called for a halt to World War I reparations to be paid by Germany to France, as well as forgiveness of Allied war debts to the U.S.

### HOOVER AND CIVIL RIGHTS

Holding true to his belief in individualism, Hoover saw little need for significant civil rights legislation during his presidency, including any overtures from the NAACP to endorse federal anti-lynching legislation. He felt African Americans would benefit more from education and assimilation than from federal legislation or programs; yet he failed to recognize that, at this time in history, federal legislation and programs were required to ensure equal opportunities.
Hoover did give special attention to the improvement of Native American conditions, beginning with his selection of Charles Curtis as his vice-presidential running mate in the 1928 election. Curtis, of the Kaw Tribe, became the country’s first Native American to hold so high an elected office. Hoover subsequently appointed Charles Rhoads as the new commissioner of the Bureau of Indian Affairs and advocated, with Rhoads’ assistance, for Native American self-sufficiency and full assimilation as Americans under the Indian Citizenship Act of 1924. During Hoover’s presidency, federal expenditures for Native American schools and health care doubled.

### A FINAL ASSESSMENT

Herbert Hoover’s presidency, embarked upon with much promise following his election in November 1928, produced a legacy of mixed reactions. Some Americans blamed him for all of the economic and social woes from which they suffered for the next decade; all blamed him for simply not responding to their needs. As contemporary commentator and actor Will Rogers said at the time, “If an American was lucky enough to find an apple to eat in the Depression and bit into it only to find a worm, they would blame Hoover for the worm.” Likewise, subsequent public opinion polls of presidential popularity, as well as polls of professional historians, routinely rate Hoover in the bottom seven of all U.S. presidents in terms of overall success.
However, Hoover the president was a product of his time. Americans sought a president in 1928 who would continue the policies of normalcy with which many associated the prosperity they enjoyed. They wanted a president who would forego government interference and allow industrial capitalism to grow unfettered. Hoover, from his days as the secretary of commerce, was the ideal candidate. In fact, he was too ideal when the Great Depression actually hit. Holding steadfast to his philosophy of “American individualism,” Hoover proved largely incapable of shifting into economic crisis mode when Americans came to realize that prosperity could not last forever. Desperate to help, but unwilling to compromise on his philosophy, Hoover could not manage a comprehensive solution to the worldwide depression that few foresaw. Only when reelection was less than a year away did a reluctant Hoover initiate significant policies, but even then, they did not provide direct relief. By the start of 1932, unemployment hovered near 25 percent, and thousands of banks and factories were closing their doors. Combined with Hoover’s ill-timed response to the Bonus Army crisis, his political fate was sealed. Americans would look to the next president for a solution. “Democracy is a harsh employer,” Hoover concluded, as he awaited all but certain defeat in the November election of 1932 ().

### Section Summary

In Hoover, Americans got the president they had wanted, at least at first. He was third in a line of free-market Republican presidents, elected to continue the policies that had served the economy so well. But when the stock market crashed in 1929, and the underlying weaknesses in the economy came to the fore, Hoover did not act with clear intentionality and speed. His record as a president will likely always bear the taint of his unwillingness to push through substantial government aid, but, despite that failing, his record is not without minor accomplishments. Hoover’s international policies, particularly in regard to Latin America, served the country well. And while his attitude toward civil rights mirrored his conviction that government intervention was a negative force, he did play a key role changing living conditions for Native Americans. In all, it was his—and the country’s—bad luck that his presidency ultimately required a very different philosophy than the one that had gotten him elected.

