Hard Times: The Great Depression


FEBRUARY, 1928.STOCK PRICES
BEGIN A STEADY CLIMB
THAT WILL DOUBLE THE DOW JONES
INDUSTRIAL AVERAGE
IN JUST 18 MONTHS.TRADING MUSHROOMS,
FROM 2 MILLION SHARES A DAY
TO OVER 5 MILLION SHARES.STOCK PRICES INCREASE
AN AVERAGE OF 40%.
SPECULATION IS INTENSE,AND CONSUMERS ARE CAUGHT
IN ITS LURE.
Man #1:
DON’T PUT YOUR MONEY
IN THE BANK. BUY STOCK, EVEN IF YOU HAVE
TO BORROW MONEY… Man #2:
WHY WOULD YOU WANT TO BUY
A NEW AUTOMOBILE?! IT’S ONLY GONNA DEPRECIATE
IN VALUE, AND THEN WHAT? Man #3:
THAT R.C.A. OFFERING
IS GOING THROUGH THE ROOF. Man #4:
IN TWO YEARS,
YOU’LL TRIPLE YOUR MONEY. Man #5:
BUY SHARES OF GENERAL
MOTORS INSTEAD. IT WAS THAT STORY
WHICH I THINK LURED A LOT OF PEOPLE
INTO THE STOCK MARKET. AND OF COURSE, MANY OF THEM
THEN BEGAN TO BORROW MONEY IN ORDER TO PURCHASE
STOCK ON MARGIN. YOU COULD PAY OFF
YOUR BROKER’S LOAN, AND YOU COULD STILL HAVE
A TIDY CAPITAL GAIN.
IT WAS WONDERFUL. THE PROBLEM IS
THAT IN A BULL MARKET
LIKE THAT, IN ORDER TO MAKE
A CAPITAL GAIN THERE ALWAYS HAVE TO BE
MORE BUYERS THAN SELLERS.OCTOBER, 1929.THERE ARE HINTS OF TROUBLE
ON THE 21st AND 23rd,
ALARMING DECLINES
IN STOCK PRICES
FOLLOWED BY TEMPORARY
RECOVERY.
Michael Bernstein:
J.P. MORGAN AND SOME OTHER
LEADING FINANCIERS HAD TRIED TO BAND TOGETHER
TO COORDINATE WHOLESALE
BUYING OF STOCKS TO TRY AND BOLSTER
THE MARKET AND PUT A LIMIT
TO THE DECLINE IN THE VALUES OF STOCKS. THERE WAS A SENSE
THAT THIS IS A BAD PATCH, BUT WE CAN GET THROUGH THIS
IF WE ALL ACT RESPONSIBLY AND WITH A CERTAIN AMOUNT
OF ECONOMIC COURAGE.BUT THEN ON OCTOBER 29th,“BLACK TUESDAY,” IT ALL
COMES TUMBLING DOWN.
EFFORTS TO SAVE
THE MARKET HAVE FAILED.
Bernstein:
THESE WERE DAYS
ON THE NEW YORK EXCHANGE WHERE UNPRECEDENTED
VOLUMES OF STOCKS WERE SOLD AND, OF COURSE,
THE VALUES OF STOCKS PLUMMETED. FOR CERTAIN INDIVIDUALS,
THIS BECAME A TERRIBLE CRISIS. STOCKBROKERS AND OTHER
FINANCIERS ARE JUMPING
OUT OF BUILDINGS IN LOWER MANHATTAN. CLEARLY THERE WAS
A LOT OF DISTRESS. THE GREAT DEPRESSION
CAME AS A SURPRISE
TO MOST PEOPLE, BUT IF YOU LOOK CLOSELY,
YOU CAN SEE THAT
THERE WERE SIGNS THAT THE ECONOMY
WAS NOT QUITE AS HEALTHY AS IT SEEMED
IN THE LATE ’20s. FIRST OF ALL, THE AGRICULTURAL
ECONOMY, WHICH PLAYED
A MUCH LARGER ROLE IN THE LIVES
OF AMERICANS IN THE ’20s THAN IT DID IN LATER YEARS,
HAD BEEN DEPRESSED THROUGH MOST
OF THE DECADE. SECONDLY,
THE AUTOMOBILE ECONOMY WAS SOFTENING
BY ABOUT 1927 AND DROPPING QUITE RAPIDLY
IN TERMS OF SALES IN 1929, BECAUSE IT HAD SATURATED
THE MARKET AND HAD MOVED FROM SUPPLYING PEOPLE
WITH CARS THEY’VE NEVER
OWNED BEFORE, TO SUPPLYING PEOPLE
WITH REPLACEMENTS, WHICH IS
A SMALLER MARKET.EVEN BEFORE THE CRASH,
SOME ECONOMISTS ARE CONCERNED
THAT THE FEVER
OF SPECULATION IS DRIVING
THE PRICE OF STOCKS
BEYOND THE VALUE
OF THE COMPANIES THEMSELVES.
