A New Deal and a New War (1930-1941). Complete Idiot’s Guide to American History by Alan Axelrod.

A New Deal and a New War (1930-1941). Complete Idiot’s Guide to American History by Alan Axelrod.

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In This Chapter

The Hoover administration during the Great Depression.

FDR’s New Deal.

An era of “organized crime”.

Approach and outbreak of World War II.

 Herbert Clark Hoover was born on August 10, 1874, the son of a West Branch, Iowa, blacksmith. He learned the meaning of hard work practically from the cradle, and at age 8, he also came to know the tragedy of loss. Orphaned, Hoover was sent to live with an uncle in Oregon and enrolled in the mining engineering program at Stanford University, graduating in 1895. For some 20 years, Hoover traveled the world, earning a fortune as a mining engineer. The Quaker ideals acquired from his uncle prompted him to aid in relief efforts during World War 1, and Hoover earned a reputation as an effective humanitarian. During the period of U.S. participation in the war, Hoover served as food administrator, charged with promoting agricultural production and food conservation. At the end of the war, President Wilson sent Hoover to Europe to direct the American Relief Administration. Hoover served as U.S. secretary of commerce in the cabinets of Warren G. Harding and Calvin Coolidge.

When Coolidge declined to seek a second term (privately observing that an economic disaster was on the way, and he didn’t want any part of it), Hoover easily won election as the nation’s Best president. He ran on the optimistic platform that, if everyone would just put their heads together, poverty would be eliminated in America. The future looked bright. And who should know this better than a man justly hailed as “the great humanitarian”?

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.

Urban War. In the end, it would take the approach of World War II, with its demand for the materials of strife, to end the Great Depression. But years before the United States entered that war, another, different kind of combat was being waged on the streets of the nation’s cities. Prohibition had spawned a gangster culture in the 1920s, which many Americans found colorful, almost romantic. After all, the urban outlaws supplied the public with the good times that government denied them.

Then came St. Valentine’s Day, 1929, the day Al Capone decided to eliminate rival Chicago gangland leader “Bugs” Moran. Capone dispatched gunmen, disguised as policemen, who rounded up seven members of the gang, stood them up against the wall of Moran’s commercial garage, and brutally executed them with Tommy guns. (Moran himself wasn’t present and escaped assassination.) Mobsters had been rubbing one another out for years, but the blatant butchery of the St. Valentine’s Day Massacre finally outraged the public. Capone and other gangsters were no longer viewed as Robin Hoods, but as cold-blooded murderers. Yet, as gangsters became more viciously violent, they also became increasingly organized.

In the same year as the St. Valentine’s Day Massacre, Capone proposed to the gang leaders of New York and other cities that they meet to organize crime throughout the United States. The meeting took place in Atlantic City and included such underworld luminaries as Lucky Luciano, Joe Adonis, Alberto Anastasia, Frank Costello, and Meyer Lansky. The national crime Syndicate was born, consolidating nationwide gambling, prostitution, extortion, and liquor trafficking. After 1933, when the 18th Amendment was repealed, thereby ending Prohibition, the Syndicate began to enter the trade in narcotics, hoping it would replace booze as the public’s illicit substance of choice.

The economic conditions of the 1930s produced at least two durable legacies into American life: one, a federal government that takes an active role in the welfare of its citizens (even today, when many conservative politicians clamor to slash “welfare budgets,” few are foolhardy enough to suggest reducing the Social Security program) and two, organized crime.

A New War. The Great Depression brought the United States close to the brink of revolution, but a deeply ingrained tradition of democratic capitalism, combined with FDR’s ability to restore and maintain faith in the government, averted a violent breakdown. In Europe, also hard hit by the Depression, the people of Italy and Germany hungered not for democracy, but for the strongman leadership promised by a journalist named Benito Mussolini (1883-1945) and a failed artist, sometimes house painter, and full-time political agitator named Adolf Hitler (1889-1945). Exhausted humanity had assumed that the horrors of World War I, combined with the peaceful prosperity of the 1920s, guaranteed the permanent rise of international stability and liberal constitutionalism. But Germany, crippled by the harsh conditions of the Versailles treaty, was robbed of postwar prosperity. Then the Depression drove its people to desperation. In Germany and Italy, militaristic authoritarianism burst into iron blossom with promises of a return to national glory and national prosperity.

Europe Darkens, Then Dies. In Germany, Hitler and his Nazi party won a popular following that propelled him to the position of chancellor under the aged and infirm President Paul von Hindenberg and into absolute dictatorship after Hindenberg’s death in 1934. Hitler took Germany out of the League of Nations in 1933 and, in defiance of the Treaty of Versailles, initiated a massive rearmament program. In 1936, the dictator sent troops into the Rhineland, which had been demilitarized by the Versailles treaty. The League of Nations stood by helplessly, as did the Allies of World War I. Indeed, one of those erstwhile Allies, Italy, openly sided with Nazi Germany. Seeking an easy foreign conquest to solidify popular support, Benito Mussolini, like some monstrous incarnation of a schoolyard bully, sent Italy’s modern army into Africa against Ethiopians who were armed chiefly with spears. Ethiopia collapsed by 1936, and although the nation’s emperor, Haile Salassie (1892-1975), appealed to the League of Nations with great dignity and eloquence, the world body, once again, proved impotent.

