Theodor Gilbert Morell (22 July 1886 – 26 May 1948) was a German doctor known for acting as Adolf Hitler's personal physician. Morell was well known in Germany for his unconventional treatments. He assisted Hitler daily in virtually everything he did for several years and was beside Hitler until the last stages of the Battle of Berlin. Morell was granted high awards by Hitler, and became a multi-millionaire from business deals with the Nazi government made possible by his status.

Early years[edit]

Morell was the second son of a primary school teacher, born and raised in the small village of Trais-Münzenberg in Upper Hesse.^[1] He studied medicine in Grenoble and Paris, then trained in obstetrics and gynecology in Munich in 1910. On 23 May 1913, he completed his doctoral degree and was fully licensed as a physician.^[1] He served as a ship's doctor until 1914, when he volunteered for service at the Front during the First World War. Morell served as an army battalion medical officer until 1917.^[1] By 1918, he was in Berlin with his own medical practice, and in 1920 he married Hannelore Moller, a wealthy actress. He furnished his office with the latest medical technology through his wife's fortune.^[2] He targeted his unconventional treatments at an upscale market, his practice becoming fashionable for treatment of skin and venereal diseases,^[3] and turned down invitations to be personal physician to both the Shah of Persia and the King of Romania.^[4]

Career[edit]

Hitler's physician[edit]

Morell joined the Nazi Party when Hitler came to power in 1933.^[1] In 1935, Hitler's personal photographer, Heinrich Hoffmann, was successfully treated by Morell. Hoffmann told Hitler that Morell had saved his life.^[5] Hitler met Morell in 1936, and Morell began treating Hitler with various commercial preparations, including a combination of vitamins and hydrolyzed E. coli bacteria called Mutaflor, which successfully treated Hitler's severe stomach cramps.^[1]^[5] Through Morell's prescriptions, a leg rash which Hitler had developed also disappeared.^[5] Hitler was convinced of Morell's medical genius and Morell became part of his social inner circle.^[6]^[7]

Some historians have attempted to explain this by citing Morell's reputation in Germany for success in treating syphilis, along with Hitler's own (speculated) fears of the disease, which he associated closely with Jews. Others have commented on the possibility that Hitler had visible symptoms of Parkinson's disease, especially towards the end of the war.^[8]

Hitler recommended Morell to others of the Nazi leadership, but most of them, including Hermann Göring and Heinrich Himmler, dismissed Morell as a quack. As Albert Speer related in his autobiography:^[9]

In 1936, when my circulation and stomach rebelled...I called at Morell's private office. After a superficial examination, Morell prescribed for me his intestinal bacteria, dextrose, vitamins and hormone tablets. For safety's sake I afterward had a thorough examination by Professor von Bergmann, the specialist in internal medicine at Berlin University. I was not suffering from any organic trouble, he concluded, but only from nervous symptoms caused by overwork. I slowed down my pace as best I could and the symptoms abated. To avoid offending Hitler I pretended that I was carefully following Morell's instructions, and since my health improved, I became for a time Morell's showpiece. – Albert Speer, Inside the Third Reich (1969)

When Hitler was troubled with grogginess in the morning, Morell would inject him with a solution of water mixed with a substance from several small, gold-foiled packets, which he called "Vitamultin". Hitler would arise, refreshed and invigorated. Hitler gave a packet to Himmler, who immediately became suspicious and instead secretly ordered one of his SS physicians, Ernst-Günther Schenck, to have it tested in a laboratory. It was found to contain methamphetamine. On at least one occasion, Hitler ordered his private train stopped so that Morell could inject him without worrying about the train jostling.

Speer characterised Morell as an opportunist, who once he achieved status as Hitler's physician, became extremely careless and lazy in his work. By 1944, Morell developed a hostile rivalry with Dr. Karl Brandt, who had been attending Hitler since 1934. Though criticized by Brandt and other physicians, Morell was always "restored to favor".^[10]

Morell was not popular with Hitler's entourage, who complained about the doctor's crude table manners, poor hygiene and body odor. Hitler is said to have responded "I do not employ him for his fragrance, but to look after my health."^[11] Hermann Göring called Morell Der Reichsspritzenmeister, ("Reich Master of Injections"), and variations on that theme,^[12]^[13] implying that Morell resorted to using drug injections when faced with medical problems, and overused them.

Substances administered to Hitler[edit]

Morell kept a medical diary of the drugs, tonics, vitamins and other substances he administered to Hitler, usually by injection (up to 20 times per day) or in pill form. Most were commercial preparations, some were Morell's own mixes. Since some of these compounds are considered toxic, historians have speculated that Morell inadvertently contributed to Hitler's deteriorating health. The fragmentary list (below) of some 74 substances (in 28 different mixtures)^[14] administered to Hitler include psychoactive drugs such as heroin as well as commercial poisons. Among the compounds, in alphabetical order, were:^[7]

Brom-Nervacit: bromide, Sodium diethylbarbiturate, Pyramidon, since August 1941 a spoonful of this tranquilizer almost every night, to counteract stimulation from methamphetamine and to allow sleep.^[7]
Cardiazol and Coramine: since 1941 for leg oedema.
Chineurin: Quinine-containing preparation for common colds and flu.
Cocaine and adrenaline (via eye drops)^[15]
Coramine: Nikethamide injected when unduly sedated with barbiturates. In addition, Morell would use Coramine as part of an all-purpose "tonic".
Cortiron: Desoxycorticosterone Acetate IM injections for muscle weaknesses, influencing carbon hydrate metabolism.
Doktor Koster's Antigaspills: 2–4 pills before every meal, for a total of 8–16 tablets a day,^[16] since 1936 Belladonna extractum and Strychnos nux vomica in high doses, for meteorism.^[17]^[18]
Enbasin: Sulfonamide, intragluteal 5cc, for diverse infections.
Euflat: Bile extract, Radix Angelica, Aloes, Papaverine, Caffeine, Pancreatine, Fel tauri – pills, for meteorism, and treatment of digestion disorders
Eukodal: heavy doses Oxycodone, for intestinal spasms, painkiller^[19]
Eupaverin: Moxaverine, an isoquinoline derivative for intestinal spasms and colics.
Glucose: 1938 till 1940 every third day Glucose injections 5 and 10%, for potentiation of the Strophanthus effect
Glyconorm: metformin,^[7] Metabolism Enzymes (Cozymase I and II), Amino acids, Vitamins – injectable solution as a strengthener tonic
Homatropin: Homatropine. HBr 0.1g, NaCl 0.08g; Distilled water added 10 ml. Eye drops for right eye problems.
Intelan: twice a day Vitamins A, D3 and B12 – tablets as a strengthener, tonic.
Camomilla Officinale: chamomile – intestinal enemata, on the patient's personal request
Luitzym: after each meal Enzymes with Cellulase, Hemicellulases, Amylase, Proteases for intestinal problems, meteorism.
Mutaflor: Emulsion of Escherichia coli-strains – enteric coated tablets for improvement of intestinal flora. They were prescribed to Hitler for flatulence in 1936, the first unorthodox drug treatment from Morell; bacteria cultured from human feces, see: "E. coli")^[20]
Omnadin: Mixture of protein compounds, biliar lipids and animal fat, taken at the onset of infections (together with Vitamultin).
Optalidon: Caffeine, Propyphenazone – tablets at the beginning of infections (together with Vitamultin)
Orchikrin: an extract of bovine testosterone, pituitary gland, and glycerophosphate, as a tonic, strengthener. Marketed also as an aphrodisiac.^[18]
Penicilline-Hamma: Penicillin – powder Topical antibiotic. After the attempted assassination of July 20, 1944 to treat his right arm.
Pervitin: methamphetamine injections for mental depression and fatigue^[7]^[18]
Progynon B-Oleosum: Estradiol Valerate, Benzoic ester of follicle hormone, for Improvement of the circulation in the gastric mucosa.
Prostacrinum: two ampoules every second day for a short period in '43, extract of seminal vesicles and prostate – injected IM for mental depression^[18]
Prostophanta: Strophantine 0.3 mg, Glucose, Vitamin B, Nicotinic acid – IM heart glycoside, strengthener.
Septoid: intravenous injections of 10 cc of 3% iodine (in potassium iodide form) with 10 cc of 20% glucose, two or three times a day, to improve heart's condition and the altered Second Sound.[1]
Strophantin: '41 to '44 – cycle of 2 weeks of homeopathic Strophanthus gratus glycoside 0.2 mg per day for coronary sclerosis.
Sympatol: oxedrine tartrate since '42, 10 drops daily for increasing the cardiac minute volume
Testoviron: Testosterone propionate as a tonic, strengthener.
Tonophosphan: '42 to '44, Phosphoric preparation – SC tonic, strengthener
Ultraseptyl: Sulfonamide for respiratory infections
Veritol: since March '44 Hydroxyphenyl-2-methylamino-propane – eyedrops for left eye treatment
Vitamultin-Calcium: Caffeine, Vitamins.

An almost complete listing of the drugs used by Morell, wrote historian Hugh Trevor-Roper, was compiled after the war from his own meticulous daily records unlikely to have been exaggerated.^[14]

SMERSH

Vozhd
Generalissimus
Joseph Stalin
Vozhd; Generalissimus; Joseph Stalin
Иосиф Сталин; იოსებ სტალინი
	1937 portrait of Stalin used in state propaganda
General Secretary of the; Communist Party of the Soviet Union
	In office; 3 April 1922 – 16 October 1952
Preceded by	Vyacheslav Molotov; (as Responsible Secretary)
Succeeded by	Georgy Malenkov (de facto)
Chairman of the Council of; People's Commissars of the Soviet Union
	In office; 6 May 1941 – 15 March 1946
Preceded by	Vyacheslav Molotov
Succeeded by	Himself (as Chairman of the Council of Ministers)
Chairman of the Council of; Ministers of the Soviet Union
	In office; 15 March 1946 – 5 March 1953
President	Mikhail Kalinin; Nikolai Shvernik;
First deputies	Nikolai Voznesensky; Vyacheslav Molotov; Nikolai Bulganin;
Preceded by	Himself (as Chairman of the Council of People's Commissars)
Succeeded by	Georgy Malenkov
Member of the Russian Constituent Assembly
	In office; 25 November 1917 – 20 January 1918
Served alongside	show 11 others
Preceded by	Constituency established
Succeeded by	Constituency abolished
Constituency	Petrograd Metropolis
Minister of Defence
	In office; 15 March 1946 – 3 March 1947
Preceded by	Himself (as People's Commissar of Defense of the Soviet Union)
Succeeded by	Nikolai Bulganin
People's Commissar for Nationalities of the RSFSR
	In office; 8 November 1917 – 7 July 1923
Preceded by	Position established
Succeeded by	Position abolished
People's Commissar of Defense of the Soviet Union
	In office; 19 July 1941 – 25 February 1946
Preceded by	Semyon Timoshenko
Succeeded by	Himself (as People's Commissar of the Armed Forces of the Soviet Union)
Personal details
Born	Ioseb Besarionis dze Jughashvili; 18 December [O.S. 6] 1878; Gori, Tiflis Governorate, Russian Empire (now Georgia)
Died	5 March 1953 (aged 74); Kuntsevo Dacha, Moscow, Soviet Union (now Russia)
Resting place	Lenin's Mausoleum, Moscow (1953–1961); Kremlin Wall Necropolis, Moscow (from 1961);
Nationality	Russian (until 1917); Soviet;
Political party	Bloc of Communists and Non-Partisans: CPSU (1952–1953); ;
Other political; affiliations	RSDLP (1898–1903); RSDLP (Bolsheviks) (1903–1918); RCP (Bolsheviks) (1918–1925); Bloc of Communists and Non-Partisans (from 1936) AUCP (Bolsheviks) (1925–1952); ;
Spouse(s)	Ekaterine Svanidze (m. 1906; died 1907) Nadezhda Alliluyeva (m. 1919; died 1932)
Children	Yakov Dzhugashvili; Vasily Stalin; Svetlana Alliluyeva; Artyom Sergeyev (adopted);
Parents	Besarion Jughashvili (father); Ekaterine Geladze (mother);
Education	Tbilisi Spiritual Seminary
Occupation	Politician
Cabinet	Stalin I–II [es] Stalin's Third Government [es]
Religion	None (atheism); Formerly Georgian Orthodox Christianity;
Signature
Nickname(s)	Koba
Military service
Allegiance	Russian Empire; Soviet Russia; Soviet Union;
Branch/service	Imperial Russian Army; Red Army; Soviet Armed Forces;
Years of service	1916–1917; 1918–1921; 1941–1953;
Rank	Marshal of the Soviet Union (1943);
Commands	Southern Front (1918–1920) (commissar); Southwestern Front (1920) (commissar); Soviet Armed Forces (1941–1953) (Supreme Commander);
Battles/wars	Russian Revolution October Revolution; ; Russian Civil War Battle of Tsaritsyn; Soviet-Georgian war; Polish–Soviet War; ; August uprising; Sino-Soviet War; Xinjiang Wars Kumul Rebellion; Soviet invasion; Islamic Revolt; ; First Soviet-Japanese War; Winter War; World War II (Great Patriotic War) Operation Barbarossa; Anglo-Soviet invasion of Iran; Battle of Moscow; Battle of Stalingrad; Continuation War; Berlin Offensive; Second Soviet-Japanese War; ; Iran Crisis; Xinjiang Wars Ili Rebellion; ; Korean War;
Awards	See list
	show Central institution membership show Other offices held Leader of the Soviet Union; ← Lenin; Malenkov→;

Main Directorate of Counter-Intelligence "SMERSH"
Главное управление контрразведки СМЕРШ; СМЕРШ
Military counter-intelligence overview
Formed	14 April 1943
Preceding agencies	Directorate of Special Departments within NKVD USSR; III Main Directorate within MGB USSR;
Dissolved	4 May 1946
Type	Military counter-intelligence
Jurisdiction	Soviet Union newly liberated and newly occupied territories (World War II)
Headquarters	Lubyanka (4th and 6th floors) Moscow, Soviet Union
Motto	Death to Spies!
Parent department	State Defense Committee
Parent Military counter-intelligence	State Defense Committee

Theodor Morell
Theodor Morell
	(undated photograph)
Born	Theodor Gilbert Morell; 22 July 1886; Trais-Münzenberg, Germany
Died	26 May 1948 (aged 61); Tegernsee, Bavaria, Allied-occupied Germany
Occupation	Physician
Employer	Adolf Hitler
Known for	Service as Adolf Hitler's personal physician
Spouse(s)	Hannelore Morell (m. 1920⁠–⁠1948)

From Wikipedia, the free encyclopedia

SMERSH (Russian: СМЕРШ) was an umbrella organization for three independent counter-intelligence agencies in the Red Army formed in late 1942 or even earlier, but officially announced only on 14 April 1943. The name SMERSH was coined by Joseph Stalin. The formal justification for its creation was to subvert the attempts by Nazi German forces to infiltrate the Red Army on the Eastern Front.^[3]^[4]

The official statute of SMERSH listed the following tasks to be performed by the organisation: counter-intelligence, counter-terrorism, preventing any other activity of foreign intelligence in the Red Army; fighting "anti-Soviet elements" in the Red Army; protection of the front lines against penetration by spies and "anti-Soviet elements"; investigating traitors, deserters, and self-inflicted wounds in the Red Army; and checking military and civil personnel returning from captivity.

The organisation was officially in existence until 4 May 1946,^[1]^[2] when its duties were transferred back to the MGB.^[5] The head of the agency throughout its existence was Viktor Abakumov, who rose to become Minister of State Security in the postwar years.

Joseph Stalin

From Wikipedia, the free encyclopedia

Joseph Vissarionovich Stalin^[g] (born Ioseb Besarionis dze Jughashvili;^[d] 18 December [O.S. 6 December] 1878^[1] – 5 March 1953) was a Georgian revolutionary and Soviet political leader who ruled the Soviet Union from 1922 until his death in 1953. He held power as General Secretary of the Communist Party of the Soviet Union (1922–1952) and Chairman of the Council of Ministers of the Soviet Union (1941–1953). Initially governing the country as part of a collective leadership, he consolidated power to become a dictator by the 1930s. Ideologically adhering to the Leninist interpretation of Marxism, he formalised these ideas as Marxism–Leninism, while his own policies are called Stalinism.

Born to a poor family in Gori in the Russian Empire (now Georgia), Stalin attended the Tbilisi Spiritual Seminary before joining the Marxist Russian Social Democratic Labour Party. He edited the party's newspaper, Pravda, and raised funds for Vladimir Lenin's Bolshevik faction via robberies, kidnappings and protection rackets. Repeatedly arrested, he underwent several internal exiles. After the Bolsheviks seized power in the October Revolution and created a one-party state under the new Communist Party in 1917, Stalin joined its governing Politburo. Serving in the Russian Civil War before overseeing the Soviet Union's establishment in 1922, Stalin assumed leadership over the country following Lenin's death in 1924. Under Stalin, socialism in one country became a central tenet of the party's dogma. As a result of his Five-Year Plans, the country underwent agricultural collectivisation and rapid industrialisation, creating a centralised command economy. Severe disruptions to food production contributed to the famine of 1932–33. To eradicate accused "enemies of the working class", Stalin instituted the Great Purge, in which over a million were imprisoned and at least 700,000 executed between 1934 and 1939. By 1937, he had absolute control over the party and government.

Stalin promoted Marxism–Leninism abroad through the Communist International and supported European anti-fascist movements during the 1930s, particularly in the Spanish Civil War. In 1939, his regime signed a non-aggression pact with Nazi Germany, resulting in the Soviet invasion of Poland. Germany ended the pact by invading the Soviet Union in 1941. Despite initial catastrophes, the Soviet Red Army repelled the German invasion and captured Berlin in 1945, ending World War II in Europe. Amid the war, the Soviets annexed the Baltic states and Bessarabia and North Bukovina, subsequently establishing Soviet-aligned governments throughout Central and Eastern Europe and in parts of East Asia. The Soviet Union and the United States emerged as global superpowers and entered a period of tension, the Cold War. Stalin presided over the Soviet post-war reconstruction and its development of an atomic bomb in 1949. During these years, the country experienced another major famine and an antisemitic campaign that culminated in the doctors' plot. After Stalin's death in 1953, he was eventually succeeded by Nikita Khrushchev, who subsequently denounced his rule and initiated the de-Stalinisation of Soviet society.

Widely considered to be one of the 20th century's most significant figures, Stalin was the subject of a pervasive personality cult within the international Marxist–Leninist movement, which revered him as a champion of the working class and socialism. Since the dissolution of the Soviet Union in 1991, Stalin has retained popularity in Russia and Georgia as a victorious wartime leader who cemented the Soviet Union's status as a leading world power. Conversely, his regime has been described as totalitarian, and has been widely condemned for overseeing mass repression, ethnic cleansing, wide-scale deportation, hundreds of thousands of executions, and famines that killed millions.

Heinz Linge

From Wikipedia, the free encyclopedia

Heinz Linge
Linge in 1935
Born	23 March 1913 Bremen, German Empire
Died	9 March 1980 (aged 66) Hamburg, West Germany
Allegiance	Nazi Germany
Service/branch	Schutzstaffel
Years of service	1933–45
Rank	Obersturmbannführer
Unit	1st SS Division Leibstandarte SS Adolf Hitler; Führerbegleitkommando
Battles/wars	World War II Battle of Berlin (POW)

Heinz Linge (23 March 1913 – 9 March 1980) was a German SS officer who served as a valet for German Führer Adolf Hitler. Linge was present in the Führerbunker on 30 April 1945, when Hitler committed suicide.

Early life and education[edit]

Linge was born in Bremen, Germany. He was employed as a bricklayer prior to joining the SS in 1933. He served in the Leibstandarte SS Adolf Hitler (LSSAH), Hitler's bodyguard. In 1934, when he was part of No. 1 Guard to Hitler's residence on the Obersalzberg near Berchtesgaden, Linge was selected to serve at the Reich Chancellery.^[1] By the end of the war, he had obtained the rank of SS-Obersturmbannführer (lieutenant colonel).

