The Great Depression, Part Twelve
Between 1929 and 1933, the economy suffered some staggering blows. Business investment plummeted by more than 95% from the 1929 level, international trade declined by about 50%, Gross National Product (GNP), used to measure the sum of all goods and services produced by the economy, dropped by nearly 30%, construction spending fell by 78%, the Consumer Price Index (CPI) showed an overall drop in prices by 18%, and the unemployment rate hit 24.9%; that is, 15 million Americans were unemployed, and millions more had only part time work. Even with these stark statistics, in 1932, charitable giving by Americans hit a record amount.
Franklin D. Roosevelt brought a new demeanor to the White House. Unlike the moody, more intellectual Hoover, Roosevelt was smiling, confident and optimistic. Highly respected Supreme Court Justice Oliver Wendell Holmes, after meeting the new president, issued a statement that has, more or less, labeled Roosevelt ever since, “A second class intellect, but a first class temperament.” Seemingly aware of his intellectual limitations, he brought into his administration highly competent advisers who devised a wide variety of plans to combat the Depression. Roosevelt reviewed their plans and then acted to “sell” the ideas to Congress and to the public. He wasn’t a saint, and he could be downright petty and vindictive; a trait that got him into some trouble with the electorate during his second term*, but the good will he had established with the American people trumped his personal faults. He had a knack for politics, a natural feel for what people wanted and what they would support. While Hoover had great difficulty conveying his personal concern for people, Roosevelt excelled at “connecting to people;” and during the Depression, this kind of “national hand holding” was important. Roosevelt had suffered from polio during the 1920s, and he was left essentially unable to walk or even to stand for long periods. His affliction seems to have given him a deep compassion for others, and he carried that compassion into the White House. For a nation suffering with a crippling affliction of its own, that compassion was much needed.**
Roosevelt took action immediately. He called Congress into session and presented a basic plan of action to try to turn the tide against the Depression. The banks were closed, in a bank holiday (a tactic actually devised by many states, not the Federal government), and Americans were assured that the banks that reopened would be safe, that they would have Federal inspections, new regulations, and that deposits would be insured by Uncle Sam, through the FDIC, the Federal Deposit Insurance Corporation. The stock market would have new regulation, too, with margin (credit) requirements being upped to 90%. (Remember in an earlier part of this series, I said that previously, if you bought $1000 worth of stock on margin, you only needed to put down $100. With the new regulations, you would have to put up $900, and thus you held a large equity in the stock, making “margin calls” a rarity.) Many mortgages were helped by the advent of the Federal Housing Administration (FHA) in 1934, which gave Federal insurance to many homeowners. New public works projects, through the Public Works Administration (PWA), put the unemployed to work building schools, highways, and dams. The Civilian Conservation Corps (CCC) cleaned up riverbanks and did reforestation. The Tennessee Valley Authority (TVA) built dams to control flooding and to provide electric power to a large area of the southeastern part of the country where electric service had not yet been made available; thus opening new markets for appliances (you can’t very well sell electric appliances to places that don’t have electricity). Workers were given rights and protections, including minimum wage, regulated work hours, overtime pay, easier union organizing, and better Federal unemployment insurance. Not all programs proved to be politically popular, and the plan that paid farmers NOT to grow as many crops received harsh criticism at a time when many people lacked adequate food. This situation proved to be a tough one, as farmers had often been producing so much, that they were actually hurting themselves, and frequently they had to sell produce at a loss or at the break even point, at best. The Roosevelt administration opted to pay farmers not to grow as much, so as to bring prices for farm produce to the point where farmers would make a profit.
All of these programs and many more that I haven’t touched upon were enacted during Roosevelt’s first two terms. Many business interests and purist capitalists huffed and puffed and stomped about many of the programs designed to help average Americans, and in spite of the hand wringing by these folks, the country survived and Americans didn’t all go around wearing little hammer and sickle insignias, and a red flag was not run up over the White House. FDR helped save their basic system for them.
Roosevelt was not really all that far removed from Hoover’s beliefs, and he feared high deficits on a Keynesian scale. John Maynard Keynes was an economist who pushed the idea of countries spending their way out of depressions, even if they incurred huge budget deficits. Also like Hoover, Roosevelt feared the “dole” mentality; that is, that some unemployed people would develop a lifestyle of taking money from the government and then not wanting to return to work when work was available. In those times, it was called “being on the dole,” an expression seldom heard in our modern times. Unemployment remained very high throughout the 1930s, in the double digits, but life was made easier for the unemployed and low income folks by the new government programs. The basic plan for old age income security was taken from the Hoover administration’s never completed program. The plan was modified and expanded and enacted as Social Security. This was one of those programs that was never properly funded, and it was instituted as a pay as you go system, but it helped many older Americans with their incomes and their dignity in retirement and it continues as a highly popular program to this day.