NOW, WHETHER THE FEDERAL
RESERVE BOARD COULD HAVE TIGHTENED
INTEREST RATES MORE
DRAMATICALLY, WHETHER THAT
WOULD HAVE DAMPENED SOME
OF THE SPECULATION, I THINK A LOT OF ECONOMIC
HISTORIANS DOUBT BECAUSE SO MUCH MONEY
WAS FLOWING INTO THE BROKER’S
LOAN MARKET FROM NON-BANKING SOURCES. FOR EXAMPLE,
MAJOR CORPORATIONS–
GENERAL MOTORS, DUPONT, THE FORD
MOTOR COMPANY– WERE LENDING
THEIR SURPLUS IN THEIR CORPORATE TREASURIES
INTO THE BROKER’S
LOAN MARKET. THIS WAS
TOTALLY OUTSIDE OF THE REGULATORY STRUCTURE
OF THE FEDERAL RESERVE.THE STOCK MARKET CRASH
OF 1929
DOES NOT CAUSE
THE DEPRESSION.
RATHER, IT SETS INTO MOTION
A CHAIN OF EVENTS
THAT EXPOSES
THE WEAKNESSES
OF THE AMERICAN ECONOMY.MOST PEOPLE WERE NOT
INVESTED IN THE MARKET AND RELATIVELY FEW PEOPLE
WERE DIRECTLY AFFECTED
BY THE CRASH. BUT WHAT THE CRASH
DID DO WAS DESTABILIZE OTHER
AREAS OF THE ECONOMY, PARTICULARLY THE BANKING SYSTEM.
A LOT OF BANKS HAD INVESTED IN THE MARKET
AND HAD DONE SO
SOMEWHAT RECKLESSLY WITHOUT RETAINING
SUFFICIENT RESERVES TO MEET THEIR
DEPOSITORS’ DEMANDS. Parrish:
WHAT MR. HOOVER DID
WAS TO ENCOURAGE THE BANKERS TO ORGANIZE SOMETHING
CALLED THE NATIONAL
CREDIT CORPORATION. THE IDEA WAS THAT THE BANKS
THAT WERE STILL SOUND WOULD CONTRIBUTE
$2-3 MILLION OF THEIR OWN MONEY
TO HELP RESCUE THE BANKS THAT WERE IN DANGER
OF FAILING TO MEET THEIR DEPOSITORS’
DEMANDS FOR CASH. UNFORTUNATELY,
THE DIRECTORS OF THE NATIONAL
CREDIT CORPORATION
WERE BANKERS AND THEY WERE RELUCTANT
TO PURCHASE THESE DUBIOUS ASSETS
OF THE BANKS THAT WERE IN JEOPARDY
OF FAILING. AND SO THE CORPORATION
NEVER SPENT MORE THAN A THIRD OF THE RESOURCES
IT HAD AVAILABLE.ADDING TO THE BANKING CRISISIS THE INSTABILITY
OF AMERICAN BUSINESS
AND INDUSTRY.Bernstein:
THE HARDEST-HIT SEGMENTS OF THE ECONOMY
TEND TO BE THE OLDER
INDUSTRIAL SECTORS. THESE HAD BEEN TRADITIONALLY
VERY LARGE EMPLOYERS, AND INDEED,
BY THE FALL OF 1929, ACCOUNT FOR A VAST PROPORTION
OF NATIONAL EMPLOYMENT. THERE ARE, HOWEVER,
CERTAIN SEGMENTS OF INDUSTRY THAT, IRONICALLY ENOUGH,
CONTINUE TO DO WELL
IN THE ’30s- NEWER INDUSTRIES– CHEMICALS, ELECTRONICS, NEW PROCESSED FOODS, APPLIANCE MANUFACTURE,
PETROLEUM. THE IRONY IS THAT THEY
ACCOUNT FOR A SMALL SHARE OF NATIONAL EMPLOYMENT WHEN THE CRISIS BEGINS
IN 1929. MUCH OF THIS HAS TO DO
WITH THE FACT THAT THEY’RE
EITHER STILL RELATIVELY EARLY
IN THEIR GROWTH CYCLE, ALSO, IN SOME CASES,
THEY WORK WITH RELATIVELY
SOPHISTICATED TECHNOLOGIES AND EQUIPMENT
THAT REQUIRE FEWER WORKERS. SO, AS THE OLDER INDUSTRIES
ARE DECLINING, ALL OF THIS UNEMPLOYMENT
THAT RESULTS CAN’T BE ABSORBED. THERE’S UNEMPLOYMENT
LEVELS OF NEARLY 30%
IN THE UNITED STATES. MILLIONS OF PEOPLE
ARE OUT OF WORK. THERE’S REAL PAIN,
THERE’S HUNGER, PEOPLE ARE LOSING
THEIR HOUSES…BRINGING
UNPRECEDENTED DESPAIR
TO MOST SEGMENTS
OF AMERICAN SOCIETY.
