The Morning After

The calamity in Wall Street buried something more than the paper dreams and paper profits of the wildest binge in our history. It buried an era and a way of life. It buried the Get-Rich-Quick idea. It buried the What-The-Hell philosophy behind the dizzy ride so many Americans went on when the postwar kinks were ironed out and the good times came. It brought the nation to its senses: the gray tomorrow had to be faced.

dust stormAnd an odd thing happened: the people turned to Washington. Virtually ungoverned since the war, free to write their own tickets not just in manners and morals but on all levels, free to borrow and burn as they chose, free to speculate on fly-by-night investments while the policing agencies in the capital looked the other way, the people turned to Washington to write some rules and regulations for the next round. The people wanted the government to do something. The eight free-and-easy years of Harding and Coolidge, looking back, suddenly lost their luster.

Where was the government while we were running wild? Where was the government while the seeds of depression were planted? Where was the government while the Great Crash was in the making? That's the kind of question the man in the street began to ask in the wake of the debacle in Wall Street.

farm foreclosureHerbert Hoover did not hurl the forces of government into the breech. He wheeled up the weapon he had used before the crash and during the crash: optimism. The country was "fundamentally sound" that was the word from the capital. Recovery was just around the corner. Influential sections of the business world and all kinds of independent authorities supported this happy view. In the spring of 1930, the Harvard Economic Society took a long look at its graphs and charts and assured the republic that the worst was over: the recession had been checked. The general idea in all the high places was that if we just kept calm and didn't interfere with the wonderful self-healing processes of America's private economy, everything would straighten itself out.

It didn't, of course.

Millions of men lost their jobs the total reached 4,500,000 during 1931 and tripled during 1932. Commodity prices dipped to new lows. The business index showed 50 percent below normal. National income fell to half what it was before the dark October days of 1929. Forty percent of the nation's farms were mortgaged and some long-suffering tillers of the Midwestern soil were threatening violence to ward off any more foreclosures.

Thus the whole edifice of the New Era crumpled into ruin. All the prophets of everlasting prosperity went with it. First, the gods of business, the legend of their infallibility smothered in the ticker tape avalanche. Then, the Great White Fathers in Washington. The nation passed harsh judgments: Warren Harding hadn't governed at all; he just played poker with the boys and hoped they wouldn't steal too much. Calvin Coolidge shut out the world and slept, confident that the businessmen would keep the good times rolling. Herbert Hoover looked the other way as economic disaster struck.

f.d.r.In this setting, the 1932 national election was no contest. Herbert Hoover went into the campaign like a loser. Franklin D. Roosevelt talked about vast social and economic reforms and Hoover protested that "the very foundations of our American system" would be imperiled if the man got in. Roosevelt talked about a New Deal for the "forgotten man" and Hoover inveighed against dangerous new philosophies of government. Roosevelt talked hope and bold action and Hoover was shrouded in despair. Roosevelt talked about a new prosperity and Hoover looked longingly back on the old, the one that didn't stick. Roosevelt won in a landslide. It was a time for a change, and change came with staggering speed.

On Sunday, March 5, the day after his inauguration, the new President smiling, self-assured, surrounded by a daring Brain Trust ordered a fera campbank holiday to furnish a breather for the nation's slowly collapsing banking structure. He got Congress to pass emergency legislation to put the resources of the Federal Reserve System behind the banks to prevent any more shut-downs caused by runs on deposits.

Then the New Dealers launched their massive assault on the depression.

The Agricultural Adjustment Administration cut farm surpluses through production controls and subsidies. The National Industrial Recovery Act (NRA) set up codes of fair practice in industry, boosted wages by raising minimum pay and spread out jobs by shortening working hours. wpa projectThe Federal Emergency Relief Administration (FERA) allocated hundreds of millions of dollars to the states to help sustain the jobless. The Public Works Administration (PWA, later the Works Projects Administration, or WPA) put out billions to create employment on useful construction jobs. The Civilian Conservation Corps (CCC) put unemployed youths into reforestation jobs at $1 a day plus bed and board. The National Labor Board set up the first real playing rules between the unions and management. The Farm Credit Administration and the Home Owners Loan Corporation (HOLC) choked off the rising tide of foreclosures and evictions.

On the other levels, the Roosevelt Administration moved with the same breathtaking speed: the Reconstruction Finance Corporation, set up under Hoover but not much more than a figurehead agency, got vast amounts to lend to private investors. ccc projectTVA, a trail-blazing experiment in low-cost public power, undertook the social and economic development of the Tennessee Valley. The Federal Deposit Insurance Corporation (FDIC) insured individual accounts up to $5,000 to restore confidence in the private savings institutions. The Securities and Exchange Commission (SEC) set up safeguards to protect investors in the stock market. The Federal Public Housing Administration (FPHA) started the first meaningful assault on the slums by subsidizing new, modern, low-rent apartments.

license platePeople made jokes about the way the alphabet was taking such a beating in Washington; there were suggestions that Roosevelt (FDR) would have to stop setting up new government agencies because he was running out of letters. And there were fierce protests too. "New Deal" took on an ugly sound in the board rooms where men looked back with longing on twelve years of delightful non-interference from government. The cry of "Socialism!" issued from high places.

It wasn't Socialism as we knew it then but it was revolution.

It was revolution on the broadest imaginable social and economic levels. It was revolution in government in existing government. It was revolution in thinking. It was revolution in the whole concept of the state's relation to the citizen and responsibility to the citizen in a free republic.

The Lawless Decade set the stage for it. The Lawless Decade brought us up to it willing, eager and in dire necessity. Say that about a time that was wild and whacky and finally tragic but never dull. The twenties weren't wasted at all; the wide and wonderful land came of age.