HISTORY 1DD3 Chapter Notes - Chapter 24: Federal Music Project, John Dos Passos, Federal Emergency Relief Administration
22 Jun 2018
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Chp 24 Identifications
The Great Depression begins (Oct 1929~)
● Background Info: Stock prices had risen steadily in the 1920s, but a frenzied upsurge
in 1928-29 meant a big bubble was waiting to burst.
● In 1918 and again in Sept 1919, the Federal Reserve Board tried to dampen
speculation by raising interest rates, but with speculators willing to pay up to 20%,
banks continued to loan freely.
● The collapse finally came on Oct 24, a day that became called “Black Thursday”.
As prices fell, some stocks became literally worthless.
● A weak upswing in 1930 suggested the beginning of recovery. But instead of
recovering, as many predicted, the economy fell into full-scale depression.
● Economists point to agricultural depression, wage increases less in proportion to to
price increases, and assembly-line methods that encouraged overproduction as
causes, believe the lagging of railroads, steel, textiles, and mining made recovery
difficult. Economists also criticize the Reserve Board’s tight-money policies.
Response to the Depression
● Hoover went against historical belief that depressions were natural and urged
business leaders to maintain wages and employment.
● In Oct 1930, he set up the Emergency Committee for Employment.
● In 1931, he persuaded the nation’s largest banks to form the National Credit
Corporation, which would help hard-pressed smaller banks.
● These measures did little good. Hoover, dreading a budget deficit, also increased
taxes. As the depression worsened, public opinion turned against Hoover. A section
of Central Park where jobless men lived was dubbed Hoover Valley.
● Midwestern farmers organized a boycott movement called Farmers’ Holiday
Association. The most alarming protest came from WW1 veteran bonus marchers
who demanded immediate payment of bonuses intended over 20 years. When
Congress refused and some stirkers stayed put, Hoover called in the army.
● American fiction also exuded despair, as shown in John Dos Passos’ The 42nd
Parallel (1930).
● In 1932, Hoover put aside his principles and set up the Reconstruction Finance
Corporation (RFC) to make loans to major economic institutions. However, Hoover
gained little political benefit.
● As Hoover endlessly claimed that prosperity was “just around the corner,” his media
relations soured. An administration launched with hope in 1929 was falling apart.
Election of 1932
● The Republicans renominated Hoover as the democrats scented victory.
● The Democrats rejected 1928 candidate Al Smith and nominated Franklin D.
Roosevelt. Roosevelt’s campaign offered no clear program, but instead promised “a
new deal for the American people.”
● Roosevelt exuded confidence, and above all, was not Hoover. Both houses went
heavily democratic, and FDR won in a landslide.
President XXXII: Franklin D. Roosevelt
● FDR seemed an unlikely popular hero, coming from wealthy origins (like distant
cousin TR). He allied with the Democrats' urban-immigrant wing and had introduced
innovative measures in NY. FDR dedicated his administration to helping people in
crisis and had no definite agenda.
● FDR brought in a circle of advisers nicknamed the brain trust. With FDR listening
from all sides, no one person dominated the administration's New Deal.
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● FDR's cabinet was diverse, including Postmaster Gen. James Farley (top political
adviser), Secretary of Labor Frances Perkins (first woman cabinet member), and
Interior Secretary Harold Ickes. Eleanor Roosevelt, FDR's wife, played a key
role, always supporting her wheelchair-ridden husband.
The Hundred Days and the First New Deal
● Between Mar 9 and its adjournment on June 16, 1933, Congress enacted over a
dozen new measures. (see below sections)
Emergency Banking Act (1933) and Federal Deposit Insurance Corporation (FDIC)
● FDR addressed the banking crisis by ordering all banks to close on Mar 5, and
reopening healthy banks on Mar 9 under the Emergency Banking Act.
● The act also set up procedures for dealing with failed banks and increased govt.
oversight of banks. Congress also created the FDIC to insure all banks $5k.
National Industrial Recovery Act (NIRA) (1933)
● In order to provide jobs and stimulate the economy, the National Industrial Recovery
Act appropriated 3.3b for heavy-duty public-works programs.
● Section 7a, thanks to Robert Wagner, guaranteed workers’ right to unionize and
bargain collectively.
● The Public Works Administration (PWA) was headed by Harold Ickes.
● However, as unemployment continued, Harry Hopkins suggested direct federal
relief programs rather than going through state and local agencies.
● FDR named Hopkins to a temporary Civil Works Administration (CWA) in 1933.
● FDR feared creating a permanent underclass living on welfare, and abolished the
CWA when warm weather returned in 1934.
● Sidenote: The PWA did pick up steam in 1935-36, a period known as the Second
New Deal. Over 30k bridges, damns, and buildings were built under the PWA.
