Relief

The most pressing problem for the new administration was to provide relief for destitute families. One of the first actions of the Roosevelt administration, therefore, was to create the Federal Emergency Relief Agency. Through this agency, the federal government pumped a half billion dollars (about $25 billion in today’s money using unskilled wages

Photographers for the Works Progress Administration took now classic pictures of poverty-stricken Americans to build support for the New Deal.

As the inflator) into bankrupt state and local relief efforts. The agency was directed by Harry Hopkins, a social worker and administrator from New York; already a friend of Roosevelt, he would become one of Roosevelt’s most trusted advisers and confidants during the depression. In 1935, the federal government set up the Works Progress Administration (later the name was changed to Works Projects Administration to avoid the left-wing associations of the term “Progress”), also under Hopkins’s direction. This agency employed millions of people in road building, flood control projects, and similar programs. Its most famous and controversial projects employed writers, photographers, and other creative artists. Critics complained, with some justice, that these projects

Often pushed strong left-wing political messages. Some of the projects, however, such as recording the recollections of the last generation of former slaves, also had lasting value. Under Hopkins’s direction, the main emphasis of the Works Projects Administration was creating employment; the contribution of these projects to the infrastructure of the economy was secondary. Another well-known agency with a similar purpose was the Civilian Conservation Corps described in New View 24.1. All of these relief efforts reflected Hopkins’s philosophy of relief. It was not enough to give the unemployed cash

SHOULD THE GOVERNMENT BE THE EMPLOYER OF LAST RESORT?

When the unemployment rate rises, should the federal government step in and hire the unemployed? After all, if the banks can have a lender of last resort to bail them out, why can’t the workingman or woman have an employer of last resort? Supporters of this proposal argue that the government has a moral obligation to relieve the enormous suffering caused by unemployment. Critics of this proposal warn that such a policy would be enormously expensive, would undermine the work ethic of the unemployed, and might well become political patronage, the breeding ground of corruption. The text discusses historical examples that one could study to see how such a system might work. The New Deal instituted a number of job creation programs. One of the most famous and most controversial was the Civilian Conservation Corps. Modeled on the army, the Corps, at its peak in 1935, employed

500,000 men in building national park facilities, cleaning and enlarging reservoirs, planting trees, and similar activities.

These work-eager lads of the Civilian Conservation Corps go at it with axe and saw as they start their first duties of the forestry army in George Washington National Park, near Luray, Va., April 18, 1933. Here they are shown clearing trees to make their camp site.

Payments: The government also had to create work for the unemployed to help them maintain their self-respect as well as maintain and build skills that could be used in the private sector when jobs again became available.

The Public Works Administration undertook larger construction projects. It spent more than $6 billion over the course of the depression on dams, low-cost housing, airports, warships, and other projects. Its director, Harold Ickes, earned an enviable reputation for honesty and for his efforts to secure employment for African Americans, but he was sometimes criticized for taking too much time to plan projects. The most ambitious and controversial of all was the Tennessee Valley Authority, a multifaceted project designed to promote economic development in a large region that had been poverty stricken for decades. The authority built dams in a seven-state area (see Map 24.1), supplied low-cost electric power to farmers, engaged in flood control, created inland navigation routes, and promoted farmer education and related projects.

One measure of the impact of the emergency relief measures is shown in Table 24.1. In 1933, the first year of the New Deal, federal, state, and local emergency work programs employed more than 2 million workers (4.3 percent of the labor force). The peak year was 1936, when 3.7 million people (7 percent of the labor force) were employed. To put the point somewhat differently, had the relief programs not existed, and had the workers not been able to find employment in the private sector, the percent of the labor force without jobs would not have been 9.9 percent in 1936 (itself a very high rate) but 16.9 percent. Indeed, the official figures, the figures usually quoted in history textbooks and newspaper, listed 16.9 percent of the workforce as unemployed. Because it was believed that these workers would be unemployed in the absence of these jobs, this figure emphasized the severity of the depression.

MAP 24.1

Public Power

The Tennessee Valley Authority—the New Deal's major experiment in publicly financed power—ranges through portions of seven states. Its supporters call it a splendid monument to “regional planning”; its foes denounce it as a noxious example of “creeping socialism.”

Source: Michael Darby, "Three and a Half Million U. S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934-1941," Journal of Political Economy 84 (1976): 7, 8. Reprinted by permission of the University of Chicago Press.