### Review Questions

### Critical Thinking Questions


# Franklin Roosevelt and the New Deal, 1932-1941

## Introduction

The election of President Franklin Delano Roosevelt signaled both immediate relief for the American public as well as a permanent shift in the role of the federal government in guiding the economy and providing direct assistance to the people, albeit through expensive programs that made extensive budget deficits commonplace. For many, the immediate relief was, at a minimum, psychological: Herbert Hoover was gone, and the situation could not grow worse under Roosevelt. But as his New Deal unfolded, Americans learned more about the fundamental changes their new president brought with him to the Oval Office. In the span of little more than one hundred days, the country witnessed a wave of legislation never seen before or since.
Roosevelt understood the need to “save the patient,” to borrow a medical phrase he often employed, as well as to “cure the ill.” This meant both creating jobs, through such programs as the Works Progress Administration, which provided employment to over eight million Americans (), as well as reconfiguring the structure of the American economy. In pursuit of these two goals, Americans re-elected Roosevelt for three additional terms in the White House and became full partners in the reshaping of their country.


# Franklin Roosevelt and the New Deal, 1932-1941

## The Rise of Franklin Roosevelt

Franklin Roosevelt was part of the political establishment and the wealthy elite, but in the 1932 presidential campaign, he did not want to be perceived that way. Roosevelt felt that the country needed sweeping change, and he ran a campaign intended to convince the American people that he could deliver that change. It was not the specifics of his campaign promises that were different; in fact, he gave very few details and likely did not yet have a clear idea of how he would raise the country out of the Great Depression. But he campaigned tirelessly, talking to thousands of people, appearing at his party’s national convention, and striving to show the public that he was a different breed of politician. As Hoover grew more morose and physically unwell in the face of the campaign, Roosevelt thrived. He was elected in a landslide by a country ready for the change he had promised.

### THE ELECTION OF FRANKLIN ROOSEVELT

By the 1932 presidential election, Hoover’s popularity was at an all-time low. Despite his efforts to address the hardships that many Americans faced, his ineffectual response to the Great Depression left Americans angry and ready for change. Franklin Roosevelt, though born to wealth and educated at the best schools, offered the change people sought. His experience in politics had previously included a seat in the New York State legislature, a vice-presidential nomination, and a stint as governor of New York. During the latter, he introduced many state-level reforms that later formed the basis of his New Deal as well as worked with several advisors who later formed the Brains Trust that advised his federal agenda.
Roosevelt exuded confidence, which the American public desperately wished to see in their leader (). And, despite his affluence, Americans felt that he could relate to their suffering due to his own physical hardships; he had been struck with polio a decade earlier and was essentially paralyzed from the waist down for the remainder of his life. Roosevelt understood that the public sympathized with his ailment; he likewise developed a genuine empathy for public suffering as a result of his illness. However, he never wanted to be photographed in his wheelchair or appear infirm in any way, for fear that the public’s sympathy would transform into concern over his physical ability to discharge the duties of the Oval Office.
Roosevelt also recognized the need to convey to the voting public that he was not simply another member of the political aristocracy. At a time when the country not only faced its most severe economic challenges to date, but Americans began to question some of the fundamental principles of capitalism and democracy, Roosevelt sought to show that he was different—that he could defy expectations—and through his actions could find creative solutions to address the nation’s problems while restoring public confidence in fundamental American values. As a result, he not only was the first presidential candidate to appear in person at a national political convention to accept his party’s nomination but also flew there through terrible weather from New York to Chicago in order to do so—a risky venture in what was still the early stages of flight as public transportation. At the Democratic National Convention in 1932, he coined the famous phrase: “I pledge myself to a new deal for the American people.” The New Deal did not yet exist, but to the American people, any positive and optimistic response to the Great Depression was a welcome one.
Hoover assumed at first that Roosevelt would be easy to defeat, confident that he could never carry the eastern states and the business vote. He was sorely mistaken. Everywhere he went, Hoover was met with antagonism; anti-Hoover signs and protests were the norm. Hoover’s public persona declined rapidly. Many news accounts reported that he seemed physically unwell, with an ashen face and shaking hands. Often, he seemed as though he would faint, and an aide constantly remained nearby with a chair in case he fell. In contrast, Roosevelt thrived on the campaign. He commented, “I have looked into the faces of thousands of Americans, and they have the frightened look of lost children.”
The election results that November were never really in question: With three million more people voting than in 1928, Roosevelt won by a popular count of twenty-three million to fifteen million. He carried all but six states while winning over 57 percent of the popular vote. Whether they voted due to animosity towards Hoover for his relative inactivity, or out of hope for what Roosevelt would accomplish, the American public committed themselves to a new vision. Historians identify this election as the beginning of a new Democratic coalition, bringing together African Americans, other ethnic minorities, and organized labor as a voting bloc upon whom the party would rely for many of its electoral victories over the next fifty years. Unlike some European nations where similar challenges caused democratic constitutions to crumble and give way to radical ideologies and authoritarian governments, the Roosevelt administration changed the nation’s economic fortunes with reforms, preserved the constitution, and expanded rather than limited the reach of democratic principles into the market economy. As a result, radical alternatives, such as the Fascist movement or Communist Party, remained on the margins of the nation’s political culture.

