geekyAs has been seen this far in this series, the tide of populism rises in the aftermath of economic decline, and the period following the Great Depression spawned a number of populist movements, including Huey Long's "Share Our Wealth" movement and Father Coughlin's social justice group. But the politician who enjoyed the greatest support from those hurting from the depression was Franklin Delano Roosevelt, a man who was both a populist as well as a member of the establishment.
When Roosevelt won the nomination as the Democratic candidate for President in the 1932 election, he traveled to Chicago to accept the nomination in person. In his acceptance speech, Roosevelt told the crowd, "I pledge you, I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms." The depression was the number one issue of the election campaign and Roosevelt and the Democratic Party mobilized the expanded ranks of the poor as well as organized labor, ethnic minorities, urbanites, and Southern whites, into what became known as the New Deal coalition.
During the campaign, Roosevelt criticized incumbent President Herbert Hoover for his failure to restore prosperity or halt the downward economic slide. At the same time, he ridiculed Hoover's huge deficits. Roosevelt campaigned promising to make "immediate and drastic reductions of all public expenditures," and to "abolish useless commissions and offices, consolidating departments and bureaus, and eliminating extravagances". Roosevelt won 57% of the vote and carried all but six states. He created a new majority coalition for the Democrats, made up of organized labor, northern African-Americans, and ethnic Americans.
After the election, Roosevelt refused Hoover's requests for a meeting to develop a joint program to stop the downward spiral and calm investors, claiming that Hoover had all the power to act if necessary. Privately, he told reporters "it is not my baby". The economy spiraled downward until the banking system began a complete nationwide shutdown as Hoover's term ended.
Roosevelt was inaugurated on March 4, 1933, at low point of the worst depression in its history. A quarter of the workforce was unemployed. Farmers were in deep trouble as prices fell by 60%. Industrial production had fallen by more than half since 1929. Two million people were homeless. By the evening of March 4, 32 of the 48 states, as well as the District of Columbia, had closed their banks. The New York Federal Reserve Bank was unable to open on the 5th, as huge sums had been withdrawn by panicky customers in previous days.
In his his inaugural address, Roosevelt blamed the economic crisis on bankers and financiers and their relentless quest for profit. He said:
"Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit."
Roosevelt realized that relief was urgently needed by tens of millions of unemployed. Recovery meant not only short-term relief, but also long-term fixes of what was wrong, especially with the financial and banking systems. Through Roosevelt's series of radio talks, known as fireside chats, he presented his proposals directly to the American public. On April 7, 1932, he delivered a radio address that has come to be known as his "Forgotten Man" speech, an address designed to send the message that he was on the side of those hardest hit by the depression.
In the address, Roosevelt commented on how the crisis now facing the nation was even greater than the one it had faced in 1917 at the time when the nation entered the Great War. He told his audience:
"These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power for plans like those of 1917 that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid."
Roosevelt rejected the notion that there was any sort of quick fix or that the nation could spend its way out of the problems it was facing. He said:
"People suggest that a huge expenditure of public funds by the Federal Government and by State and local governments will completely solve the unemployment problem. But it is clear that even if we could raise many billions of dollars and find definitely useful public works to spend these billions on, even all that money would not give employment to the seven million or ten million people who are out of work. Let us admit frankly that it would be only a stopgap. A real economic cure must go to the killing of the bacteria in the system rather than to the treatment of external symptoms."
Roosevelt commented on how approximately one-half of the American population made their living by farming or in small towns whose existence depended on farms. He said that these people had lost their purchasing power because "they are receiving for farm products less than the cost to them of growing these farm products." As a result, this had a ripple effect on those whose employment was directly tied to the farm economy. He said: "No Nation can long endure half bankrupt. Main Street, Broadway, the mills, the mines will close if half the buyers are broke. I cannot escape the conclusion that one of the essential parts of a national program of restoration must be to restore purchasing power to the farming half of the country. Without this the wheels of railroads and of factories will not turn."
