Brother, Can You Spare a Dime?: The Great Depression and the New Deal
"Brother, Can You Spare a Dime?" (1932) by E. Y. ("Yip") Harburg and Jay Gorney became a kind of anthem during the Great Depression. Harburg wrote the lyrics in response to the march of the so-called Bonus Expeditionary Force (BEF, named after the American Expeditionary Force that fought in France during World War I) to Washington, D.C. in May of 1932. Congress had voted in 1924 to give to each member of the United States military who served in the war a bonus of $1.25 for each day spent overseas and $1.00 for each day in the U.S. Veterans could collect the $1000 each would on average receive in 1945. When the Stock Market crashed in October, 1929, the economy sank into its deepest crisis in American history. The government did not collect unemployment statistics yet, but most economists at the time estimated that between one quarter and one third of the labor force had lost their jobs by the end of 1932. In desparation some 25,000 Bonus Marchers, including wives and children, converged on the nation's capital to demand the bonus be paid immediately. Most set up camp in Anacostia Flats across the river from the Capitol Building. Others occupied abandoned buildings along Pennsylvania Avenue.
The marchers made two main arguments. One was that they needed the money now; they could not wait until 1945. The other was that pumping the several billions in bonus money into the economy would increase demand and therefore help stimulate recovery. The House of Representatives passed the bonus measure, but on June 17 the Senate, still controlled by the Republicans, defeated it by a 62-18 margin. Even though there was nothing left to do in Washington, many of the marchers remained in their Hoovervilles (as tent colonies during the Depression were called). On July 28 D.C. police sought to evict those members of the BEF who were squatting on government-owned property along Pennsylvania Avenue. Fighting broke out, and two marchers were shot to death. President Hoover then ordered the Army to remove the squatters. General Douglas MacArthur did so and then, without Hoover's permission, destroyed the tent colony at Anacostia Flats. Two babies died, and hundreds of marchers needed hospital attention. Dwight D. Eisenhower, then a major under MacArthur's command, wrote "the whole scene was pitiful. The veterans were ragged, ill-fed, and felt themselves badly abused. To suddenly see the whole encampment going up in flames just added to the pity."
Harburg's lyrics express the bewilderment and resentment of the marchers and of the millions of others who had worked hard all of their lives only to find that there was no longer any place for them.
This graph from Bradford DeLong's Slouching Toward Utopia? illustrates the depth and persistence of the Great Depression. There had been several economic downturns between 1890 and 1930. The sharpest had followed the end of World War I. The Wilson administration killed defense spending abruptly, throwing many out of work as companies shut down operations to convert back to peacetime production. At the same time the administration demobilized the troops, which had the effect of dumping several million ex-soldiers into the labor market just as firms cut back production. Making matters more complex were the great strikes of 1919, especially in the steel industry. However severe the postwar recession, the economy had bounced back quickly. The earlier depression of the 1890s had, in contrast, lasted from 1893-1896, coinciding almost exactly with the second term of Grover Cleveland. And, as the graph displays, there had been other economic slowdowns. None had lasted for very long. What earns the depression of the 1930s the name "Great" is obvious from the graph. The economy fell faster and further than in any previous downturn. Recovery was painfully slow. As late as 1940 Gross National Product Per Capita had not regained its 1929 level.
The depression was a global event, but some countries fared better than others. None did more poorly than the U.S. This graph is also from Slouching Toward Utopia?.
In Japan, to cite the most obvious case, the economic downturn of 1929 was relatively mild and quickly reversed itself. By 1932, as the U.S. was entering the depths of a severe economic crisis, with overall economic activity at about 70% of 1929 levels, Japan had fully recovered. By 1940 the U.S. had not quite reached 1929 levels; Japanese production per capita was at 160% of 1929. The next most successful nation in dealing with the Depression was Nazi Germany. The initial downturn was about as great as in the U.S. Once Hitler took over, however, Germany began a strong and steady recovery reaching 1929 levels by 1935. By the start of WWII in 1939 the German economy was at 130% of its 1929 levels. Great Britain also weathered the Depression significantly better than the U.S., although its recovery was slower than Germany's. France did less well than Britain. Its economy plummeted further, although not so low as the U.S. France, like the U.S., found itself mired in the Depression, barely able to reach 1929 levels by the time Germany invaded in 1940. Fascist Italy fared substantially better than France, somewhat better than Britain, but not nearly so well as Germany or Japan.
Fascist states did better than liberal democracies because they were willing to intervene directly to stimulate their economies. Spending on their militaries provided employment in related industries such as steel making. They also more rapidly abandoned the gold standard, something that permitted them to expand the amount of money in their economies. American policy makers, like their British and French counterparts, instead worried about inflation. As a result, wages and prices fell. Deflation proved at least as destructive as they had feared inflation would prove.
Just as some nations fared better than others, so did particular groups within the United States. Historian Richard Jensen has shown that the unemployment fell disproportionately on several segments of the population. Employers sought to retain their best workers and, in the absence of strong unions to enforce seniority rules, laid workers off who had the least experience and skill. Those hiring — and even in the worst days of the Depression some jobs opened up — tended to choose the job applicants who had had the longest tenures in their last jobs. This meant that young workers, unskilled workers, and those who had historically had the least opportunity, such as African Americans, bore the brunt of the massive unemployment. Also suffering were farm families for the Depression coincided with the Dust Bowl during which farmers watched their soil literally blow away in a drought that lasted for years. Margaret Bourke-White's 1935 photograph of victims of the Louisville Flood waiting in line for emergency assistance while standing in front of a billboard advertising new cars captured the paradox. The Depression was the worst of times for millions. For millions of others there was "no way like the American Way."
One goal of this module is to give the Depression a human face. What did all the statistics — of unemployment, of bank failures, of mortgage foreclosures, of people living in Hoovervilles — mean for real people? Another is to explore the sometimes contradictory ways that the Roosevelt Administration sought to deal with the immediate crisis it faced in early 1933 and with what it saw as underlying causes. In its fabled first Hundred Days and thereafter the administration effectively reinvented the American republic. It changed the relationship between the federal government and the states; between the federal government and banks, corporations, and unions; and between the federal government and ordinary citizens. The New Deal sought to regulate economic activities of all kinds; it sought to plan national growth, most importantly through the Tennessee Valley Authority. And it sought to redistribute wealth via emergency relief payments, public works, a "Magna Carta" for labor (the Wagner Act), and the G.I. Bill, the last great New Deal measure.