Valet to Hitler[edit]

On 24 January 1935, Linge was chosen to be a valet for Hitler. He was one of three valets at that time. In September 1939, Linge replaced Karl Wilhelm Krause as chief valet for Hitler.^[2] Linge worked as a valet in the Reich Chancellery in Berlin, at Hitler's residence near Berchtesgaden, and at Wolfsschanze in Rastenburg. He stated that his daily routine was to wake Hitler each day at 11.00am and provide morning newspapers and messages. Linge would then keep him stocked with writing materials and spectacles for his morning reading session in bed. Hitler would then dress himself to a stopwatch with Linge acting as a "referee". He would take a light breakfast of tea, biscuits and an apple and a vegetarian lunch at 2.30pm. Dinner with only a few guests present was at 8.00pm.^[3] As Hitler's valet, Linge was also a member of the Führerbegleitkommando which provided personal security protection for Hitler.^[4] By 1944, he was also head of Hitler's personal service staff. Besides accompanying Hitler on all his travels, he was responsible for the accommodations; all the servants, mess orderlies, cooks, caterers and maids were "subordinate" to Linge.^[2]

Panic of 1857

From Wikipedia, the free encyclopedia

Bank run on the Seamen's Savings' Bank during the Panic of 1857

The Panic of 1857 was a financial panic in the United States caused by the declining international economy and over-expansion of the domestic economy. Because of the invention of the telegraph by Samuel F. Morse in 1844, the Panic of 1857 was the first financial crisis to spread rapidly throughout the United States.^[1] The world economy was also more interconnected by the 1850s, which also made the Panic of 1857 the first worldwide economic crisis.^[2] In Britain, the Palmerston government circumvented the requirements of the Bank Charter Act 1844, which required gold and silver reserves to back up the amount of money in circulation. Surfacing news of this circumvention set off the Panic in Britain.^[3]

Beginning in September 1857, the financial downturn did not last long, but a proper recovery was not seen until the onset of the American Civil War in 1861.^[4] The sinking of SS Central America contributed to the panic of 1857, as New York banks were awaiting a much-needed shipment of gold. American banks did not recover until after the Civil War.^[5] After the failure of Ohio Life Insurance and Trust Company, the financial panic quickly spread as businesses began to fail, the railroad industry experienced financial declines, and hundreds of workers were laid off.^[6]

Because the years immediately preceding the Panic of 1857 were prosperous, many banks, merchants, and farmers had seized the opportunity to take risks with their investments, and, as soon as market prices began to fall, they quickly began to experience the effects of financial panic.^[4]

Results[edit]

The result of the Panic of 1857 was that the largely-agrarian southern economy, which had few railroads, suffered little, but the northern economy took a significant hit and made a slow recovery. The area affected the most by the Panic was the Great Lakes region, and the troubles of that region were "quickly passed to those enterprises in the East that depended upon western sales".^[25] After approximately a year, much of the economy in the North and the entire South had recovered from the Panic.^[26]

By the end of the Panic, in 1859, tensions between the North and South regarding the issue of slavery in the United States were increasing. The Panic of 1857 encouraged those in the South who believed the North needed the South to keep a stabilized economy, and southern threats of secession were temporarily quelled. Southerners believed that the Panic of 1857 made the North "more amenable to southern demands" and would help to keep slavery alive in the United States.^[25]

According to Kathryn Teresa Long, the religious revival of 1857–1858 led by Jeremiah Lanphier began among New York City businessmen in the early months of the Panic.^[27]^{[page needed]}

Early 20th century[edit]

Economic growth and the 1910 break[edit]

The period from 1890 to 1910 was one of rapid economic growth of above 4%, in part due to rapid population growth. However, a sharp break in the growth rate to around 2.8% occurred from 1910 to 1929. Economists are uncertain what combination of supply and demand factors caused the break, but productivity growth was strong, enabling the labor cost per unit of output to decline from 1910 to 1929. The growth rate in hours worked fell 57% compared to the decline in the growth rate of output of 27%. It is generally accepted that the new technologies and more efficient business methods permanently shifted the supply and demand relationship for labor, with labor being in surplus (except during both world wars when the economy was engaged in war-time production and millions of men served in the armed forces). The technologies that became widespread after 1910, such as electrification, internal combustion powered transportation and mass production, were capital saving. Total non-residential fixed business fell after 1910 due to the fall of investment in structures.^[248]

Industry, commerce and agriculture[edit]

Two of the most transformative technologies of the century were widely introduced during the early decades: electrification, powered by high pressure boilers and steam turbines and automobiles and trucks powered by the internal combustion engine.^[224]^[249] ^[250]

Chain stores experienced rapid growth.^[232]

Standardization was urged by the Department of Commerce for consumer goods such as bedspreads and screws. A simplified standardization program was issued during World War I.^[232]

Electrification[edit]

Electrification was one of the most important drivers of economic growth in the early 20th century. The revolutionary design of electric powered factories caused the period of the highest productivity growth in manufacturing. There was large growth in the electric utility industry and the productivity growth of electric utilities was high as well.^[232]

At the turn of the 20th century electricity was used primarily for lighting and most electric companies did not provide daytime service. Electric motors that were used in daytime, such as the DC motors that powered street railways, helped balance the load, and many street railways generated their own electricity and also operated as electric utilities. The AC motor, developed in the 1890s, was ideal for industrial and commercial power and greatly increased the demand for electricity, particular during daytime.^[91]

Electrification in the U.S. started in industry around 1900, and by 1930 about 80% of power used in industry was electric. Electric utilities with central generating stations using steam turbines greatly lowered the cost of power, with businesses and houses in cities becoming electrified.^[91] In 1900 only 3% of households had electricity, increasing to 30% by 1930. By 1940 almost all urban households had electricity. Electrical appliances such as irons, cooking appliances and washing machines were slowly adopted by households. Household mechanical refrigerators were introduced in 1919 but were in only about 8% of households by 1930, mainly because of their high cost.^[224]

The electrical power industry had high productivity growth. Many large central power stations, equipped with high pressure boilers and steam turbine generators began being built after 1913. These central stations were designed for efficient handling of coal from the layout of the rail yards to the conveyor systems. They were also much more fuel efficient, lowering the amount of fuel per kilowatt-hour of electricity to a small fraction of what it had been. In 1900 it took 7 lbs coal to generate one kilowatt hour. In 1960 it took 0.9 lb/kw hr.^[251]

Electric street railways[edit]

Electric street railways developed into a major mode of transportation, and electric inter-urban service connected many cities in the Northeast and Midwest. Electric street railways also carried freight, which was important before trucks became widely introduced.^[230] The widespread adoption of the automobile and motor bus halted the expansion of the electric street railways during the 1920s.^[256]

Electrification

From Wikipedia, the free encyclopedia

Electrification is the process of powering by electricity and, in many contexts, the introduction of such power by changing over from an earlier power source.

The broad meaning of the term, such as in the history of technology, economic history, and economic development, usually applies to a region or national economy. Broadly speaking, electrification was the build-out of the electricity generation and electric power distribution systems that occurred in Britain, the United States, and other now-developed countries from the mid-1880s until around 1950 and is still in progress in rural areas in some developing countries. This included the transition in manufacturing from line shaft and belt drive using steam engines and water power to electric motors.^[1]^[2]

The electrification of particular sectors of the economy is called by terms such as factory electrification, household electrification, rural electrification or railway electrification. It may also apply to changing industrial processes such as smelting, melting, separating or refining from coal or coke heating, or chemical processes to some type of electric process such as electric arc furnace, electric induction or resistance heating, or electrolysis or electrolytic separating.

History of electrification[edit]

The earliest commercial uses of electricity were electroplating and the telegraph.

Development of magnetos, dynamos and generators[edit]

Faraday disk, the first electric generator. The horseshoe-shaped magnet (A) created a magnetic field through the disk (D). When the disk was turned, this induced an electric current radially outward from the center toward the rim. The current flowed out through the sliding spring contact m, through the external circuit, and back into the center of the disk through the axle.

In the years 1831–1832, Michael Faraday discovered the operating principle of electromagnetic generators. The principle, later called Faraday's law, is that an electromotive force is generated in an electrical conductor that is subjected to a varying magnetic flux, as for example, a wire moving through a magnetic field. He also built the first electromagnetic generator, called the Faraday disk, a type of homopolar generator, using a copper disc rotating between the poles of a horseshoe magnet. It produced a small DC voltage.

Around 1832, Hippolyte Pixii improved the magneto by using a wire wound horseshoe, with the extra coils of conductor generating more current, but it was AC. André-Marie Ampère suggested a means of converting current from Pixii's magneto to DC using a rocking switch. Later segmented commutators were used to produce direct current.^[4]

William Fothergill Cooke and Charles Wheatstone developed a telegraph around 1838-40. In 1840 Wheatstone was using a magneto that he developed to power the telegraph. Wheatstone and Cooke made an important improvement in electrical generation by using a battery-powered electromagnet in place of a permanent magnet, which they patented in 1845.^[5] The self-excited magnetic field dynamo did away with the battery to power electromagnets. This type of dynamo was made by several people in 1866.

The first practical generator, the Gramme machine, was made by Z. T. Gramme, who sold many of these machines in the 1870s. British engineer R. E. B. Crompton improved the generator to allow better air cooling and made other mechanical improvements. Compound winding, which gave more stable voltage with load, improved the operating characteristics of generators.^[6]

The improvements in electrical generation technology in the 19th century increased its efficiency and reliability greatly. The first magnetos only converted a few percent of mechanical energy to electricity. By the end of the 19th century the highest efficiencies were over 90%.

Electric lighting[edit]

Arc lighting[edit]

Yablochkov's demonstration of his brilliant arc lights at the 1878 Paris Exposition along the Avenue de l'Opéra triggered a steep sell off of gas utility stocks.

Sir Humphry Davy invented the carbon arc lamp in 1802 upon discovering that electricity could produce a light arc with carbon electrodes. However, it was not used to any great extent until a practical means of generating electricity was developed.

Carbon arc lamps were started by making contact between two carbon electrodes, which were then separated to within a narrow gap. Because the carbon burned away, the gap had to be constantly readjusted. Several mechanisms were developed to regulate the arc. A common approach was to feed a carbon electrode by gravity and maintain the gap with a pair of electromagnets, one of which retracted the upper carbon after the arc was started and the second controlled a brake on the gravity feed.^[7]

Arc lamps of the time had very intense light output – in the range of 4000 candlepower (candelas) – and released a lot of heat, and they were a fire hazard, all of which made them inappropriate for lighting homes.^[4]

In the 1850s, many of these problems were solved by the arc lamp invented by William Petrie and William Staite. The lamp used a magneto-electric generator and had a self-regulating mechanism to control the gap between the two carbon rods. Their light was used to light up the National Gallery in London and was a great novelty at the time. These arc lamps and designs similar to it, powered by large magnetos, were first installed on English lighthouses in the mid 1850s, but the power limitations prevented these models from being a proper success.^[8]

The first successful arc lamp was developed by Russian engineer Pavel Yablochkov, and used the Gramme generator. Its advantage lay in the fact that it didn't require the use of a mechanical regulator like its predecessors. It was first exhibited at the Paris Exposition of 1878 and was heavily promoted by Gramme.^[9] The arc light was installed along the half mile length of Avenue de l'Opéra, Place du Theatre Francais and around the Place de l'Opéra in 1878.^[10]

British engineer R. E. B. Crompton developed a more sophisticated design in 1878 which gave a much brighter and steadier light than the Yablochkov candle. In 1878, he formed Crompton & Co. and began to manufacture, sell and install the Crompton lamp. His concern was one of the first electrical engineering firms in the world.

Incandescent light bulbs[edit]

Various forms of incandescent light bulbs had numerous inventors; however, the most successful early bulbs were those that used a carbon filament sealed in a high vacuum. These were invented by Joseph Swan in 1878 in Britain and by Thomas Edison in 1879 in the US. Edison’s lamp was more successful than Swan’s because Edison used a thinner filament, giving it higher resistance and thus conducting much less current. Edison began commercial production of carbon filament bulbs in 1880. Swan's light began commercial production in 1881.^[11]

Swan's house, in Low Fell, Gateshead, was the world's first to have working light bulbs installed. The Lit & Phil Library in Newcastle, was the first public room lit by electric light,^[12]^[13] and the Savoy Theatre was the first public building in the world lit entirely by electricity.^[14]

Electric lighting[edit]

Arc lighting[edit]

Yablochkov's demonstration of his brilliant arc lights at the 1878 Paris Exposition along the Avenue de l'Opéra triggered a steep sell off of gas utility stocks.

Sir Humphry Davy invented the carbon arc lamp in 1802 upon discovering that electricity could produce a light arc with carbon electrodes. However, it was not used to any great extent until a practical means of generating electricity was developed.

Carbon arc lamps were started by making contact between two carbon electrodes, which were then separated to within a narrow gap. Because the carbon burned away, the gap had to be constantly readjusted. Several mechanisms were developed to regulate the arc. A common approach was to feed a carbon electrode by gravity and maintain the gap with a pair of electromagnets, one of which retracted the upper carbon after the arc was started and the second controlled a brake on the gravity feed.^[7]

Arc lamps of the time had very intense light output – in the range of 4000 candlepower (candelas) – and released a lot of heat, and they were a fire hazard, all of which made them inappropriate for lighting homes.^[4]

In the 1850s, many of these problems were solved by the arc lamp invented by William Petrie and William Staite. The lamp used a magneto-electric generator and had a self-regulating mechanism to control the gap between the two carbon rods. Their light was used to light up the National Gallery in London and was a great novelty at the time. These arc lamps and designs similar to it, powered by large magnetos, were first installed on English lighthouses in the mid 1850s, but the power limitations prevented these models from being a proper success.^[8]

The first successful arc lamp was developed by Russian engineer Pavel Yablochkov, and used the Gramme generator. Its advantage lay in the fact that it didn't require the use of a mechanical regulator like its predecessors. It was first exhibited at the Paris Exposition of 1878 and was heavily promoted by Gramme.^[9] The arc light was installed along the half mile length of Avenue de l'Opéra, Place du Theatre Francais and around the Place de l'Opéra in 1878.^[10]

British engineer R. E. B. Crompton developed a more sophisticated design in 1878 which gave a much brighter and steadier light than the Yablochkov candle. In 1878, he formed Crompton & Co. and began to manufacture, sell and install the Crompton lamp. His concern was one of the first electrical engineering firms in the world.

Incandescent light bulbs[edit]

Various forms of incandescent light bulbs had numerous inventors; however, the most successful early bulbs were those that used a carbon filament sealed in a high vacuum. These were invented by Joseph Swan in 1878 in Britain and by Thomas Edison in 1879 in the US. Edison’s lamp was more successful than Swan’s because Edison used a thinner filament, giving it higher resistance and thus conducting much less current. Edison began commercial production of carbon filament bulbs in 1880. Swan's light began commercial production in 1881.^[11]

Swan's house, in Low Fell, Gateshead, was the world's first to have working light bulbs installed. The Lit & Phil Library in Newcastle, was the first public room lit by electric light,^[12]^[13] and the Savoy Theatre was the first public building in the world lit entirely by electricity.^[14]

Central power stations and isolated systems[edit]

Electricity grid simple- North America

The first central station providing public power is believed to be one at Godalming, Surrey, U.K. autumn 1881. The system was proposed after the town failed to reach an agreement on the rate charged by the gas company, so the town council decided to use electricity. The system lit up arc lamps on the main streets and incandescent lamps on a few side streets with hydroelectric power. By 1882 between 8 and 10 households were connected, with a total of 57 lights. The system was not a commercial success and the town reverted to gas.^[15]

The first large scale central distribution supply plant was opened at Holborn Viaduct in London in 1882.^[16] Equipped with 1000 incandescent lightbulbs that replaced the older gas lighting, the station lit up Holborn Circus including the offices of the General Post Office and the famous City Temple church. The supply was a direct current at 110 V; due to power loss in the copper wires, this amounted to 100 V for the customer.

Within weeks, a parliamentary committee recommended passage of the landmark 1882 Electric Lighting Act, which allowed the licensing of persons, companies or local authorities to supply electricity for any public or private purposes.

The first large scale central power station in America was Edison's Pearl Street Station in New York, which began operating in September 1882. The station had six 200 horsepower Edison dynamos, each powered by a separate steam engine. It was located in a business and commercial district and supplied 110 volt direct current to 85 customers with 400 lamps. By 1884 Pearl Street was supplying 508 customers with 10,164 lamps.^[17]

By the mid-1880s, other electric companies were establishing central power stations and distributing electricity, including Crompton & Co. and the Swan Electric Light Company in the UK, Thomson-Houston Electric Company and Westinghouse in the US and Siemens in Germany. By 1890 there were 1000 central stations in operation.^[7] The 1902 census listed 3,620 central stations. By 1925 half of power was provided by central stations.^[18]

Load factor & isolated systems[edit]

Electricity Grid Schematic English

One of the biggest problems facing the early power companies was the hourly variable demand. When lighting was practically the only use of electricity, demand was high during the first hours before the workday and the evening hours when demand peaked.^[19] As a consequence, most early electric companies did not provide daytime service, with two-thirds providing no daytime service in 1897.^[20]

The ratio of the average load to the peak load of a central station is called the load factor.^[19] For electric companies to increase profitability and lower rates, it was necessary to increase the load factor. The way this was eventually accomplished was through motor load.^[19] Motors are used more during daytime and many run continuously. (See: Continuous production.) Electric street railways were ideal for load balancing. Many electric railways generated their own power and also sold power and operated distribution systems.^[1]

The load factor adjusted upward by the turn of the 20th century—at Pearl Street the load factor increased from 19.3% in 1884 to 29.4% in 1908. By 1929, the load factor around the world was greater than 50%, mainly due to motor load.^[21]

Before widespread power distribution from central stations, many factories, large hotels, apartment and office buildings had their own power generation. Often this was economically attractive because the exhaust steam could be used for building and industrial process heat,^[7]</ref> which today is known as cogeneration or combined heat and power (CHP). Most self-generated power became uneconomical as power prices fell. As late as the early 20th century, isolated power systems greatly outnumbered central stations.^[7] Cogeneration is still commonly practiced in many industries that use large amounts of both steam and power, such as pulp and paper, chemicals and refining. The continued use of private electric generators is called microgeneration.

Direct current electric motors[edit]

The first commutator DC electric motor capable of turning machinery was invented by the British scientist William Sturgeon in 1832.^[22] The crucial advance that this represented over the motor demonstrated by Michael Faraday was the incorporation of a commutator. This allowed Sturgeon's motor to be the first capable of providing continuous rotary motion.^[23]

Frank J. Sprague improved on the DC motor in 1884 by solving the problem of maintaining a constant speed with varying load and reducing sparking from the brushes. Sprague sold his motor through Edison Co.^[24] It is easy to vary speed with DC motors, which made them suited for a number of applications such as electric street railways, machine tools and certain other industrial applications where speed control was desirable.^[7]e electric generators is called microgeneration.

Direct current electric motors[edit]

The first commutator DC electric motor capable of turning machinery was invented by the British scientist William Sturgeon in 1832.^[22] The crucial advance that this represented over the motor demonstrated by Michael Faraday was the incorporation of a commutator. This allowed Sturgeon's motor to be the first capable of providing continuous rotary motion.^[23]

Frank J. Sprague improved on the DC motor in 1884 by solving the problem of maintaining a constant speed with varying load and reducing sparking from the brushes. Sprague sold his motor through Edison Co.^[24] It is easy to vary speed with DC motors, which made them suited for a number of applications such as electric street railways, machine tools and certain other industrial applications where speed control was desirable.^[7]

Alternating current[edit]

Although the first power stations supplied direct current, the distribution of alternating current soon became the most favored option. The main advantages of AC were that it could be transformed to high voltage to reduce transmission losses and that AC motors could easily run at constant speeds.

Alternating current technology was rooted in Michael Faraday's 1830–31 discovery that a changing magnetic field can induce an electric current in a circuit.^[25]

Three-phase rotating magnetic field of an AC motor. The three poles are each connected to a separate wire. Each wire carries current 120 degrees apart in phase. Arrows show the resulting magnetic force vectors. Three phase current is used in commerce and industry.

The first person to conceive of a rotating magnetic field was Walter Baily who gave a workable demonstration of his battery-operated polyphase motor aided by a commutator on June 28, 1879 to the Physical Society of London.^[26] Nearly identical to Baily’s apparatus, French electrical engineer Marcel Deprez in 1880 published a paper that identified the rotating magnetic field principle and that of a two-phase AC system of currents to produce it.^[27] In 1886, English engineer Elihu Thomson built an AC motor by expanding upon the induction-repulsion principle and his wattmeter.^[28]

It was in the 1880s that the technology was commercially developed for large scale electricity generation and transmission. In 1882 the British inventor and electrical engineer Sebastian de Ferranti, working for the company Siemens collaborated with the distinguished physicist Lord Kelvin to pioneer AC power technology including an early transformer.^[29]

A power transformer developed by Lucien Gaulard and John Dixon Gibbs was demonstrated in London in 1881, and attracted the interest of Westinghouse. They also exhibited the invention in Turin in 1884, where it was adopted for an electric lighting system. Many of their designs were adapted to the particular laws governing electrical distribution in the UK.^{[citation needed]}

Sebastian Ziani de Ferranti went into this business in 1882 when he set up a shop in London designing various electrical devices. Ferranti believed in the success of alternating current power distribution early on, and was one of the few experts in this system in the UK. With the help of Lord Kelvin, Ferranti pioneered the first AC power generator and transformer in 1882.^[30] John Hopkinson, a British physicist, invented the three-wire (three-phase) system for the distribution of electrical power, for which he was granted a patent in 1882.^[31]

The Italian inventor Galileo Ferraris invented a polyphase AC induction motor in 1885. The idea was that two out-of-phase, but synchronized, currents might be used to produce two magnetic fields that could be combined to produce a rotating field without any need for switching or for moving parts. Other inventors were the American engineers Charles S. Bradley and Nikola Tesla, and the German technician Friedrich August Haselwander.^[32] They were able to overcome the problem of starting up the AC motor by using a rotating magnetic field produced by a poly-phase current.^[33] Mikhail Dolivo-Dobrovolsky introduced the first three-phase induction motor in 1890, a much more capable design that became the prototype used in Europe and the U.S.^[34] By 1895 GE and Westinghouse both had AC motors on the market.^[35] With single phase current either a capacitor or coil (creating inductance) can be used on part of the circuit inside the motor to create a rotating magnetic field.^[36] Multi-speed AC motors that have separately wired poles have long been available, the most common being two speed. Speed of these motors is changed by switching sets of poles on or off, which was done with a special motor starter for larger motors, or a simple multiple speed switch for fractional horsepower motors.

