Chapter 17
In This Chapter
● Business gets bigger in the 1920s
● Dealing with attacks on minorities
● Weathering the Depression
● Meeting Franklin Roosevelt with new hope
President Warren G. Harding wasn’t a bad man, but he was suspiciously lazy in his choice of political friends. When Republican Warren Harding took over as president in 1921, the nation was ready for happy days after all the preachiness of Woodrow Wilson. Harding’s Cabinet members weren’t about to preach; in fact, they included a den of thieves.
His Secretary of the Interior leased America’s emergency Teapot Dome oil reserve to private businessmen in exchange for a $400,000 bribe ($4 million in modern money). His head of Veteran’s Affairs ripped off the modern equivalent of $2 billion by allowing shady work on veterans’ hospitals. His Attorney General — the guy who was supposed to, you know, enforce the laws — was charged with the sale of pardons and liquor permits. Harding didn’t have to face the ugly scene his friends had created: He died of an illness in the middle of his administration.
That’s the way it went in the Roaring ’20s: high times with a big bill coming later. Kicking off the 1900s, activist presidents Theodore Roosevelt, William Howard Taft, and Woodrow Wilson had tackled serious problems with the belief that progressive reform would help America live up to its high ideals (see Chapter 16). After all that progressing and the trauma of World War I, people were tired of idealism — they just wanted to return to normal. Trouble is, you can never get in the same river twice — the current moves on without you. Normal in the 1920s was a whole new world. Unfortunately for the people of that era, the Great Depression was right around the corner. More on that in this chapter.
U.S. Versus Communism: The Early Years
With the Communist revolution running wild throughout Russia, the United States had the terrorist jitters. President Wilson expanded the federal police with a new bureau headed by J. Edgar Hoover. Before the Red Scare (1920) was over, more than 10,000 people were arrested (some beaten up or held illegally).
Real terrorists did actually strike: A bomb in Washington D.C. just missed a young Franklin Delano Roosevelt, and another killed 38 people and wounded hundreds on Wall Street. The actual bombers escaped, and almost all of the people arrested were guilty of nothing more than being radical union members or recent immigrants. Immigrants suspected of troublemaking were deported.
Scared for their lives and property, most Americans supported the anti-Communist raids at first. But when the police issued a red alert for a Communist takeover on May 1 that never materialized, public support for police-state tactics started to fade. Factory owners kept the Communist issue going as long as possible by trying to link unions with Communists.
During the hysteria, five legally elected members of the New York legislature and one U.S. Congressman weren’t allowed to take their seats because of their left-wing views. Two immigrant Italians, Sacco and Vanzetti (1921) were executed for murder on evidence that had more to do with their radical views and the fact that they were immigrants than proof of their alleged crime.
Question: What happened to immigrants suspected of being trouble makers during the Red Scare (1920)?
Answer: They were deported.
The Return of the Klan
The same Ku Klux Klan (KKK) that had terrorized blacks and their Reconstruction allies in the post-Civil-War South came back from the dead like a racist Dracula during the 1920s. This time, the Klan had more than blacks to hate: It was also against booze, international cooperation, evolution, gambling, immigrants, and sex.
The Birth of a Nation
The Birth of a Nation follows the family of Northern abolitionist Congressman Stoneman (based on real life Congressman Stevens, an abolitionist leader). His Northern family visits their Southern friends the Camerons, who live on the quintessential South Carolina plantation, complete with happy slaves.
When the Civil War breaks out, the children of the two families support their respective sides, but young Northern soldier Phil Stoneman can't forget his love for Southerner Margaret Cameron. The only other surviving son is Ben Cameron. Wounded while fighting bravely for the Confederates, Ben is recovering in a Northern hospital when a lovely young nurse comes by who is, oh my gosh, his childhood love Elsie Stoneman.
After the war, Ben creates the Ku Klux Klan when he sees white children dressing up like ghosts to scare black children. He does it just in time, too, because black ex-slaves are menacing white women, including Ben's sister Flora, who jumps off a cliff to escape. When Elsie is also threatened, Ben and the Klan arrive in the nick of time to save her. Phil Stoneman and his Union army friends realize they must work together with the Klan to save what the movie calls their "Aryan birthright."
A title slide has an authentic quote from Woodrow Wilson about "the great Ku Klux Klan." The movie ends with a double Cameron/Stoneman wedding as the world lives happily together under a picture of Christ.