### THE INTERREGNUM

After the landslide election, the country—and Hoover—had to endure the interregnum, the difficult four months between the election and President Roosevelt’s inauguration in March 1933. Congress did not pass a single significant piece of legislation during this period, although Hoover spent much of the time trying to get Roosevelt to commit publicly to a legislative agenda of Hoover’s choosing. Roosevelt remained gracious but refused to begin his administration as the incumbent’s advisor without any legal authority necessary to change policy. Unwilling to tie himself to Hoover’s legacy of failed policies, Roosevelt kept quiet when Hoover supported the passage of a national sales tax. Meanwhile, the country suffered from Hoover’s inability to further drive a legislative agenda through Congress. It was the worst winter since the beginning of the Great Depression, and the banking sector once again suffered another round of panics. While Roosevelt kept his distance from the final tremors of the Hoover administration, the country continued to suffer in wait. In part as a response to the challenges of this time, the U.S. Constitution was subsequently amended to reduce the period from election to inauguration to the now-commonplace two months.
Any ideas that Roosevelt held almost did not come to fruition, thanks to a would-be assassin’s bullet. On February 15, 1933, after delivering a speech from his open car in Miami’s Bayfront Park, local Italian bricklayer Giuseppe Zangara emerged from a crowd of well-wishers to fire six shots from his revolver. Although Roosevelt emerged from the assassination attempt unscathed, Zangara wounded five individuals that day, including Chicago Mayor Tony Cermak, who attended the speech in the hopes of resolving any long-standing differences with the president-elect. Roosevelt and his driver immediately rushed Cermak to the hospital where he died 19 days later. Roosevelt’s calm and collected response to the event reassured many Americans of his ability to lead the nation through the challenges they faced. All that awaited was Roosevelt’s inauguration before his ideas would unfold to the expectant public.
So what was Roosevelt’s plan? Before he took office, it seems likely that he was not entirely sure. Certain elements were known: He believed in positive government action to solve the Depression; he believed in federal relief, public works, social security, and unemployment insurance; he wanted to restore public confidence in banks; he wanted stronger government regulation of the economy; and he wanted to directly help farmers. But how to take action on these beliefs was more in question. A month before his inauguration, he said to his advisors, “Let’s concentrate upon one thing: Save the people and the nation, and if we have to change our minds twice every day to accomplish that end, we should do it.”
Unlike Hoover, who professed an ideology of “American individualism,” an adherence that rendered him largely incapable of widespread action, Roosevelt remained pragmatic and open-minded to possible solutions. To assist in formulating a variety of relief and recovery programs, Roosevelt turned to a group of men who had previously orchestrated his election campaign and victory. Collectively known as the “Brains Trust” (a phrase coined by a New York Times reporter to describe the multiple “brains” on Roosevelt’s advisory team), the group most notably included Rexford Tugwell, Raymond Moley, and Adolph Berle. Moley, credited with bringing the group into existence, was a government professor who advocated for a new national tax policy to help the nation recover from its economic woes. Tugwell, who eventually focused his energy on the country’s agricultural problems, saw an increased role for the federal government in setting wages and prices across the economy. Berle was a mediating influence, who often advised against a centrally controlled economy, but did see the role that the federal government could play in mediating the stark cycles of prosperity and depression that, if left unchecked, could result in the very situation in which the country presently found itself. Together, these men, along with others, advised Roosevelt through the earliest days of the New Deal and helped to craft significant legislative programs for congressional review and approval.