AGRICULTURE IS A PARTICULAR
HARDSHIP CASE. INDEED, IN CERTAIN AREAS
OF THE COUNTRY LIKE OKLAHOMA,
MISSISSIPPI, ALABAMA, PEOPLE ARE JUST FORCED
OFF THE LAND AND THESE GREAT
MIGRATIONS BEGIN. BUT THE GREAT DISASTER, AND WHAT REALLY
LENDS TO THIS, IS THAT IN 1932,
THE DROUGHT WORSENED. THERE WAS LOTS AND LOTS
OF EXPOSED GROUND. THE WIND CAME UP,
KICKED UP THIS DUST, AND THE RESULTS
WERE GIGANTIC DUST-STORMS ON A SCALE THAT NO ONE
HAD EVER SEEN BEFORE– DUST-STORMS
THAT WERE SO VAST THAT THEY
COVERED PEOPLE’S HOUSES. IT BURIED CARS,
IT BURIED ANIMALS.THE HEAD OF THE COUNTRY’S
SOIL RECLAMATION SERVICE,
HUGH HAMMOND BENNETT,
TESTIFYING BEFORE CONGRESS,
TRIES TO ILLUSTRATE
JUST HOW SERIOUS
THE PROBLEM IS.
Stoll:
BENNETT KNEW
THAT A GIANT DUST-STORM HAD SWEPT ACROSS THE PLAINS
THE WEEK BEFORE AND HE WENT
OVER TO THE WINDOW
AND TORE OPEN THE CURTAIN AND INVITED THE SENATORS
TO COME OVER AND LOOK OUT THE WINDOW
AND THAT THERE WAS DUST AT THAT MOMENT
FALLING ON WASHINGTON D.C. IN FACT, DUST DID FALL
ON NEW YORK CITY AND THE DUST
FROM THE GREAT PLAINS FELL LIKE SNOW ON THE DECKS
OF SHIPS AT SEA.AT THE BEGINNING OF THE
DEPRESSION,
OVER HALF
OF ALL BLACK AMERICANS
STILL LIVE IN THE SOUTH.
Alfred Moss:
THE ’20s ARE NOT
A GOOD PERIOD FOR BLACK PEOPLE
IN THE RURAL AREAS,
AND STILL A MAJORITY OF BLACKS ARE RURAL PEOPLE
IN THE SOUTH. THE ’20s ARE GOOD YEARS
FOR BLACKS IN THE CITIES, EVEN THOUGH THEY DON’T EARN
ON A LEVEL WITH WHITES. THOSE WHO CAN GET THERE
AND STAY THERE ARE BEGINNING TO TAP
INTO THE NEW PROSPERITY IN AMERICA.
THE COMING OF THE DEPRESSION JUST SORT OF SWEEPS
THAT LADDER OUT FROM UNDER THEM. IN THE SOUTH, BLACKS
WHO ARE DOING POORLY WILL FALL TO THE
VERY, VERY BOTTOMMOST RUNG OF THE ECONOMIC
LADDER. AFRICAN-AMERICANS IN THE NORTH
WERE THE PEOPLE MOST IMMEDIATELY THROWN
INTO UNEMPLOYMENT. AND SO THESE PEOPLE
WHO ARE FIRED FIRST REALLY BECOME
DESTITUTE QUICKER. THEY HAVE NOTHING TO FALL BACK–
THEY HAVE NO HOUSES IN WHICH TO RENT ROOMS.
THEY HAVE NO SAVINGS
TO RUN THROUGH. ONE BLACK IN THE MIDDLE
OF THE DEPRESSION COMMENTED THAT IT DIDN’T HAVE
AS GREAT AN AFFECT ON BLACKS AS ON WHITES,
BECAUSE BLACKS HAD BEEN LIVING
IN THE DEPRESSION
ALL ALONG. THERE WAS
SOMETHING TO THAT. IT CERTAINLY SLOWED
THE PACE OF MIGRATION TO NORTHERN CITIES,
AND THE KINDS OF JOBS THAT WERE OPEN
TO BLACKS IN THE ’20s WEREN’T AVAILABLE
TO ANYONE IN THE ’30s. SO, IN THAT RESPECT IT HITS
THE BLACKS HARDEST IN THAT THEY’RE THE POOREST
ELEMENT OF THE POPULATION. SO BLACKS ARE
AMONG THE FIRST GROUPS
TO APPEAR IN THESE LINES WHERE PEOPLE ARE
LOOKING FOR FOOD, LOOKING FOR SHELTER,
LOOKING FOR CLOTHING. THEY WOULD ALSO FACE BRUTAL DISCRIMINATION, MOST BRUTAL
IN THE SOUTH. WHITE SOUTHERNERS
WILL STATE, ALMOST IN WORDS THAT I’M
GOING TO PARAPHRASE, THAT AT A TIME WHEN
THE REGION IS TRYING
TO SURVIVE, WHATEVER IS LEFT
TO KEEP PEOPLE ALIVE
WILL FIRST GO TO WHITES, BECAUSE THEY’RE
THE ONES WHO CAN PRESERVE
THE UNITED STATES. THE BLACKS WILL HAVE TO KEEP
THEMSELVES ALIVE THE BEST THEY CAN
OR DIE, OR WHATEVER,
UNTIL THE THING GETS BETTER, IT IS A BLEAK
AND DARK CHAPTER IN AFRICAN-AMERICAN HISTORY,
THE DEPRESSION YEARS.SIMILAR PATTERNS
OF DISCRIMINATION
CONFRONT MEXICANS
AND MEXICAN-AMERICANS.