Because it used lies to sell tickets and inflame hatred, The Birth of a Nation was boycotted in many cities and states.
Change always brings out reaction, and the 1920s version of the Klan had millions of aggressive and frightening hood-wearing members including senators, mayors, and, according to some sources, President Warren G. Harding. Although the original Klan died out some 20 years after the Civil War ended, the new Klan sprung out of the popularity of one of the first story movies: The Birth of a Nation (1915). Showing the power of popular culture, the movie made up different Klan traditions than those started by the original KKK. The new Klan organization followed the film, not the original group — basically, they learned it at the movies.
The reconstituted Klan fizzled out in the late 1920s when the corruption of their leaders and the shamefulness of their tactics became obvious even to people with sheets over their heads. Although the new Klan made lots of temporary converts among people frightened by change, the KKK also faced something it never had in the old South: stand-up opposition from progressive people who wouldn’t let hate win.
Immigration Act of 1924
In the 1920s, new laws to slow immigration relieved the nativist fear of being overwhelmed by immigrants. (See Chapter 16 for more on nativism.) The Immigration Act of 1924 capped the number of immigrants allowed in the U.S. each year at 2 percent of the number of a home nation’s citizens already in the United States as of 1890. For example, if 3 million Americans of German descent lived in the U.S. in 1890, 60,000 Germans (2 percent of 3 million) could come to the country each year under the 1924 act. This quota barred the door to many hopeful immigrants from countries that didn’t have a lot of people in the U.S. in 1890.
One such country was Italy. Lots of Italian people wanted to come to America, but the whole country was only able to send fewer than 6,000 people a year. This number still made the Italians better off than the Japanese, who were completely locked out by the act. The various groups that actually got into the U.S. tried to maintain their national cultures, but their children learned to speak English and made friends with kids from all over. Radio and movies accelerated the melting pot by teaching standardized language and culture. The number of immigrant children who were forced into child labor declined as individual states began to require school attendance and forbid underage employment.
Question: Why did fewer immigrants come to the United States in the 1920s?
Answer: The Immigration Act of 1924 limited new Americans to a low quota of 2 percent of the number of citizens by national origin in the United States by 1890.
Question: What reduced child labor in the 1920s?
Answer: States passed laws that required children to attend school and prohibited underage labor.
Bathtub Gin and a Little Sin: The Jazz Age
During the 1920s, radios, record players, magazines, and movies began to bring the world to average working people who could never have afforded to go to plays, concerts, or college. Telephones, electricity, and indoor plumbing all made life more comfortable. More people had cars than bathtubs. (After all, you can’t drive a bathtub to town.) Young people left the farm; for the first time in history, more people lived in cities than in the country. The 1920s were called the Jazz Age because popular music shared influences from big band, ragtime and rhythm, songs you could get up and dance to.
Prohibition: High demand and high crime
Prohibition, implemented by the Volstead Act after the passage of the Eighteenth Amendment (1919), may have cut down on drinking by 10 percent, but it increased crime by 50 percent. Because booze was illegal but in demand, liquor made great profits for organized crime. For every large saloon that closed, at least three small speakeasies (illicit pubs) opened.
Because low-alcohol beer and wine were bulky and hard to transport, potent hard liquor cocktails became the quick-acting drink of choice. Lots of hard liquor was smuggled, but desperate drinkers learned to make gin in their bathtubs or bought special grape juice that turned to wine with minimal effort.
Arrests for drunken driving and public intoxication went up more than 50 percent. The law made millions of otherwise-law-abiding Americans into criminals, and it gave real criminals so much money that they fought ugly wars over territory in big cities.
The king of the mobs in Chicago was Al Capone. After more than 500 deaths in the Windy City, Capone was finally sent to prison for tax evasion. At their height, illegal liquor mobs took in more money than the federal government. The Twenty-First Amendment (1933) finally repealed Prohibition.
Sex in the city
A lot of people had fun in the Roaring ’20s (1925). People did crazy dances to the new music of the Jazz Age. Anything seemed possible with the new-found freedom provided by women’s suffrage, cars, radio, movies, and — Prohibition be damned — plenty of booze. The scene also included well-known gay clubs, but they disappeared at the end of the 1920s and didn’t reappear until the 1970s.