Hard on the heels of the Italian conquest of Ethiopia came the Spanish Civil War (193-639), a complex struggle between factions allied with the nation’s liberal-leftist republican government and Fascist-sympathizing rightists led primarily by General Francisco Franco (1892-1975). Hitler and Mussolini eagerly sent military aid to Franco, and Hitler’s Luftwaffe (air force) in particular used Spanish towns as practice targets in preparation for the greater conflict looming on the dark horizon. While Soviet dictator Joseph Stalin (1879-1953) gave military equipment to the Spanish republicans, the United States, Britain, and France—fearing the outbreak of a general war—remained neutral.

Their reluctance was as understandable as it was tragic. After all, in 1914, a tangle of alliances had escalated a local Balkans war into a conflagration that engulfed the world. Yet while the former Allies waffled and waited, Germany and Italy forged the Rome-Berlin Axis in 1936. That same year, in Asia, the Empire of Japan concluded the Anti-Comintern Pact (an alliance against Communism) with Germany; in 1937, Italy signed on to the pact as well. The following year, 1938, Hitler invaded Austria and annexed it to his Third Reich. The year 1938 also saw Hitler’s demand that the Sudetenland—western Czechoslovakia, where many ethnic Germans lived—be joined to the Reich. France and Britain were bound by treaty to defend the territorial integrity of Czechoslovakia, but they nevertheless yielded the Sudetenland to Germany in an effort to “appease” Hitler. British prime minister Neville Chamberlain told the world that the cession of the Sudetenland (the Munich Agreement) insured “peace in our time.”

He was wrong. In 1939, Hitler seized the rest of Czechoslovakia, then took a part of Lithuania and prepared to gobble up the so-called Polish Corridor, a narrow strip of land that separated East Prussia from the rest of Germany. At this time, Mussolini’s Italy annexed Albania. Finally, on September 1, 1939, Germany invaded—and crushed—Poland. France and Britain could no longer stand by. World War II had begun.

Infamy at Pearl. While American eyes focused nervously on Europe, Asia was heating to the point of crisis. Despite a 1922 pledge to respect China’s territorial integrity, Japan invaded Manchuria in 1931 and established the puppet state of Manchuko the following year. The League of Nations protested, resulting in nothing more than Japan’s withdrawal from the organization in 1933. By 1, 93 7, Japan and China were engaged in full-scale war. On September 27, 1940, Japan signed the Tripartite Pact with Italy and Germany, thereby creating the Berlin-Rome-Tokyo Axis.

Although it remained officially neutral, the United States, guided by Roosevelt, edged closer to war. The sale of military supplies was authorized, and then, in March 1941, Congress passed the Lend-Lease Act, permitting the shipment of material to nations whose defense was considered vital to U.S. security—Great Britain and, later, China and the U.S.S.R. In September 1940, the first peacetime draft law in U.S. history had been passed, authorizing the registration of 17 million men. In August and September 1941, U.S. merchant vessels were armed for self-defense. The powder was packed in the keg. All it took was a flame for the war to explode upon America.

It came on December 7, 1941. At 7:50 on that quiet Sunday morning, Japanese aircraft struck without warning at Pearl Harbor, Hawaii, where some 75 major U.S. Navy ships were moored. By 1.0 am, the attack was over.

The next day, President Roosevelt asked Congress for a declaration of war, calling December 7, 1941, a “day which will live in infamy. “ Suddenly, the Great Depression ended in a headlong rush of young men into the armed forces and of others, men as well as women, into the nation’s factories. Industries now tooled up—for the second time in the century—to serve as the “arsenal of democracy.”

The Least You Need to Know

Although unjust, Herbert Hoover is often blamed for having caused the Depression; however, the federal government did not take major steps to bring economic relief until Roosevelt assumed office.

 The massive programs of the New Deal probably averted social breakdown and revolution in the U.S., but it was the economic demands of World War II that finally ended the Great Depression.

Word for the Day. Fascism, a system of government marked by centralization of authority under an absolute dictator, was masterminded in Italy by Benito Mussolini (1883-1945). The name comes from the Latin word fasces, a bundle or rods bound together around an ax, which was the ancient Roman symbol of authority. Communism, as proposed by Karl Marx (1818-83), is a system of collective ownership of property and the collective administration of power for the common good. In practice, Communism is a system of government characterized by state ownership of property and the centralization of authority in a single political party or dictator. Totalitarianism describes any system of government in which the individual is wholly subordinate to the state.

Stats. Despite the New Deal, 9.5 million people remained unemployed by 1939.


Main Event. The Depression-born longing for a bright future was summed up in two great World’s Fairs. The Century of Progress Exhibition of 1933-34, held in Chicago, did much to popularize modern architecture. And the New York World’s Fair of 1939-40 was built around the theme of “The World of Tomorrow”—even as the nightmare of total war broke once again upon Europe.


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