Stephen Pitti:
THEY WERE ALSO HARD HIT
BY THE ECONOMIC DEPRESSION BECAUSE MEXICANS
AND MEXICAN-AMERICANS
WERE OFTENTIMES THE FIRST TO BE FIRED
FROM JOBS WHEN ECONOMIC
HARD TIMES DEMANDED A RESTRUCTURING
OF A LOCAL WORKFORCE. WE CAN THINK ABOUT THIS
IN PARTICULAR IN PLACES
LIKE CALIFORNIA. PEOPLE IN THE TENS
OF THOUSANDS ARRIVING FROM THE RURAL
MIDWEST TO CALIFORNIA
IN SEARCH OF WORK OFTENTIMES
FOUND THEMSELVES COMPETING WITH LOCAL MEXICANS
AND MEXICAN-AMERICANS FOR JOBS IN LOCAL
AGRICULTURE AND IN LOCAL
URBAN INDUSTRIES.ECONOMIC HARD TIMESLEAD TO INCREASING HOSTILITY
AMONG RACIAL GROUPS.
Pitti:
LOCAL CHARITY GROUPS IN PLACES LIKE LOS ANGELES
AND IN MANY OTHER CITIES DENIED WELFARE TO PEOPLE
OF MEXICAN DESCENT DURING THE ECONOMIC
DEPRESSION. AND THE THOUGHT OF TRYING
TO SURVIVE THE WINTER
WITH NO FOOD PROMPTED MEXICANS
TO GET ON TRAINS AND
RETURN TO MEXICO, WHERE THEY HOPED FOR
A BETTER LIFE. AT THE SAME TIME,
MEXICAN GOVERNMENT
OFFICIALS ADVERTISED BROADLY
IN MEXICAN IMMIGRANT
COMMUNITIES IN THE UNITED STATES
THAT NOW WAS THE TIME TO RETURN HOME
TO THE HOMELAND WHERE PEOPLE
WOULD NOT ENCOUNTER
RACIAL DISCRIMINATION, WHERE PEOPLE
COULD HELP BUILD MEXICO
AS A MODERN COUNTRY. ROUGHLY 500,000
REPATRIATED IN THE EARLY 1930s
TO MEXICO FROM THE UNITED STATES
AS A RESULT OF THE PRESSURES
OF THE ECONOMIC DEPRESSION.FOR ASIAN-AMERICANS TOO,
THE DEPRESSION REINFORCES
LONG-STANDING PATTERNS
OF DISCRIMINATION
IN WAYS THAT SOMETIMES
INSULATE THEM
FROM THE DISTRESS
OF THE MOMENT.
Darrell Y. Hamamoto:
THEY WEREN’T ON WALL STREET,
SO THEY HAD NO FORTUNES TO LOSE. IF A FACTORY CLOSED,
IT REALLY MEANT NOTHING OR VERY LITTLE
TO JAPANESE-AMERICAN
WORKING-CLASS PEOPLE WHO WEREN’T THERE IN LARGE
NUMBERS, BECAUSE THEY WEREN’T
ADMITTED IN THE FIRST PLACE.ECONOMIC ACTIVITY
FOR ASIAN-AMERICANS
TAKES PLACE
WITHIN THEIR OWN COMMUNITY.
THEY HAD NOT EVEN
BEGUN TO PENETRATE THE PROFESSIONS, THEY HAD NOT BEGUN
TO ENTER INTO FINANCE, MANUFACTURING,
AS EUROPEAN IMMIGRANTS WERE ALREADY BEGINNING
TO MAKE THEIR PRESENCE FELT. AND AGAIN, IT’S PRIMARILY
BECAUSE OF THE RACIAL DIVIDING LINE
THAT THEY FELL UNDER. THAT AS, NON-WHITE.
AMONGST THEMSELVES,
REGIONALLY PERHAPS, THEY WERE
BECOMING A FORCE. BUT THEY WERE
BY NO MEANS PART OF THE MAINSTREAM ECONOMY,
SOCIETY OR CULTURE.THE GAINS WOMEN HAVE ACHIEVED
IN THE WORKPLACE
IS CHALLENGED DURING
THE DEPRESSION YEARS.
Alice Kessler-Harris:
WE WOULD EXPECT THAT MARRIED WOMEN
WOULD BE PUSHED OUT OF THE LABOR
FORCE AS A RESULT
OF THE DEPRESSION AND AS A RESULT
OF ENORMOUS HOSTILITY DURING THE DEPRESSION,
WHERE BOTH MEN AND WOMEN
ARE SAYING, “ONE JOB PER FAMILY.
