Brother, Can You Spare a Dime?
When the Wall Street crash came, Hoover was slow to react and merely assured the public that “prosperity was just around the corner.” As each month brought worse financial news and lengthened the lines of the jobless, the homeless, and the desperate, Hoover proposed a number of relief programs, but insisted that the state and local governments were responsible for financing them. In principle, this arrangement was prudent. Who better knew the needs of the people than their local government? In practice, however, the policy was doomed for a very simple reason: state and local governments had no money.
Most significantly, Hoover steadfastly refused to make federal aid available directly to individuals. He feared that big-government intervention would compromise the liberty, integrity, and initiative of the individual citizen.
In the meantime, shanty towns constructed of boxes and crates bloomed like evil flowers across the American landscape to house the homeless. “Hoovervilles” they were called, and the “great humanitarian’s” reputation was forever tarnished. Unjustly—but understandably—blame for the Great Depression was laid entirely at the doorstep of the White House.
The Verge of Revolution
America had had its share of boom and bust before. But the Great Depression of the 1930s was unparalleled in magnitude, scope, and duration. Fifteen to 25 percent of the work force was jobless. Families lost their savings, their homes, and even their lives-to disease and sometimes starvation. The Depression was not confined to the United States. It gripped the world, especially those citadels of democracy, the Western capitalist nations. Worst of all, the Depression showed no signs of letup. As the unrelieved years went by, want and misery became a way of life.
Discontent and despair bred revolution. The nations of Europe seethed-especially Germany, already economically crippled by the punitive Treaty of Versailles, now brought to its knees by the Depression. First in Italy, then in Germany—and to a lesser extent, elsewhere in Europe—two major ideologies came into violent opposition: Fascism versus Communism. To most Americans, both of these totalitarian ideologies seemed clearly repugnant to democracy.
Democracy was not putting beans on the table, however. Among intellectuals and even some radical workers, Communism seemed to offer a viable alternative to what was apparently the nation’s failed capitalism. Slowly but surely, the gunpowder scent of revolution tainted American air.
The Epoch of FDR
Born to wealth in Hyde Park, New York, in 1882, Franklin Delano Roosevelt never experienced poverty firsthand. The product of Groton School, Harvard University, and Columbia University Law School, young Roosevelt became a Wall Street lawyer. He devoted some of his time to free legal work for the poor and by this means came to know and sympathize with the plight of the so-called common man. FDR worked his way to prominence in Dutchess County (New York) politics and was appointed assistant secretary of the Navy in the Wilson administration. In 1920, FDR was running mate to James M. Cox, the democratic presidential hopeful who lost to Republican Warren G. Harding.
Then came Roosevelt’s darkest—and finest—hour. In the summer of 1921, while resident at his summer home on Campobello Island (New Brunswick, Canada), Roosevelt was felled by polio. Desperately ill, he recovered, but was left paralyzed from the waist down. His mother urged him to retire to the family’s Hyde Park estate. His wife, the remarkable Eleanor Roosevelt—FDR’s distant cousin and the niece of Theodore Roosevelt—persuaded FDR to return to public life. With great personal strength and courage, Roosevelt underwent intensive physical therapy, learned to stand using iron leg braces, to walk with the aid of crutches, and even to drive his own car. He ran for governor of New York and won, bringing to the state such progressive measures as the development of public power utilities, civil-service reform, and social-welfare programs.
When he decided to run for president, Roosevelt faced opponents who objected that he was neither intellectually nor (obviously!) physically fit for the White House.
FDR proved his opponents dead wrong. Having overcome the odds in his personal fight against polio, Roosevelt set about proving himself capable of overcoming the even grimmer odds in the national fight to lift America out of Depression. FDR flew to Chicago and addressed the 1932 Democratic National Convention, pledging to deliver to the American people a “New Deal,” a federally funded, federally administered program of relief and recovery.
Government Redefined
When he accepted the 1932 Democratic presidential nomination, Franklin D. Roosevelt declared: “I pledge you, I pledge myself, to a new deal for the American people.” Following Roosevelt’s inauguration, the phrase “New Deal” caught on in a way that transformed the federal government. Within the first three months of the new administration—dubbed with Napoleonic grandeur by the press the “Hundred Day”—FDR introduced to Congress his relief legislation. The legislation promised to stimulate industrial recovery, assist individual victims of the Depression (something Hoover and all previous presidents had refused to do), guarantee minimum living standards, and help avert future crises.
Most of the actual legislation of the Hundred Days was aimed at providing immediate relief. The Federal Deposit Insurance Corporation (FDIC) was established to protect depositors from losing their savings in the event of bank failure. The measure did much to restore confidence in the nation’s faltering banking system. The Federal Reserve Board, which regulates the nation’s money supply, was strengthened. The Home Owners Loan Corporation was established to supply funds to help beleaguered home owners avoid foreclosure. A Federal Securities Act reformed the regulation of stock offering and trading—an effort to avert the kind of wild speculation that helped bring about the crash of 1929.
Next, the Civilian Conservation Corps—the CCC—put thousands of men to work on projects in national forests, parks, and public lands; the National Recovery Act (NRA), most sweeping and controversial of the early New Deal legislation, established the Public Works Administration (PWA) and imposed upon industry a strict code of fair practice.
The act set minimum wages and maximum working hours and gave employees the right to collective bargaining. Private industry fought FDR tooth and nail on the NRA, but such was the depth of the Depression crisis and the personal charisma of Roosevelt that the administration prevailed.
In sharp contrast to the world’s communist regimes, the Roosevelt administration showed equal concern for the industrial worker and the agricultural worker. Farmers were in a desperate plight during the Depression, and in May 1933, FDR prevailed on Congress to create the Agricultural Adjustment Administration, a program of production limits and federal subsidies. Perhaps the single most visible manifestation of the New Deal program of agricultural reform was the establishment of the Tennessee Valley Authority (TVA), which built roads, great dams, and hydroelectric plants in seven of the nation’s poorest states.
More programs followed the Hundred Days. In 1935, the Works Progress Administration (WPA) was formed, which put 8.5 million people to work between 1935 and 1943—when the program ended. The employees built public projects out of concrete and steel, and they also created cultural works through the Federal Theater Project, the Federal Writers’ Program, and the Federal Art Project. The most enduring of the New Deal programs was Social Security, introduced in 1935, which created old-age pension funds through payroll and wage taxes. None of the New Deal programs brought full recovery, but they helped restore confidence in the American government and propelled Roosevelt to a landslide second-term victory over Republican Alf Landon in 1936. A “Second New Deal” went into effect, which concentrated on labor reforms.