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So the first 100 days represents
a mixed bag. By
May and June, you're beginning to hear certain voices of protest already emerging
as Franklin Roosevelt and his administration continue to push legislation
into the halls of Congress in the expectation
of rapid passage. We've talked about the sort of dichotomy
in the legislation of the first 100 days,
the mixture of conservatism and radicalism,
sometimes in the same piece of legislation that would seem to
counteract or, you know,
allow each piece of legislation to counteract the other. What
I want to talk about now in particular are the three, for me,
major pieces of legislation that I really want you to know from the first 100 days.
I think they're
very telling pieces. These three pieces of legislation
are the Agricultural Adjustment Act,
which was made into law May 12th,
1933, the Tennessee Valley Authority,
which became law May 18th, 1933,
and a really important piece of legislation, the National
Industrial Recovery Act, June 16th
1933. Let's start out with the Agricultural Adjustment Act.
If you'll recall,
the farm economy had been in trouble
since, really, the boom-and-bust cycle in the early 1920's.
Prices for farm commodities had been extraordinarily high during the First
World War.
They were in high demand in Europe to feed the populace
and they were in high demand for the military uses in the United States. So,
really high prices. But then, immediately after the war is over, the First World
War,
those prices drop precipitously and throughout the 1920's
farm prices never fully recover. The result is
that farmers, through the 1920's, will struggle.
Rural areas will struggle.
There's a great deal going on here. It's not just the economics, but that's a huge
part of it.
We'll talk more about the problems farmers faced in just a moment.
Well, the Agricultural Adjustment
Act, which again is passed by Congress in May of 1933,
will, among other things, create the Agricultural Adjustment
Administration, or the AAA, right?
It's not Triple-A, it's not your auto
assistance people, it's the Agricultural Adjustment
Administration. Now, this administration would be responsible for
conducting a broad series of programs related to commodity crops
that was designed to put money in the pockets
of farmer's. Among other crops,
this Agricultural Adjustment Administration
oversaw commodity crops like wheat, cotton,
corn, hogs, milk (dairy),
and let me include in there tobacco. The way
the program worked in principle is really quite simple.
If the problem
of low prices for crops,
when farmers go to sell their crops, if the problem
of low prices is really about overproduction...
in other words, if farmers are being too successful
what that means is oversupply, right? You know the traditional
economic notion that you have
demand and then you have supply, and prices are set based on how demand and
supply relate to one another.
Too much supply, there's too much product around --
prices should be low.
Not enough supply, demand remains steady, prices should go up.
If demand drops, prices go down, if demand goes up,
prices go up. Well, in this scenario the general consensus was that there was
over-production and, thus, too much supply. So,
the way to raise farm prices was, ultimately, to reduce the supply and
what that meant was convincing farmers to grow less not more.
I mean the traditional farm idea these kind of great
optimists, these existential optimists, in a way,
has always been that next year will be a better crop. Next year, I'll grow more
and the more I grow the closer I'll come to getting out of debt.
When the reality was often just the reverse,
whenever farmers had bumper crops they tended to flood the market
creating an oversupply that made prices go down.
How do you stop this? One way
is by finding a way to regulate the amount farmers grow
and the amount that comes to market so that you can sort of
regulate prices and keep farmers away from any kind of great highs, but also
any kind of great lows. You know
where they can't pay their mortgage because they had a really bad year in
terms of prices.
What makes this program special here in the New Deal is that government's going
to fulfill that function.
And I just want to bring up, because I think it's really amazing, if you go back
in time
we talked about the Ocala platform Omaha and we talked about
the farmers Alliance notion that government had a role to play in
protecting the farmer.
We talked about, or should have talk about, the Subtreasury Plan,
the notion that government would hold crops off the market
so that farmers could await higher prices.
Once supply dropped, and if demand
remained steady, farmers could expect higher prices
for their crops. It wouldn't help them much but it would help farmers get
a little bit more out of the system. Government had a role to play. Well, guess
what?
We're back! Here we are in 1933.
Essentially talking about the idea of government actively taking a role
in managing prices by
helping farmers key product of the market.
The way this is going to work is through parity payments.
Now, the government would go back to a set period and it depended on the type of
crop,
but a set period and look at prices
over the course of that period. Those prices would become a sort of baseline
price.
If you as a farmer managed your crop
so as to grow only so much
or bring only so much to market, you would be
assured of the so called parity price.
That's the price set over that arbitrary selected
period in the past.
