Jump to: navigation, search

Essay: New Ordeal

3,245 bytes removed, 21:37, October 12, 2011
/* Unemployment worse than in 1933 */
When FDR was inaugurated for his second term in March 1937 [[national income]], [[payroll]]s, and industrial production<ref>League of Nations Monthly Bulletin of Statistics, June, 1936. Percentage change 1929 to March 1936, United States -21.8%, rank number 13.</ref> were still 20 per cent below the 1929 figure and construction was still only about one third what it had been in 1929 when the nation had a booming economy due to massive speculation that would ultimately lead to the stock market crash. By June, 1937 the [[U.S. Treasury]] reported relief payments were less than in the same period the preceding 12 months, however this was not so. The Treasury merely shifted relief payments to other accounts. Relief payments were, in fact, larger than the year before. The Treasury made a practice of "cooking the books" to produce phony numbers. Stock prices declined and by September the dire reality could be no longer hidden. By the end of October 1937 the market crashed. The U.S budget was running a [[deficit]] at the time of $300,000,000 a month.
===Unemployment worse than in 1933===
In January 1938, John D. Biggers in a study commissioned by President Roosevelt reported there were 10,870,000 people out of work, more than when FDR first took office in 1933.
<ref>[,9171,758790,00.html ''Two Schemes''], Time magazine, Jan. 10, 1938.</ref> Roosevelt realized that all the “pump priming” and spending $17 billion had failed. Despite the billions added to the debt, the Depression was back and Roosevelt was at the center of a tug-of-war with advocates of spending like [[Harry Hopkins]], [[Leon Henderson]] and [[Rex Tugwell]] on one side, and opponents like [[Henry Morgenthau]] on the other.
DNC Chairman [[Jim Farley]] recalled on a meeting with Roosevelt on March 28, 1938. FDR told Farley he would have "to go in for pump priming or relief," but complained he could not spend on local projects because the states and cities did not want any more buildings and institutions which they would have to pay for in perpetuity. States and localities were having trouble paying the bills on New Deal projects already built. Many [[WPA]] projects approved by the federal government were abandoned because the states and cities could not raise the money to support and occupy them.
In the 1938 Congressional elections Harry Hopkins oversaw spending programs with no regard for economic utility to meet the immediate political necessities of an election, but the growth of debt could not go on indefinitely. And the New Dealers problem was complicated by pressure from within the Democratic party to balance the budget.
New capital made available for investment amounted to $348,000,000 in 1935. This was less than 1/10th of the amount available in 1929. By contrast, the British economy had nearly recovered to its 1929 levels by 1935, and the amount available for investment was almost twice as much as the United States.
{| style="background:white; color:blue" border="1" class="wikitable"
! Year
! United States <ref>Standard Statistics Co., ''New Money for Operating and Producing.''</ref>
! Great Britain <ref>Midland Bank, London, ''New Issues for British Companies,'' converted from £ to $ at $4.8665.</ref>
| 1927
| $3,201,000,000
| $710,509,000
| 1928
| 3,062,000,000
| 983,033,000
| 1929
| 3,668,000,000
| 759,174,000
| 1930
| 3,039,000,000
| 394,186,500
| 1931
| 1,006,000,000
| 155,728,000
| 1932
| 321,000,000
| 248,191,500
| 1933
| 177,000,000
| 296,856,500
| 1934
| 356,000,000
| 350,388,000
| 1935
| 348,000,000
| 666,710,500
The country now reached a greater crisis than in 1933. The [[National debt]], which was $22 billion when Roosevelt took office and largely a heritage of [[World War I]], now was $37 billion. Taxes had been more than doubled by Roosevelt.
By April 1938 [[unemployment]] reached several thousand more than when Roosevelt was elected in 1932. This was now Roosevelt’s Double Dip Depression. Voices began to speak up suggesting after all Hoover may have known what he was doing, but here, nine years after the Depression began the fundamental condition of the country was no further advanced than it was at the end of Hoover's three year struggle with it.
===The Second New Deal===