Now all of this being said, Roosevelt’s program, termed the “New Deal, did NOT end the Depression, as even in 1939, ten years after the start of the Depression, the unemployment rate was more than 14%. The tremendous expenditures made to fight World War Two provided the final push that conquered not only Hitler, Mussolini and Tojo, but also the Great Depression.
* Roosevelt got into some trouble with Americans when he began to try to “purge” members of his own Democratic Party from Congress who disagreed with some of his programs. Further, he tried a move to circumvent the existing Supreme Court by proposing an expansion of the number of justices, a plan that came to be dubbed by the Press and the public, “a court packing scheme.” These unpopular moves and a downturn in what had been a gradually improving economy led to big Republican gains in both houses of Congress in the midterm elections of 1938, but the GOP had been so decimated, that even with these gains, Democrats maintained control of both houses of Congress by hefty margins.
** I recall reading and hearing about when FDR's funeral train or funeral procession (I can't recall the exact details) was passing by mourners, a man was asked if he had known the President, and he said, "No, but he knew me." That one statement tells how FDR related to millions of Americans.
WORD HISTORY:
Dole-This word, closely related to "deal," goes back to Indo European "dail/dhail," which meant "to divide, to part." This gave its Old Germanic offspring "dailiz," with the same general meaning. This then gave Old English (Anglo-Saxon) "dal," with the notion of "divide" giving the meaning "portion or share (of something)." This then became "dol," and with the more specific meaning "something given as charity." By the 20th Century, the term came to be used in England for "government support given to citizens," and thus developed the expression, "on the dole," to mean "someone receiving government aid." "Deal," from the same source, retained the more general meaning "divide, apportion;" thus later used also for cards. The verb form "dole" developed in the 1400s from the noun, and is most common today in the expression "dole out." Common in the other Germanic languages, but more so with the meaning "part, portion, allotment;" thus making these versions more directly related in meaning to "deal." English is the only Germanic language, to my knowledge, to use a variation to mean "government aid." German has "Teil," Low German has "Deel," Dutch has "deel," West Frisian has "diel," Danish, Swedish and Norwegian all have "del." Again, all of these forms generally meaning "part, portion." Icelandic has "deila," but it has come to mean "quarrel;" that is, "a division between people."
Franklin D. Roosevelt brought a new demeanor to the White House. Unlike the moody, more intellectual Hoover, Roosevelt was smiling, confident and optimistic. Highly respected Supreme Court Justice Oliver Wendell Holmes, after meeting the new president, issued a statement that has, more or less, labeled Roosevelt ever since, “A second class intellect, but a first class temperament.” Seemingly aware of his intellectual limitations, he brought into his administration highly competent advisers who devised a wide variety of plans to combat the Depression. Roosevelt reviewed their plans and then acted to “sell” the ideas to Congress and to the public. He wasn’t a saint, and he could be downright petty and vindictive; a trait that got him into some trouble with the electorate during his second term*, but the good will he had established with the American people trumped his personal faults. He had a knack for politics, a natural feel for what people wanted and what they would support. While Hoover had great difficulty conveying his personal concern for people, Roosevelt excelled at “connecting to people;” and during the Depression, this kind of “national hand holding” was important. Roosevelt had suffered from polio during the 1920s, and he was left essentially unable to walk or even to stand for long periods. His affliction seems to have given him a deep compassion for others, and he carried that compassion into the White House. For a nation suffering with a crippling affliction of its own, that compassion was much needed.**
Roosevelt took action immediately. He called Congress into session and presented a basic plan of action to try to turn the tide against the Depression. The banks were closed, in a bank holiday (a tactic actually devised by many states, not the Federal government), and Americans were assured that the banks that reopened would be safe, that they would have Federal inspections, new regulations, and that deposits would be insured by Uncle Sam, through the FDIC, the Federal Deposit Insurance Corporation. The stock market would have new regulation, too, with margin (credit) requirements being upped to 90%. (Remember in an earlier part of this series, I said that previously, if you bought $1000 worth of stock on margin, you only needed to put down $100. With the new regulations, you would have to put up $900, and thus you held a large equity in the stock, making “margin calls” a rarity.) Many mortgages were helped by the advent of the Federal Housing Administration (FHA) in 1934, which gave Federal insurance to many homeowners. New public works projects, through the Public Works Administration (PWA), put the unemployed to work building schools, highways, and dams. The Civilian Conservation Corps (CCC) cleaned up riverbanks and did reforestation. The Tennessee Valley Authority (TVA) built dams to control flooding and to provide electric power to a large area of the southeastern part of the country where electric service had not yet been made available; thus opening new markets for appliances (you can’t very well sell electric appliances to places that don’t have electricity). Workers were given rights and protections, including minimum wage, regulated work hours, overtime pay, easier union organizing, and better Federal unemployment insurance. Not all programs proved to be politically popular, and the plan that paid farmers NOT to grow as many crops received harsh criticism at a time when many people lacked adequate food. This situation proved to be a tough one, as farmers had often been producing so much, that they were actually hurting themselves, and frequently they had to sell produce at a loss or at the break even point, at best. The Roosevelt administration opted to pay farmers not to grow as much, so as to bring prices for farm produce to the point where farmers would make a profit.