### INAUGURATION DAY: A NEW BEGINNING

March 4, 1933, dawned gray and rainy. Roosevelt rode in an open car along with outgoing president Hoover, facing the public, as he made his way to the U.S. Capitol. Hoover’s mood was somber, still personally angry over his defeat in the general election the previous November; he refused to crack a smile at all during the ride among the crowd, despite Roosevelt’s urging to the contrary. At the ceremony, Roosevelt rose with the aid of leg braces equipped under his specially tailored trousers and placed his hand on a Dutch family Bible as he took his solemn oath. At that very moment, the rain stopped and the sun began to shine directly on the platform, and those present would later claim that it was as though God himself was shining down on Roosevelt and the American people in that moment ().
Bathed in the sunlight, Roosevelt delivered one of the most famous and oft-quoted inaugural addresses in history. He encouraged Americans to work with him to find solutions to the nation’s problems and not to be paralyzed by fear into inaction. Borrowing a wartime analogy provided by Moley, who served as his speechwriter at the time, Roosevelt called upon all Americans to assemble and fight an essential battle against the forces of economic depression. He famously stated, “The only thing we have to fear is fear itself.” Upon hearing his inaugural address, one observer in the crowd later commented, “Any man who can talk like that in times like these is worth every ounce of support a true American has.” To borrow the popular song title of the day, “happy days were here again.” Foregoing the traditional inaugural parties, the new president immediately returned to the White House to begin his work to save the nation.

### Section Summary

Franklin Roosevelt was a wealthy, well-educated, and popular politician whose history of polio made him a more sympathetic figure to the public. He did not share any specifics of his plan to bring the country out of the Great Depression, but his attitude of optimism and possibility contrasted strongly with Hoover’s defeated misery. The 1932 election was never really in question, and Roosevelt won in a landslide. During the four-month interregnum, however, Americans continued to endure President Hoover’s failed policies, which led the winter of 1932–1933 to be the worst of the Depression, with unemployment rising to record levels.
When Roosevelt took office in March 1933, he infused the country with a sense of optimism. He still did not have a formal plan but rather invited the American people to join him in the spirit of experimentation. Roosevelt did bring certain beliefs to office: the belief in an active government that would take direct action on federal relief, public works, social services, and direct aid to farmers. But as much as his policies, Roosevelt’s own personality and engaging manner helped the country feel that they were going to get back on track.

### Review Questions


# Franklin Roosevelt and the New Deal, 1932-1941

## The First New Deal

Much like a surgeon assessing the condition of an emergency room patient, Roosevelt began his administration with a broad, if not specific, strategy in mind: a combination of relief and recovery programs designed to first save the patient (in this case, the American people), and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom before seen in the history of the country. By the close of 1933, in an effort to stem the crisis, Congress had passed over fifteen significant pieces of legislation—many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around issues of relief, recovery, and reform. At the outset of the First New Deal, specific goals included 1) bank reform; 2) job creation; 3) economic regulation; and 4) regional planning.

### REFORM: THE BANKING CRISIS

When Roosevelt took office, he faced one of the worst moments in the country’s banking history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. In all, over five thousand banks had been shuttered. Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, a scant eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those who held gold were told to sell it to the U.S. Treasury for a discounted rate of a little over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen prior to the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.
On March 12, the day before the banks were set to reopen, Roosevelt held his first “fireside chat” (). In this initial radio address to the American people, he explained what the bank examiners had been doing over the previous week. He assured people that any bank open the next day had the federal government’s stamp of approval. The combination of his reassuring manner and the promise that the government was addressing the problems worked wonders in changing the popular mindset. Just as the culture of panic had contributed to the country’s downward spiral after the crash, so did this confidence-inducing move help to build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves, and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.
In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act. This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500. Other measures designed to boost confidence in the overall economy beyond the banking system included passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and those of the Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.