AC power stations[edit]

The first AC power station was built by the English electrical engineer Sebastian de Ferranti. In 1887 the London Electric Supply Corporation hired Ferranti for the design of their power station at Deptford. He designed the building, the generating plant and the distribution system. It was built at the Stowage, a site to the west of the mouth of Deptford Creek once used by the East India Company. Built on an unprecedented scale and pioneering the use of high voltage (10,000 V) AC current, it generated 800 kilowatts and supplied central London. On its completion in 1891 it was the first truly modern power station, supplying high-voltage AC power that was then "stepped down" with transformers for consumer use on each street. This basic system remains in use today around the world.

In America, George Westinghouse who had become interested in the power transformer developed by Gaulard and Gibbs, began to develop his AC lighting system, using a transmission system with a 20:1 step up voltage with step-down. In 1890 Westinghouse and Stanley built a system to transmit power several miles to a mine in Colorado. A decision was taken to use AC for power transmission from the Niagara Power Project to Buffalo, New York. Proposals submitted by vendors in 1890 included DC and compressed air systems. A combination DC and compressed air system remained under consideration until late in the schedule. Despite the protestations of the Niagara commissioner William Thomson (Lord Kelvin) the decision was taken to build an AC system, which had been proposed by both Westinghouse and General Electric. In October 1893 Westinghouse was awarded the contract to provide the first three 5,000 hp, 250 rpm, 25 Hz, two phase generators.^[37] The hydro power plant went online in 1895,^[38] and it was the largest one until that date.^[39]

By the 1890s, single and poly-phase AC was undergoing rapid introduction.^[40] In the U.S. by 1902, 61% of generating capacity was AC, increasing to 95% in 1917.^[41] Despite the superiority of alternating current for most applications, a few existing DC systems continued to operate for several decades after AC became the standard for new systems.

Steam turbines[edit]

The efficiency of steam prime movers in converting the heat energy of fuel into mechanical work was a critical factor in the economic operation of steam central generating stations. Early projects used reciprocating steam engines, operating at relatively low speeds. The introduction of the steam turbine fundamentally changed the economics of central station operations. Steam turbines could be made in larger ratings than reciprocating engines, and generally had higher efficiency. The speed of steam turbines did not fluctuate cyclically during each revolution; making parallel operation of AC generators feasible, and improved the stability of rotary converters for production of direct current for traction and industrial uses. Steam turbines ran at higher speed than reciprocating engines, not being limited by the allowable speed of a piston in a cylinder. This made them more compatible with AC generators with only two or four poles; no gearbox or belted speed increaser was needed between the engine and the generator. It was costly and ultimately impossible to provide a belt-drive between a low-speed engine and a high-speed generator in the very large ratings required for central station service.

The modern steam turbine was invented in 1884 by the British Sir Charles Parsons, whose first model was connected to a dynamo that generated 7.5 kW (10 hp) of electricity.^[42] The invention of Parson's steam turbine made cheap and plentiful electricity possible. Parsons turbines were widely introduced in English central stations by 1894; the first electric supply company in the world to generate electricity using turbo generators was Parsons' own electricity supply company Newcastle and District Electric Lighting Company, set up in 1894.^[43] Within Parson's lifetime, the generating capacity of a unit was scaled up by about 10,000 times.^[44]

An 1899 Parsons steam turbine linked directly to a dynamo

The first U.S. turbines were two De Leval units at Edison Co. in New York in 1895. The first U.S. Parsons turbine was at Westinghouse Air Brake Co. near Pittsburgh.^[45]

Steam turbines also had capital cost and operating advantages over reciprocating engines. The condensate from steam engines was contaminated with oil and could not be reused, while condensate from a turbine is clean and typically reused. Steam turbines were a fraction of the size and weight of comparably rated reciprocating steam engine. Steam turbines can operate for years with almost no wear. Reciprocating steam engines required high maintenance. Steam turbines can be manufactured with capacities far larger than any steam engines ever made, giving important economies of scale.

Steam turbines could be built to operate on higher pressure and temperature steam. A fundamental principle of thermodynamics is that the higher the temperature of the steam entering an engine, the higher the efficiency. The introduction of steam turbines motivated a series of improvements in temperatures and pressures. The resulting increased conversion efficiency lowered electricity prices.^[46]

The power density of boilers was increased by using forced combustion air and by using compressed air to feed pulverized coal. Also, coal handling was mechanized and automated.^[47]

Electrical grid[edit]

Construction workers raising power lines, 1920

With the realization of long distance power transmission it was possible to interconnect different central stations to balance loads and improve load factors. Interconnection became increasingly desirable as electrification grew rapidly in the early years of the 20th century.

Charles Merz, of the Merz & McLellan consulting partnership, built the Neptune Bank Power Station near Newcastle upon Tyne in 1901,^[48] and by 1912 had developed into the largest integrated power system in Europe.^[49] In 1905 he tried to influence Parliament to unify the variety of voltages and frequencies in the country's electricity supply industry, but it was not until World War I that Parliament began to take this idea seriously, appointing him head of a Parliamentary Committee to address the problem. In 1916 Merz pointed out that the UK could use its small size to its advantage, by creating a dense distribution grid to feed its industries efficiently. His findings led to the Williamson Report of 1918, which in turn created the Electricity Supply Bill of 1919. The bill was the first step towards an integrated electricity system in the UK.

The more significant Electricity (Supply) Act of 1926, led to the setting up of the National Grid.^[50] The Central Electricity Board standardised the nation's electricity supply and established the first synchronised AC grid, running at 132 kilovolts and 50 Hertz. This started operating as a national system, the National Grid, in 1938.

In the United States it became a national objective after the power crisis during the summer of 1918 in the midst of World War I to consolidate supply. In 1934 the Public Utility Holding Company Act recognized electric utilities as public goods of importance along with gas, water, and telephone companies and thereby were given outlined restrictions and regulatory oversight of their operations.^[51]

Finance, money and banking[edit]

A major economic downturn in 1906 ended the expansion from the late 1890s. This was followed by the Panic of 1907. The Panic of 1907 was a factor in the establishment of the Federal Reserve Bank in 1913.^[262]

The mild inflation of the 1890s, attributed to the rising gold supply from mining, continued until World War I, at which time inflation rose sharply with wartime shortages including labor shortages. Following the war the rate of inflation fell, but prices remained above the prewar level.^[226]

The U.S. economy prospered during World War I, partly due to sales of war goods to Europe. The stock market had its best year in history in 1916. The U.S. gold reserves doubled between 1913 and 1918, causing the price level to rise. Interest rates had been held low to minimize interest on war bonds, but after the final war bonds were sold in 1919, the Federal Reserve raised the discount rate from 4% to 6%. Interest rates rose and the money supply contracted. The economy entered the Depression of 1920-21, which was a sharp decline financially. By 1923, the economy had returned to full employment.^[263]

A debt-fueled boom developed following the war. Jerome (1934) gives an unattributed quote about finance conditions that allowed the great industrial expansion of the post World War I period:

Probably never before in this country had such a volume of funds been available at such low rates for such a long period.^[264]

There was also a real estate and housing bubble in the 1920s, especially in Florida, which burst in 1925. Alvin Hansen stated that housing construction during the 1920s decade exceeded population growth by 25%.^[265] See also:Florida land boom of the 1920s

Debt reached unsustainable levels. Speculation in stocks drove prices up to unprecedented valuation levels. The stock market crashed in late October 1929.

Political developments[edit]

The Pure Food and Drug Act of 1906 was the first of a series of legislation that led to the establishment of the Food and Drug Administration (FDA). Another such act passed the same year was the Federal Meat Inspection Act. The new laws helped the large packers, and hurt small operations that lacked economy of scale or quality controls.^[266]

The Sixteenth Amendment to the United States Constitution, which allowed the Federal Government to tax all income, was adopted in 1913.

The Emergency Quota Act (1921) established a quota system on immigrants by country of origin, with the maximum number of annual immigrants from a country limited to 3% of the number of that national background living in the U.S. according to the 1910 United States Census. The Immigration Act of 1924 reduced the quota from 3% to 2% and added additional restrictions on certain nationalities.

In the early years of American history, most political leaders were reluctant to involve the federal government too heavily in the private sector, except in the area of transportation. In general, they accepted the concept of laissez-faire, a doctrine opposing government interference in the economy except to maintain law and order. This attitude started to change during the latter part of the 19th century, when small business, farm, and labor movements began asking the government to intercede on their behalf.^[267]

Fear of monopolies ("trusts") is shown in this attack on Rockefeller's Standard Oil Company

By the start of the 20th century, a middle class had developed that was leery of both the business elite and the somewhat radical political movements of farmers and laborers in the Midwest and West. Known as Progressives, these people favored government regulation of business practices to, in their minds, ensure competition and free enterprise. Congress enacted a law regulating railroads in 1887 (the Interstate Commerce Act), and one preventing large firms from controlling a single industry in 1890 (the Sherman Antitrust Act). These laws were not rigorously enforced, however, until the years between 1900 and 1920, when Republican President Theodore Roosevelt (1901–1909), Democrat President Woodrow Wilson (1913–1921), and others sympathetic to the views of the Progressives came to power. Many of today's U.S. regulatory agencies were created during these years, including the Interstate Commerce Commission and the Federal Trade Commission. Ida M. Tarbell wrote a series of articles against the Standard Oil monopoly. The series helped pave the way for the breakup of the monopoly.^[267]

Noon hour in a furniture factory. Indianapolis, Indiana, 1908

Muckrakers were journalists who encouraged readers to demand more regulation of business. Upton Sinclair's The Jungle (1906) showed America the horrors of the Chicago Union Stock Yards, a giant complex of meat processing that developed in the 1870s. The federal government responded to Sinclair's book with the new regulatory Food and Drug Administration.

President Wilson in 1913 using tariff, currency, and anti-trust laws to "prime the pump" and get the economy working.

When Democrat Woodrow Wilson was elected president with a Democrat controlled Congress in 1912 he implemented a series of progressive policies. In 1913, the Sixteenth Amendment was ratified, and the income tax was instituted in the United States. Wilson resolved the longstanding debates over tariffs and antitrust, and created the Federal Reserve, a complex business-government partnership that to this day dominates the financial world.

World War I[edit]

The World War involved a massive mobilization of money, taxes, and banking resources to pay for the American war effort and, through government-to-government loans, most of the Allied war effort as well.^[268]

Roaring Twenties: 1920–1929[edit]

People filing tax forms in 1920

Under Republican President Warren G. Harding, who called for normalcy and an end to high wartime taxes, Secretary of the Treasury Andrew Mellon raised the tariff, cut marginal tax rates and used the large surplus to reduce the federal debt by about a third from 1920 to 1930. Secretary of Commerce Herbert Hoover worked to introduce efficiency, by regulating business practices. This period of prosperity, along with the culture of the time, was known as the Roaring Twenties. The rapid growth of the automobile industry stimulated industries such as oil, glass, and road-building. Tourism soared and consumers with cars had a much wider radius for their shopping. Small cities prospered, and large cities had their best decade ever, with a boom in construction of offices, factories and homes. The new electric power industry transformed both business and everyday life. Telephones and electricity spread to the countryside, but farmers never recovered from the wartime bubble in land prices. Millions migrated to nearby cities. However, in October 1929, the Stock market crashed and banks began to fail in the Wall Street Crash of 1929.^[269]

Quality of life[edit]

The early decades of the 20th century were remarkable for the improvements of the quality of life in the U.S. The quality of housing improved, with houses offering better protection against cold. Floor space per occupant increased. Sanitation was greatly improved by the building of water supply and sewage systems, plus the treatment of drinking water by filtration and chlorination. The change over to internal combustion took horses off the streets and eliminated horse manure and urine and the flies they attracted.^[224] Federal regulation of food products and processing, including government inspection of meat processing plants helped lower the incidence of food related illness and death.^[224]

Infant mortality, which had been declining dramatically in the last quarter of the 19th century, continued to decline.^[224]

The workweek, which averaged 53 hours in 1900, continued to decline. The burden of household chores lessened considerably. Hauling water and firewood into the home every day was no longer necessary for an increasing number of households.^[224]

Electric light was far less expensive and higher quality than kerosene lamp light. Electric light also eliminated smoke and fumes and reduced the fire hazard.^[230]

Welfare capitalism[edit]

Beginning in the 1880s but especially by the 1920s, some large non-union corporations such as Kodak, Sears, and IBM, adopted the philosophy of paternalistic welfare capitalism. In this system, workers are considered an important stakeholder alongside owners and customers. In return for loyalty to the company, workers get long-term job security, health care, defined benefit pension plans, and other perks. Welfare capitalism was seen as good for society, but also for the economic interests of the company as a way to prevent unionization, government regulation, and socialism or Communism, which became a major concern in the 1910s. By the 1980s, the philosophy had declined in popularity in favor of maximizing shareholder value at the expense of workers, and defined contribution plans such as 401(k)s, replaced guaranteed pensions.Muckrakers were journalists who encouraged readers to demand more regulation of business. Upton Sinclair's The Jungle (1906) showed America the horrors of the Chicago Union Stock Yards, a giant complex of meat processing that developed in the 1870s. The federal government responded to Sinclair's book with the new regulatory Food and Drug Administration.

President Wilson in 1913 using tariff, currency, and anti-trust laws to "prime the pump" and get the economy working.

When Democrat Woodrow Wilson was elected president with a Democrat controlled Congress in 1912 he implemented a series of progressive policies. In 1913, the Sixteenth Amendment was ratified, and the income tax was instituted in the United States. Wilson resolved the longstanding debates over tariffs and antitrust, and created the Federal Reserve, a complex business-government partnership that to this day dominates the financial world.

World War I[edit]

The World War involved a massive mobilization of money, taxes, and banking resources to pay for the American war effort and, through government-to-government loans, most of the Allied war effort as well.^[268]

Roaring Twenties: 1920–1929[edit]

People filing tax forms in 1920

Under Republican President Warren G. Harding, who called for normalcy and an end to high wartime taxes, Secretary of the Treasury Andrew Mellon raised the tariff, cut marginal tax rates and used the large surplus to reduce the federal debt by about a third from 1920 to 1930. Secretary of Commerce Herbert Hoover worked to introduce efficiency, by regulating business practices. This period of prosperity, along with the culture of the time, was known as the Roaring Twenties. The rapid growth of the automobile industry stimulated industries such as oil, glass, and road-building. Tourism soared and consumers with cars had a much wider radius for their shopping. Small cities prospered, and large cities had their best decade ever, with a boom in construction of offices, factories and homes. The new electric power industry transformed both business and everyday life. Telephones and electricity spread to the countryside, but farmers never recovered from the wartime bubble in land prices. Millions migrated to nearby cities. However, in October 1929, the Stock market crashed and banks began to fail in the Wall Street Crash of 1929.^[269]

Quality of life[edit]

The early decades of the 20th century were remarkable for the improvements of the quality of life in the U.S. The quality of housing improved, with houses offering better protection against cold. Floor space per occupant increased. Sanitation was greatly improved by the building of water supply and sewage systems, plus the treatment of drinking water by filtration and chlorination. The change over to internal combustion took horses off the streets and eliminated horse manure and urine and the flies they attracted.^[224] Federal regulation of food products and processing, including government inspection of meat processing plants helped lower the incidence of food related illness and death.^[224]

Infant mortality, which had been declining dramatically in the last quarter of the 19th century, continued to decline.^[224]

The workweek, which averaged 53 hours in 1900, continued to decline. The burden of household chores lessened considerably. Hauling water and firewood into the home every day was no longer necessary for an increasing number of households.^[224]

Electric light was far less expensive and higher quality than kerosene lamp light. Electric light also eliminated smoke and fumes and reduced the fire hazard.^[230]

Causes of the Great Depression

From Wikipedia, the free encyclopedia

US annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted

Money supply decreased significantly between Black Tuesday, October 24, 1929, and the Bank Holiday in March 1933 when there were massive bank runs across the United States.

The causes of the Great Depression in the early 20th century in the United States have been extensively discussed by economists and remain a matter of active debate.^[1] They are part of the larger debate about economic crises and recessions. The specific economic events that took place during the Great Depression are well established. There was an initial stock market crash that triggered a "panic sell-off" of assets. This was followed by a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment (over 13 million people were unemployed by 1932) and impoverishment. However, economists and historians have not reached a consensus on the causal relationships between various events and government economic policies in causing or ameliorating the Depression.

Current mainstream theories may be broadly classified into two main points of view. The first are the demand-driven theories, from Keynesian and institutional economists who argue that the depression was caused by a widespread loss of confidence that led to drastically lower investment and persistent underconsumption. The demand-driven theories argue that the financial crisis following the 1929 crash led to a sudden and persistent reduction in consumption and investment spending, causing the depression that followed.^[2] Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets. Holding money therefore became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand.

Second, there are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve) caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.^[3] Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms.

There are also several various heterodox theories that reject the explanations of the Keynesians and monetarists. Some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression.

General theoretical reasoning[edit]

The two classical competing theories of the Great Depression are the Keynesian (demand-driven) and the monetarist explanation. There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists.

Economists and economic historians are almost evenly split as to whether the traditional monetary explanation that monetary forces were the primary cause of the Great Depression is right, or the traditional Keynesian explanation that a fall in autonomous spending, particularly investment, is the primary explanation for the onset of the Great Depression.^[4] Today the controversy is of lesser importance since there is mainstream support for the debt deflation theory and the expectations hypothesis that building on the monetary explanation of Milton Friedman and Anna Schwartz add non-monetary explanations.

There is consensus that the Federal Reserve System should have cut short the process of monetary deflation and banking collapse. If the Fed had done that, the economic downturn would have been far less severe and much shorter.^[5]

Monetarist[edit]

The Great Depression in a monetary view.

In their 1963 book A Monetary History of the United States, 1867–1960, Milton Friedman and Anna Schwartz laid out their case for a different explanation of the Great Depression. Essentially, the Great Depression, in their view, was caused by the fall of the money supply. Friedman and Schwartz write: "From the cyclical peak in August 1929 to a cyclical trough in March 1933, the stock of money fell by over a third." The result was what Friedman and Schwartz called "The Great Contraction"^[8] — a period of falling income, prices, and employment caused by the choking effects of a restricted money supply. Friedman and Schwartz argue that people wanted to hold more money than the Federal Reserve was supplying. As a result, people hoarded money by consuming less. This caused a contraction in employment and production since prices were not flexible enough to immediately fall. The Fed's failure was in not realizing what was happening and not taking corrective action.^[9] In a speech honoring Friedman and Schwartz, Ben Bernanke stated:

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again."^[10]^[11]
— Ben S. Bernanke

After the Depression, the primary explanations of it tended to ignore the importance of the money supply. However, in the monetarist view, the Depression was "in fact a tragic testimonial to the importance of monetary forces".^[12] In their view, the failure of the Federal Reserve to deal with the Depression was not a sign that monetary policy was impotent, but that the Federal Reserve implemented the wrong policies. They did not claim the Fed caused the depression, only that it failed to use policies that might have stopped a recession from turning into a depression.

After the Great Depression, the US economy had already experienced a number of depressions. These depressions were often set off by banking crisis, the most significant occurring in 1873, 1893, 1901, and 1907.^[13] Before the 1913 establishment of the Federal Reserve, the banking system had dealt with these crises in the U.S. (such as in the Panic of 1907) by suspending the convertibility of deposits into currency. Starting in 1893, there were growing efforts by financial institutions and business men to intervene during these crises, providing liquidity to banks that were suffering runs. During the banking panic of 1907, an ad hoc coalition assembled by J. P. Morgan successfully intervened in this way, thereby cutting off the panic, which was likely the reason why the depression that would normally have followed a banking panic did not happen this time. A call by some for a government version of this solution resulted in the establishment of the Federal Reserve.^[14]

But in 1929–32, the Federal Reserve did not act to provide liquidity to banks suffering bank runs. In fact, its policy contributed to the banking crisis by permitting a sudden contraction of the money supply. During the Roaring Twenties, the central bank had set as its primary goal "price stability", in part because the governor of the New York Federal Reserve, Benjamin Strong, was a disciple of Irving Fisher, a tremendously popular economist who popularized stable prices as a monetary goal. It had kept the number of dollars at such an amount that prices of goods in society appeared stable. In 1928, Strong died, and with his death this policy ended, to be replaced with a real bills doctrine requiring that all currency or securities have material goods backing them. This policy permitted the U.S. money supply to fall by over a third from 1929 to 1933.^[15]

When this money shortage caused runs on banks, the Fed maintained its true bills policy, refusing to lend money to the banks in the way that had cut short the 1907 panic, instead allowing each to suffer a catastrophic run and fail entirely. This policy resulted in a series of bank failures in which one-third of all banks vanished.^[16] According to Ben Bernanke, the subsequent credit crunches led to waves of bankruptcies.^[17] Friedman said that if a policy similar to 1907 had been followed during the banking panic at the end of 1930, perhaps this would have stopped the vicious circle of the forced liquidation of assets at depressed prices. Consequently, the banking panics of 1931, 1932, and 1933 might not have happened, just as suspension of convertibility in 1893 and 1907 had quickly ended the liquidity crises at the time."^[18]

Monetarist explanations had been rejected in Samuelson's work Economics, writing "Today few economists regard Federal Reserve monetary policy as a panacea for controlling the business cycle. Purely monetary factors are considered to be as much symptoms as causes, albeit symptoms with aggravating effects that should not be completely neglected."^[19] According to Keynesian economist Paul Krugman, the work of Friedman and Schwartz became dominant among mainstream economists by the 1980s but should be reconsidered in light of Japan's Lost Decade of the 1990s.^[20] The role of monetary policy in financial crises is in active debate regarding the financial crisis of 2007–2008; see Causes of the Great Recession.