All of these programs and many more that I haven’t touched upon were enacted during Roosevelt’s first two terms. Many business interests and purist capitalists huffed and puffed and stomped about many of the programs designed to help average Americans, and in spite of the hand wringing by these folks, the country survived and Americans didn’t all go around wearing little hammer and sickle insignias, and a red flag was not run up over the White House. FDR helped save their basic system for them.
Roosevelt was not really all that far removed from Hoover’s beliefs, and he feared high deficits on a Keynesian scale. John Maynard Keynes was an economist who pushed the idea of countries spending their way out of depressions, even if they incurred huge budget deficits. Also like Hoover, Roosevelt feared the “dole” mentality; that is, that some unemployed people would develop a lifestyle of taking money from the government and then not wanting to return to work when work was available. In those times, it was called “being on the dole,” an expression seldom heard in our modern times. Unemployment remained very high throughout the 1930s, in the double digits, but life was made easier for the unemployed and low income folks by the new government programs. The basic plan for old age income security was taken from the Hoover administration’s never completed program. The plan was modified and expanded and enacted as Social Security. This was one of those programs that was never properly funded, and it was instituted as a pay as you go system, but it helped many older Americans with their incomes and their dignity in retirement and it continues as a highly popular program to this day.
Now all of this being said, Roosevelt’s program, termed the “New Deal, did NOT end the Depression, as even in 1939, ten years after the start of the Depression, the unemployment rate was more than 14%. The tremendous expenditures made to fight World War Two provided the final push that conquered not only Hitler, Mussolini and Tojo, but also the Great Depression.
* Roosevelt got into some trouble with Americans when he began to try to “purge” members of his own Democratic Party from Congress who disagreed with some of his programs. Further, he tried a move to circumvent the existing Supreme Court by proposing an expansion of the number of justices, a plan that came to be dubbed by the Press and the public, “a court packing scheme.” These unpopular moves and a downturn in what had been a gradually improving economy led to big Republican gains in both houses of Congress in the midterm elections of 1938, but the GOP had been so decimated, that even with these gains, Democrats maintained control of both houses of Congress by hefty margins.
** I recall reading and hearing about when FDR's funeral train or funeral procession (I can't recall the exact details) was passing by mourners, a man was asked if he had known the President, and he said, "No, but he knew me." That one statement tells how FDR related to millions of Americans.
WORD HISTORY:
Dole-This word, closely related to "deal," goes back to Indo European "dail/dhail," which meant "to divide, to part." This gave its Old Germanic offspring "dailiz," with the same general meaning. This then gave Old English (Anglo-Saxon) "dal," with the notion of "divide" giving the meaning "portion or share (of something)." This then became "dol," and with the more specific meaning "something given as charity." By the 20th Century, the term came to be used in England for "government support given to citizens," and thus developed the expression, "on the dole," to mean "someone receiving government aid." "Deal," from the same source, retained the more general meaning "divide, apportion;" thus later used also for cards. The verb form "dole" developed in the 1400s from the noun, and is most common today in the expression "dole out." Common in the other Germanic languages, but more so with the meaning "part, portion, allotment;" thus making these versions more directly related in meaning to "deal." English is the only Germanic language, to my knowledge, to use a variation to mean "government aid." German has "Teil," Low German has "Deel," Dutch has "deel," West Frisian has "diel," Danish, Swedish and Norwegian all have "del." Again, all of these forms generally meaning "part, portion." Icelandic has "deila," but it has come to mean "quarrel;" that is, "a division between people."
Labels: deficit spending, Election of 1938, English, etymology, Franklin D. Roosevelt, Germanic languages, government programs, John Maynard Keynes, Social Security, the Great Depression, the New Deal
posted by Randy at 2:03 PM
2 Comments:
So 'dole' and 'deal' are just variations of one another. The terrible stats about the depression are frightening. Americans were tough, and so was FDR.
Roosevelt inspired Americans. He was a great leader, in spite of the things said against him by the right wing.
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