### THE FIRST HUNDRED DAYS

In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. A sympathetic Democrat-controlled Congress helped propel his agenda forward.

### Relief: Employment for the Masses

Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.
Roosevelt was aware of the need for immediate help, but he mostly wanted to create more jobs. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. With Hopkins at its helm, the CWA, founded in early 1933, went on to put millions of men and women to work. At its peak, there were some four million Americans repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps ().
The various programs that made up the First New Deal are listed in the table below ().
The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks who owned the original mortgages by relieving them of the refinancing responsibility. Later New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, created through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.

### Rescuing Farms and Factories

While much of the legislation of the first hundred days focused on immediate relief and job creation through federal programs, Roosevelt was committed to addressing the underlying problems inherent in the American economy. In his efforts to do so, he created two of the most significant pieces of New Deal legislation: the Agricultural Adjustment Act (AAA) and the National Industry Recovery Act (NIRA).
Farms around the country were suffering, but from different causes. In the Great Plains, drought conditions meant that little was growing at all, while in the South, bumper crops and low prices meant that farmers could not sell their goods at prices that could sustain them. The AAA offered some direct relief: Farmers received $4.5 million through relief payments. But the larger part of the program paid southern farmers to reduce their production: Wheat, cotton, corn, hogs, tobacco, rice, and milk farmers were all eligible. Passed into law on May 12, 1933, it was designed to boost prices to a level that would alleviate rural poverty and restore profitability to American agriculture. These price increases would be achieved by encouraging farmers to limit production in order to increase demand while receiving cash payments in return. Corn producers would receive thirty cents per bushel for corn they did not grow. Hog farmers would get five dollars per head for hogs not raised. The program would be financed by a tax on processing plants, passed on to consumers in the form of higher prices.
This was a bold attempt to help farmers address the systemic problems of overproduction and lower commodity prices. Despite previous efforts to regulate farming through subsidies, never before had the federal government intervened on this scale; the notion of paying farmers not to produce crops was unheard of. One significant problem, however, was that, in some cases, there was already an excess of crops, in particular, cotton and hogs, which clogged the marketplace. A bumper crop in 1933, combined with the slow implementation of the AAA, led the government to order the plowing under of ten million acres of cotton, and the butchering of six million baby pigs and 200,000 sows. Although it worked to some degree—the price of cotton increased from six to twelve cents per pound—this move was deeply problematic. Critics saw it as the ultimate example of corrupt capitalism: a government destroying food, while its citizens were starving, in order to drive up prices.
Another problem plaguing this relief effort was the disparity between large commercial farms, which received the largest payments and set the quotas, and the small family farms that felt no relief. Large farms often cut production by laying off sharecroppers or evicting tenant farmers, making the program even worse for them than for small farm owners. Their frustration led to the creation of the Southern Tenant Farmers Union (STFU), an interracial organization that sought to gain government relief for these most disenfranchised of farmers. The STFU organized, protested, and won its members some wage increases through the mid-1930s, but the overall plight of these workers remained dismal. As a result, many of them followed the thousands of Dust Bowl refugees to California ().
The AAA did succeed on some fronts. By the spring of 1934, farmers had formed over four thousand local committees, with more than three million farmers agreeing to participate. They signed individual contracts agreeing to take land out of production in return for government payments, and checks began to arrive by the end of 1934. For some farmers, especially those with large farms, the program spelled relief.