So you're essentially paying farmers not to grow,
and in the first year, even as people were starving,
even as people were desperate for work,
consider that the Agricultural Adjustment Administration has farmers
plowing under crops and dumping milk and killing hogs.
And you can't really just give those hogs to the hungry because
that undermines the price of hog meat.
So, there's this potential for some really bad publicity. And some of
it
it does hit the Agricultural Adjustment Administration.
But the principle of the idea is limit production
by paying farmers not to grow.
It could be done in different ways. You could have market quotas,
which determine how much a farmer can bring to market and still be assured of
receiving
the base, or parity price.
But you can also restrict acreage, which is how it worked,
for instance, with the tobacco crop.
Right? Where you restrict the amount acreage. That's called an allotment system.
You have to get permission to grow tobacco and when you do
there's only so much tobacco that can be grown and so you're limited by
acreage. That would change over time.
But you see, I hope, how this system works. More importantly,
I hope you understand that what the New Deal here is doing is, again, seeking to
push money
into the economy, into people's pockets, to start building confidence again.
And there would be more. I mean one aspect of
New Deal policy would be going back to this issue
of gold and silver. Making silver part of the
reserve for circulating currency.
Well, last time we really talked about that was 1896.
This is a farm issue, this business of expanding the currency of
using silver as a standard
and that's exactly what the Roosevelt Administration moves toward.
Another long-term issue faced by
farmers has been this business
farmers has been this business
of credit and the availability of credit.
It goes to the silver issue as well, but one of the pieces of legislation
that'll be passed and will correspond very nicely to the Agricultural
Adjustment Act will be the commodity
Credit Corporation being created,
which will actually lend farmers money on existing crops.
The problem for farmers often has been the only thing they could use
as collateral was their land. Here you're loaning money based
on crops. It's the Commodity Credit Corporation
which will function to handle the financial mechanisms
that make the Agricultural Adjustment programs possible.
It's just amazing system. Now in 1933, I've
mention this before, over 6 million hogs will be slaughtered
and cotton farmers will plow under about a quarter of the crop
and there are people starving, and textile mill shut down, and it just seems
counterintuitive
but I hope you understand the rationale that went into passage of
the Agricultural Adjustment Act.
The second of the major pieces of legislation that I want to emphasize
during the New Deal
would have been the Tennessee Valley Authority, May 18th, 1933
and it has to do with the valley of the Tennessee River.
In 1938, the United States government
in an economic report had named the United States South
the nation's number one economic problem. And I hope we'll have a chance to talk a
little bit about those statistics
just a wee bit later, but
of the South, the Tennessee Valley,
the valley the Tennessee River, which stretches from really
southwestern Virginia and Western North Carolina through eastern Tennessee
sweeps around through North Georgia and North Alabama
into Mississippi and up
back into West and Middle Tennessee and up to the Ohio River,
that entire valley of the Tennessee River
represented one of the most poverty-stricken areas within the South.
When I say poverty, I mean you had massive
erosion that had occurred over years and years of farming exhausted soil.
You had farmers struggling to survive, limited industrial opportunity,
extraordinarily low wages.
You know, really just a mess by all statistical indicators.
Very rural. Very, you might say, backward, though I want to be really careful about that
term.
But, nonetheless, and it is worth noting, that it's in the Tennessee Valley where,
for instance, the Scopes Trial is taking place.
It is rather notable, that.
The question was what do you do about that poverty?
Understand, and I think the New Dealers did understand that this is not just the
product of an economic depression in the late 20's and,
of course, in the early 30's, this is a systemic issue. This is a long time
debilitation
that we're seeing across the South in terms of wages and
agricultural production and the waste of land.
But in the Tennessee Valley, you know, it has just been there.
What do you do about that?
Well, back during the First World War interestingly enough
the Wilson government had okayed, had given their consent,
to the construction of a dam on the Tennessee River
down in Alabama at the Muscle Shoals. Now,
Muscle Shoals is this one of many
obstructions on the Tennessee River
that made navigation of the river extraordinarily difficult.
So the government, back during World War I, says let's build a dam
and let's take advantage of local resources
to actually begin producing nitrates.
Using the power of the dam, let's use the dams power to start producing
nitrates that can be used
in ammunition for the war effort,
but can also be used as part of chemical fertilizers,
which could then be applied to local farmlands
and increase productivity.
Now the dam itself did not get finished in time for the war. In fact,
its own start date is really close to the Armistice Day that ends the fighting
more or less in Europe.