Because Sigmund Freud had explained sex drives as a natural part of being human, the subject of sex was less taboo. Margaret Sanger (1921) risked arrest to get birth control information to women.
Question: Who was Margaret Sanger?
Answer: Margaret Sanger was an early advocate who publicized information about birth control.
Mass production and mass consumption
Prosperity was the lion behind the ’20s’ roar. Mass production made new inventions and former luxuries available to almost everybody, especially with the financially dangerous new invention of time payments. Henry Ford lowered the price of his Model T to a few hundred dollars, cheap enough for most working people who could get a loan to buy their car on time. By the end of the decade, the U.S. had one car for every five Americans, far more than all the automobiles in the rest of the world.
Advertising got good at making people want things they didn’t even need through the mass media of radio, billboards, and popular magazines. Frederick Taylor (1922), the father of scientific management, broke work assignments down into tasks and figured out the most efficient way to get jobs done. Unions lost membership as employers used government support and fear of radicals to break up strikes.
Question: What happened to the Progressive political movement in the 1920s?
Answer: Progressive reforms all but disappeared as conservative Republican government slowed immigration, relaxed the regulations on business, and weakened unions.
Cars and planes
Motor vehicles were good for more than just joy rides. Trucks moved goods to market more cheaply and quickly than trains; produce farmers made more money and city people got better fruit and vegetables. People didn’t have to live right next to where they worked anymore; the first suburbs appeared. Buses allowed schools to consolidate and reach more students.
Women took to driving right from the start; it gave them freedom from dependence on men. Cars were so handy that people didn’t even begin to notice the cost in dollars, accidents, and pollution until years later.
Automobiles were fast, but planes were faster. The Wright brothers flew the first plane in 1903. After that, it took 20 years and countless crashes for aviation to become practical. The first transcontinental airmail route began from San Francisco to New York in 1920. Few passengers flew in the 1920s; most airliners concentrated on carrying the mail.
After Charles Lindbergh became a hero by single-handedly flying his Spirit of St. Louis (1927) from New York to Paris, aviation was on everybody’s mind. The first flight attendant stepped on board a regularly scheduled commercial flight in 1930.
Radio
The first radio breakthrough occurred when original station KDKA in Pittsburgh broadcasted the news of Warren Harding’s election in 1920. As more and more families gathered around the early radios, commercials for products soon began popping up.
Radio broke down local accents by providing a national standard of speech. It also affected politics by carrying the words of candidates and the sound of their speaking voices, something only a small proportion of the population had ever heard before the 1920s. This development hurt squeaky-voiced politicians like Al Smith and helped great radio personalities like Franklin Roosevelt.
The Harlem Renaissance
The Harlem Renaissance (1926) expanded the urban culture of black Americans with writers like Langston Hughes and Zora Neale Hurston, plus musicians like Louis Armstrong and Duke Ellington.
William Haines
The most famous movie actor of 1925 was William Haines, who lived openly with his gay lover. Pushed to cover up by the studios, they switched to interior decoration and lived together the rest of their lives, more than 50 years — in the words of Joan Crawford, "the happiest married couple in Hollywood." They decorated the houses of the stars, including Ronald Reagan's Governor's Mansion.
Marcus Garvey (1921) tried to raise money for black-owned businesses and an African American colony in Liberia. He galvanized black pride but was set up by the first black employees of the FBI and deported. For the first time, blacks and whites mingled in the nightspots. The Harlem Renaissance basketball team was the best in the world.
Question: Who was Marcus Garvey?
Answer: Garvey was an organizer who raised African American pride with plans for black owned businesses and an African colony.
Movies and their influence
Movies changed history during this period, whether it was through an overt message like The Birth of a Nation or the shared experience of just going to the movies together.
As one of the first feature films, The Great Train Robbery (1903) excited the audience so much that some of them ducked when the train went by. The earliest movies were silent and included explanation signs; the cowboys would be galloping silently away and suddenly everything would stop for what looked like a PowerPoint slide. That kept people reading, but it didn’t survive the 1920s.
In 1927, The Jazz Singer contained the first synchronized dialogue (and singing) in a feature film. After sound was possible, nobody wanted to read written explanations in films again (except for maybe the beginning of Star Wars), and from then on movies could talk. About the same time, color movies began to appear. Films largely replaced ethnic theater and united the country in shared dramatic experiences. Movies helped ethnicities become regular Americans.