Additional modern nonmonetary explanations[edit]

The monetary explanation has two weaknesses. First, it is not able to explain why the demand for money was falling more rapidly than the supply during the initial downturn in 1930–31.^[21] Second, it is not able to explain why in March 1933 a recovery took place although short term interest rates remained close to zero and the Money supply was still falling. These questions are addressed by modern explanations that build on the monetary explanation of Milton Friedman and Anna Schwartz but add non-monetary explanations.

Debt deflation[edit]

Crowd at New York's American Union Bank during a bank run early in the Great Depression.

Crowd gathering on Wall Street after the 1929 crash.

Total debt to GDP levels in the U.S. reached a high of just under 300% by the time of the Depression. This level of debt was not exceeded again until near the end of the 20th century.^[22]

Jerome (1934) gives an unattributed quote about finance conditions that allowed the great industrial expansion of the post WW I period:

Probably never before in this country had such a volume of funds been available at such low rates for such a long period.^[23]

Furthermore, Jerome says that the volume of new capital issues increased at a 7.7% compounded annual rate from 1922 to 1929 at a time when the Standard Statistics Co.'s index of 60 high grade bonds yielded from 4.98% in 1923 to 4.47% in 1927.

There was also a real estate and housing bubble in the 1920s, especially in Florida, which burst in 1925. Alvin Hansen stated that housing construction during the 1920s decade exceeded population growth by 25%.^[24] See also:Florida land boom of the 1920s Statistics kept by Cook County, Illinois show over 1 million vacant plots for homes in the Chicago area, despite only 950,000 plots being occupied, the result of Chicago's explosive population growth in combination with a real estate bubble.

Irving Fisher argued the predominant factor leading to the Great Depression was over-indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles.^[25] He then outlined nine factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows:

Debt liquidation and distress selling
Contraction of the money supply as bank loans are paid off
A fall in the level of asset prices
A still greater fall in the net worths of business, precipitating bankruptcies
A fall in profits
A reduction in output, in trade and in employment.
Pessimism and loss of confidence
Hoarding of money
A fall in nominal interest rates and a rise in deflation adjusted interest rates.^[25]

During the Wall Street Crash of 1929 preceding the Great Depression, margin requirements were only 10%.^[26] Brokerage firms, in other words, would lend $90 for every $10 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets.^[27]

Outstanding debts became heavier, because prices and incomes fell by 20–50% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 U.S. banks failed. (In all, 9,000 banks failed during the 1930s.) By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday.^[28]

Bank failures snowballed as desperate bankers called in loans, which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending.^[27] Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated.

The liquidation of debt could not keep up with the fall of prices it caused. The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings. The very effort of individuals to lessen their burden of debt effectively increased it. Paradoxically, the more the debtors paid, the more they owed.^[25] This self-aggravating process turned a 1930 recession into a 1933 great depression.

Fisher's debt-deflation theory initially lacked mainstream influence because of the counter-argument that debt-deflation represented no more than a redistribution from one group (debtors) to another (creditors). Pure re-distributions should have no significant macroeconomic effects.

Building on both the monetary hypothesis of Milton Friedman and Anna Schwartz as well as the debt deflation hypothesis of Irving Fisher, Ben Bernanke developed an alternative way in which the financial crisis affected output. He builds on Fisher's argument that dramatic declines in the price level and nominal incomes lead to increasing real debt burdens which in turn leads to debtor insolvency and consequently leads to lowered aggregate demand, a further decline in the price level then results in a debt deflationary spiral. According to Bernanke, a small decline in the price level simply reallocates wealth from debtors to creditors without doing damage to the economy. But when the deflation is severe falling asset prices along with debtor bankruptcies lead to a decline in the nominal value of assets on bank balance sheets. Banks will react by tightening their credit conditions, that in turn leads to a credit crunch which does serious harm to the economy. A credit crunch lowers investment and consumption and results in declining aggregate demand which additionally contributes to the deflationary spiral.^[29]^[30]^[31]

Economist Steve Keen revived the debt-reset theory after he accurately predicted the 2008 recession based on his analysis of the Great Depression, and recently^[when?] advised Congress to engage in debt-forgiveness or direct payments to citizens in order to avoid future financial events.^[32] Some people support the debt-reset theory.^[33]^[34]

Expectations hypothesis[edit]

Expectations have been a central element of macroeconomic models since the economic mainstream accepted the new neoclassical synthesis. While not rejecting that it was inadequate demand that sustained the depression, according to Peter Temin, Barry Wigmore, Gauti B. Eggertsson and Christina Romer the key to recovery and the end of the Great Depression was the successful management of public expectations. This thesis is based on the observation that after years of deflation and a very severe recession, important economic indicators turned positive in March 1933, just as Franklin D. Roosevelt took office. Consumer prices turned from deflation to a mild inflation, industrial production bottomed out in March 1933, investment doubled in 1933 with a turnaround in March 1933. There were no monetary forces to explain that turnaround. Money supply was still falling and short term interest rates remained close to zero. Before March 1933, people expected a further deflation and recession so that even interest rates at zero did not stimulate investment. But when Roosevelt announced major regime changes people began to expect inflation and an economic expansion. With those expectations, interest rates at zero began to stimulate investment as planned. Roosevelt's fiscal and monetary policy regime change helped to make his policy objectives credible. The expectation of higher future income and higher future inflation stimulated demand and investments. The analysis suggests that the elimination of the policy dogmas of the gold standard, a balanced budget in times of crises and small government led to a large shift in expectation that accounts for about 70–80 percent of the recovery of output and prices from 1933 to 1937. If the regime change had not happened and the Hoover policy had continued, the economy would have continued its free fall in 1933, and output would have been 30 percent lower in 1937 than in 1933.^[35]^[36]^[37]

The recession of 1937–38, which slowed down economic recovery from the great depression, is explained by fears of the population that the moderate tightening of the monetary and fiscal policy in 1937 would be first steps to a restoration of the pre March 1933 policy regime.^[38]

New Deal

From Wikipedia, the free encyclopedia

New Deal
Top left: The TVA Act signed into law in 1933 Top right: President Franklin D. Roosevelt led the New Dealers; Bottom: A public mural from the arts program
Location	United States
Type	Economic program
Cause	Great Depression
Organized by	President Franklin D. Roosevelt
Outcome	Reform of Wall Street; relief for farmers and unemployed; Social Security; political power shifts to Democratic New Deal Coalition

The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs and agencies included the Civilian Conservation Corps (CCC), the Civil Works Administration (CWA), the Farm Security Administration (FSA), the National Industrial Recovery Act of 1933 (NIRA) and the Social Security Administration (SSA). They provided support for farmers, the unemployed, youth, and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt.

The programs focused on what historians refer to as the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression.^[1] The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House for seven out of the nine presidential terms from 1933 to 1969) with its base in liberal ideas, the South, big city machines and the newly empowered labor unions, and various ethnic groups. The Republicans were split, with conservatives opposing the entire New Deal as hostile to business and economic growth and liberals in support. The realignment crystallized into the New Deal coalition that dominated presidential elections into the 1960s while the opposing conservative coalition largely controlled Congress in domestic affairs from 1937 to 1964.^[2]tained. However, after 1974 the call for deregulation of the economy gained bipartisan support.^[10] The New Deal regulation of banking (Glass–Steagall Act) lasted until it was suspended in the 1990s.

Several organizations created by New Deal programs remain active and those operating under the original names include the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC).

Origins[edit]

Economic collapse (1929–1933)[edit]

US annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted

Unemployment rate in the United States from 1910–1960, with the years of the Great Depression (1929–1939) highlighted (accurate data begins in 1939)

From 1929 to 1933 manufacturing output decreased by one third,^[11] which economist Milton Friedman called the Great Contraction. Prices fell by 20%, causing deflation that made repaying debts much harder. Unemployment in the United States increased from 4% to 25%.^[12] Additionally, one-third of all employed persons were downgraded to working part-time on much smaller paychecks. In the aggregate, almost 50% of the nation's human work-power was going unused.^[13]

Before the New Deal, USA bank deposits were not "guaranteed" by government.^[14] When thousands of banks closed, depositors temporarily lost access to their money; most of the funds were eventually restored but there was gloom and panic. The United States had no national safety net, no public unemployment insurance and no Social Security.^[15] Relief for the poor was the responsibility of families, private charity and local governments, but as conditions worsened year by year demand skyrocketed and their combined resources increasingly fell far short of demand.^[13]

The depression had psychologically devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933, all state governors had authorized bank holidays or restricted withdrawals—many Americans had little or no access to their bank accounts.^[16]^[17] Farm income had fallen by over 50% since 1929. Between 1930 and 1933, an estimated 844,000 non-farm mortgages were foreclosed on, out of a total of five million.^[18] Political and business leaders feared revolution and anarchy. Joseph P. Kennedy, Sr., who remained wealthy during the Depression, stated years later that "in those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half".^[19]

Campaign[edit]

The phrase "New Deal" was coined by an adviser to Roosevelt, Stuart Chase, who used A New Deal as the title for an article published in the liberal magazine New Republic a few days before Roosevelt's speech. Speechwriter Rosenman added it to his draft of FDR's speech at the last minute. ^[20]^[21]

Upon accepting the 1932 Democratic nomination for president, Roosevelt promised "a new deal for the American people", saying:

Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth... I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.^[22]
Origins[edit]
Economic collapse (1929–1933)[edit]
US annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted
Unemployment rate in the United States from 1910–1960, with the years of the Great Depression (1929–1939) highlighted (accurate data begins in 1939)
From 1929 to 1933 manufacturing output decreased by one third,^[11] which economist Milton Friedman called the Great Contraction. Prices fell by 20%, causing deflation that made repaying debts much harder. Unemployment in the United States increased from 4% to 25%.^[12] Additionally, one-third of all employed persons were downgraded to working part-time on much smaller paychecks. In the aggregate, almost 50% of the nation's human work-power was going unused.^[13]
Before the New Deal, USA bank deposits were not "guaranteed" by government.^[14] When thousands of banks closed, depositors temporarily lost access to their money; most of the funds were eventually restored but there was gloom and panic. The United States had no national safety net, no public unemployment insurance and no Social Security.^[15] Relief for the poor was the responsibility of families, private charity and local governments, but as conditions worsened year by year demand skyrocketed and their combined resources increasingly fell far short of demand.^[13]
The depression had psychologically devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933, all state governors had authorized bank holidays or restricted withdrawals—many Americans had little or no access to their bank accounts.^[16]^[17] Farm income had fallen by over 50% since 1929. Between 1930 and 1933, an estimated 844,000 non-farm mortgages were foreclosed on, out of a total of five million.^[18] Political and business leaders feared revolution and anarchy. Joseph P. Kennedy, Sr., who remained wealthy during the Depression, stated years later that "in those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half".^[19]
Campaign[edit]
The phrase "New Deal" was coined by an adviser to Roosevelt, Stuart Chase, who used A New Deal as the title for an article published in the liberal magazine New Republic a few days before Roosevelt's speech. Speechwriter Rosenman added it to his draft of FDR's speech at the last minute. ^[20]^[21]
Upon accepting the 1932 Democratic nomination for president, Roosevelt promised "a new deal for the American people", saying:
Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth... I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.^[22]
First New Deal (1933–1934)[edit]
1935 cartoon by Vaughn Shoemaker in which he parodied the New Deal as a card game with alphabetical agencies
Roosevelt entered office without a specific set of plans for dealing with the Great Depression—so he improvised as Congress listened to a very wide variety of voices.^[23] Among Roosevelt's, more famous advisers was an informal "Brain Trust", a group that tended to view pragmatic government intervention in the economy positively.^[24] His choice for Secretary of Labor, Frances Perkins, greatly influenced his initiatives. Her list of what her priorities would be if she took the job illustrates: "a forty-hour workweek, a minimum wage, worker's compensation, unemployment compensation, a federal law banning child labor, direct federal aid for unemployment relief, Social Security, a revitalized public employment service and health insurance".^[25]
The New Deal policies drew from many different ideas proposed earlier in the 20th century. Assistant Attorney General Thurman Arnold led efforts that hearkened back to an anti-monopoly tradition rooted in American politics by figures such as Andrew Jackson and Thomas Jefferson. Supreme Court Justice Louis Brandeis, an influential adviser to many New Dealers, argued that "bigness" (referring, presumably, to corporations) was a negative economic force, producing waste and inefficiency. However, the anti-monopoly group never had a major impact on New Deal policy.^[26] Other leaders such as Hugh S. Johnson of the NRA took ideas from the Woodrow Wilson Administration, advocating techniques used to mobilize the economy for World War I. They brought ideas and experience from the government controls and spending of 1917–1918. Other New Deal planners revived experiments suggested in the 1920s, such as the TVA. The "First New Deal" (1933–1934) encompassed the proposals offered by a wide spectrum of groups (not included was the Socialist Party, whose influence was all but destroyed).^[27] This first phase of the New Deal was also characterized by fiscal conservatism (see Economy Act, below) and experimentation with several different, sometimes contradictory, cures for economic ills.
Roosevelt created dozens of new agencies. They are traditionally and typically known to Americans by their alphabetical initials.They are traditionally and typically known to Americans by their alphabetical initials.
The First 100 Days (1933)[edit]
Main article: First 100 days of Franklin D. Roosevelt's presidency
The American people were generally extremely dissatisfied with the crumbling economy, mass unemployment, declining wages, and profits, and especially Herbert Hoover's policies such as the Smoot–Hawley Tariff Act and the Revenue Act of 1932. Roosevelt entered office with enormous political capital. Americans of all political persuasions were demanding immediate action and Roosevelt responded with a remarkable series of new programs in the "first hundred days" of the administration, in which he met with Congress for 100 days. During those 100 days of lawmaking, Congress granted every request Roosevelt asked and passed a few programs (such as the Federal Deposit Insurance Corporation to insure bank accounts) that he opposed. Ever since presidents have been judged against Roosevelt for what they accomplished in their first 100 days. Walter Lippmann famously noted:
At the end of February we were a congeries of disorderly panic-stricken mobs and factions. In the hundred days from March to June, we became again an organized nation confident of our power to provide for our own security and to control our own destiny.^[28]
The economy had hit bottom in March 1933 and then started to expand. Economic indicators show the economy reached its lowest point in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production sank to its lowest point of 52.8 in July 1932 (with 1935–1939 = 100) and was practically unchanged at 54.3 in March 1933. However, by July 1933 it reached 85.5, a dramatic rebound of 57% in four months. Recovery was steady and strong until 1937. Except for employment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war. The U.S. population was 124,840,471 in 1932 and 128,824,829 in 1937, an increase of 3,984,468.^[29] The ratio of these numbers, times the number of jobs in 1932, means there was a need for 938,000 more jobs in 1937, to maintain the same employment level.
Fiscal policy[edit]
The Economy Act, drafted by Budget Director Lewis Williams Douglas, was passed on March 15, 1933. The act proposed to balance the "regular" (non-emergency) federal budget by cutting the salaries of government employees and cutting pensions to veterans by fifteen percent. It saved $500 million per year and reassured deficit hawks, such as Douglas, that the new president was fiscally conservative. Roosevelt argued there were two budgets: the "regular" federal budget, which he balanced; and the emergency budget, which was needed to defeat the depression. It was imbalanced on a temporary basis.^[30]^[31]
Roosevelt initially favored balancing the budget, but soon found himself running spending deficits to fund his numerous programs. However, Douglas—rejecting the distinction between a regular and emergency budget—resigned in 1934 and became an outspoken critic of the New Deal. Roosevelt strenuously opposed the Bonus Bill that would give World War I veterans a cash bonus. Congress finally passed it over his veto in 1936 and the Treasury distributed $1.5 billion in cash as bonus welfare benefits to 4 million veterans just before the 1936 election.^[32]^[33]
New Dealers never accepted the Keynesian argument for government spending as a vehicle for recovery. Most economists of the era, along with Henry Morgenthau of the Treasury Department, rejected Keynesian solutions and favored balanced budgets.^[34]^[35]
Banking reform[edit]
Crowd at New York's American Union Bank during a bank run early in the Great Depression
Roosevelt's ebullient public personality, conveyed through his declaration that "the only thing we have to fear is fear itself" and his "fireside chats" on the radio did a great deal to help restore the nation's confidence
Fireside Chat 1 On the Banking Crisis (13:09)
13:09
Roosevelt's first Fireside Chat on the Banking Crisis (March 12, 1933)
Problems playing this file? See media help.
At the beginning of the Great Depression, the economy was destabilized by bank failures followed by credit crunches. The initial reasons were substantial losses in investment banking, followed by bank runs. Bank runs occur when a large number of customers withdraw their deposits because they believe the bank might become insolvent. As the bank run progressed, it generated a self-fulfilling prophecy: as more people withdrew their deposits, the likelihood of default increased and this encouraged further withdrawals.
Milton Friedman and Anna Schwartz have argued that the drain of money out of the banking system caused the monetary supply to shrink, forcing the economy to likewise shrink. As credit and economic activity diminished, price deflation followed, causing further economic contraction with disastrous impact on banks.^[36] Between 1929 and 1933, 40% of all banks (9,490 out of 23,697 banks) failed.^[37] Much of the Great Depression's economic damage was caused directly by bank runs.^[38]
Herbert Hoover had already considered a bank holiday to prevent further bank runs but rejected the idea because he was afraid to incite a panic. However, Roosevelt gave a radio address, held in the atmosphere of a Fireside Chat. He explained to the public in simple terms the causes of the banking crisis, what the government would do, and how the population could help. He closed all the banks in the country and kept them all closed until new legislation could be passed.^[39]
On March 9, 1933, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's top advisors. The act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system.^[40] By the end of 1933, 4,004 small local banks were permanently closed and merged into larger banks. Their deposits totaled $3.6 billion. Depositors lost $540 million (equivalent to $11,303,907,455 in 2021) and eventually received on average 85 cents on the dollar of their deposits.^[41]
The Glass–Steagall Act limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations. It also established the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $2,500, ending the risk of runs on banks.^[42] This banking reform offered unprecedented stability as while throughout the 1920s more than five hundred banks failed per year, it was less than ten banks per year after 1933.^[43]
Monetary reform[edit]
Under the gold standard, the United States kept the dollar convertible to gold. The Federal Reserve would have had to execute an expansionary monetary policy to fight the deflation and to inject liquidity into the banking system to prevent it from crumbling—but lower interest rates would have led to a gold outflow.^[44] Under the gold standards, price–specie flow mechanism countries that lost gold, but nevertheless wanted to maintain the gold standard, had to permit their money supply to decrease and the domestic price level to decline (deflation).^[45] As long as the Federal Reserve had to defend the gold parity of the dollar it had to sit idle while the banking system crumbled.^[44]
In March and April in a series of laws and executive orders, the government suspended the gold standard. Roosevelt stopped the outflow of gold by forbidding the export of gold except under license from the Treasury. Anyone holding significant amounts of gold coinage was mandated to exchange it for the existing fixed price of U.S. dollars. The Treasury no longer paid out gold for dollars and gold would no longer be considered valid legal tender for debts in private and public contracts.^[46]
The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold. With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35. These measures enabled the Federal Reserve to increase the amount of money in circulation to the level the economy needed. Markets immediately responded well to the suspension in the hope that the decline in prices would finally end.^[46] In her essay "What ended the Great Depression?" (1992), Christina Romer argued that this policy raised industrial production by 25% until 1937 and by 50% until 1942.^[47]
Securities Act of 1933[edit]
Before the Wall Street Crash of 1929, securities were unregulated at the federal level. Even firms whose securities were publicly traded published no regular reports or even worse rather misleading reports based on arbitrarily selected data. To avoid another crash, the Securities Act of 1933 was passed. It required the disclosure of the balance sheet, profit and loss statement, and the names and compensations of corporate officers for firms whose securities were traded. Additionally, the reports had to be verified by independent auditors. In 1934, the U.S. Securities and Exchange Commission was established to regulate the stock market and prevent corporate abuses relating to corporate reporting and the sale of securities.^[48]
Repeal of Prohibition[edit]
In a measure that garnered substantial popular support for his New Deal, Roosevelt moved to put to rest one of the most divisive cultural issues of the 1920s. He signed the bill to legalize the manufacture and sale of alcohol, an interim measure pending the repeal of prohibition, for which a constitutional amendment of repeal (the 21st) was already in process. The repeal amendment was ratified later in 1933. States and cities gained additional new revenue and Roosevelt secured his popularity especially in the cities and ethnic areas by legalizing alcohol.^[49]In the 1920s, farm production had increased dramatically thanks to mechanization, more potent insecticides, and increased use of fertilizer. Due to an overproduction of agricultural products, farmers faced severe and chronic agricultural depression throughout the 1920s. The Great Depression even worsened the agricultural crises and at the beginning of 1933 agricultural markets nearly faced collapse.^[55] Farm prices were so low that in Montana wheat was rotting in the fields because it could not be profitably harvested. In Oregon, sheep were slaughtered and left to rot because meat prices were not sufficient to warrant transportation to markets.^[56]
Roosevelt was keenly interested in farm issues and believed that true prosperity would not return until farming was prosperous. Many different programs were directed at farmers. The first 100 days produced the Farm Security Act to raise farm incomes by raising the prices farmers received, which was achieved by reducing total farm output. The Agricultural Adjustment Act created the Agricultural Adjustment Administration (AAA) in May 1933. The act reflected the demands of leaders of major farm organizations (especially the Farm Bureau) and reflected debates among Roosevelt's farm advisers such as Secretary of Agriculture Henry A. Wallace, M.L. Wilson, Rexford Tugwell and George Peek.^[57]
The AAA aimed to raise prices for commodities through artificial scarcity. The AAA used a system of domestic allotments, setting total output of corn, cotton, dairy products, hogs, rice, tobacco, and wheat. The farmers themselves had a voice in the process of using the government to benefit their incomes. The AAA paid land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. To force up farm prices to the point of "parity", 10 million acres (40,000 km²) of growing cotton was plowed up, bountiful crops were left to rot and six million piglets were killed and discarded.^[58]
The idea was to give farmers a "fair exchange value" for their products in relation to the general economy ("parity level").^[59] Farm incomes and the income for the general population recovered fast since the beginning of 1933.^[60]^[61] Food prices remained still well below the 1929 peak.^[62] The AAA established an important and long-lasting federal role in the planning of the entire agricultural sector of the economy and was the first program on such a scale for the troubled agricultural economy. The original AAA targeted landowners, and therefore did not provide for any sharecroppers or tenants or farm laborers who might become unemployed.^[63]
A Gallup poll printed in the Washington Post revealed that a majority of the American public opposed the AAA.^[64] In 1936, the Supreme Court declared the AAA to be unconstitutional, stating that "a statutory plan to regulate and control agricultural production, [is] a matter beyond the powers delegated to the federal government". The AAA was replaced by a similar program that did win Court approval. Instead of paying farmers for letting fields lie barren, this program subsidized them for planting soil-enriching crops such as alfalfa that would not be sold on the market. Federal regulation of agricultural production has been modified many times since then, but together with large subsidies is still in effect today.
The Farm Tenancy Act in 1937 was the last major New Deal legislation that concerned farming. It created the Farm Security Administration (FSA), which replaced the Resettlement Administration.
The Food Stamp Plan, a major new welfare program for urban poor, was established in 1939 to provide stamps to poor people who could use them to purchase food at retail outlets. The program ended during wartime prosperity in 1943 but was restored in 1961. It survived into the 21st century with little controversy because it was seen to benefit the urban poor, food producers, grocers, and wholesalers as well as farmers, thus it gained support from both liberal and conservative Congressmen. In 2013, Tea Party activists in the House nonetheless tried to end the program, now known as the Supplemental Nutrition Assistance Program, while the Senate fought to preserve it.^[65]^[66]
Recovery[edit]
Recovery was the effort in numerous programs to restore the economy to normal levels. By most economic indicators, this was achieved by 1937—except for unemployment, which remained stubbornly high until World War II began. Recovery was designed to help the economy bounce back from depression. Economic historians led by Price Fishback have examined the impact of New Deal spending on improving health conditions in the 114 largest cities, 1929–1937. They estimated that every additional $153,000 in relief spending (in 1935 dollars, or $1.95 million in the year 2000 dollars) was associated with a reduction of one infant death, one suicide, and 2.4 deaths from infectious diseases.^[67]^[68]
NRA "Blue Eagle" campaign[edit]
Main article: National Recovery Administration
National Recovery Administration Blue Eagle
Manufacturing employment in the U.S. from 1920 to 1940^[69]
From 1929 to 1933, the industrial economy suffered from a vicious cycle of deflation. Since 1931, the U.S. Chamber of Commerce, the voice of the nation's organized business, promoted an anti-deflationary scheme that would permit trade associations to cooperate in government-instigated cartels to stabilize prices within their industries. While existing antitrust laws clearly forbade such practices, the organized business found a receptive ear in the Roosevelt Administration.^[70]
Roosevelt's advisors believed that excessive competition and technical progress had led to overproduction and lowered wages and prices, which they believed lowered demand and employment (deflation). He argued that government economic planning was necessary to remedy this.^[71] New Deal economists argued that cut-throat competition had hurt many businesses and that with prices having fallen 20% and more, "deflation" exacerbated the burden of debt and would delay recovery. They rejected a strong move in Congress to limit the workweek to 30 hours. Instead, their remedy, designed in cooperation with big business, was the National Industrial Recovery Act (NIRA). It included stimulus funds for the WPA to spend and sought to raise prices, give more bargaining power for unions (so the workers could purchase more), and reduce harmful competition.
At the center of the NIRA was the National Recovery Administration (NRA), headed by former General Hugh S. Johnson, who had been a senior economic official in World War I. Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35–45 hours and the abolition of child labor. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.^[72] To mobilize political support for the NRA, Johnson launched the "NRA Blue Eagle" publicity campaign to boost what he called "industrial self-government". The NRA brought together leaders in each industry to design specific sets of codes for that industry—the most important provisions were anti-deflationary floors below which no company would lower prices or wages and agreements on maintaining employment and production. In a remarkably short time, the NRA announced agreements from almost every major industry in the nation. By March 1934, industrial production was 45% higher than in March 1933.^[73]
NRA Administrator Hugh Johnson was showing signs of a mental breakdown due to the extreme pressure and workload of running the National Recovery Administration.^[74] Johnson lost power in September, 1934 but kept his title. Roosevelt replaced his position with a new National Industrial Recovery Board,^[75]^[76] of which Donald Richberg was named Executive Director.
On May 27, 1935, the NRA was found to be unconstitutional by a unanimous decision of the U.S. Supreme Court in the case of A.L.A. Schechter Poultry Corp. v. United States. After the end of the NRA, quotas in the oil industry were fixed by the Railroad Commission of Texas with Tom Connally's federal Hot Oil Act of 1935, which guaranteed that illegal "hot oil" would not be sold.^[77] By the time NRA ended in May 1935, well over 2 million employers accepted the new standards laid down by the NRA, which had introduced a minimum wage and an eight-hour workday, together with abolishing child labor.^[51] These standards were reintroduced by the Fair Labor Standards Act of 1938.
Historian William E. Leuchtenburg argued in 1963:
The NRA could boast some considerable achievements: it gave jobs to some two million workers; it helped stop a renewal of the deflationary spiral that had almost wrecked the nation; it did something to improve business ethics and civilize competition; it established a national pattern of maximum hours and minimum wages; and it all but wiped out child labor and the sweatshop. But this was all it did. It prevented things from getting worse, but it did little to speed recovery, and probably actually hindered it by its support of restrictionism and price raising. The NRA could maintain a sense of national interest against private interests only so long as the spirit of national crisis prevailed. As it faded, restriction-minded businessmen moved into a decisive position of authority. By delegating power over price and production to trade associations, the NRA created a series of private economic governments.^[78]
Housing sector[edit]
The New Deal had an important impact on the housing field. The New Deal followed and increased President Hoover's lead-and-seek measures. The New Deal sought to stimulate the private home building industry and increase the number of individuals who owned homes.^[79] The New Deal implemented two new housing agencies; Home Owners' Loan Corporation (HOLC) and the Federal Housing Administration (FHA). HOLC set uniform national appraisal methods and simplified the mortgage process. The Federal Housing Administration (FHA) created national standards for home construction.^[80]
Reform[edit]
Reform was based on the assumption that the depression was caused by the inherent instability of the market and that government intervention was necessary to rationalize and stabilize the economy and to balance the interests of farmers, business, and labor. Reforms targeted the causes of the depression and sought to prevent a crisis like it from happening again. In other words, financially rebuilding the U.S. while ensuring not to repeat history.
Trade liberalization[edit]
Most economic historians assert that protectionist policies, culminating in the Smoot-Hawley Act of 1930, worsened the Depression.^[81] Roosevelt already spoke against the act while campaigning for president during 1932.^[82] In 1934, the Reciprocal Tariff Act was drafted by Cordell Hull. It gave the president power to negotiate bilateral, reciprocal trade agreements with other countries. The act enabled Roosevelt to liberalize American trade policy around the globe and it is widely credited with ushering in the era of liberal trade policy that persists to this day.^[83]
Puerto Rico[edit]
The Puerto Rico Reconstruction Administration oversaw a separate set of programs in Puerto Rico. It promoted land reform and helped small farms, it set up farm cooperatives, promoted crop diversification, and helped the local industry.^[84]
Social Security Act[edit]
A poster publicizing Social Security benefits
Until 1935, only a dozen states had implemented old-age insurance, and these programs were woefully underfunded. Just one state (Wisconsin) had an insurance program. The United States was the only modern industrial country where people faced the Depression without any national system of social security. The work programs of the "First New Deal" such as CWA and FERA were designed for immediate relief, for a year or two.^[86]
The most important program of 1935, and perhaps of the New Deal itself, was the Social Security Act. It established a permanent system of universal retirement pensions (Social Security), unemployment insurance and welfare benefits for the handicapped and needy children in families without a father present.^[87] It established the framework for the U.S. welfare system. Roosevelt insisted that it should be funded by payroll taxes rather than from the general fund—he said: "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program".^[88]
Labor relations[edit]
The National Labor Relations Act of 1935, also known as the Wagner Act, finally guaranteed workers the rights to collective bargaining through unions of their own choice. The Act also established the National Labor Relations Board (NLRB) to facilitate wage agreements and to suppress the repeated labor disturbances. The Wagner Act did not compel employers to reach agreement with their employees, but it opened possibilities for American labor.^[89] The result was a tremendous growth of membership in the labor unions, especially in the mass-production sector, led by the older and larger American Federation of Labor and the new, more radical Congress of Industrial Organizations. Labor thus became a major component of the New Deal political coalition. However, the intense battle for members between the AFL and the CIO coalitions weakened labor's power.^[90]
The Fair Labor Standards Act of 1938 set maximum hours (44 per week) and minimum wages (25 cents per hour) for most categories of workers. Child labor of children under the age of 16 was forbidden, children under 18 years were forbidden to work in hazardous employment. As a result, the wages of 300,000 workers, especially in the South, were increased and the hours of 1.3 million were reduced.^[91] It was the last major New Deal legislation and it passed with support of Northern industrialists who wanted to stop the drain of jobs to the low-wage South.^[92]
Works Progress Administration[edit]
Works Progress Administration (WPA) poster promoting the LaGuardia Airport project (1937)
Roosevelt nationalized unemployment relief through the Works Progress Administration (WPA), headed by close friend Harry Hopkins. Roosevelt had insisted that the projects had to be costly in terms of labor, beneficial in the long term and the WPA was forbidden to compete with private enterprises—therefore the workers had to be paid smaller wages.^[93] The Works Progress Administration (WPA) was created to return the unemployed to the workforce.^[94] The WPA financed a variety of projects such as hospitals, schools, and roads,^[51] and employed more than 8.5 million workers who built 650,000 miles of highways and roads, 125,000 public buildings as well as bridges, reservoirs, irrigation systems, parks, playgrounds and so on.^[95]
Prominent projects were the Lincoln Tunnel, the Triborough Bridge, the LaGuardia Airport, the Overseas Highway and the San Francisco–Oakland Bay Bridge.^[96] The Rural Electrification Administration used cooperatives to bring electricity to rural areas, many of which still operate.^[97] The National Youth Administration was another semi-autonomous WPA program for youth. Its Texas director, Lyndon B. Johnson, later used the NYA as a model for some of his Great Society programs in the 1960s.^[98] The WPA was organized by states, but New York City had its own branch Federal One, which created jobs for writers, musicians, artists and theater personnel. It became a hunting ground for conservatives searching for communist employees.^[99]
The Federal Writers' Project operated in every state, where it created a famous guide book—it also catalogued local archives and hired many writers, including Margaret Walker, Zora Neale Hurston and Anzia Yezierska, to document folklore. Other writers interviewed elderly ex-slaves and recorded their stories.
Under the Federal Theater Project, headed by charismatic Hallie Flanagan, actresses and actors, technicians, writers and directors put on stage productions. The tickets were inexpensive or sometimes free, making theater available to audiences unaccustomed to attending plays.^[98]
One Federal Art Project paid 162 trained woman artists on relief to paint murals or create statues for newly built post offices and courthouses. Many of these works of art can still be seen in public buildings around the country, along with murals sponsored by the Treasury Relief Art Project of the Treasury Department.^[100]^[101] During its existence, the Federal Theatre Project provided jobs for circus people, musicians, actors, artists, and playwrights, together with increasing public appreciation of the arts.^[51]
Tax policy[edit]
In 1935, Roosevelt called for a tax program called the Wealth Tax Act (Revenue Act of 1935) to redistribute wealth. The bill imposed an income tax of 79% on incomes over $5 million. Since that was an extraordinarily high income in the 1930s, the highest tax rate actually covered just one individual—John D. Rockefeller. The bill was expected to raise only about $250 million in additional funds, so revenue was not the primary goal. Morgenthau called it "more or less a campaign document". In a private conversation with Raymond Moley, Roosevelt admitted that the purpose of the bill was "stealing Huey Long's thunder" by making Long's supporters of his own. At the same time, it raised the bitterness of the rich who called Roosevelt "a traitor to his class" and the wealth tax act a "soak the rich tax".^[102]
A tax called the undistributed profits tax was enacted in 1936. This time the primary purpose was revenue, since Congress had enacted the Adjusted Compensation Payment Act, calling for payments of $2 billion to World War I veterans. The bill established the persisting principle that retained corporate earnings could be taxed. Paid dividends were tax deductible by corporations. Its proponents intended the bill to replace all other corporation taxes—believing this would stimulate corporations to distribute earnings and thus put more cash and spending power in the hands of individuals.^[103] In the end, Congress watered down the bill, setting the tax rates at 7 to 27% and largely exempting small enterprises.^[104] Facing widespread and fierce criticism,^[105] the tax deduction of paid dividends was repealed in 1938.^[103]
Housing Act of 1937[edit]
Main article: Housing Act of 1937
The United States Housing Act of 1937 created the United States Housing Authority within the U.S. Department of the Interior. It was one of the last New Deal agencies created. The bill passed in 1937 with some Republican support to abolish slums.^[106]
Court-packing plan and jurisprudential shift[edit]
Main article: Judiciary Reorganization Bill of 1937
When the Supreme Court started abolishing New Deal programs as unconstitutional, Roosevelt launched a surprise counter-attack in early 1937. He proposed adding five new justices, but conservative Democrats revolted, led by the Vice President. The Judiciary Reorganization Bill of 1937 failed—it never reached a vote. Momentum in Congress and public opinion shifted to the right and very little new legislation was passed expanding the New Deal. However, retirements allowed Roosevelt to put supporters on the Court and it stopped killing New Deal programs.^[107]
Court-packing plan and jurisprudential shift[edit]
Main article: Judiciary Reorganization Bill of 1937
When the Supreme Court started abolishing New Deal programs as unconstitutional, Roosevelt launched a surprise counter-attack in early 1937. He proposed adding five new justices, but conservative Democrats revolted, led by the Vice President. The Judiciary Reorganization Bill of 1937 failed—it never reached a vote. Momentum in Congress and public opinion shifted to the right and very little new legislation was passed expanding the New Deal. However, retirements allowed Roosevelt to put supporters on the Court and it stopped killing New Deal programs.^[107]
Recession of 1937 and recovery[edit]
Main article: Recession of 1937
The Roosevelt administration was under assault during Roosevelt's second term, which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production and profits declined sharply. Unemployment jumped from 14.3% in May 1937 to 19.0% in June 1938. The downturn was perhaps due to nothing more than the familiar rhythms of the business cycle, but until 1937 Roosevelt had claimed responsibility for the excellent economic performance. That backfired in the recession and the heated political atmosphere of 1937.^[108]
Keynes did not think that the New Deal under Roosevelt ended the Great Depression: "It is, it seems, politically impossible for a capitalistic democracy to organize expenditure on the scale necessary to make the grand experiments which would prove my case—except in war conditions."^[109]
World War II and full employment[edit]
Female factory workers in 1942, Long Beach, California
The U.S. reached full employment after entering World War II in December 1941. Under the special circumstances of war mobilization, massive war spending doubled the gross national product (GNP).^[110] Military Keynesianism brought full employment and federal contracts were cost-plus. Instead of competitive bidding to get lower prices, the government gave out contracts that promised to pay all the expenses plus a modest profit. Factories hired everyone they could find regardless of their lack of skills—they simplified work tasks and trained the workers, with the federal government paying all the costs. Millions of farmers left marginal operations, students quit school and housewives joined the labor force.^[111]
The emphasis was for war supplies as soon as possible, regardless of cost and inefficiencies. Industry quickly absorbed the slack in the labor force and the tables turned such that employers needed to actively and aggressively recruit workers. As the military grew, new labor sources were needed to replace the 12 million men serving in the military. Propaganda campaigns started pleading for people to work in the war factories. The barriers for married women, the old, the unskilled—and (in the North and West) the barriers for racial minorities—were lowered.^[112]
Federal budget soars[edit]
In 1929, federal expenditures accounted for only 3% of GNP. Between 1933 and 1939, federal expenditures tripled, but the national debt as a percent of GNP showed little change. Spending on the war effort quickly eclipsed spending on New Deal programs. In 1944, government spending on the war effort exceeded 40% of GNP. These controls shared broad support among labor and business, resulting in cooperation between the two groups and the U.S. government. This cooperation resulted in the government subsidizing business and labor through both direct and indirect methods.^[113]
Wartime welfare projects[edit]
Conservative domination of Congress during the war meant that all welfare projects and reforms had to have their approval, which was given when business supported the project. For example, the Coal Mines Inspection and Investigation Act of 1941 significantly reduced fatality rates in the coal-mining industry, saving workers' lives and company money.^[114] In terms of welfare, the New Dealers wanted benefits for everyone according to need. However, conservatives proposed benefits based on national service—especially tied to military service or working in war industries—and their approach won out.
The Community Facilities Act of 1940 (the Lanham Act) provided federal funds to defense-impacted communities where the population had soared and local facilities were overwhelmed. It provided money for the building of segregated housing for war workers as well as recreational facilities, water, and sanitation plants, hospitals, day care centers, and schools.^[115]^[116]^[117]
The Servicemen's Dependents Allowance Act of 1942 provided family allowances for dependents of enlisted men. Emergency grants to states were authorized in 1942 for programs for day care for children of working mothers. In 1944, pensions were authorized for all physically or mentally helpless children of deceased veterans regardless of the age of the child at the date the claim was filed or at the time of the veteran's death, provided the child was disabled at the age of sixteen and that the disability continued to the date of the claim. The Public Health Service Act, which was passed that same year, expanded federal-state public health programs and increased the annual amount for grants for public health services.^[118]
The Emergency Maternity and Infant Care Program (EMIC), introduced in March 1943 by the Children's Bureau, provided free maternity care and medical treatment during an infant's first year for the wives and children of military personnel in the four lowest enlisted pay grades. One out of seven births was covered during its operation. EMIC paid $127 million to state health departments to cover the care of 1.2 million new mothers and their babies. The average cost of EMIC maternity cases completed was $92.49 for medical and hospital care. A striking effect was the sudden rapid decline in home births as most mothers now had paid hospital maternity care.^[119]^[120]^[121]^[122]
Under the 1943 Disabled Veterans Rehabilitation Act, vocational rehabilitation services were offered to wounded World War II veterans and some 621,000 veterans would go on to receive assistance under this program.^[123] The G.I. Bill (Servicemen's Readjustment Act of 1944) was a landmark piece of legislation, providing 16 million returning veterans with benefits such as housing, educational and unemployment assistance and played a major role in the postwar expansion of the American middle class.^[124]
Fair Employment Practices[edit]
Main article: Fair Employment Practice Committee
In response to the March on Washington Movement led by A. Philip Randolph, Roosevelt promulgated Executive Order 8802 in June 1941, which established the President's Committee on Fair Employment Practices (FEPC) "to receive and investigate complaints of discrimination" so that "there shall be no discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin".^[125]
Growing equality of income[edit]
A major result of the full employment at high wages was a sharp, long-lasting decrease in the level of income inequality (Great Compression). The gap between rich and poor narrowed dramatically in the area of nutrition because food rationing and price controls provided a reasonably priced diet to everyone. White collar workers did not typically receive overtime and therefore the gap between white collar and blue collar income narrowed. Large families that had been poor during the 1930s had four or more wage earners and these families shot to the top one-third income bracket. Overtime provided large paychecks in war industries^[126] and average living standards rose steadily, with real wages rising by 44% in the four years of war, while the percentage of families with an annual income of less than $2,000 fell from 75% to 25% of the population.^[127]