While Roosevelt hoped the AAA would help farms and farmers, he also sought aid for the beleaguered manufacturing sector. The Emergency Railroad Transportation Act created a national railroad office to encourage cooperation among different railroad companies, hoping to shore up an industry essential to the stability of the manufacturing sector, but one that had been devastated by mismanagement. More importantly, the NIRA suspended antitrust laws and allowed businesses and industries to work together in order to establish codes of fair competition, including issues of price setting and minimum wages. New Deal officials believed that allowing these collaborations would help industries stabilize prices and production levels in the face of competitive overproduction and declining profits; however, at the same time, many felt it important to protect workers from potentially unfair agreements.
A new government agency, the National Recovery Administration (NRA), was central to this plan, and mandated that businesses accept a code that included minimum wages and maximum work hours. In order to protect workers from potentially unfair agreements among factory owners, every industry had its own “code of fair practice” that included workers’ rights to organize and use collective bargaining to ensure that wages rose with prices (). Headed by General Hugh S. Johnson, the NRA worked to create over five hundred different codes for different industries. The administration of such a complex plan naturally created its own problems. While codes for key industries such as automotive and steel made sense, Johnson pushed to create similar codes for dog food manufacturers, those who made shoulder pads for women’s clothing, and even burlesque shows (regulating the number of strippers in any one show).
The NIRA also created the Public Works Administration (PWA). The PWA set aside $3.3 billion to build public projects such as highways, federal buildings, and military bases. Although this program suffered from political squabbles over appropriations for projects in various congressional districts, as well as significant underfunding of public housing projects, it ultimately offered some of the most lasting benefits of the NIRA. Secretary of the Interior Harold Ickes ran the program, which completed over thirty-four thousand projects, including the Golden Gate Bridge in San Francisco and the Queens-Midtown Tunnel in New York. Between 1933 and 1939, the PWA accounted for the construction of over one-third of all new hospitals and 70 percent of all new public schools in the country.
Another challenge faced by the NRA was that the provision granting workers the right to organize appeared to others as a mandate to do so. In previously unorganized industries, such as oil and gas, rubber, and service occupations, workers now sought groups that would assist in their organization, bolstered by the encouragement they now felt from the government. The Communist Party took advantage of the opportunity to assist in the hope of creating widespread protests against the American industrial structure. The number of strikes nationwide doubled between 1932 and 1934, with over 1.5 million workers going on strike in 1934 alone, often in protests that culminated in bloodshed. A strike at the Auto-Lite plant in Toledo, Ohio, that summer resulted in ten thousand workers from other factories joining in sympathy with their fellow workers to attack potential strike-breakers with stones and bricks. Simultaneously in Minneapolis, a teamsters strike resulted in frequent, bloody confrontations between workers and police, leading the governor to contemplate declaring martial law before the companies agreed to negotiate better wages and conditions for the workers. Finally, a San Francisco strike among 14,000 longshoremen closed the city’s waterfront and eventually led to a city-wide general strike of over 130,000 workers, essentially paralyzing the city. Clashes between workers, and police and National Guardsmen left many strikers bloodied, and at least two dead.
Although Roosevelt’s relief efforts provided jobs to many and benefitted communities with the construction of several essential building projects, the violence that erupted amid clashes between organized labor and factories backed by police and the authorities exposed a fundamental flaw in the president’s approach. Immediate relief did not address long-existing, inherent class inequities that left workers exposed to poor working conditions, low wages, long hours, and little protection. For many workers, life on the job was not much better than life as an unemployed American. Employment programs may have put men back to work and provided much needed relief, but the fundamental flaws in the system required additional attention—attention that Roosevelt was unable to pay in the early days of the New Deal. Critics were plentiful, and the president would be forced to address them in the years ahead.