Flappers
The most beautiful woman in films was The It-girl, Clara Bow, whose brassy personality was a model for the flappers (1925), newly liberated women who made up their own rules about clothes (including short dresses and hair) and behavior. Females could afford to be more independent because the number of women with jobs increased by 25 percent in the 1920s. People called them wild, but flappers didn’t care what people thought.
Question: Who were the flappers in the 1920s?
Answer: The flappers were women who felt liberated to make up their own minds about appearance and behavior. Their style was short hair, short dresses, independence, and wild dancing.
Monkeying around with evolution
The idea of evolution scared a lot of conservative religious people who thought that it didn’t fit with their idea of God. The state of Tennessee banned the teaching of evolution, but a young high-school football coach named John Scopes taught it anyway and landed in court in the Scopes Monkey Trial (1925).
The trial starred famous defense attorney Clarence Darrow as Scopes’ lawyer and former presidential candidate William Jennings Bryan as the prosecutor. Bryan took the stand to explain why the Bible was right, and Darrow made him look foolish.
Laws against teaching evolution stayed around until the 1960s, when the Supreme Court ruled that such bans violate the First Amendment because their primary purpose is religious. Fundamentalists still try to get what they call intelligent design recognized in schools, but now they’re trying to get into the classroom instead of keeping science out.
Even though the Scopes Trial didn’t immediately repeal the law, it began to change the way most people thought, which eventually changed the law.
Question: Who were the key attorneys in the Scopes Trial?
Answer: William Jennings Bryan and Clarence Darrow.
The power of the pen
The sharpest pen of the 1920s belonged to H.L. Mencken, who was the Jon Stewart of his generation. As a Baltimore newspaperman and editor of the American Mercury magazine, Mencken took on the backward establishment of America. He defined a puritan as someone with “the haunting fear that someone, somewhere, might be happy.”
Other writers stirred the dark coals of the happily roaring ’20s:
● F. Scott Fitzgerald wrote The Great Gatsby (1925) about the hopeless social climbing of an also-ran who could never reach success because glamor isn’t life.
● Theodore Dreiser went even sadder in An American Tragedy (1925), a novel about the murder of a pregnant girl by her social-climbing boyfriend.
● The poet e.e. cummings wrote verse so direct that it didn’t need capitalization.
● Ernest Hemingway stripped away all the Victorian prose and wrote in simple English. His A Farewell to Arms (1929), a novel paralleling his own experience in World War I, combined toughness with feeling.
● Sherwood Anderson’s Winesburg, Ohio (1919) contained the touchingly pathetic stories of small-town Americans lost in their own private suffering.
● Sinclair Lewis wrote Main Street (1920) and Babbitt (1922) about the limits of sophistication in early 1900s America. The character Babbitt became a synonym for the shortsighted, self-serving boosterism encountered in any club or city.
● William Faulkner described the South, prejudices and all, in The Sound and the Fury (1929).
On the whole, the writers of the 1920s were surprisingly gloomy for a roaring decade. Maybe they saw trouble coming, or perhaps they just valued honesty more than uplift. So did the many Americans who chose to read their books. In that sense, the writers of the ’20s were the worthy successors to the early-1900s muckrakers. Unlike the early muckrakers, however, these writers were living in a political world that, for the time being, valued wealth more than progress.
Question: What was the spirit of critically acclaimed writers of the 1920s? Answer: Writers generally reflected a gloomy questioning of society.
Architecture
Frank Lloyd Wright (1928) was something of an architectural poet. If architecture is frozen music, he made that music new, stripping off tired classical references to build for a new world.
The soaring Chrysler Building and Empire State Building in New York were further proof of late-1920s architectural exuberance. The International style began to emphasize glass and light as modern building techniques allowed more openness.
Major Money Shift: Signs of Trouble Ahead
Even as the 1920s roared, signs that America’s fast growth was running on empty began to appear.
● U.S. manufacturing output rose by 50 percent, but even in good times, hundreds of banks failed every year.
● Buying on credit was rare at the beginning of the decade, but by the end of the 1920s, more than half of the purchases for cars and appliances were on time payments.
● A Florida land boom so hot that people even bought lots that were under water turned to bust in one 1925 hurricane.
The stock market went up for so long that everybody forgot it could go down. Ordinary working people bet their life savings on stocks, buying them on margin — a kind of time payment, just like the financing scheme they used for their cars.
