Franklin Delano Roosevelt won the presidency from Herbert Hoover. By the time he
took office 80% of state banks had shut their doors, with many declaring bank holidays,
to prevent citizens from getting their money out.  (Who would have believed bankers
would do such a thing?)

This page is dedicated to Christopher, the first person who asked for it.

The New Deal: 1933-1941

Franklin Delano Roosevelt won the presidency from Herbert Hoover. By the time he took office 80% of state banks had shut their doors, with many declaring bank holidays, to prevent citizens from getting their money. The Hundred Days after inauguration was a time of  lots of action. Congress had already submitted to the states and repealed Prohibition. FDR announced he would execute broad executive power to overcome the crisis. Congress would not argue against any of the Presidents plan. The president cut federal salaries 15%, cut veterans benefits, thus worsening the problem. On March 5 he declared a bank holiday, took to the airways and made a fireside chat explaining the banking crisis to the country. A plan for reopening the banks under Treasury Department licenses was developed. The Federal Deposit Insurance Corporation (FDIC) was formed to insure depositors money. FDR forced the separation of investment banking and commercial banking and created the Home Owners Loan Corporation (HOLC) to refinance mortgages and prevent foreclosures. The Federal Securities Act gave the Federal Trade Commission the right to demand full disclosure about new stock issues. The National Recovery Administration (NRA) was formed by the National Industrial Recovery Act, to allow manufacturers -- supervised by the NIRA government intelligentsia -- to get together and fix prices and other fair business practices. It was mandatory for American business men to live with the fixed prices and fixed fair business practices, somewhat like more compulsory plans developed by Adolf Hitler and Benito Mussolini. Those businesses who followed the government dictates got to fly the "We Do Our Part" Blue Eagle symbol. Of course, business used their NIRA monopolistic powers to raise power and limit production, rather than hire new workers. The NIRA also set up the Public Works Administration (PWA) authorized to spend $3.3 billion. The Civilian Conservation Corps got $500 million to hire people to do reforestation and other conservation projects. The Civil Works Administration (CWA) provided make work projects for cities. The NIRA did help unions organize, especially John L. Lewis' Committee for Industrial Organizations (CIO). The Agricultural Adjustment Administration (AAA) was setup in May 1933 to aid the farmers. It required farmers to limit production and gave subsidies to growers of wheat, cotton, tobacco, pork and other staples, by taxing those who got the products to market. The idea was to return nature and progress to its 1910-1914 years when there was more parity between industrial and farm prices. Farmers were paid for what they did not grow. Farmers and politicians became so mutually dependent on these payments that they continued for another 60 years, maintaining a long term unrealistic market for farmers' products. Henry A. Wallace, FDR's Agricultural Secretary decided to pay farmers to destroy crops; the food that city dwellers needed, the food that share croppers grew and the products that the railroads shipped. The Tennessee Valley Administration (TVA) was set up to expand upon the damn building started during The Great War, at Muscle Shoals on the Tennessee River, just north of the Georgia Border on the Tennessee River. Senator George W. Norris of Nebraska and other cheap power enthusiasts had believed the government could operate the power site better than capitalists. They were successful in preventing the government turnover of the plant. Now, FDR expanded the concept with the TVA Act in May 1933 — opposed by Wendell Wilkie of the Commonwealth and Southern Corporation. The TVA built dams, power lines and transmission lines. They produced and sold nitrates (fertilizers) and undertook flood control, soil conservation, and reforestation projects while improving river navigation. It eradicated malaria and educated the public in the use of electricity and fertilizers. This authority, perhaps born of need, lingered for years, even after the need was long gone. The New Deal Spirit soared. Bureaucrats were hired and given free reign to experiment. Washington DC had become -- in 1000 days -- the ultimate do-good paradise. Roosevelt had few ideas, himself, but his Brain Trust worked overtime. The Brain Trust was lead by Raymond Moley and included Rexford G. Tugwell and Adolph A. Berle Jr, all from Columbia University. The New Deal was anti-banker and pro-inflation (populist) and disliked competition and weakened anti-trust enforcement (TR's New Nationalism). Louis D. Brandeis held considerable persuasive power with FDR and New Deal labor policies were based upon Wilson's Great War's War Labor Board. There was a clash between Roosevelt's big spenders, led by Tugswell, against those led by Lewis Douglas, director of the budget. Special interest groups swarmed into Washington to make sure they could get the most from Roosevelt and his bureaucrats. The special interest groups were so successful that William E. Leuchtenburg invented the phrase "interest group democracy" to legitimize the new special interest dictatorship. Ellis W. Hawley, another historian coined the word "counterorganization" to define the monopoly power, previously given to industry, now being given to farm and labor groups. Whatever words were used it remained then — as it does now — a political system in which the unorganized majority had no serious voice in government. The NRA and the AAA got their operating money from the disorganized majority. The Unemployed were at 9 million in 1934, despite the big spending. Malcolm X believed 1934 was the worst year. Still, Americans liked to see action, and the mid term elections saw the Democrats increase their majority in both houses. In May 1933 the Federal Emergency Relief Administration (FERA), headed by Harry L. Hopkins, got $500 million to be dispensed through state relief programs. Mr. Hopkins went for more money, championing a Civil Works Administration (CWA) to put 4 million of the unemployed into business building and repairing roads and public buildings, teaching, decorating, writing and recording (for example, the Gullah language). Hopkins was a great spender. In five months he spent $1 billion and Roosevelt canceled the program. Literature in the Depression included John Dos Passos USA (1930-1936), describing famous people like Carnegie, Rudolp Valentino, Frank Lloyd Wright and William Jennings Bryan. John Steinbeck 's Grapes of Wrath (1939) described the Joads, driven from their farm by the drought and on the road looking for a laborer jobs. He also wrote Tortilla Flats (1935) and The Long Valley (1938). Thomas Wolfe wrote Look Homeward Angel (1929), Of Time and the River (1939), The Web and the Rock (1939) and You Can't Go Home Again (1940). William Faulkner wrote The Sound and the Fury , As I Lay Dying , Sanctuary



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