In 1941, 40% of all American families lived on less than the $1,500 per year defined as necessary by the Works Progress Administration for a modest standard of living. The median income stood at $2,000 a year, while 8 million workers earned below the legal minimum. From 1939 to 1944, wages and salaries more than doubled, with overtime pay and the expansion of jobs leading to a 70% rise in average weekly earnings during the course of the war. Membership in organized labor increased by 50% between 1941 and 1945 and because the War Labor Board sought labor-management peace, new workers were encouraged to participate in the existing labor organizations, thereby receiving all the benefits of union membership such as improved working conditions, better fringe benefits, and higher wages. As noted by William H. Chafe, "with full employment, higher wages and social welfare benefits provided under government regulations, American workers experienced a level of well-being that, for many, had never occurred before".^{[citation needed]}
As a result of the new prosperity, consumer expenditures rose by nearly 50%, from $61.7 billion at the start of the war to $98.5 billion by 1944. Individual savings accounts climbed almost sevenfold during the course of the war. The share of total income held by the top 5% of wage earners fell from 22% to 17% while the bottom 40% increased their share of the economic pie. In addition, during the course of the war, the proportion of the American population earning less than $3,000 (in 1968 dollars) fell by half.^[128]
Legacy[edit]
New Deal Era
1930s–1960s
The New Deal was the inspiration for President Lyndon B. Johnson's Great Society in the 1960s: Johnson (on right) headed the Texas NYA and was elected to Congress in 1938
Location United States
Including Great Depression
World War II
Cold War
Post-war Era
President(s) Franklin D. Roosevelt
Harry S. Truman
Dwight D. Eisenhower
John F. Kennedy
Lyndon B. Johnson
Key events First New Deal
Second New Deal
Proposed Second Bill of Rights
Fair Deal
New Frontier
War on Poverty
Great Society
← Preceded by
— Followed by →
Reagan Era
Analysts agree the New Deal produced a new political coalition that sustained the Democratic Party as the majority party in national politics into the 1960s.^[129] A 2013 study found that "an average increase in New Deal relief and public works spending resulted in a 5.4 percentage point increase in the 1936 Democratic voting share and a smaller amount in 1940. The estimated persistence of this shift suggests that New Deal spending increased long-term Democratic support by 2 to 2.5 percentage points. Thus, it appears that Roosevelt's early, decisive actions created long-lasting positive benefits for the Democratic party... The New Deal did play an important role in consolidating Democratic gains for at least two decades".^[130]
However, there is disagreement about whether it marked a permanent change in values. Cowie and Salvatore in 2008 argued that it was a response to Depression and did not mark a commitment to a welfare state because the U.S. has always been too individualistic.^[131] MacLean rejected the idea of a definitive political culture. She says they overemphasized individualism and ignored the enormous power that big capital wields, the Constitutional restraints on radicalism and the role of racism, antifeminism and homophobia. She warns that accepting Cowie and Salvatore's argument that conservatism's ascendancy is inevitable would dismay and discourage activists on the left.^[132] Klein responds that the New Deal did not die a natural death—it was killed off in the 1970s by a business coalition mobilized by such groups as the Business Roundtable, the Chamber of Commerce, trade organizations, conservative think tanks and decades of sustained legal and political attacks.^[133]
Historians generally agree that during Roosevelt's 12 years in office there was a dramatic increase in the power of the federal government as a whole.^[134]^[135] Roosevelt also established the presidency as the prominent center of authority within the federal government. Roosevelt created a large array of agencies protecting various groups of citizens—workers, farmers, and others—who suffered from the crisis and thus enabled them to challenge the powers of the corporations. In this way, the Roosevelt administration generated a set of political ideas—known as New Deal liberalism—that remained a source of inspiration and controversy for decades. New Deal liberalism lay the foundation of a new consensus. Between 1940 and 1980, there was the liberal consensus about the prospects for the widespread distribution of prosperity within an expanding capitalist economy.^[129] Especially Harry S. Truman's Fair Deal and in the 1960s Lyndon B. Johnson's Great Society used the New Deal as inspiration for a dramatic expansion of liberal programs.
The New Deal's enduring appeal on voters fostered its acceptance by moderate and liberal Republicans.^[136]
As the first Republican president elected after Roosevelt, Dwight D. Eisenhower (1953–1961) built on the New Deal in a manner that embodied his thoughts on efficiency and cost-effectiveness. He sanctioned a major expansion of Social Security by a self-financed program.^[137] He supported such New Deal programs as the minimum wage and public housing—he greatly expanded federal aid to education and built the Interstate Highway system primarily as defense programs (rather than jobs program).^[138] In a private letter, Eisenhower wrote:
Should any party attempt to abolish social security and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group of course, that believes you can do these things [...] Their number is negligible and they are stupid.^[139]
In 1964, Barry Goldwater, an unreconstructed anti-New Dealer, was the Republican presidential candidate on a platform that attacked the New Deal. The Democrats under Lyndon B. Johnson won a massive landslide and Johnson's Great Society programs extended the New Deal. However, the supporters of Goldwater formed the New Right which helped to bring Ronald Reagan into the White House in the 1980 presidential election. Once an ardent supporter of the New Deal, Reagan turned against it, now viewing government as the problem rather than solution and, as president, moved the nation away from the New Deal model of government activism, shifting greater emphasis to the private sector.^[140]
A 2016 review study of the existing literature in the Journal of Economic Literature summarized the findings of the research as follows:^[141]
The studies find that public works and relief spending had state income multipliers of around one, increased consumption activity, attracted internal migration, reduced crime rates, and lowered several types of mortality. The farm programs typically aided large farm owners but eliminated opportunities for share croppers, tenants, and farm workers. The Home Owners' Loan Corporation's purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex-post cost to taxpayers. The Reconstruction Finance Corporation's loans to banks and railroads appear to have had little positive impact, although the banks were aided when the RFC took ownership stakes.
Historiography and evaluation of New Deal policies[edit]
Historians debating the New Deal have generally been divided between liberals who support it, conservatives who oppose it, and some New Left historians who complain it was too favorable to capitalism and did too little for minorities. There is consensus on only a few points, with most commentators favorable toward the CCC and hostile toward the NRA.
Consensus historians of the 1950s, such as Richard Hofstadter, according to Lary May:
[B]elieved that the prosperity and apparent class harmony of the post-World War II era reflected a return to the true Americanism rooted in liberal capitalism and the pursuit of individual opportunity that had made fundamental conflicts over resources a thing of the past. They argued that the New Deal was a conservative movement that built a welfare state, guided by experts, that saved rather than transformed liberal capitalism.^[142]
Liberal historians argue that Roosevelt restored hope and self-respect to tens of millions of desperate people, built labor unions, upgraded the national infrastructure, and saved capitalism in his first term when he could have destroyed it and easily nationalized the banks and the railroads.^[87] Historians generally agree that apart from building up labor unions, the New Deal did not substantially alter the distribution of power within American capitalism. "The New Deal brought about limited change in the nation's power structure".^[143] The New Deal preserved democracy in the United States in a historic period of uncertainty and crises when in many other countries democracy failed.^[144]
The most common arguments can be summarized as follows:
Harmful
Further information: List of critics of the New Deal
The New Deal vastly increased the federal debt (Billington and Ridge).^[145] However, Keynesians argue that the federal deficit between 1933 and 1939 averaged only 3.7% which was not enough to offset the reduction in private sector spending during the Great Depression^[146]
Fostered bureaucracy and administrative inefficiency (Billington and Ridge)^[145] and enlarged the powers of the federal government^[147]
Slowed the growth of civil service reform by multiplying offices outside the merit system (Billington and Ridge)^[145]
Infringed upon free business enterprise (Billington and Ridge)^[145]
Rescued capitalism when the opportunity was at hand to nationalize banking, railroads, and other industries (New Left critique)^[148]
Neutral
Stimulated the growth of class consciousness among farmers and workers (Billington and Ridge)^[145]
Raised the issue of how far economic regulation could be extended without sacrificing the liberties of the people (Billington and Ridge)^[145]
Beneficial
Allowed the nation to come through its greatest depression without undermining the capitalist system (Billington and Ridge)^[145]
Made the capitalist system more beneficial by enacting banking and stock market regulations to avoid abuses and providing greater financial security, through, for example, the introduction of Social Security or the Federal Deposit Insurance Corporation (David M. Kennedy)^[149]
Created a better balance among labor, agriculture, and industry (Billington and Ridge)^[145]
Produced a more equal distribution of wealth (Billington and Ridge)^[145]
Help conserve natural resources (Billington and Ridge)^[145]
Permanently established the principle that the national government should take action to rehabilitate and preserve America's human resources (Billington and Ridge)^[145]
Fiscal policy[edit]
National debt as gross national product climbs from 20% to 40% under President Herbert Hoover; levels off under Roosevelt; and soars during World War II from Historical States US (1976)
Julian Zelizer (2000) has argued that fiscal conservatism was a key component of the New Deal.^[150] A fiscally conservative approach was supported by Wall Street and local investors and most of the business community—mainstream academic economists believed in it as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees. Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits. As Zelizer notes, public opinion polls consistently showed public opposition to deficits and debt. Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably Lewis Douglas the Director of Budget in 1933–1934; and Henry Morgenthau Jr., Secretary of the Treasury from 1934 to 1945. They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits. Personally, Roosevelt embraced their fiscal conservatism, but politically he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen. On the other hand, there was enormous pressure to act and spending money on high visibility work programs with millions of paychecks a week.^[150]
Douglas proved too inflexible and he quit in 1934. Morgenthau made it his highest priority to stay close to Roosevelt, no matter what. Douglas's position, like many of the Old Right, was grounded in a basic distrust of politicians and the deeply ingrained fear that government spending always involved a degree of patronage and corruption that offended his Progressive sense of efficiency. The Economy Act of 1933, passed early in the Hundred Days, was Douglas's great achievement. It reduced federal expenditures by $500 million, to be achieved by reducing veterans' payments and federal salaries. Douglas cut government spending through executive orders that cut the military budget by $125 million, $75 million from the Post Office, $12 million from Commerce, $75 million from government salaries and $100 million from staff layoffs. As Freidel concludes: "The economy program was not a minor aberration of the spring of 1933, or a hypocritical concession to delighted conservatives. Rather it was an integral part of Roosevelt's overall New Deal".^[151]
Revenues were so low that borrowing was necessary (only the richest 3% paid any income tax between 1926 and 1940).^[152] Douglas, therefore, hated the relief programs, which he said reduced business confidence, threatened the government's future credit and had the "destructive psychological effects of making mendicants of self-respecting American citizens".^[150] Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.
Morgenthau shifted with Roosevelt, but at all times tried to inject fiscal responsibility—he deeply believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment. The Wagner Act met Morgenthau's requirement because it strengthened the party's political base and involved no new spending. In contrast to Douglas, Morgenthau accepted Roosevelt's double budget as legitimate—that is a balanced regular budget and an "emergency" budget for agencies, like the WPA, PWA, and CCC, that would be temporary until full recovery was at hand. He fought against the veterans' bonus until Congress finally overrode Roosevelt's veto and gave out $2.2 billion in 1936. His biggest success was the new Social Security program as he managed to reverse the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. It was Morgenthau who insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.^[150]
Race and gender[edit]
African Americans[edit]
While many Americans suffered economically during the Great Depression, African Americans also had to deal with social ills, such as racism, discrimination, and segregation. Black workers were especially vulnerable to the economic downturn since most of them worked the most marginal jobs such as unskilled or service-oriented work, therefore they were the first to be discharged and additionally many employers preferred white workers. When jobs were scarce some employers even dismissed black workers to create jobs for white citizens. In the end, there were three times more African American workers on public assistance or relief than white workers.^[153]
Roosevelt appointed an unprecedented number of African Americans to second-level positions in his administration—these appointees were collectively called the Black Cabinet. The WPA, NYA, and CCC relief programs allocated 10% of their budgets to blacks (who comprised about 10% of the total population, and 20% of the poor). They operated separate all-black units with the same pay and conditions as white units.^[154] Some leading white New Dealers, especially Eleanor Roosevelt, Harold Ickes and Aubrey Williams, worked to ensure blacks received at least 10% of welfare assistance payments.^[154] However, these benefits were small in comparison to the economic and political advantages that whites received. Most unions excluded blacks from joining and enforcement of anti-discrimination laws in the South was virtually impossible, especially since most blacks worked in hospitality and agricultural sectors.^[155]
The New Deal programs put millions of Americans immediately back to work or at least helped them to survive.^[156] The programs were not specifically targeted to alleviate the much higher unemployment rate of blacks.^[157] Some aspects of the programs were even unfavorable to blacks. The Agricultural Adjustment Acts, for example, helped farmers which were predominantly white but reduced the need of farmers to hire tenant farmers or sharecroppers which were predominantly black. While the AAA stipulated that a farmer had to share the payments with those who worked the land, this policy was never enforced.^[158] The Farm Service Agency (FSA), a government relief agency for tenant farmers, created in 1937, made efforts to empower African Americans by appointing them to agency committees in the South. Senator James F. Byrnes of South Carolina raised opposition to the appointments because he stood for white farmers who were threatened by an agency that could organize and empower tenant farmers. Initially, the FSA stood behind their appointments, but after feeling national pressure FSA was forced to release the African Americans from their positions. The goals of the FSA were notoriously liberal and not cohesive with the southern voting elite. Some harmful New Deal measures inadvertently discriminated against blacks. Thousands of blacks were thrown out of work and replaced by whites on jobs where they were paid less than the NRA's wage minimums because some white employers considered the NRA's minimum wage "too much money for Negroes". By August 1933, blacks called the NRA the "Negro Removal Act".^[159] An NRA study found that the NIRA put 500,000 African Americans out of work.^[160]
However, since blacks felt the sting of the depression's wrath even more severely than whites, they welcomed any help. Until 1936, almost all African Americans (and many whites) shifted from the "Party of Lincoln" to the Democratic Party.^[157] This was a sharp realignment from 1932 when most African Americans voted the Republican ticket. New Deal policies helped establish a political alliance between blacks and the Democratic Party that survives into the 21st century.^[154]^[161]
There was no attempt whatsoever to end segregation or to increase black rights in the South, and a number of leaders that promoted the New Deal were racist and anti-semitic.^[162]
The wartime Fair Employment Practices Commission (FEPC) executive orders that forbade job discrimination against African Americans, women, and ethnic groups was a major breakthrough that brought better jobs and pay to millions of minority Americans. Historians usually treat FEPC as part of the war effort and not part of the New Deal itself.
Segregation[edit]
The New Deal was racially segregated as blacks and whites rarely worked alongside each other in New Deal programs. The largest relief program by far was the WPA—it operated segregated units, as did its youth affiliate the NYA.^[163] Blacks were hired by the WPA as supervisors in the North, but of 10,000 WPA supervisors in the South only 11 were black.^[164] Historian Anthony Badger argues that "New Deal programs in the South routinely discriminated against blacks and perpetuated segregation".^[165] In its first few weeks of operation, CCC camps in the North were integrated. By July 1935, practically all the camps in the United States were segregated, and blacks were strictly limited in the supervisory roles they were assigned.^[166] Kinker and Smith argue that "even the most prominent racial liberals in the New Deal did not dare to criticize Jim Crow".
Secretary of the Interior Harold Ickes was one of the Roosevelt Administration's most prominent supporters of blacks and former president of the Chicago chapter of the NAACP. In 1937, when Senator Josiah Bailey Democrat of North Carolina accused him of trying to break down segregation laws Ickes wrote him to deny that:
I think it is up to the states to work out their social problems if possible, and while I have always been interested in seeing that the Negro has a square deal, I have never dissipated my strength against the particular stone wall of segregation. I believe that wall will crumble when the Negro has brought himself to a high educational and economic status…. Moreover, while there are no segregation laws in the North, there is segregation in fact and we might as well recognize this.^[167]^[168]^[169]
The New Deal's record came under attack by New Left historians in the 1960s for its pusillanimity in not attacking capitalism more vigorously, nor helping blacks achieve equality. The critics emphasize the absence of a philosophy of reform to explain the failure of New Dealers to attack fundamental social problems. They demonstrate the New Deal's commitment to save capitalism and its refusal to strip away private property. They detect a remoteness from the people and indifference to participatory democracy and call instead for more emphasis on conflict and exploitation.^[170]^[171]
Women[edit]
Federal Emergency Relief Administration (FERA) camp for unemployed women in Maine, 1934
At first, the New Deal created programs primarily for men as it was assumed that the husband was the "breadwinner" (the provider) and if they had jobs the whole family would benefit. It was the social norm for women to give up jobs when they married—in many states, there were laws that prevented both husband and wife holding regular jobs with the government. So too in the relief world, it was rare for both husband and wife to have a relief job on FERA or the WPA.^[172] This prevailing social norm of the breadwinner failed to take into account the numerous households headed by women, but it soon became clear that the government needed to help women as well.^[173]
Many women were employed on FERA projects run by the states with federal funds. The first New Deal program to directly assist women was the Works Progress Administration (WPA), begun in 1935. It hired single women, widows, or women with disabled or absent husbands. The WPA employed about 500,000 women and they were assigned mostly to unskilled jobs. 295,000 worked on sewing projects that made 300 million items of clothing and bedding to be given away to families on relief and to hospitals and orphanages. Women also were hired for the WPA's school lunch program.^[174]^[175]^[176] Both men and women were hired for the small but highly publicized arts programs (such as music, theater, and writing).
The Social Security program was designed to help retired workers and widows but did not include domestic workers, farmers or farm laborers, the jobs most often held by blacks. However, Social Security was not a relief program and it was not designed for short-term needs, as very few people received benefits before 1942.
Relief[edit]
Anti-relief protest sign near Davenport, Iowa by Arthur Rothstein, 1940
The New Deal expanded the role of the federal government, particularly to help the poor, the unemployed, youth, the elderly and stranded rural communities. The Hoover administration started the system of funding state relief programs, whereby the states hired people on relief. With the CCC in 1933 and the WPA in 1935, the federal government now became involved in directly hiring people on relief in granting direct relief or benefits. Total federal, state and local spending on relief rose from 3.9% of GNP in 1929 to 6.4% in 1932 and 9.7% in 1934—the return of prosperity in 1944 lowered the rate to 4.1%. In 1935–1940, welfare spending accounted for 49% of the federal, state and local government budgets.^[177] In his memoirs, Milton Friedman said that the New Deal relief programs were an appropriate response. He and his wife were not on relief, but they were employed by the WPA as statisticians.^[178] Friedman said that programs like the CCC and WPA were justified as temporary responses to an emergency. Friedman said that Roosevelt deserved considerable credit for relieving immediate distress and restoring confidence.^[179]
Recovery[edit]
Roosevelt’s New Deal Recovery programs focused on stabilizing the economy by creating long-term employment opportunities, decreasing agricultural supply to drive prices up, and helping homeowners pay mortgages and stay in their homes, which also kept the banks solvent. In a survey of economic historians conducted by Robert Whaples, Professor of Economics at Wake Forest University, anonymous questionnaires were sent to members of the Economic History Association. Members were asked to disagree, agree, or agree with provisos with the statement that read: "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression". While only 6% of economic historians who worked in the history department of their universities agreed with the statement, 27% of those that work in the economics department agreed. Almost an identical percent of the two groups (21% and 22%) agreed with the statement "with provisos" (a conditional stipulation) while 74% of those who worked in the history department and 51% in the economic department disagreed with the statement outright.^[81]
Economic growth and unemployment (1933–1941)[edit]
WPA employed 2 to 3 million unemployed at unskilled labor
From 1933 to 1941, the economy expanded at an average rate of 7.7% per year.^[180] Despite high economic growth, unemployment rates fell slowly.
Unemployment rate^[181] 1933 1934 1935 1936 1937 1938 1939 1940 1941
Workers in job creation programs counted as unemployed 24.9% 21.7% 20.1% 16.9% 14.3% 19.0% 17.2% 14.6% 9.9%
Workers in job creation programs counted as employed 20.6% 16.0% 14.2% 9.9% 9.1% 12.5% 11.3% 9.5% 8.0%
John Maynard Keynes explained that situation as an underemployment equilibrium where skeptic business prospects prevent companies from hiring new employees. It was seen as a form of cyclical unemployment.^[182]
There are different assumptions as well. According to Richard L. Jensen, cyclical unemployment was a grave matter primarily until 1935. Between 1935 and 1941, structural unemployment became the bigger problem. Especially the unions successes in demanding higher wages pushed management into introducing new efficiency-oriented hiring standards. It ended inefficient labor such as child labor, casual unskilled work for subminimum wages and sweatshop conditions. In the long term, the shift to efficiency wages led to high productivity, high wages and a high standard of living, but it necessitated a well-educated, well-trained, hard-working labor force. It was not before war time brought full employment that the supply of unskilled labor (that caused structural unemployment) downsized.^[111]
Mainstream economics interpretation[edit]
U.S. GDP annual pattern and long-term trend (1920–1940) in billions of constant dollars
Keynesians: halted the collapse but lacked Keynesian deficit spending[edit]
At the beginning of the Great Depression, many economists traditionally argued against deficit spending. The fear was that government spending would "crowd out" private investment and would thus not have any effect on the economy, a proposition known as the Treasury view, but Keynesian economics rejected that view. They argued that by spending vastly more money—using fiscal policy—the government could provide the needed stimulus through the multiplier effect. Without that stimulus, business simply would not hire more people, especially the low skilled and supposedly "untrainable" men who had been unemployed for years and lost any job skill they once had. Keynes visited the White House in 1934 to urge President Roosevelt to increase deficit spending. Roosevelt afterwards complained that "he left a whole rigmarole of figures—he must be a mathematician rather than a political economist".^[183]
The New Deal tried public works, farm subsidies and other devices to reduce unemployment, but Roosevelt never completely gave up trying to balance the budget. Between 1933 and 1941, the average federal budget deficit was 3% per year.^[184] Roosevelt did not fully utilize^{[clarification needed]} deficit spending. The effects of federal public works spending were largely offset by Herbert Hoover's large tax increase in 1932, whose full effects for the first time were felt in 1933 and it was undercut by spending cuts, especially the Economy Act. According to Keynesians like Paul Krugman, the New Deal therefore was not as successful in the short run as it was in the long run.^[185]
Following the Keynesian consensus (that lasted until the 1970s), the traditional view was that federal deficit spending associated with the war brought full-employment output while monetary policy was just aiding the process. In this view, the New Deal did not end the Great Depression, but halted the economic collapse and ameliorated the worst of the crises.^[186]
Monetarist interpretation[edit]
Milton Friedman[edit]
More influential among economists has been the monetarist interpretation by Milton Friedman as put forth in A Monetary History of the United States,^{[citation needed]} which includes a full-scale monetary history of what he calls the "Great Contraction".^[187] Friedman concentrated on the failures before 1933 and points out that between 1929 and 1932 the Federal Reserve allowed the money supply to fall by a third which is seen as the major cause that turned a normal recession into a Great Depression. Friedman especially criticized the decisions of Hoover and the Federal Reserve not to save banks going bankrupt. Friedman's arguments got an endorsement from a surprising source when Fed Governor Ben Bernanke made this statement:
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.^[188]^[189]
Monetarists state that the banking and monetary reforms were a necessary and sufficient response to the crises. They reject the approach of Keynesian deficit spending. In an interview in 2000, Friedman said:
You have to distinguish between two classes of New Deal policies. One class of New Deal policies was reform: wage and price control, the Blue Eagle, the national industrial recovery movement. I did not support those. The other part of the new deal policy was relief and recovery ... providing relief for the unemployed, providing jobs for the unemployed, and motivating the economy to expand ... an expansive monetary policy. Those parts of the New Deal I did support.^[190]
Bernanke and Parkinson: cleared the way for a natural recovery[edit]
Ben Bernanke and Martin Parkinson declared in "Unemployment, Inflation, and Wages in the American Depression" (1989) that "the New Deal is better characterized as having cleared the way for a natural recovery (for example, by ending deflation and rehabilitating the financial system) rather than as being the engine of recovery itself".^[191]^[192]
Claims of fascism[edit]
Further information: The New Deal and corporatism
Worldwide, the Great Depression had the most profound impact in Germany and the United States. In both countries the pressure to reform and the perception of the economic crisis were strikingly similar. When Hitler came to power he was faced with exactly the same task that faced Roosevelt, overcoming mass unemployment and the global Depression. The political responses to the crises were essentially different: while American democracy remained strong, Germany replaced democracy with fascism, a Nazi dictatorship.^[212]
The initial perception of the New Deal was mixed. On the one hand, the eyes of the world were upon the United States because many American and European democrats saw in Roosevelt's reform program a positive counterweight to the seductive powers of the two great alternative systems, communism and fascism.^[213] As the historian Isaiah Berlin wrote in 1955: "The only light in the darkness was the administration of Mr. Roosevelt and the New Deal in the United States".^[214]
By contrast, enemies of the New Deal sometimes called it "fascist", but they meant very different things. Communists denounced the New Deal in 1933 and 1934 as fascist in the sense that it was under the control of big business. They dropped that line of thought when Stalin switched to the "Popular Front" plan of cooperation with liberals.^[215]
In 1934, Roosevelt defended himself against those critics in a "fireside chat":
[Some] will try to give you new and strange names for what we are doing. Sometimes they will call it 'Fascism', sometimes 'Communism', sometimes 'Regimentation', sometimes 'Socialism'. But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical.... Plausible self-seekers and theoretical die-hards will tell you of the loss of individual liberty. Answer this question out of the facts of your own life. Have you lost any of your rights or liberty or constitutional freedom of action and choice?^[216]
After 1945, only few observers continued to see similarities and later on some scholars such as Kiran Klaus Patel, Heinrich August Winkler and John Garraty came to the conclusion that comparisons of the alternative systems do not have to end in an apology for Nazism since comparisons rely on the examination of both similarities and differences. Their preliminary studies on the origins of the fascist dictatorships and the American (reformed) democracy came to the conclusion that besides essential differences "the crises led to a limited degree of convergence" on the level of economic and social policy.^{[disputed – discuss]} The most important cause was the growth of state interventionism since in the face of the catastrophic economic situation both societies no longer counted on the power of the market to heal itself.^[217]
John Garraty wrote that the National Recovery Administration (NRA) was based on economic experiments in Nazi Germany and Fascist Italy, without establishing a totalitarian dictatorship.^[218] Contrary to that, historians such as Hawley have examined the origins of the NRA in detail, showing the main inspiration came from Senators Hugo Black and Robert F. Wagner and from American business leaders such as the Chamber of Commerce. The model for the NRA was Woodrow Wilson's War Industries Board, in which Johnson had been involved too.^[219] Historians argue that direct comparisons between Fascism and New Deal are invalid since there is no distinctive form of fascist economic organization.^[220] Gerald Feldman wrote that fascism has not contributed anything to economic thought and had no original vision of a new economic order replacing capitalism. His argument correlates with Mason's that economic factors alone are an insufficient approach to understand fascism and that decisions taken by fascists in power cannot be explained within a logical economic framework. In economic terms, both ideas were within the general tendency of the 1930s to intervene in the free market capitalist economy, at the price of its laissez-faire character, "to protect the capitalist structure endangered by endogenous crises tendencies and processes of impaired self-regulation".^[220]
Stanley Payne, a historian of fascism, examined possible fascist influences in the United States by looking at the KKK and its offshoots and movements led by Father Coughlin and Huey Long. He concluded that "the various populist, nativist, and rightist movements in the United States during the 1920s and 1930s fell distinctly short of fascism".^[221] According to Kevin Passmore, lecturer in history at Cardiff University, the failure of fascism in the United States was due to the social policies of the New Deal that channelled anti-establishment populism into the left rather than the extreme right.^[222]
Great Depression in the United States
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Great Depression in the United States
1929–1941
Dorothea Lange's 1936 photo Migrant Mother is one of the most iconic photos associated with the Great Depression
Location United States, quickly spreading around the world
President(s) Herbert Hoover
Franklin D. Roosevelt
Key events Wall Street Crash of 1929
Smoot-Hawley Tariff Act
Widespread bank failures
Hitler's rise to power
Dust Bowl
New Deal
Hindenburg disaster
Recession of 1937–1938
← Preceded by
Roaring Twenties Followed by →
World War II
Unemployed men outside a soup kitchen in Chicago, 1931
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In the United States, the Great Depression began with the Wall Street Crash of October 1929. The stock market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth as well as for personal advancement. Altogether, there was a general loss of confidence in the economic future.^[1]
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, and the lack of high-growth new industries. These all interacted to create a downward economic spiral of reduced spending, falling confidence and lowered production.^[2] Industries that suffered the most included construction, shipping, mining, logging and agriculture (compounded by dust-bowl conditions in the heartland). Also hard hit was the manufacturing of durable goods like automobiles and appliances, whose purchase consumers could postpone. The economy hit bottom in the winter of 1932–1933; then came four years of growth until the recession of 1937–1938 brought back high levels of unemployment.^[3]
US annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted
Unemployment rate in the US 1910–60, with the years of the Great Depression (1929–39) highlighted; accurate data begins in 1939, represented by a blue line.
The Depression caused major political changes in America. Three years into the depression, President Herbert Hoover, widely blamed for not doing enough to combat the crisis, lost the election of 1932 to Franklin Delano Roosevelt by a historically wide margin. Roosevelt's economic recovery plan, the New Deal, instituted unprecedented programs for relief, recovery and reform, and brought about a major realignment of American politics.
The Depression also resulted in an increase of emigration for the first time in American history. Some immigrants went back to their native countries, and some native U.S. citizens went to Canada, Australia and South Africa. There were mass migrations of people from badly hit areas in the Great Plains (the Okies) and the South to places such as California and the cities of the North (the Great Migration).^[4]^[5] Racial tensions also increased during this time. By the 1940s, immigration had returned to normal, and emigration declined.
The memory of the Depression also shaped modern theories of economics and resulted in many changes in how the government dealt with economic downturns, such as the use of stimulus packages, Keynesian economics, and Social Security. It also shaped modern American literature, resulting in famous novels such as John Steinbeck's The Grapes of Wrath and Of Mice and Men.
Examining the causes of the Great Depression raises multiple issues: what factors set off the first downturn in 1929; what structural weaknesses and specific events turned it into a major depression; how the downturn spread from country to country; and why the economic recovery was so prolonged.^[6]
Many banks began to fail in October 1930 when farmers defaulted on loans. There was no federal deposit insurance during that time as bank failures were considered a normal part of economic life. Worried depositors started to withdraw savings, so the money multiplier worked in reverse. Banks were forced to liquidate assets (such as calling in loans rather than creating new loans).^[7] This caused the money supply to shrink and the economy to contract (the Great Contraction), resulting in a significant decline in aggregate investment. The decreased money supply further aggravated price deflation, putting more pressure on already struggling businesses.
A $10 US gold certificate. The U.S. used the gold standard until 1934 and controlled nearly half of the global gold supply during the inter-war period.
The U.S. Government's commitment to the gold standard prevented it from engaging in expansionary monetary policy.^{[clarification needed]} High interest rates needed to be maintained in order to attract international investors who bought foreign assets with gold. However, the high interest also inhibited domestic business borrowing.^{[citation needed]} The U.S. interest rates were also affected by France's decision to raise their interest rates to attract gold to their vaults. In theory, the U.S. would have two potential responses to that: allow the exchange rate to adjust, or increase their own interest rates to maintain the gold standard. At the time, the U.S. was pegged to the gold standard. Therefore, Americans converted their dollars into francs to buy more French assets, the demand for the U.S. dollar fell, and the exchange rate increased. One of the only things the U.S. could do to get back into equilibrium was increase interest rates.^{[citation needed]}
In the late 20th century, Winner of the Swedish Central Bank Nobel Memorial Prize in Economic Sciences economist Milton Friedman and his fellow monetarist Anna Schwartz argued that the Federal Reserve could have stemmed the severity of the Depression, but failed to exercise its role of managing the monetary system and ameliorating banking panics, resulting in a Great Contraction of the economy from 1929 until the New Deal began in 1933.^[8] This view was endorsed by Fed Governor Ben Bernanke who in 2002 said in a speech honoring Friedman and Schwartz:
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.^[9]^[8]
— Ben S. Bernanke