WHY SHOULD ONE FAMILY HAVE TWO JOBS,
BOTH FOR A HUSBAND
AND A WIFE?” AND YET JOB SEGREGATION IS SUCH THAT EVEN WHERE
A HUSBAND IS UNEMPLOYED, EMPLOYERS WILL SEEK
TO FIND WOMEN TO FILL CERTAIN KINDS OF JOBS. ONCE THEY HIRE WOMEN,
THEY CAN HAVE A CHEAPER
LABOR FORCE. SO, IT TURNS OUT
THAT THE PROPORTION OF MARRIED WOMEN
IN THE WORK FORCE DOESN’T DROP AT ALL
DURING THE DEPRESSION. IT’S STILL RELATIVELY LOW
AT AROUND 15%, BUT IT REMAINS
A STURDY 15% AND THEN OF COURSE
WITH WORLD WAR II, IT ZIPS UPWARD
IMMEDIATELY.THE DEPRESSION SHAKES
THE CONFIDENCE
OF THE NATION, CERTAINLY.
BUT REACTIONS VARY.
CRITICS ARE QUICK
TO CONDEMN
THE COUNTRY’S SOCIAL
AND ECONOMIC SYSTEM.
OTHERS CLING FIERCELY
TO TRADITIONAL VALUES
AND GOALS.
Brinkley:
THE CULTURAL FERMENT
OF THE 1930s WAS DIRECTLY A RESULT OF THE DEPRESSION
AND OF THE ENORMOUS
UNEMPLOYMENT, OF THE SPREAD OF POVERTY
WELL BEYOND THE ALREADY LARGE GROUPS
OF AMERICANS WHO WERE POOR PRIOR
TO THE DEPRESSION. IT WAS ALSO A RESULT
OF A NEW AWARENESS OF ECONOMIC CONDITIONS
THAT HAD BEEN A PART OF AMERICAN LIFE
FOR DECADES, EVEN CENTURIES– A DISCOVERY
OF RURAL POVERTY,
FOR EXAMPLE, BY URBAN,
EDUCATED PEOPLE AND BY THE GOVERNMENT ITSELF,
A RECOGNITION THAT THE NEWFOUND POVERTY OF THE URBAN WORLD
WAS IN FACT ACCOMPANIED BY A MUCH OLDER
POVERTY IN THE RURAL WORLD. Gary Gerstle:
THE MOVIES BECOME AN INCREDIBLY IMPORTANT
CULTURAL FORCE IN AMERICA
IN THE 1930s AND THEY ARE CAUGHT UP
IN THE POLITICS OF THE TIME. ARGUABLY THE MOST
POPULAR FILMMAKER IN THE 1930s IS A MAN
BY THE NAME OF FRANK CAPRA, WHO MADE THE SO-CALLED
POPULIST TRILOGY. AND THESE ARE ALL STORIES
ABOUT THE LITTLE GUY IN AMERICAN SOCIETY
STANDING UP FOR WHAT’S RIGHT AND TAKING AMERICA
BACK FROM THE ELITES WHO HAVE CORRUPTED AMERICA.
IT’S A PROFOUNDLY REFORMIST MESSAGE. IT ALIGNS HOLLYWOOD
IN SOME PROFOUND WAYS WITH THE POLITICS
OF THE NEW DEAL AT A TIME WHEN CORPORATIONS
AND THE RICH WERE THOUGHT TO HAVE LED
AMERICA ASTRAY.IN THE LATER 1930s,
POLITICAL LITERATURE
TENDS TO ADOPT A MORE
OPTIMISTIC,
THOUGH NO LESS RADICAL,
VIEW OF SOCIETY.
THIS IS IN PART
A RESULT OF THE RISE
OF THE POPULAR FRONT.
Brinkley:
THE AMERICAN COMMUNIST PARTY
DURING THIS PERIOD, ANNOUNCED ITS WILLINGNESS
TO ALLY WITH OTHER
DISSIDENT GROUPS AND FORM WHAT THEY CALLED
A POPULAR FRONT. AND OUT OF THAT
POPULAR FRONT CAME THIS CULTURE
OF SOCIAL REALISM, THIS CULTURE
OF THE WORKING CLASS. We’re going to bring
our union into Monroe. Brinkley:
BUT A LOT OF IT CAME
OUT OF THE NEW DEAL ITSELF, OUT OF OTHER
WRITERS AND ARTISTS
WHO WERE NEVER AFFILIATED WITH THE COMMUNIST PARTY
OR EVEN THE POPULAR FRONT. SO IT WAS A PERIOD
IN WHICH A CONVENTIONAL
20th-CENTURY CULTURE OF CONSUMER CULTURE
COMPETED WITH A CULTURE
OF SOCIAL REFORM AND SOCIAL REALISM,
A CULTURE THAT TRIED
TO REINTERPRET AMERICAN HISTORY
AS A HISTORY OF THE STRUGGLE
OF WORKING PEOPLE TO WIN DIGNITY
AND ECONOMIC ADVANCEMENT.HERBERT HOOVER BEGINS
HIS PRESIDENCY
IN MARCH OF 1929
BELIEVING, LIKE MOST
AMERICANS,
THAT THE NATION FACES
A BRIGHT AND PROSPEROUS
FUTURE.