### Regional Planning

Regionally, Roosevelt’s work was most famously seen in the Tennessee Valley Authority (TVA) (), a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power. Employing several thousand Americans on a project that Roosevelt envisioned as a template for future regional redevelopment, the TVA revitalized a river valley that landowners had badly over-farmed, leaving behind eroded soil that lacked essential nutrients for future farming. Under the direction of David Lilienthal, beginning in 1933, the TVA workers erected a series of dams to harness the Tennessee River in the creation of much-needed hydroelectric power. The arrival of both electric lighting and machinery to the region eased the lives of the people who lived there, as well as encouraged industrial growth. The TVA also included an educational component, teaching farmers important lessons about crop rotation, soil replenishment, fertilizing, and reforestation.
The TVA was not without its critics, however, most notably among the fifteen thousand families who were displaced due to the massive construction projects. Although eventually the project benefited farmers with the introduction of new farming and fertilizing techniques, as well as the added benefit of electric power, many local citizens were initially mistrustful of the TVA and the federal government’s agenda. Likewise, as with several other New Deal programs, women did not directly benefit from these employment opportunities, as they were explicitly excluded for the benefit of men who most Americans still considered the family’s primary breadwinner. However, with the arrival of electricity came new industrial ventures, including several textile mills up and down the valley, several of which offered employment to women. Throughout his presidency, Roosevelt frequently pointed to the TVA as one of the glowing accomplishments of the New Deal and its ability to bring together the machinery of the federal government along with private interests to revitalize a regional economy. Just months before his death in 1945, he continued to speak of the possibility of creating other regional authorities throughout the country.

### ASSESSING THE FIRST NEW DEAL

While many were pleased with the president’s bold plans, there were numerous critics of the New Deal, discussed in the following section. The New Deal was far from perfect, but Roosevelt’s quickly implemented policies reversed the economy’s long slide. It put new capital into ailing banks. It rescued homeowners and farmers from foreclosure and helped people keep their homes. It offered some direct relief to the unemployed poor. It gave new incentives to farmers and industry alike, and put people back to work in an effort to both create jobs and boost consumer spending. The total number of working Americans rose from twenty-four to twenty-seven million between 1933 and 1935, in contrast to the seven-million-worker decline during the Hoover administration. Perhaps most importantly, the First New Deal changed the pervasive pessimism that had held the country in its grip since the end of 1929. For the first time in years, people had hope.
It was the hard work of Roosevelt’s advisors—the “Brains Trust” of scholars and thinkers from leading universities—as well as Congress and the American public who helped the New Deal succeed as well as it did. Ironically, it was the American people’s volunteer spirit, so extolled by Hoover, that Roosevelt was able to harness. The first hundred days of his administration was not a master plan that Roosevelt dreamed up and executed on his own. In fact, it was not a master plan at all, but rather a series of, at times, disjointed efforts made from different assumptions. But after taking office and analyzing the crisis, Roosevelt and his advisors did feel that they had a larger sense of what had caused the Great Depression and thus attempted a variety of solutions to fix it. They believed that it was caused by abuses on the part of a small group of bankers and businessmen, aided by Republican policies that built wealth for a few at the expense of many. The answer, they felt, was to root out these abuses through banking reform, as well as adjust production and consumption of both farm and industrial goods. This adjustment would come about by increasing the purchasing power of everyday people, as well as through regulatory policies like the NRA and AAA. While it may seem counterintuitive to raise crop prices and set prices on industrial goods, Roosevelt’s advisors sought to halt the deflationary spiral and economic uncertainty that had prevented businesses from committing to investments and consumers from parting with their money.

### Section Summary

After assuming the presidency, Roosevelt lost no time in taking bold steps to fight back against the poverty and unemployment plaguing the country. He immediately created a bank holiday and used the time to bring before Congress legislation known as the Emergency Banking Act, which allowed federal agencies to examine all banks before they reopened, thus restoring consumer confidence. He then went on, in his historic first hundred days, to sign numerous other significant pieces of legislation that were geared towards creating jobs, shoring up industry and agriculture, and providing relief to individuals through both refinancing options and direct handouts. Not all of his programs were effective, and many generated significant criticism. Overall, however, these programs helped to stabilize the economy, restore confidence, and change the pessimistic mindset that had overrun the country.

### Review Questions