Stock market crash[edit]

The Wall Street Crash of 1929 is often cited as the beginning of the Great Depression. It began on October 24, 1929, and was the most devastating stock market crash in the history of the United States. Much of the stock market crash can be attributed to exuberance and false expectations. In the years leading up to 1929, the rising stock market prices had created vast sums of wealth in relation to amounts invested, in turn encouraging borrowing to further buy more stock. However, on October 24 (Black Thursday), share prices began to fall and panic selling caused prices to fall sharply. On October 29 (Black Tuesday), share prices fell by $14 billion in a single day, more than $30 billion in the week.^[10] The value that evaporated that week was ten times more than the entire federal budget and more than all of what the U.S. had spent on World War I. By 1930 the value of shares had fallen by 90%.^[11]

Since many banks had also invested their clients' savings in the stock market, these banks were forced to close when the stock market crashed. After the stock market crash and the bank closures, people were afraid of losing more money. Because of their fears of further economic challenge, individuals from all classes stopped purchasing and consuming. Thousands of individual investors who believed they could get rich by investing on margin lost everything they had. The stock market crash severely impacted the American economy.

Banking failures[edit]

A large contribution to the recession was the closure and suspension of thousands of banks across the country. Financial institutions failed for several reasons, including unregulated lending procedures, confidence in the Gold standard, consumer confidence in future economics, and agricultural defaults on outstanding loans. With these compounding issues the banking system struggled to keep up with the public's increasing demand for cash withdrawals. This overall decreased the money supply and forced the banks to resort to short or liquidate existing loans.^[7] In the race to liquidate assets the banking system began to fail on a wide scale. In November 1930 the first major banking crisis began with over 800 banks closing their doors by January 1931. By October 1931 over 2100 banks were suspended with the highest suspension rate recorded in the St. Louis Federal Reserve District, with 2 out of every 5 banks suspended.^[12] The economy as a whole experienced a massive reduction in banking footholds across the country amounting to more than nine thousand closed banks by 1933.

People outside a closed bank after 1929 stock market crash.

The closures resulted in a massive withdrawal of deposits by millions of Americans estimated at near $6.8 billion (equivalent to about $115 billion in today's dollars 1931 $1=$17). During this time the Federal Deposit Insurance Corporation (FDIC) was not in place resulting in a loss of roughly $1.36 billion (or 20%) of the total $6.8 billion accounted for within the failed banks. These losses came directly from everyday individuals' savings, investments and bank accounts. As a result, GDP fell from the high seven-hundreds in 1929 to the low to mid six-hundreds in 1933 before seeing any recovery for the first time in nearly 4 years.^[13] Federal leadership intervention is highly debated on its effectiveness and overall participation. The Federal Reserve Act could not effectively tackle the banking crisis as state bank and trust companies were not compelled to be a member, paper eligible discount member banks heavily restricted access to the Federal Reserve, power between the twelve Federal Reserve banks was decentralized and federal level leadership was ineffective, inexperienced, and weak.

Contagion[edit]

With a lack of consumer confidence in the economic direction given by the federal government panic started to spread across the country shortly after the Wall Street Crash of 1929. President Hoover retained the Gold Standard as the country's currency gauge throughout the following years. As a result, the American shareholders with the majority of the gold reserves began to grow wary of the value of gold in the near future. Europe's decision to move away from the Gold Standard caused individuals to start to withdraw gold shares and move the investments out of the country or began to hoard gold for future investment. The market continued to suffer due to these reactions, and as a result caused several of the everyday individuals to speculate on the economy in the coming months. Rumors of market stability and banking conditions began to spread, consumer confidence continued to drop and panic began to set in. Contagion spread like wildfire pushing Americans all over the country to withdraw their deposits en masse. This idea would continue from 1929 to 1933 causing the greatest financial crisis ever seen at the banking level pushing the economic recovery efforts further from resolution. An increase in the currency-deposit ratio and a money stock determinant forced money stock to fall and income to decline. This panic-induced banking failure took a mild recession to a major recession.^[18]

Whether this caused the Great Depression is still heavily debated due to many other attributing factors. However, it is evident that the banking system suffered massive reductions across the country due to the lack of consumer confidence. As withdraw requests would exceed cash availability banks began conducting steed discount sales such as fire sales and short sales. Due to the inability to immediately determine current value worth these fire sales and short sales would result in massive losses when recuperating any possible revenue for outstanding and defaulted loans. This would allow healthy banks to take advantage of the struggling units forcing additional losses resulting in banks not being able to deliver on depositor demands and creating a failing cycle that would become widespread.^[19] Investment would continue to stay low through the next half-decade as the private sector would hoard savings due to uncertainty of the future. The federal government would run additional policy changes such as the Check tax, monetary restrictions (including reduction of money supply by burning), High Wage Policy, and the New Deal through the Hoover and Roosevelt administration.

Europe[edit]

Europe as a whole was badly hit, in both rural and industrial areas. Democracy was discredited and the left often tried a coalition arrangement between Communists and Socialists, who previously had been harsh enemies. Right wing movements sprang up, often following Italy's fascist mode.^[38]
As the Great Depression in the United Kingdom worsened, the Labour Party lost power and a coalition government dominated by the Conservative Party came to power in 1931, remaining in power until the 1945 general election. There were no programs in Britain comparable to the New Deal.
In France, the "Popular Front" government of Socialists with some Communist support, was in power 1936–1938. It launched major programs favoring labor and the working class, but engendered stiff opposition.
Germany during the Weimar Republic had fully recovered and was prosperous in the late 1920s. The Great Depression hit in 1929 and was severe. The political system descended into violence and the Nazi Party led by Adolf Hitler came to power through a series of elections in the early 1930s. Economic recovery was pursued through autarky, pressure on economic partners, wage controls, price controls, and spending programs such as public works and, especially, military spending.
Spain saw mounting political crises that led in 1936–1939 to the Spanish Civil War and the takeover of the country by Francisco Franco's Nationalist faction.

In Benito Mussolini's Italy, the economic controls of his corporate state were tightened. The economy was never prosperous.

Controls and taxes[edit]

Federal tax policy was highly contentious during the war, with President Franklin D. Roosevelt opposing a conservative coalition in Congress. However, both sides agreed on the need for high taxes (along with heavy borrowing) to pay for the war: top marginal tax rates ranged from 81–94% for the duration of the war, and the income level subject to the highest rate was lowered from $5,000,000 to $200,000. Roosevelt tried unsuccessfully, by executive order 9250,^[4] to impose a 100% surtax on after-tax incomes over $25,000 (equal to roughly $391,490 today). However, Roosevelt did manage to impose this cap on executive pay in corporations with government contracts.^[5] Congress also enlarged the tax base by lowering the minimum income to pay taxes, and by reducing personal exemptions and deductions. By 1944 nearly every employed person was paying federal income taxes (compared to 10% in 1940).^[6]

Many controls were put on the economy. The most important was price controls, imposed on most products and monitored by the Office of Price Administration. Wages were also controlled.^[7] Corporations dealt with numerous agencies, especially the War Production Board (WPB), and the War and Navy departments, which had the purchasing power and priorities that largely reshaped and expanded industrial production.^[8]

Sugar rationing

In 1942 a rationing system was begun to guarantee minimum amounts of necessities to everyone (especially poor people) and prevent inflation. Tires were the first item to be rationed in January 1942 because supplies of natural rubber were interrupted. Gasoline rationing proved an even better way to allocate scarce rubber. In June 1942 the Combined Food Board was set up to coordinate the worldwide supply of food to the Allies, with special attention to flows from the U.S. and Canada to Britain. By 1943, government-issued ration coupons were required to purchase coffee, sugar, meat, cheese, butter, lard, margarine, canned foods, dried fruits, jam, gasoline, bicycles, fuel oil, clothing, silk or nylon stockings, shoes, and many other items. Some items, like automobiles and home appliances, were no longer made. The rationing system did not apply to used goods like clothes or cars, but they became more expensive since they were not subject to price controls.

To get a classification and a book of rationing stamps, people had to appear before a local rationing board. Each person in a household received a ration book, including babies and children. When purchasing gasoline, a driver had to present a gas card along with a ration book and cash. Ration stamps were valid only for a set period to forestall hoarding. All forms of automobile racing were banned, including the Indianapolis 500 which was canceled from 1942 to 1945. Sightseeing driving was banned.

Labor[edit]

The unemployment problems of the Great Depression largely ended with the mobilization for war. Out of a labor force of 54 million, unemployment fell by half from 7.7 million in spring 1940 (when the first accurate statistics were compiled) to 3.4 million by fall of 1941 and fell by half again to 1.5 million by fall of 1942, hitting an all-time low of 700,000 in fall 1944.^[11] There was a growing labor shortage in war centers, with sound trucks going street by street begging for people to apply for war jobs.

Greater wartime production created millions of new jobs, while the draft reduced the number of young men available for civilian jobs. So great was the demand for labor that millions of retired people, housewives, and students entered the labor force, lured by patriotism and wages.^[12] The shortage of grocery clerks caused retailers to convert from service at the counter to self-service. With new shorter women clerks replacing taller men, some stores lowered shelves to 5 feet 8 inches (1.73 m). Before the war, most groceries, dry cleaners, drugstores, and department stores offered home delivery service. The labor shortage and gasoline and tire rationing caused most retailers to stop delivery. They found that requiring customers to buy their products in person increased sales.^[13]

Labor[edit]

The unemployment problems of the Great Depression largely ended with the mobilization for war. Out of a labor force of 54 million, unemployment fell by half from 7.7 million in spring 1940 (when the first accurate statistics were compiled) to 3.4 million by fall of 1941 and fell by half again to 1.5 million by fall of 1942, hitting an all-time low of 700,000 in fall 1944.^[11] There was a growing labor shortage in war centers, with sound trucks going street by street begging for people to apply for war jobs.

Greater wartime production created millions of new jobs, while the draft reduced the number of young men available for civilian jobs. So great was the demand for labor that millions of retired people, housewives, and students entered the labor force, lured by patriotism and wages.^[12] The shortage of grocery clerks caused retailers to convert from service at the counter to self-service. With new shorter women clerks replacing taller men, some stores lowered shelves to 5 feet 8 inches (1.73 m). Before the war, most groceries, dry cleaners, drugstores, and department stores offered home delivery service. The labor shortage and gasoline and tire rationing caused most retailers to stop delivery. They found that requiring customers to buy their products in person increased sales.^[13]

Women[edit]

"Rosie the Riveter", working on an A-31 "Vengeance" dive bomber, Tennessee, 1943.