THE ECONOMIC CRISIS
THAT BEGINS BEFORE
THE YEAR IS OUT
FORCES HIM TO DEAL
WITH A VERY DIFFERENT
SET OF PROBLEMS.
Parrish:
HE DID TRY, IN A COUPLE OF NOTABLE CASES,
TO BEGIN TO USE THE POWER
OF THE FEDERAL GOVERNMENT TO MANAGE SOME OF THESE
ECONOMIC ISSUES. THE MOST SIGNIFICANT ONE,
I THINK, WAS HIS SUPPORT FOR WHAT BECAME KNOWN
AS THE AGRICULTURAL MARKETING ACT IN 1929, WHICH, IN CERTAIN WAYS,
WAS THE FIRST SERIOUS ATTEMPT
BY THE FEDERAL GOVERNMENT TO TRY TO MANAGE
THE ENORMOUS AGRICULTURAL
SURPLUSES THAT WERE BEING GENERATED
BY THE ENORMOUS PRODUCTIVITY
OF AMERICAN FARMS. THE LAW ULTIMATELY
ALLOWED THE FARM BOARD TO ACTUALLY INTERVENE
IN THE MARKET AND TO PURCHASE
FARM PRODUCTS IN ORDER, SUPPOSEDLY,
TO PROP UP THE PRICE. THE FATAL FLAW
IN THE PROGRAM IS THAT THERE WERE
NO EFFORTS TO CONTROL WHAT THE INDIVIDUAL
FARMER WAS PRODUCING. Brinkley:
HOOVER TRIED A LOT
OF THINGS THAT NO PRESIDENT HAD EVER TRIED BEFORE
TO COUNTERACT THE GREAT
DEPRESSION. TOWARDS THE END OF HIS
ADMINISTRATION, HE CREATED
A NUMBER OF AGENCIES THAT WERE VERY IMPORTANT
TO THE NEW DEAL, INCLUDING THE RECONSTRUCTION
FINANCE CORPORATION, WHICH PROVIDED GOVERNMENT
MONEY TO BE INVESTED IN
PRIVATE INSTITUTIONS, BANKS AND RAILROADS
THAT WERE IN TROUBLE. BECAUSE IF THEY WENT BANKRUPT,
THERE WAS THE FEAR THAT UNEMPLOYMENT,
OF COURSE, WOULD INCREASE TOO. NOW HE WAS
IMMEDIATELY CRITICIZED
BY THE DEMOCRATIC PARTY WHO BASICALLY SAID,
“HE’S NOT PROVIDING ANY HELP TO THE UNEMPLOYED,
TO THOSE WHO ARE REALLY
DOWN AND OUT.” SO AS A RESULT OF THAT,
THERE WERE AMENDMENTS PASSED WHICH FOR THE FIRST TIME PERMITTED THE AGENCY TO MAKE
DIRECT LOANS TO COUNTIES,
TO CITY GOVERNMENTS, AND TO STATE
GOVERNMENTS IN ORDER TO ENCOURAGE THEM
TO CREATE PUBLIC WORKS JOBS.FOR THE FIRST SEVERAL YEARS
OF THE DEPRESSION,
AMERICANS ARE EITHER
TOO STUNNED OR TOO CONFUSED
TO RAISE
ANY EFFECTIVE PROTEST.
BUT BY THE MIDDLE
OF 1932,
DISSIDENT VOICES
BEGIN TO BE HEARD.
FARMERS THREATEN
TO WITHHOLD THEIR PRODUCTS
FROM MARKET.
AN ARMY OF VETERANS
BUILDS CRUDE CAMPS
AROUND THE NATION’S
CAPITAL, VOWING TO STAY
UNTIL CONGRESS APPROVES
THEIR BONUS PAY.
THESE PROTESTS DO NOTHINGTO BOOST THE PRESIDENT’S
POPULARITY.