The Republican-controlled Congress cut the taxes on rich people: What was three dollars in tax for the rich in 1920 became only one dollar. Wealth-friendly politicians said this money would trickle down to the poorer people.
Question: What was the Republican position on taxes for the rich?
Answer: Republicans cut taxes on the rich, claiming benefits would trickle down to poorer people.
A little trickling down would have been good, because 40 percent of the whole nation (and a much higher percentage of farmers and blacks) lived below the poverty line. While the poor people lived without government help, cheap taxes for the rich made the economy blow up like a big balloon.
Question: Which groups had it hardest during the 1920s?
Answer: The most-economically-depressed groups were farmers and blacks. They didn’t share much in the 1920s boom times.
Politics Lead to Depression
The three Republican presidents in the 1920s really thought people should take care of themselves. Even after the stock market crashed in 1929, Herbert Hoover quoted the cold-hearted words of President Cleveland from 50 years before: “. . . though the people support the Government, the Government should not support the people.”
The same hands-off governmental philosophy guided the Republican presidential trio in international affairs; the U.S. was isolationist and unprepared for war. Antitrust laws passed by Progressive presidents went unenforced, and businesses soon learned that they could get away with forming trade associations that limited competition:
● The Esch-Cummins Transportation Act (1920) allowed the private combination of the railroads and committed the Interstate Commerce Commission to help them make a profit.
● The Merchant Marine Act (1920) sold off ships built by the government at bargain prices to big businessmen. A railroad strike protesting a 12 percent pay cut during boom times was put down with harsh measures by the government in 1922.
International efforts were mostly symbolic:
● The U.S. called the leading powers together to sign the Washington Naval Treaty (1922) where they agreed to limit warship construction at a nice high level.
● Harding helped American companies grab oil concessions (1923) in the Middle East that would eventually become habit-forming.
● The Nine-Power Treaty (1922) made an Open Door policy to China look official, but it didn’t keep Japan and Russia from trying to sneak in that door to grab some territory for themselves.
● The Kellogg-Briand Pact (1928) proved how easy it is to say good words by “outlawing war.”
All these agreements sounded good, but with only a weak League of Nations, they didn’t have any power to enforce them.
Republicans hiked the tariffs, like they always did, under the Fordney-McCumber Tariff Law (1922), which also gave the president the power to raise or lower tariffs by himself. No surprise, the Republican presidents sent the tariffs even higher on 32 important commodities like dairy products and iron. They lowered taxes on only five items nobody wanted anyway, including paintbrush handles and bobwhite quail.
Calvin Coolidge: "Silent Cal” stands by
After President Harding escaped facing his administration’s corruption through the clever tactic of dying, Calvin Coolidge took over and cooled the situation down. Coolidge specialized in keeping his remarks simple. A famous story tells of a dinner guest who said, “Mr. Coolidge, I’ve made a bet against a fellow who said it was impossible to get more than two words out of you.” Coolidge’s reply: “You lose.”
Although Coolidge had little to say, he supported business like it was a religion. In fact, he believed that “the man who builds a factory builds a temple” and “the man who works there worships there.” He’d obviously never worked in a factory.
Although Coolidge came from a New England farm family, he stood by and did nothing as one out of four families lost their farms to debt in the 1920s. He just said that farming had never paid much and that the government couldn’t do anything about it. Coolidge got elected once in his own right and then ran out of energy to try it again.
Herbert Hoover: Good intentions, bad mistakes
Herbert Hoover had a great reputation as a humanitarian and a problem-solver for three earlier administrations. Then he actually became president and blew it all away in the Great Depression. Elected in a landslide in 1928, he started by actually trying to do something for the desperate farmers.
The Agricultural Marketing Act (1929) lent money to farmers’ organizations to manage their crops for maximum profit. It didn’t work very well; prices for grain and cotton just kept dropping because farmers kept growing an oversupply of crops.
The Stock Market Crash of 1929
On Black Tuesday (1929) in October 1929, the stock market crashed. Stocks kept sliding until they reached a point in 1932 when they were down 89 percent, lower than they’d been since the 1800s. Prudent investors who bought slowly over their lifetime would have been protected from the worst market fluctuations by the law of averages. However, anyone who bought stocks only at the highest and therefore worst time in mid-1929 and held on to them saw most of his adult life pass by before finally breaking even in 1954.