● The National Recovery Administration (NRA) - which brought business leaders
together and drafted codes of "fair competition" - was headed by former War
Industries Board member Hugh Johnson.
● They rallied behind a blue eagle logo with the slogan "We Do Our Part".
● As the unity spirit faded, violations increased. Small businesses argued it hurt them,
while the administration itself became bogged down with trivial codes.
● In 1935, the Supreme Court ruled the NRA unconstitutional for it gave president
Congress' regulatory powers and as it regulated intrastate commerce reserved for
individual states.
Federal Securities Act (1933)
● The Reconstruction Finance Corporation remained active and proved a powerful
financial resource for corporate America. It also reinforced the incorporation of
businesses in FDR's "all American team."
● On the other hand, the Federal Securities Act took a more regulatory approach to
businesses and required corporations to inform the Federal Trade Commission
fully on all stocks and made executives liable for any mistakes.
● In 1934, Congress created the Securities and Exchange Commission to enforce
the new regulations.
Federal Emergency Relief Act (1933)
● The Home Owners Loan Corporation and Farm Credit Administration assisted
urban and rural Americans struggling to survive.
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● The Civilian Conservation Corps (CCC) employed jobless youths in govt. projects,
combining work relief with environ. programs. By 1935, 0.5m were earning a crucial
$35 a month to families with little or no income.
● The principal relief measure, the Federal Emergency Relief Act, appropriated $500m
for state and local relief agencies. Harry Hopkins was chosen as the administrator,
and soon became a powerful New Deal figure.
Tennessee Valley Authority (TVA) (1933)
● Background Info: A hydroelectric station was built during WW1, and was continued in
the 1920s as a facility that would power a plant nearby.
● The TVA advanced the economic and social development of the entire Tennessee R.
and provided electricity, water recreation, and erosion prevention to poor regions.
● The TVA remained as one of the popular and enduring achievements.
Agricultural Adjustment Acts (1933, 1938)
● In 1933, Congress set up the Agriculture Adjustment Administration (AAA).
● Under this law, producers of major agriculture commodities received subsidies for
cutting production, which were funded by a tax on food processors.
● In 1938, Congress set up new procedures for limiting production of farm goods and a
system to provide farmers with warehouses to supply surplus crops.
● Farm income rose 50% during FDR's first term. However, by reducing production,
the individual southern sharecropper was actually hurt.
● Some victims resisted through the Southern Tenant Farmers' Union.
● Advocates of a more class based farm policy soon gained support as the Great Plains
were turned into a Dust Bowl by drought.
● Battered by debt and drought, many “Okies” gave up and abandoned houses and
farms. Survivors never forgot the experience.
Charles E. Coughlin, Francis E. Townsend, and Huey Long
● Rising frustration found expression in 1934 through over 2000 strikes.
● Coughlin and his followers attacked FDR as a great "betrayer and liar".
● Townsend proposed the govt. pay $200/month to all retired citizens, and require
them to spend the money within 30 days. The scheme would have bankrupted the
govt., but many rallied behind his call.
● Long preached his "Share Our Wealth" program. This program suggested a 100%
tax on all incomes over $1m and distribution of all fortunes in excess of $5m. He
proclaimed, "Every man a king!" and had 7.5m supporters by 1935. Long was
assassinated that Sept., but his organization survived.
● But other than from reactionaries and radicals, the New Deal remained popular.
● FDR also maintained good relations with the media and set a precedent by appearing
favorably on radio (later presidents would do so on TV).
● FDR also responded vigorously to challenges with a series of bold legislative
initiatives in 1935 and 1936, called the Second New Deal. (see below sections)
This was because FDR’s political advisers feared that supporters of Coughlin,
Townsend, and Long could cost FDR enough votes in 1936.
Emergency Relief Appropriation Act (1935)
● Congress passed the $5b Emergency Relief Appropriation Act and set up the Works
Progress Administration (WPA). Hopkins was placed in charge of the WPA, an
administration that - like the CWA - directly assisted individuals.
● The Federal Writers' Project, Federal Music Project, Federal Theater Project,
and Federal Arts Project made drastic impacts on people.
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Document Summary
Background info: stock prices had risen steadily in the 1920s, but a frenzied upsurge in 1928-29 meant a big bubble was waiting to burst. In 1918 and again in sept 1919, the federal reserve board tried to dampen speculation by raising interest rates, but with speculators willing to pay up to 20%, banks continued to loan freely. The collapse finally came on oct 24, a day that became called black thursday . As prices fell, some stocks became literally worthless. A weak upswing in 1930 suggested the beginning of recovery. But instead of recovering, as many predicted, the economy fell into full-scale depression. Economists point to agricultural depression, wage increases less in proportion to to price increases, and assembly-line methods that encouraged overproduction as causes, believe the lagging of railroads, steel, textiles, and mining made recovery difficult. Economists also criticize the reserve board"s tight-money policies.