Bernstein:
HERBERT HOOVER
IS A GREAT MYSTERY, BECAUSE ON PAPER,
WHEN HE’S ELECTED PRESIDENT IN 1928,
YOU WOULD THINK, “THIS GUY’S GOING TO BE
THE ALL-TIME, ALL-STAR
PRESIDENT.” HE WAS A GENIUS. HE HAD ADVANCED DEGREES
IN ENGINEERING FROM ELITE UNIVERSITIES. HE HAD A REMARKABLE AMOUNT
OF EXPERIENCE IN GOVERNMENT, SO THE PERCEPTION IS
THAT THIS GUY IS GOING TO BE THE BABE RUTH
OF AMERICAN POLITICS AND KNOW EXACTLY
WHAT TO DO WITH ANY PARTICULAR PROBLEM
HE MIGHT FACE. HIS INACTION IN THE FACE
OF THE CRISIS IS A GREAT
BIOGRAPHICAL MYSTERY. Silverman:
PRESIDENT HOOVER
IS SEEN AS SOMEONE WHO’S NOT UP TO DEALING
WITH THIS CRISIS. MIGHT BE A NICE GUY,
MIGHT BE A COMPETENT
ENGINEER, BUT HE DOESN’T HAVE ANY
GOOD IDEAS FOR DEALING WITH IT. HE’S USING TRADITIONAL
REPUBLICAN PRESCRIPTIONS; THEY DON’T WORK ANYMORE. Brinkley:
BY THE BEGINNING OF 1932,
HOOVER WAS SO UNPOPULAR THAT VIRTUALLY
ANY PRESIDENTIAL CANDIDATE COULD HAVE BEATEN HIM,
AND THE FACT THAT THE DEMOCRATS NOMINATED
FRANKLIN ROOSEVELT IS EVIDENCE OF THAT
BECAUSE FRANKLIN ROOSEVELT,
IN 1932, WAS NOT
A TITANIC FIGURE ON THE POLITICAL
LANDSCAPE. HE WAS AN ATTRACTIVE CANDIDATE
WITH AN ATTRACTIVE NAME BUT NOT VERY WELL-KNOWN
NATIONALLY. Parrish:
HE WAS ABLE, BY AND LARGE,
TO WIN THE NOMINATION BECAUSE HE HAD THE SUPPORT
OF SOME VERY POWERFUL POLITICAL LEADERS
INCLUDING, FOR EXAMPLE,
HUEY LONG OF LOUISIANA. HE WAS ALSO BACKED
BY SOME OF THE MAJOR NEWSPAPER ORGANIZATIONS. SO IN MANY WAYS HE WAS THE MOST
LOGICAL CANDIDATE IN 1932 IN TERMS
OF THE DEMOCRATIC PARTY. Robert Dawidoff:
POOR OLD HERBERT HOOVER SAID DURING THE DEPRESSION
THAT WHAT AMERICA NEEDED
WAS A GREAT POEM. AND I THINK
HE DIDN’T EXPECT THAT FDR MIGHT BE
THE POEM. IT’S ALSO PROBABLY TRUE
THAT ANY DEMOCRAT WHO WAS NOMINATED
IN 1932 WOULD HAVE HAD
A VERY GOOD CHANCE OF DEFEATING HOOVER
BECAUSE HE HAD BECOME WEAKENED BY THE DEPRESSION
AND CERTAINLY BY THE VIOLENCE THAT OCCURRED
IN WASHINGTON AS A RESULT
OF THE BONUS MARCH. Silverman:
ON THE OTHER HAND, THERE’S FRANKLIN DELANO
ROOSEVELT, WHO PROMISES
TO TAKE CARE OF THE PROBLEMS OF THE UNITED STATES.
HE’S VAGUE ABOUT HOW
HE’LL DO IT. HE SIMPLY KEPT
HIS MOUTH SHUT AND LET
PRESIDENT HOOVER DROWN IN HIS OWN PROBLEMS.IN NOVEMBER,
TO NO ONE’S SURPRISE,
ROOSEVELT WINS THE ELECTION
BY A LANDSLIDE,
AND THE DEMOCRATS
DOMINATE BOTH HOUSES
OF CONGRESS.
IT IS A BROAD
AND CONVINCING MANDATE.
Parrish:
THE MOST DRAMATIC EVENT
IN THE AWKWARD PERIOD BETWEEN NOVEMBER
AND MARCH 4th WHEN ROOSEVELT
TOOK THE OATH OF OFFICE WAS, OF COURSE,
THE ASSASSINATION ATTEMPT
ON THE PRESIDENT-ELECT, WHICH ROOSEVELT,
OF COURSE, ESCAPED. THE OTHER DRAMATIC PERIOD,
OF COURSE, WAS THE EFFORT
BY THE OUTGOING PRESIDENT TO TRY AND ENCOURAGE PRESIDENT ROOSEVELT
TO ENTER INTO A SERIES OF AGREEMENTS
ABOUT HOW THE ECONOMY WOULD BE MANAGED
AFTER MARCH 4th. AND ROOSEVELT, I THINK,
QUITE PROPERLY ARGUED THAT HE WAS NOT
THE PRESIDENT AND THAT THOSE DECISIONS
SHOULD BE MADE BY MR. HOOVER AND THAT HE WOULD THEN
MAKE HIS OWN DECISIONS
AFTER MARCH 4th. Brinkley:
HOOVER WAS FURIOUS
ABOUT THIS AND CRITICIZED HIM
OPENLY FOR NOT PARTICIPATING
IN THE EFFORT TOWARDS
RECOVERY. BUT ROOSEVELT BELIEVED
THAT ANY COOPERATION
WITH HOOVER DURING THIS PERIOD WOULD