Responding to business pressure, Hoover did exactly the wrong thing by signing the terrible Smoot-Hawley Tariff (1930). A world economy teetering on the brink of economic collapse certainly didn’t need the highest peacetime tariff in U.S. history; the rest of the world viewed the tariff as a kind of giant “screw you,” and economic walls went up all over the world.
Tariffs certainly didn’t help the United States get over the crisis that started with the Wall Street meltdown in 1929. Unemployment was at 9 percent in 1930 when the Smoot-Hawley tariff passed, but it jumped to 16 percent the next year and 25 percent two years after that.
Bad news hits hard
As people’s jobs evaporated and families started to go hungry, Hoover’s response was to assist businesses so that their wealth would trickle down to the poor.
After the Depression had gone on for three years, Congress finally passed the Reconstruction Finance Corporation (RFC) Act (1932). The RFC lent money to businesses, agricultural organizations, and local governments. Many called it the millionaires’ dole.
Actually, Hoover had come a long way from the take-care-of-yourself position of earlier 1920s Republicans, including himself. Realizing that they would have to do something for worried laborers whose union membership had gone down by a third in the union-busting 1920s, Congress passed the Norris-La Guardia Anti-Injunction Act (1932), which forbade court interference in peaceful strikes and stopped management from forcing workers to sign anti-union pledges.
Question: What national program did Herbert Hoover establish to help fight the Depression?
Answer: Hoover established the Reconstruction Finance Corporation (RFC) at the end of his term in 1932 to loan money to businesses, organizations, and state and local governments.
A march on Washington by 20,000 hungry veterans called the Bonus Expeditionary Force (1932) asked for the bonus ($15,000 in modern money) promised them in the Adjusted Compensaton Act (1924) when they really needed it, which was right now. General Douglas MacArthur broke up the march with force, but that didn’t make Hoover any more popular.
Meanwhile, Japan used the economic troubles of the U.S. as a good time to brutally attack China. The United States did nothing but shake its finger.
While his own country was slipping down the economic drain, Hoover did manage to make some conciliatory gestures in Latin America that later formed the basis of the Good Neighbor Policy (1933) under Franklin Roosevelt. At home under Hoover, the situation just kept getting worse.
Question: What did the government do when the Bonus Expeditionary Force marched on Washington during the Great Depression?
Answer: The government used the army to break up the march and sent the marchers home.
Hoover is left holding the bag
1932 wasn’t a good time to be Herbert Hoover running for re-election. One in four Americans — more than 11 million people — had no job. The people didn’t want to hear any more Republican philosophy about how it was good for the poor to have to struggle on their own. As people pointed out, Hoover’s RFC could pay to feed a pig but not a human child.
Shantytowns of displaced people called Hoovervilles sprung up near big cities. The Depression was cause for a great internal migration of transient people traveling from town to town looking for work; 2,000 applicants would show up for a single job interview.
Question: What was the impact of the Depression on where people lived?
Answer: Transient people travelled from town to town in a great internal migration around the United States looking for work.
Franklin D. Roosevelt: Helping the Country to a New Deal
Franklin Delano Roosevelt (FDR) was the Democratic candidate for president. Roosevelt was a distant cousin of Teddy Roosevelt, and his wife was Teddy’s niece Eleanor. FDR had been the Democratic nominee for vice president in 1920 — tall, athletic and maybe just a little stuck up. Beaten for vice president in the Harding landslide, in 1921 he was struck by a disease that paralyzed his legs for life. He didn’t give up, but he did begin to see what a struggle life could be for what he called the forgotten man.
FDR was governor of New York when the Depression hit, and he immediately launched relief programs that reached worried people. His campaign song is still a theme for the Democratic party: “Happy Days Are Here Again.” People believed in his hope and determination, and Roosevelt beat Hoover in a landslide.
His inaugural address contained now-famous words, quoted here in a slightly extended version to show their serious context: “The only thing we have to fear is fear itself —nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
Roosevelt’s New Deal (1933) program centered on three R’s: relief, recovery, and reform:
First, FDR wanted to provide immediate relief from hunger and homelessness, very real problems in 1933, when one out of four Americans were unemployed.
Second, the New Deal hoped to help the economy recover so that people would have stable jobs and businesses with which to support themselves.
