The Opening of the “Hundred Days”: March 6, 1933
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The day after his inauguration, President Franklin Delano Roosevelt met with advisers long into the night to decide what to do about the country’s economic crisis. Since November, the federal government had done nothing about the depression. Hoover did not want to initiate any new policies to which Roosevelt would be opposed, and Roosevelt (fearful that he would be hamstrung by agreeing to policies not fully his own) refused to collaborate with Hoover in working up new policies. Facing government inaction, people took matters into their own hands and withdrew their savings from banks. Bank failures proliferated until some state governors began proclaiming “bank holidays” — days on which no transactions could occur.
It was doubtful whether the course Roosevelt finally decided to take was constitutional or not, but people were too desperate to ask any questions. On March 6, the president ordered the closing of all banks for four days. Roosevelt followed this up with more decisive action. On March 9, the first day of Congress’ session, he submitted an emergency bank bill to Congress. In the record time of eight hours, Congress passed this bill, which allowed the banks to reopen with a new license system and under the direction of conservators. This was decisive action, indeed! It caught everyone’s attention and filled them with a confidence that they had not known for three years. When the banks reopened on March 13, there was no run on savings. On March 15, the stock market began its slow upward trend.
Roosevelt again surprised the country on March 12 by addressing them on the banking crisis over the radio. This was the first of his “Fireside Chats,” as he called them, with which, over the next several years, he explained and promoted his policies to the public. Roosevelt had a resonant voice that he used to effect to instill confidence in his policies.
The first 100 days of Roosevelt’s administration were a dizzying whirlwind of activity. The people he had gathered around him as advisers (called the “brain trust” because most were from college and universities) with the president worked out the policies that formed the first onslaught of the New Deal. Between March 9 and June 16, 1933, the president presented Congress with 13 bills, each of which the Senate and House passed in record time. Bills normally took months to pass through Congress; but these bills, many of which were revolutionary in character, took only hours to pass.
The bills of the first 100 days were either emergency measures to take care of immediate problems or were meant to be permanent. The emergency measures included the Federal Emergency Relief Act (passed May 12, 1933), which dedicated $500 million in federal funds for the relief of states, cities, and counties. Later, this figure would rise to $5 billion. With the Agricultural Adjustment Act (AAA, passed May 12), the federal government could appoint county agents to oversee a reduction in the planting of grains, tobacco, sugarcane, and other crops to increase their price. Under the AAA, fields were left fallow, and farmers plowed crops under and slaughtered livestock. In the fall of 1933, farmers slaughtered 6 million piglets and the government froze 100 million pounds of pork, which was sent to families on government relief. The federal government paid $200 million in subsidies to farmers who cooperated with the AAA. The Emergency Farm Mortgage Act (also passed May 12) stopped bank foreclosures on farms, while the Home Owners Loan Corporation was established to refinance small mortgages on houses.
Roosevelt did not believe that it was good for a man’s sense of self-dignity to receive handouts, so he pushed through Congress measures that would provide work for the unemployed. On March 31, Congress created the Civilian Conservation Corps (CCC). Established under army control, the CCC employed young men to help conserve natural resources, the care of which had been neglected since the days of Teddy Roosevelt. By August, the CCC had employed over 300,000 men. The National Industrial Recovery Act (passed June 16) in 1935 established the Works Projects Administration (WPA), which employed men in reforestation and flood control projects, in building schools and in clearing slums. The WPA also employed “white collar” workers and college graduates to write guides for regions and states and hired out-of-work librarians to staff government-run libraries. Artists were employed to create public art. Similar to the WPA was the CWA, Civil Works Administration, which had been set up under the Federal Emergency Relief Act. By 1934, the CWA had employed over 4 million workers in building roads, schoolhouses, parks, airports, as well as in other projects.
