Roosevelt – The Great Depression

Franklin Delano Roosevelt, a Democrat, came from a wealthy New York family and was educated at Harvard University. He entered politics in 1910 and elected Governor of New York State in 1928 after surviving a bout of polio.

The Democrats choose Roosevelt as their candidate to oppose Hoover in the 1932 Presidential Election. During the campaign he said, “I pledge you, I pledge myself, to a New Deal for the American people”. He promised to use government money and power to rebuild the economy.

Roosevelt won with a landslide victory. One of the main reasons for this was that the previous President, Hoover, had not controlled, or attempts to help the economic downfall of the United States. Hoover thought matters would right themselves and therefore took little action. In 1932 Hoover did eventually find some money to help a number of struggling banks and businesses, but he refused to set up federal relief programmes to aid the unemployed. As the Depression dragged on, a protest movement developed among the hungry and the unemployed. Many Americans had lost confidence in President Hoover and were looking for new leadership that arrived in the form of Roosevelt.

Once elected, Roosevelt had many problems facing him and his party that the American people expected him to solve.

* Most of the populace was unemployed. Over 12 million Americans did not have a job, and this figure was increasing by 12,000 every day. Families relied on charity to stay alive and breadlines were common in every city.

* Over 1 million people were homeless. In 1932, 250,000 Americans stopped paying their mortgages and were evicted from their homes.

Because of this, many became ‘hobos’ or tramps while others moved to waste ground to build huts from scraps of wood and metal, these unhealthy camps were known as ‘Hoovervilles’ after Herbert Hoover.

* Total economic collapse followed – With so many people out of work the cities could not afford to buy all the food the farmers produced; and by 1932 – 1 in 2 farm owners had been evicted.

* Many veterans living in poverty demanded bonuses immediately. Their annoyance at not receiving their money came to a head when, during summer 1932, veterans from all over the country went to Washington capital to protest. Many hijacked trains to get there and fought with police who tried to stop them.

In June of the same year, more than 20,000 veterans had arrived in Washington and set up a Hooverville opposite the White House.

Congress voted against paying the veterans their bonuses and Hoover ordered the army to evict the veterans from their Hooverville.

The army thought it was necessary to bring in 4 companies of infantry, 4 troops of cavalry, a machine gun squadron and 6 tanks to disperse the veterans.

In the ensuing chaos 2 veterans died and 1000 were injured.

* Bank failures were another large problem. During the depression, many people with savings in the bank took the money out to stay alive.

This led to new problems; small banks did not have enough money to pay their savers and went bankrupt.

After a bank failed, savers with deposits in other banks rushed to take out their savings from other banks, leading to more banks going bankrupt- A total of 1616 banks in 1932.

* Many people affected by the depression organised protests in hope to improve conditions.

In Iowa, the farmers union organised strikes to stop food reaching markets. This aimed to create food shortage and increase food prices.

Roosevelt took a tough stance towards these areas of difficulty, and in his inauguration speech he stated that “the only thing we have to fear is fear itself”. To affect change in America, Roosevelt need more power than he already had. In 1917 congress had allowed President Wilson to change laws without asking and this ‘trading with the enemy” act was still effective when Roosevelt came into power. Roosevelt realised he could use this act to speed the healing process for America’s economy.

Roosevelt proposed, and Congress passed, a series of measures designed to provide relief for the unemployed and promote economic recovery. Roosevelt also hoped that the New Deal would help America’s problems by bringing about a number of long-term reforms.

Two days after his inauguration on the 6th of March, Roosevelt ordered all banks to close for a long bank holiday while he and a cabinet worked out a way to solve the problem.

Most Americans were glad to see Roosevelt dealing with the problem although some though he was becoming a dictator and leading America down the road to socialism.

By 1933, the number of people unemployed was about 13 million. To get America moving again, these people had to have work and be earning money, allowing them buy products from others.

Roosevelt decided that a program of temporary jobs should be put in place, as well as food distribution to the hungry and low-interest loans given to home-owners.

Roosevelt’s most famous actions against the depression were the Alphabet Agencies; so called because all were condensed into a set of initials for ease of use.

* The Civilian Conservation Corps (C.C.C.) was set up in 1933 and was a popular Roosevelt idea. Unemployed young men were given six-month jobs in the countryside working on projects concerned with forestry, flood control and soil conservation. By doing this, they received a small wage, food, clothing, and shelter. By the end of the 1930’s, two and a half million men had been in the C.C.C.

* Another popular program of reform for that year was the Agricultural Adjustment Act (A.A.A.). It was designed to help farmers who were suffering from low incomes, with many being forced off their land. The government paid the farmers to grow less, which forced prices of food up. Crop prices gradually recovered, and within four years the average farm income had almost doubled.

* One of the most important New Deal measures was the National Industrial Recovery Act (N.I.R.A.). This comprised of two sections; the first being the Public Works Administration (P.W.A.), which organised and provided money for the building of useful projects: schools, hospitals, roads, bridges etc. The Works Progress Administration (W.P.A.) was another successful New Deal agency that funded a number of projects to create employment, although these were on a smaller scale than the P.W.A.

The other section on the N.I.R.A was the National Recovery Administration (N.R.A.) which recommended an eight-hour day, together with a minimum wage, to help create jobs.

Employers who accepted these recommendations were allowed to display a ‘Blue Eagle’ sign on their goods. Over 2 million people embraced the new standards and benefited because of it; the public was encouraged to buy only from businesses that had joined the scheme.

* Roosevelt’s many plans were new, and his kinds of tactics for dealing with depression was regarded as blunt by many people. His other plans however were over-shadowed when he decided to set up the Tennessee Valley Authority (T.V.A.) in order to help a poor, badly eroded region which was also prone to flooding. The T.V.A built a network of dams to control the floods and give the area a supply of cheap electricity. This attracted industry and gradually the whole region began to prosper.

* Finally, in 1935, the Social Security Act provided pensions for the elderly and benefits for the unemployed, as well as providing help for dependant mothers and children and the handicapped.

Roosevelt brought about partial recovery to the United States with the New Deal and ‘Pump priming’ strategy. It was not until the Second World War and the demand for American goods however, that the American economy returned to its former prosperity.