Third, the Democrats planned to reform the system so that no American would have to suffer another Great Depression again.
A newly elected, heavily Democratic Congress passed a slew of legislation so quickly that it became known as the Hundred Days (1933) of the new administration. Roosevelt wanted to fix agriculture, banks, and jobs without nationalizing basic industries.
Question: What were Roosevelt’s key aims with the New Deal?
Answer: FDR wanted to save the country and the capitalist system by reforming banks, agriculture, and jobs without nationalizing major industries.
Heating with an alphabet soup of agencies
The first step was to stop the run on the banks that had people desperately trying to withdraw their savings, thus making bank collapse a self-fulfilling prophecy. Roosevelt temporarily closed all the banks, then reopened them under the Emergency Banking Act, which took all of eight hours to pass.
Congress created the Federal Deposit Insurance Corporation (FDIC) (1933), guaranteeing bank deposits and thus helping stop the panic. To create more money, FDR purposely caused inflation by increasing the price of gold.
For direct help to starving people, Congress passed the Federal Emergency Relief Administration (1933), which handed out billions of dollars in grants and jobs through the states. More help was on the way.
Civilian Conservation Corps (CCC)
The Civilian Conservation Corps (CCC) (1933) created more than 3 million jobs in the nine years of its life, hiring mostly young men from poor families. Civilian Conservation Corps camps were run by the Army in every state in the nation.
The CCC constructed buildings and trails in city, state, and national parks that still exist today. The first CCC recruit was ready for training little more than a month after Roosevelt took office; the program continued until World War II gave young men something else to do.
Most Americans happily endorsed the CCC as a combination of good work and necessary economic support — most of a CCC recruit’s small-but-regular pay went home to help his family. Although the national CCC ended, over a hundred state and local work programs still exist today modeled on the Conservation Corps.
WPA, CWA, and PWA
More jobs were created by the Works Progress Administration (WPA), the Civil Works Administration (CWA) and the Public Works Administration (PWA). A regular alphabet soup of well-meaning agencies tried to help America keep working through the nightmare of the Depression.
Trails and roads weren’t the only major projects; the PWA built the Grand Coulee Dam on the Columbia River, the largest structure in the world that had been built up to that time since the Great Wall of China. To keep people cheerful and raise a little tax revenue, the nation got rid of Prohibition with the Twenty-first Amendment (1933).
Tennessee Valley Authority (TVA)
The federal government got into the electricity business with the construction of the nine dams of the Tennessee Valley Authority (TVA) (1933). Even by Depression standards, the Tennessee Valley area was in bad shape, with exhausted soil, epidemic malaria, and widespread poverty. The TVA brought jobs and low-cost power with what was to become one of the largest electrical utilities in the world. At the same time, state public utility commissions began to control abuses by private power companies.
Help for agriculture
The Agricultural Adjustment Act (1933) helped improve farm income by limiting supply, but the Supreme Court overturned it. The Soil Conservation and Domestic Allotment Act (1936) and a reformed second Agricultural Adjustment Act (1938) passed Court tests to become the beginning of the national farm support program that continues to this day.
Question: What was the Agricultural Adjustment Act (1933)?
Answer: This act was the first attempt at a national farm policy that included limiting supply to raise farm income.
Securities and Exchange Commission (SEC)
Because Wall Street represented as a bad guy in the Great Depression, the Roosevelt government started the first fair trading rules for stocks with the Securities and Exchange Commission (SEC) (1934). The SEC is still around and gets regularly strengthened when corporations devise new ways to fool investors.
Federal Housing Administration (FHA)
To increase the number of construction jobs and homes, the Federal Housing Administration (FHA) (1934) began to back small loans for remodeling and new home construction.
When the FHA started, most home mortgages were short-term, three-to-five-year interest-only loans, with a huge balloon payment for the entire value of the loan at the end of three or five years. Buyers had to come up with at least 40 percent of the value of the home as a down payment. With the Depression, people couldn’t make big balloon payments or find 40 percent for a down payment. Banks were stuck with houses nobody could afford to buy, and the housing market tanked. With the FHA, home ownership has increased from 40 percent in the 1930s to nearly 70 percent today.