The National Industrial Recovery Act established as well the National Recovery Administration (NRA). The purpose of the NRA was to apply to industry codes that governed relations between labor and management. These codes set maximum hours of work and, in some cases, maximum prices for goods. The codes determined minimum wages and forbade child labor. Industries that volunteered could negotiate their own codes with representatives of government and labor, while those that refused were governed by blanket codes imposed by the government. NRA volunteers were allowed to post a blue eagle in their windows and on their products as a sign of their good faith; if they violated the codes they could lose this distinctive symbol.
Though the NRA only governed businesses engaged in interstate commerce, it seemed to go far beyond the commerce clause in the Constitution that allowed the federal government to regulate commerce between states. Relations between labor and management had, before, been a state concern. By forbidding child labor, the federal government was entering into the realm of the family by making decisions regarding child welfare. Such decisions had, traditionally, been reserved to parents. On the other hand, among the poor, parental freedom to direct family life had already been curtailed by the wage system that had prevailed in the United States. The poverty suffered by industrial and rural workers alike often compelled poorer parents to send their children into the workplace.
Among the chief concerns of the architects of the New Deal (many of whom were women, including the secretary of labor, Frances Perkins, and the first lady, Eleanor Roosevelt) was to provide heads of families with a living wage so that, not only children, but even mothers of families need not leave the home in search of gainful employment. Roosevelt himself said the NRA codes would “guarantee living wages.” “By living wages, I mean,” said Roosevelt, “more than a bare subsistence living — I mean the wages of decent living.” That these were living wages for heads of families (who were presumed to be male) is shown by the fact that New Deal programs tended to discourage female employment and assured men a higher wage structure than women.
The 100 days also produced more permanent legislation. On May 18, Congress passed an act establishing the Tennessee Valley Authority (TVA). The TVA governed the 652-mile valley of the Tennessee River, which runs through Tennessee, Alabama, Mississippi, and Kentucky. The TVA, an independent public body, built dams for flood control and for production of electricity; it erected power plants and nitrate plants for fertilizer. A total of six dams were built by the TVA between 1933 and 1936. The damns and power plants brought electrical power to most of Tennessee and to portions of Georgia, Alabama, Mississippi, and Kentucky.
One of the most significant acts of the hundred days was Roosevelt’s decision, on April 19, to abandon the gold standard. (Congressional ratification followed on June 5.) This, and the subsequent Thomas amendment to the Agricultural Adjustment Act, would allow the president to determine at will the value of the dollar up to fifty percent of the current value it had in 1933. Abandoning the gold standard meant the government would no longer redeem greenbacks with their equivalent value in gold. This broke an implicit understanding with the people that paper money could be redeemed with gold. Later, Roosevelt would set the value of the dollar at roughly 60 cents gold, thus devaluing the savings of Americans by nearly half. Though men like Al Smith criticized going off the gold standard (Smith said he was “for gold dollars as against baloney dollars”), Wall Street praised it because, they said, it would make American industries more competitive in the world market.
Another important act contained a provision that even Roosevelt thought too radical, though he signed it anyway. This was the Glass-Steagall Banking Act of June 16. Besides ruling that commercial banks (which took in deposits from savers and made loans) might no longer use investors’ funds to speculate on the stock market, Glass-Steagall established the Federal Deposit Insurance Corporation (FDIC) which guaranteed all bank deposits up to $5,000. Only the most elastic constructionist could find justification for this act in the Constitution.
AAA, WPA, CCC, FDIC, NRA, CWA — this alphabet soup of laws represented a prodigious effort on the part of Roosevelt, his “brain trust,” and Congress. By June 16, when a tired Congress went into recess, it left not only a ton of legislation as the token of all its sweat, but a new nation. The federal government had embarked on a new course; it would become what Alexander Hamilton, over 150 years earlier, had hoped for when he proposed the abolition of the states. The federal government, henceforth, would be sole sovereign in the nation.
“Let us unite in banishing fear” —
The First of the Fireside Chats
Here, Franklin Roosevelt addresses his intervention in the bank crisis of 1933.