Roosevelt said that it was important to solve "the problem of keeping the home-owner and the farm-owner where he is, without being dispossessed through the foreclosure of his mortgage." He criticized President Hoover for the "two billion dollar fund which President Hoover and the Congress have put at the disposal of the big banks, the railroads and the corporations of the Nation". He said that "the local lender in many cases does not want to evict the farmer or home-owner by foreclosure proceedings, he is forced to do so in order to keep his bank or company solvent" and he saw the federal government's objective as being "to provide at least as much assistance to the little fellow as it is now giving to the large banks and corporations."
Roosevelt criticized the Hawley-Smoot Tariff of 1929, which he said closed of international markets because it "compelled the world to build tariff fences so high that world trade is decreasing to the vanishing point. The value of goods internationally exchanged is today less than half of what it was three or four years ago." He saw international trade as essential to keep American factories working, but he said that "this foolish tariff of ours makes that impossible."
Roosevelt reiterated his three goals: (1) restoring farmers' buying power, (2) providing relief to the small banks and home-owners, and (3) a reconstructed tariff policy. He closed his address by telling his audience: "It is high time to get back to fundamentals. It is high time to admit with courage that we are in the midst of an emergency at least equal to that of war. Let us mobilize to meet it.
Roosevelt's first 100 days in office concentrated on providing immediate relief for those suffering the adverse effects of the depression. From March 9 to June 16, 1933, he sent Congress a record number of bills, all of which passed easily. Roosevelt's inauguration on March 4, 1933 took place in the middle of a bank panic and were underscored by his famous words: "The only thing we have to fear is fear itself." The following day he declared a "bank holiday" and called for a special session of Congress to start March 9, at which Congress passed the Emergency Banking Act.To give Americans confidence in the banks, Roosevelt signed the Glass–Steagall Act that created the Federal Deposit Insurance Corporation (FDIC) to underwrite savings deposits.
Other relief measures included the continuation of Herbert Hoover's major relief program for the unemployed under a new name: Federal Emergency Relief Administration. The Civilian Conservation Corps hired 250,000 unemployed young men to work on rural local projects. Congress also gave the Federal Trade Commission broad new regulatory powers and provided mortgage relief to millions of farmers and homeowners. Roosevelt expanded a Hoover agency, the Reconstruction Finance Corporation, making it a major source of financing for railroads and industry. Roosevelt also set up the first Agricultural Adjustment Administration (AAA). The AAA tried to force higher prices for commodities by paying farmers to take land out of crops and to cut herds.
The National Industrial Recovery Act of 1933 tried to regulate industries with regulations which encouraged unions and suspended anti-trust laws. The NIRA was found to be unconstitutional by unanimous decision of the US Supreme Court on May 27, 1935. Roosevelt opposed the decision, saying, "The fundamental purposes and principles of the NIRA are sound. To abandon them is unthinkable. It would spell the return to industrial and labor chaos." In 1933, major new banking regulations were passed. In 1934, the Securities and Exchange Commission was created to regulate Wall Street. Roosevelt wanted a federal minimum wage as part of the NIRA, but Congress did not adopt a minimum wage law until the Fair Labor Standards Act of 1938. It was the last major domestic reform measure of the New Deal.
Recovery was based on the theory of "priming the pump", (i.e federal spending). The NIRA included $3.3 billion of spending through the Public Works Administration to stimulate the economy. Roosevelt worked to create the largest government-owned industrial enterprise in American history — the Tennessee Valley Authority (TVA) — which built dams and power stations, controlled floods, and modernized agriculture and home conditions in the poverty-stricken Tennessee Valley. The repeal of prohibition also brought in new tax revenues and helped Roosevelt keep a major campaign promise. Executive Order 6102 declared that all privately held gold of American citizens was to be sold to the US Treasury and the price raised from $20 to $35 per ounce. The goal was to counter the deflation which was paralyzing the economy.
The Forgotten Man is also the title of best-selling 2007 book by Amity Schlaes about the Great Depression. The phrase was also used recently by President Donald Trump in his presidential victory speech on November 9, 2016, when he told his audience:
"Every single American will have the opportunity to realize his or her fullest potential. The forgotten men and women of our country will be forgotten no longer."