BUT TIE HIS HANDS ONCE
HE BECAME PRESIDENT. IN MARCH, 1933,
WHEN HE FINALLY DID
BECOME PRESIDENT, HOWEVER, HE MOVED VERY QUICKLY
TO CHANGE BOTH THE TONE AND THE SUBSTANCE
OF PUBLIC POLICY TOWARDS THE DEPRESSION. HIS INAUGURAL ADDRESS
WAS A RINGING PROMISE OF FORCEFUL ACTION
TO DEAL WITH THE ECONOMY, WITH HINTS
THAT HE WOULD USE
WAR POWERS IF NECESSARY. FDR:
In the event
that the congress shall fail to take one
of these two courses, in the event
that the national emergency is still critical, I shall not evade
the clear course of duty that will then
confront me… …that the only thing
we have to fear is fear itself. Bernstein:
HIS FIRST ACTION WAS TO ISSUE
AN EMERGENCY ORDER, DECLARING BANK HOLIDAYS– LITERALLY DAYS OFF TO ALLOW BANKS
TO RECOUP, PERHAPS GET THEIR HANDS
ON OTHER ASSETS OR REMOVE CASH RESERVES
FROM ONE BRANCH TO ANOTHER– TO MEET THE DEMANDS
OF THEIR DEPOSITORS WITHOUT LOCKING THEIR DOORS
OR CLOSING DOWN. ROOSEVELT AND HIS ADVISORS
PERCEIVED THAT THE BANKING
CRISIS WAS PROBABLY THE MOST
IMMEDIATE EMERGENCY. YOU FIX THAT,
YOU BEGIN TO ESTABLISH SOME OF THE FOUNDATIONS
FOR A RECOVERY. AND IN A VERY RAPID PERIOD THEY WERE ABLE TO SURVEY WHICH OF THE BANKS
WERE SOUND AND WHICH OF THE BANKS
WERE NOT, AND TO IN A SENSE REASSURE
THE AMERICAN PEOPLE THAT THE BANKS
THAT DID OPEN FOLLOWING
THE BANKING HOLIDAY WERE BANKS IN WHICH
YOU COULD ENTRUST
YOUR FUNDS. Bernstein:
SECONDLY, ONE OF THE FIRST
REGULATORY ACTS OF THE NEW DEAL GOVERNMENT
IN 1934 WAS TO PASS
LEGISLATION THAT WOULD BAN BANKS FROM VENTURING
THEIR CASH RESERVES IN THE STOCK MARKET
IN THE WAYS THAT THEY HAD DONE LEADING UP TO THE COLLAPSE
IN ’29– SAID THIS IS BAD
BUSINESS PRACTICE. ONCE BITTEN, TWICE SHY;
WE WON’T ALLOW BANKS
TO DO THIS AGAIN. PROBABLY THE MOST IMPORTANT
PIECE OF THE LEGISLATION IN 1933 WAS A PIECE THAT ROOSEVELT
HIMSELF OPPOSED AND THAT WAS, OF COURSE,
FEDERAL DEPOSIT INSURANCE. HE APPARENTLY BELIEVED
THAT FEDERAL DEPOSIT INSURANCE WOULD ONLY ENCOURAGE
MANY OF THE BANKERS TO BE MORE IRRESPONSIBLE
AND MORE RECKLESS IN TERMS
OF THEIR BEHAVIOR. THIS WAS ALSO ANOTHER KIND OF OBLIGATION
FOR THE FEDERAL GOVERNMENT TO UNDERTAKE AT A TIME
WHEN HE WAS TRYING TO CUT
THE FEDERAL BUDGET. Brinkley:
HE PASSED AN ACT,
IRONICALLY, TO CUT THE FEDERAL BUDGET
TO TRY TO REASSURE BANKERS AND FINANCIERS
THAT THE GOVERNMENT WAS
IN RESPONSIBLE HANDS, EVEN THOUGH, OF COURSE,
CUTTING THE BUDGET WAS NOT A DEPRESSION-FIGHTING
MEASURE AND HAD LITTLE EFFECT
ON THE BUDGET DEFICITS
THAT VERY QUICKLY EMERGED. AND HE ALSO MOVED
VERY QUICKLY TO PROVIDE MONEY TO STATE AND LOCAL
RELIEF AGENCIES SO THAT MORE PEOPLE
COULD RECEIVE ASSISTANCE DURING THIS TIME
OF HIGH UNEMPLOYMENT. I THINK THE MOST IMPORTANT
THING THAT ROOSEVELT DID IN HIS FIRST DAYS
AND WEEKS IN OFFICE WAS TO INJECT
AN AURA OF CONFIDENCE AND OPTIMISM
INTO POLITICAL RHETORIC AND INTO PUBLIC CULTURE AND
TO MAKE HIS OWN PERSONALITY SOMETHING PEOPLE
COULD RALLY AROUND. Confidence and courage are the essentials
of success in carrying out
our plan.THE UNFINISHED NATION
IS A 52-PART AMERICAN
HISTORY SERIES.
FOR MORE INFORMATION ABOUT THIS
PROGRAM AND ACCOMPANYING
MATERIALS,
CALL…OR VISIT US ONLINE AT…

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