Women also joined the workforce to replace men who had joined the forces, though in fewer numbers. Roosevelt stated that the efforts of civilians at home to support the war through personal sacrifice was as critical to winning the war as the efforts of the soldiers themselves. "Rosie the Riveter" became the symbol of women laboring in manufacturing. Women worked in defense plants and volunteered for war-related organizations. Women even learned to fix cars and became "conductorettes" for the train. The war effort brought about significant changes in the role of women in society as a whole. When the male breadwinner returned, wives could stop working.

Alice Throckmorton McLean founded the American Women's Voluntary Services (AWVS) in January 1940, 23 months before the United States entered the war. When Pearl Harbor was bombed, the AWVS had more than 18,000 members who were ready to drive ambulances, fight fires, lead evacuations, operate mobile kitchens, deliver first aid, and perform other emergency services.^[14] By war's end the AWVS counted 325,000 women at work and selling an estimated $1 billion in war bonds and stamps.^[15]

At the end of the war, most of the munitions-making jobs ended. Many factories were closed; others retooled for civilian production. In some jobs, women were replaced by returning veterans who did not lose seniority because they were in service. However, the number of women at work in 1946 was 87% of the number in 1944, leaving 13% who lost or quit their jobs. Many women working in machinery factories and more were taken out of the workforce. Many of these former factory workers found other work at kitchens, being teachers, etc.

The table shows the development of the United States labor force by sex during the war years.^[16]

Year	Total labor force (*1000)	of which Male (*1000)	of which Female (*1000)	Female share of total (%)
1940	56,100	41,940	14,160	25.2
1941	57,720	43,070	14,650	25.4
1942	60,330	44,200	16,120	26.7
1943	64,780	45,950	18,830	29.1
1944	66,320	46,930	19,390	29.2
1945	66,210	46,910	19,304	29.2
1946	60,520	43,690	16,840	27.8

Women also took on new roles in sport and entertainment, which opened to them as more and more men were drafted. The All-American Girls Professional Baseball League was the creation of Chicago Cubs owner Philip Wrigley, who sought alternative ways to expand his baseball franchise as top male players left for military service. In 1943, he created an eight-team league in small industrial cities around the Great Lakes. Night games offered affordable, patriotic entertainment to working Americans who had flocked to wartime jobs in the Midwest hubs of Chicago and Detroit. The league provided a novel entertainment of women playing baseball well while wearing short, feminine uniform skirts. Players as young as fifteen were recruited from white farm families and urban industrial teams. Fans supported the League to the extent that it continued well past the conclusion of the war, lasting through 1953.^[17]

Farming[edit]

Victory garden poster

Labor shortages were felt in agriculture, even though most farmers were given an exemption and few were drafted. Large numbers volunteered or moved to cities for factory jobs. At the same time, many agricultural commodities were in greater demand by the military and for the civilian populations of Allies. Production was encouraged and prices and markets were under tight federal control.^[18] Civilians were encouraged to create "victory gardens", farms that were often started in backyards and lots. Children were encouraged to help with these farms, too.^[19]

The Bracero Program, a bi-national labor agreement between Mexico and the U.S., started in 1942. Some 290,000 braceros ("strong arms," in Spanish) were recruited and contracted to work in the agriculture fields. Half went to Texas, and 20% to the Pacific Northwest.^[20]^[21]

Between 1942 and 1946 some 425,000 Italian and German prisoners of war were used as farm laborers, loggers, and cannery workers. In Michigan, for example, the POWs accounted for more than one-third of the state's agricultural production and food processing in 1944.^[22]

Children[edit]

To help with the need for a larger source of food, the nation looked to school-aged children to help on farms. Schools often had a victory garden in vacant parking lots and on roofs. Children would help on these farms to help with the war effort.^[23] The slogan, "Grow your own, can your own", also influenced children to help at home.^[24]

Teenagers[edit]

With the war's ever-increasing need for able-bodied men consuming America's labor force in the early 1940s, the industry turned to teen-aged boys and girls to fill in as replacements.^[25] Consequently, many states had to change their child-labor laws to allow these teenagers to work. The lures of patriotism, adulthood, and money led many youths to drop out of school and take a defense job. Between 1940 and 1944, the number of teenage workers increased by 1.9 million, and the number of students in public high schools dropped from 6.6 million in 1940 to 5.6 million in 1944, about a million students—and many teachers—took jobs.^[26]

Office of Price Administration

From Wikipedia, the free encyclopedia

Office of Price Administration
Agency overview
An OPA
Formed	August 28, 1941
Preceding	Council of National Defense (World War I)^[1]
Dissolved	May 29, 1947
Superseding agencies	1942 siblings: Office of Economic Stabilization, Office of Production Management liquidated in 1947 to Agriculture, Justice, Commerce, RFC and others Similar functions later performed by Office of Price Stabilization (Korean War-era price board) Council of Economic Advisors (Kennedy-era price board)^[2] Pay Board and Price Commission (Nixon-era price board)^[2]
Jurisdiction	United States Government
Headquarters	Washington, D.C.
Agency executives	Leon Henderson, 1941–1942 Prentiss Marsh Brown, 1943 Chester Bliss Bowles, 1943–1946
Parent agency	Office for Emergency Management

The Office of Price Administration (OPA) was established within the Office for Emergency Management of the United States government by Executive Order 8875 on August 28, 1941. The functions of the OPA were originally to control money (price controls) and rents after the outbreak of World War II.^[3]

History[edit]

President Franklin D. Roosevelt inaugurated the Council of National Defense Advisory Commission on May 29, 1940,^[4] to include Price Stabilization and Consumer Protection Divisions. Both divisions merged to become the Office of Price Administration and Civilian Supply (OPACS) within the Office for Emergency Management by Executive Order 8734, on April 11, 1941. Civil supply functions were transferred to the Office of Production Management.^[1]

It became an independent agency under the Emergency Price Control Act, January 30, 1942. The OPA had the power to place ceilings on all prices except agricultural commodities, and to ration scarce supplies of other items, including tires, automobiles, shoes, nylon, sugar, gasoline, fuel oil, coffee, meats and processed foods. At the peak, almost 90% of retail food prices were frozen. It could also authorize subsidies for production of some of those commodities.^[5]

Dissolution[edit]

As early as 1944, in its annual debate about price control extension, Congress discussed limiting the power of the OPA as World War II drew to a close and the necessity of price controls was called into question. While some argued for the continuation of price controls to hold post war inflation in check, there was widespread support among conservatives and businessmen for the rapid deregulation of the economy as it reconverted to a civilian footing.^[6] Groups such as the National Association of Manufacturers and the National Retail Dry Good Association sought to guarantee companies a minimum amount of profits, thereby effectively limiting the price control measures.^[7] However, the OPA still enjoyed widespread popular support and the agency was renewed in 1944 and again in 1945.^[7]^[8] While these renewals were considerable successes for many consumer advocacy groups, they also marked the height of the OPA, from which the agency's power and popularity would decline in the next two years.^[7]

By June 1946 significant opposition by NAM and NRDA had been mounted to sway Congress, which, only two days before the existing legislation was set to expire, passed a bill that would have left the OPA a much-weakened version of its past self.^[7]^[8] President Harry S. Truman vetoed this bill in hopes of forcing Congress to create a stronger one, but as the month of June came to an end the OPA shut down, and its price and rent controls went with it.^[8] The result was a sharp jump in prices, with food increasing by 14 percent and the cost of overall living rising by 6 percent, an equivalent to more than 100 percent per year.^[7]^[8] Consumers all over the nation turned out in varying numbers to protest these increases, with labor unions forming a major part of the participants.^[7]^[8]

By the end of July Congress had reversed course and passed legislation reinstating the OPA and price controls, though this bill was no stronger than what President Truman had vetoed earlier.^[7]^[8] This much-weakened version of the OPA did not last long, as meat packers launched their own form of protest against the agency, slowing slaughtering rates and withholding meat from market.^[7]^[8] The resulting widespread shortages did much to damage the public faith in the OPA, which was now seen as ineffective, and the Democrat lead Congress.^[7]^[8] When faced with the choices of higher prices or no meat, the consumers chose the latter. Although President Truman ended price controls on meat on October 14 just two weeks before the election, in a rejection of price controls and as a sign of the changing attitude of the American public towards a control free re-conversion, many Democratic incumbents were defeated and Republicans gained control of Congress.^[6]^[7]^[8] Following this defeat, Truman lifted almost all price and wage controls, and while the OPA was authorized to exist through June 30, 1947, its range of tasks and ability to effectively regulate prices had been curtailed severely being reduced to rent control and some price control over a very limited number of goods.^[8] Most functions of the OPA were transferred to the newly established Office of Temporary Controls (OTC) by Executive Order 9809, December 12, 1946. The Financial Reporting Division was transferred to the Federal Trade Commission. By the end of December 1946, many of OPA's local offices and price boards would be closed and the OPA would not survive until its June 30 extension.^[8]

The OPA was abolished effective May 29, 1947, by the General Liquidation Order issued March 14, 1947, by the OPA Administrator.^[9] Some of its functions were taken up by successor agencies:

Sugar and sugar products distribution by the Sugar Rationing Administration in the Department of Agriculture pursuant to the Sugar Control Extension Act (61 Stat. 36), March 31, 1947
Price controls over rice by the Department of Agriculture by Executive Order 9841, on April 23, 1947, effective May 4, 1947
Food subsidies by the Reconstruction Finance Corporation, effective May 4, 1947
Rent control by the Office of the Housing Expediter, effective May 4, 1947
Price violation litigation by the Department of Justice, effective June 1, 1947
All other OPA functions by the Division of Liquidation, Department of Commerce, effective June 1, 1947.

Famous employees include economist John Kenneth Galbraith, legal scholar William Prosser, President Richard Nixon, and law professor John Honnold.^[7]

The OPA is featured, in fictionalized form as the Bureau of Price Regulation, in Rex Stout's Nero Wolfe mystery novel The Silent Speaker.

The OPA unsuccessfully tried to revoke the car dealer license of unorthodox businessman Madman Muntz for violating used car regulations, subject to price control. Muntz was acquitted in Los Angeles Superior Court on 1 August 1945.^[10]

During the Korean War, similar functions were performed by the Office of Price Stabilization (OPS).

Women and the OPA[edit]

The success of the OPA’s price controls and rationing policies depended on the support of women who acted as the main shoppers of their households, especially during wartime. Local community organizations, governments, and OPA boards held educational seminars aimed at women, targeted women to join local price and rationing boards, and recruited women for volunteer programs.^[7] Many women led local volunteer War Price and Rationing Boards that ensured adherence to stabilization policies through check-ins with stores to report businesses breaking the rules. Women involved with the OPA largely fell into two broad categories: Women who were part of already organized groups, such as labor unions, women’s groups, and consumer groups, among others, often with agendas that aligned with OPA’s goals of price stabilization. The second group comprise women not already part of organized groups who came from a diverse pool of backgrounds. They used the OPA as a legally established and legitimate framework for organizing themselves.^[7]

The OPA’s enlistment of women to ensure that local businesses were complying with federal policies extended the public sphere into the private sphere and the effective growth of “state supervision.”^[7] This resulted in a pseudo-militant attitude toward regulation and made it more difficult for politicians to curb the power of the OPA.

The OPA worked with consumer activists in a “mutually empowering” and mutually reliant fashion to ensure the effectiveness of its policies and activists’ interests.^[7] The state could back a large swathe of consumer activists into helping to ensure businesses were compliant with its policies. Widespread support of the OPA came from the belief that the agency could help establish postwar prosperity.

African Americans and the OPA[edit]

Black consumer activists also were among those who supported the OPA, which gave them support from the federal government in fighting market discrimination.^[7]

The OPA had a base of consumer support that included different socioeconomic classes and racial groups who supported the agency because of their belief it would bring about a postwar vision of “broad popular participation and consumer rights."^[7] The OPA worked to defend consumers from exploitation by businesses while also acting as a space for citizens to become involved in politics.

Administrators of the office[edit]

OPA points[edit]

OPA points are small vulcanized fibre red and blue ration tokens issued during World War II to make change for ration coupons. Approximately 1.1 billion red and 0.9 billion blue were produced, and even though many were collected and destroyed after the war, they are still quite common today. The red OPA points are a bit more common than the blue. Each token has two letters on it, and some people collect them by letter combination.^[11]

Gallery[edit]

An OPA menu with ceiling prices.

A mileage ration book issued by the OPA.

Red and blue OPA points.
Postwar
Women at work on bomber, Douglas Aircraft Company, Long Beach, California (1942)
Women quickly responded to Rosie the Riveter, who convinced them that they had a patriotic duty to enter the workforce. Some claim that she forever opened the work force for women, but others dispute that point, noting that many women were discharged after the war and their jobs were given to returning servicemen.[30] These critics claim that when peace returned, few women returned to their wartime positions and instead resumed domestic vocations or transferred into sex-typed occupations such as clerical and service work.[31]

For some, World War II represented a major turning point for women as they eagerly supported the war effort, but other historians emphasize that the changes were temporary and that immediately after the war was over, women were expected to return to traditional roles of wives and mothers. A third group has emphasized how the long-range significance of the changes brought about by the war provided the foundation for the contemporary woman's movement.^[32] Leila J. Rupp in her study of World War II wrote "For the first time, the working woman dominated the public image. Women were riveting housewives in slacks, not mother, domestic beings, or civilizers."^[33]

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Theodor Morell
(undated photograph)
Born	Theodor Gilbert Morell 22 July 1886 Trais-Münzenberg, Germany
Died	26 May 1948 (aged 61) Tegernsee, Bavaria, Allied-occupied Germany
Occupation	Physician
Employer	Adolf Hitler
Known for	Service as Adolf Hitler's personal physician
Spouse(s)	Hannelore Morell (m. 1920⁠–⁠1948)

Military counter-intelligence overview
Главное управление контрразведки СМЕРШ СМЕРШ

Formed	14 April 1943
Preceding agencies	Directorate of Special Departments within NKVD USSR III Main Directorate within MGB USSR
Dissolved	4 May 1946^[1]^[2]
Type	Military counter-intelligence
Jurisdiction	Soviet Union newly liberated and newly occupied territories (World War II)
Headquarters	Lubyanka (4th and 6th floors) Moscow, Soviet Union
Motto	Death to Spies!
Parent department	State Defense Committee
Parent Military counter-intelligence	State Defense Committee

Vozhd Generalissimus Joseph Stalin
Иосиф Сталин იოსებ სტალინი
1937 portrait of Stalin used in state propaganda

General Secretary of the Communist Party of the Soviet Union
In office 3 April 1922 – 16 October 1952^[a]
Preceded by	Vyacheslav Molotov (as Responsible Secretary)
Succeeded by	Georgy Malenkov (de facto)^[b]
Chairman of the Council of People's Commissars of the Soviet Union
In office 6 May 1941 – 15 March 1946
Preceded by	Vyacheslav Molotov
Succeeded by	Himself (as Chairman of the Council of Ministers)
Chairman of the Council of Ministers of the Soviet Union
In office 15 March 1946 – 5 March 1953
President	Mikhail Kalinin Nikolai Shvernik
First deputies	Nikolai Voznesensky Vyacheslav Molotov Nikolai Bulganin
Preceded by	Himself (as Chairman of the Council of People's Commissars)
Succeeded by	Georgy Malenkov
Member of the Russian Constituent Assembly
In office 25 November 1917 – 20 January 1918^[c]
Served alongside	show 11 others
Preceded by	Constituency established
Succeeded by	Constituency abolished
Constituency	Petrograd Metropolis
Minister of Defence
In office 15 March 1946 – 3 March 1947
Preceded by	Himself (as People's Commissar of Defense of the Soviet Union)
Succeeded by	Nikolai Bulganin
People's Commissar for Nationalities of the RSFSR
In office 8 November 1917 – 7 July 1923
Preceded by	Position established
Succeeded by	Position abolished
People's Commissar of Defense of the Soviet Union
In office 19 July 1941 – 25 February 1946
Preceded by	Semyon Timoshenko
Succeeded by	Himself (as People's Commissar of the Armed Forces of the Soviet Union)
Personal details
Born	Ioseb Besarionis dze Jughashvili^[d] 18 December [O.S. 6] 1878^[e] Gori, Tiflis Governorate, Russian Empire (now Georgia)
Died	5 March 1953 (aged 74) Kuntsevo Dacha, Moscow, Soviet Union (now Russia)
Resting place	Lenin's Mausoleum, Moscow (1953–1961) Kremlin Wall Necropolis, Moscow (from 1961)
Nationality	Russian (until 1917) Soviet
Political party	Bloc of Communists and Non-Partisans: CPSU (1952–1953)
Other political affiliations	RSDLP (1898–1903) RSDLP (Bolsheviks) (1903–1918) RCP (Bolsheviks) (1918–1925) Bloc of Communists and Non-Partisans (from 1936) AUCP (Bolsheviks) (1925–1952)
Spouse(s)	Ekaterine Svanidze (m. 1906; died 1907) Nadezhda Alliluyeva (m. 1919; died 1932)
Children	Yakov Dzhugashvili Vasily Stalin Svetlana Alliluyeva Artyom Sergeyev (adopted)
Parents	Besarion Jughashvili (father) Ekaterine Geladze (mother)
Education	Tbilisi Spiritual Seminary
Occupation	Politician
Cabinet	Stalin I–II [es] Stalin's Third Government [es]
Religion	None (atheism) Formerly Georgian Orthodox Christianity
Signature
Nickname(s)	Koba
Military service
Allegiance	Russian Empire Soviet Russia Soviet Union
Branch/service	Imperial Russian Army Red Army Soviet Armed Forces
Years of service	1916–1917 1918–1921 1941–1953
Rank	Marshal of the Soviet Union (1943)
Commands	Southern Front (1918–1920) (commissar) Southwestern Front (1920) (commissar) Soviet Armed Forces (1941–1953) (Supreme Commander)
Battles/wars	Russian Revolution October Revolution Russian Civil War Battle of Tsaritsyn Soviet-Georgian war Polish–Soviet War August uprising Sino-Soviet War Xinjiang Wars Kumul Rebellion Soviet invasion Islamic Revolt First Soviet-Japanese War Winter War World War II (Great Patriotic War) Operation Barbarossa Anglo-Soviet invasion of Iran Battle of Moscow Battle of Stalingrad Continuation War Berlin Offensive Second Soviet-Japanese War Iran Crisis Xinjiang Wars Ili Rebellion Korean War
Awards	See list
show Central institution membership show Other offices held Leader of the Soviet Union ← Lenin Malenkov^[f]→

Unemployment rate^[181]	1933	1934	1935	1936	1937	1938	1939	1940	1941
Workers in job creation programs counted as unemployed	24.9%	21.7%	20.1%	16.9%	14.3%	19.0%	17.2%	14.6%	9.9%
Workers in job creation programs counted as employed	20.6%	16.0%	14.2%	9.9%	9.1%	12.5%	11.3%	9.5%	8.0%

Temperance Charmides

OR TEMPERANCE

CHARMIDE

Labor[edit]

Theodor Morell

Early years[edit]

Career[edit]

Hitler's physician[edit]

Substances administered to Hitler[edit]

SMERSH

Joseph Stalin

Heinz Linge

Early life and education[edit]

Valet to Hitler[edit]

Panic of 1857

Results[edit]

Early 20th century[edit]

Economic growth and the 1910 break[edit]

Industry, commerce and agriculture[edit]

Electrification[edit]

Electric street railways[edit]

Electrification

History of electrification[edit]

Development of magnetos, dynamos and generators[edit]

Electric lighting[edit]

Arc lighting[edit]

Incandescent light bulbs[edit]

Electric lighting[edit]

Arc lighting[edit]

Incandescent light bulbs[edit]

Central power stations and isolated systems[edit]

Load factor & isolated systems[edit]

Direct current electric motors[edit]

Direct current electric motors[edit]

Alternating current[edit]

AC power stations[edit]

Steam turbines[edit]

Electrical grid[edit]

Finance, money and banking[edit]

Political developments[edit]

World War I[edit]

Roaring Twenties: 1920–1929[edit]

Quality of life[edit]

Welfare capitalism[edit]

World War I[edit]

Roaring Twenties: 1920–1929[edit]

Quality of life[edit]

Causes of the Great Depression

General theoretical reasoning[edit]

Monetarist[edit]

Additional modern nonmonetary explanations[edit]

Debt deflation[edit]

Expectations hypothesis[edit]

New Deal

Origins[edit]

Economic collapse (1929–1933)[edit]

Campaign[edit]

Origins[edit]

Economic collapse (1929–1933)[edit]

Campaign[edit]

First New Deal (1933–1934)[edit]

The First 100 Days (1933)[edit]

Fiscal policy[edit]

Banking reform[edit]

Monetary reform[edit]

Securities Act of 1933[edit]

Repeal of Prohibition[edit]

Recovery[edit]

NRA "Blue Eagle" campaign[edit]

Housing sector[edit]

Reform[edit]

Trade liberalization[edit]

Puerto Rico[edit]

Social Security Act[edit]

Labor relations[edit]

Works Progress Administration[edit]

Tax policy[edit]

Housing Act of 1937[edit]

Court-packing plan and jurisprudential shift[edit]

Court-packing plan and jurisprudential shift[edit]