Social Security
Certainly the largest, lasting change in life for older people was the creation of the Social Security Administration (1935), which guaranteed small pensions for the elderly and the handicapped by taxing the income of current workers. In the presidential election of 1936, Roosevelt tromped his Republican opponent. The Democrats controlled two thirds of the votes in both the House and the Senate. No political party had enjoyed this much public support since the Era of Good Feelings (see Chapter 10) more than 100 years before.
Question: How was the Social Security Administration funded?
Answer: Social Security taxed current workers to pay for retirement benefits.
One not-so-perfect new deal
The New Deal made mistakes. To create more jobs, the government created the National Recovery Administration (NRA), in which participating industries agreed to job sharing and wage and price controls to make more work. It was an administrative nightmare and was soon declared unconstitutional.
Roosevelt went too far when he tried to add more justices to the Supreme Court to keep it from blocking his legislation. Even his supporters couldn’t go along with this manipulation of the Constitution.
Wrapping up the New Deal agencies
The Indian New Deal, officially named the Indian Reorganization Act of 1934, encouraged tribes to organize their own governments and stopped the breakup of American Indian lands.
A change in government treatment of unions was signaled by the National Labor Relations Board (NLRB) (1935), which allowed workers a fair hearing when organizing unions. Even with a more sympathetic government, strikers were killed in San Francisco (1934) and Chicago (1937). The Congress of Industrial Organizations (CIO) (1937) later formed to organize whole industries, including unskilled workers and blacks who hadn’t been part of the older AFL confederation (see Chapter 15). By 1938, the CIO had 4 million members.
To keep enthusiastic government employees from campaigning for their boss, the Hatch Act (1939) barred political work by government employees.
Question: What did the Congress of Industrial Organizations (CIO) add to the labororganizing movement?
Answer: The CIO offered representation to unskilled workers and blacks across whole industries, going beyond the AFL’s push for skilled workers by trade.
The legacy of the New Deal
Fighting the Depression before World War II closed in, Roosevelt managed to cut unemployment from 25 percent to 12 percent. He literally kept people all over the country from starving. The New Deal also started programs that prevented something as horrible as the Great Depression from happening again. Millions of people got a chance to improve their lives, and the spirit of the New Deal put a safety net under the American people that no President — no matter how conservative — has ever seriously tried to take away.
You don’t really have to memorize all the New Deal alphabet letters, but be ready for questions on the Depression. For essay answers, an understanding of the scope of Roosevelt’s recovery program and some specific agencies is important. At minimum, you want to know the agencies started in the New Deal that are still part of America: FDIC, TVA, SEC, FHA, NLRB, and Social Security. If you can figure out what the letters mean, the agencies pretty well explain themselves.
The Grapes of Wrath
John Steinbeck's The Grapes of Wrath (1939) tells the story of the Joad family's trip from barren Oklahoma to California in search of a new life. Enduring death and the desertion of family members, the Joads push on, learning that their only hope lies in solidarity with other poor people. A New Deal relief program tries to help, but in the end their daughter Rose gives up the milk she had for her stillborn baby to save a starving man.
Steinbeck won the Pulitzer Prize and the Nobel Prize for Literature, and the film version won two Academy Awards. The Grapes of Wrath showed rural poverty up close and put a face on the bravery it took to confront Depression homelessness. The story built solid support for social programs in the United States, a country that only a few years before had elected presidents who said the government shouldn't help the people.
Toughing It Out in the Dust Bowl
The New Deal tried to give long-suffering farmers a break by paying them not to grow crops, thus limiting supply, conserving land, and raising prices of now more moderately produced food. When things were already bad out on the land, overplowed dry land blew away in the Dust Bowl (1935) centered in Kansas and Oklahoma. This led to an exodus of poor farmers headed west to look for work and food.
Depression-era Demagoguery
Whenever there is a shortage of money, there is a surplus of people with good sounding schemes about how to change things. The 1930s had its share of demagogues ready to fool the people with big talk:
● Huey P. “Kingfish”Long (1934) promised fat money bonuses for everyone in his native Louisiana in order to get almost-dictatorial power as governor and senator.
● Father Charles Coughlin (1935) was a thorn in the side of the Roosevelt administration, preaching unchristian hatred and isolationism over a national radio network.
● Francis Townsend (1936) had a plan for old age assistance (aptly named the Townsend Plan), which wasn’t practical itself but did help spur the Social Security Act.
Question: What was the contribution of Francis Townsend in the 1930s?
Answer: His Townsend Plan helped encourage the development of Social Security.