It won't be until about 1924 that the dam is finally finished.
But in a progressive sense, this dam construction,
you have to be careful how you say that, but this dam construction
is actually government directed, it's government lend.
No less a figure than Henry Ford actually proposed
privatizing the dam and the production facilities there at
Muscle Shoals. But one figure in particular,
one figure in particular, in Congress
opposed, dramatically, Ford's effort at privatization,
and this figure was George Norris,
George W. Norris, from Nebraska. Norris is a
very important political figure of a progressive stripe,
who had supported Bob LaFollette back about 1912,
but ultimately had remained within the Republican ranks,
the republican party ranks. But he had that old sort of progressive mentality.
And what Norris perceived was the benefits
of, here again with progressive ideas, government intervention,
government activism, government activity.
Even to the extent of using dams, and the construction of dams,
to fundamentally alter the economics of a region.
He opposed, vehemently, Henry Ford's efforts at privatization because he
believed
in the role of government
on a regional basis.
So,
the TVA is born and George W. Norris of
Nebraska is its sponsor in Congress.
Before this program is finished,
before this program is finished, it will be one of the most important experiments in
regional planning
undertaken by the United States government up to this time.
And perhaps, well,
at least purposefully, perhaps ever.
On the one hand, the purpose
of the TVA is to deal with something as simple as flooding.
It's also deal with navigation. Remember I said that
obstacles, like the Muscle Shoals, were numerous.
So the TVA by building a number of dams
multiple, multiple dams throughout the watershed
will ultimately deal with overcoming navigation issues, make the Tennessee
River navigable,
but also, then, hold back waters the traditionally had led to spring floods
throughout the region, washing away soil.
And that leads to another aspect of the TVA.
part of the TVA's job would be
soil conservation, replanting of trees,
and the protection of the watershed, which is along a conservation principle.
But there are other aspects of the TVA that are worth consideration.
Before it's over, the TVA would be very much
about producing electricity in a rural area.
Electricity that could be taken to
rural communities where you'd see rural
electrification. That's something that George Norris of Nebraska
was very much interested in.
But there's even more.
The cheap electricity that could be produced,
this hydro-electric power, could be used as an incentive to draw in
industry and manufacturing, where all too little
existed. Where you had an excessive of population on worn-out farms trying to make a
living
and either getting out, we talked a bit about the great migration, remember,
or living in poverty.
if you could get investment,
if you could get plants and factories to locate there
in the Tennessee River Valley, you could supply jobs that would deal with a
long-term problem of poverty and unemployment.
More importantly, you could induce
Tennessee Valley residents to begin to associate their lives with a
more urbanized existence, with education,
and with all of the amenities that in America seemed to flow from
urban life, or connection to urban life,
urban markets, and urban centers.
The TVA, Tennessee Valley Authority, is created
as this odd hybrid, this public corporation.
It's a corporate entity that will be controlled, dominated by the government.
It will involve national planning for a complete and total
river watershed. That is an amazing role for government,
for the national government within a state,
Granted, the TVA covers multiple states but,
nonetheless, a massive role.
To generate and sell electricity, to deal with flooding, to develop local
industries,
reforestation, environmental issues
aid farmers in an agricultural program to teach them how to
farm more scientifically.
It is an amazing undertaking guided by
a very limited number of directors.
It is worth noting, however, that as with other New Deal
agencies, the Tennessee Valley Authority will adhere
to the notions of segregation.
The third, and we can talk about so much more. We could talk about Norris dam,
the construction of Norris dam in Norris, Tennessee. I mean they didn't just build dams, they built towns and
think,
just think, of the number of people who are put to work, who have jobs
because of this federal investment in remaking an entire watershed,
an entire region of the United States.
The TVA is just an amazing, amazing undertaking
and its implications will be huge as well. We're still talking, in this country,
about the role of government in enterprises like electricity, and electric production,
and electric provisions,
but the TVA was more than just electricity.
The last, though, major piece of legislation I want to talk about here
is the National Industrial Recovery Act
and its important can't be overstated for a number of reasons.
June of 1933, the National Industrial Recovery Act will,
under its beneficence, or authority,
will create the National Recovery Administration,
the NRA. Now, that its not to be confused
with the National Rifle Association,
but the National Recovery Administration.
Franklin Roosevelt referred to
the National Industrial Recovery Act as
"the most important and far-reaching legislation
enacted by the American Congress."
And its import really can't be overstated.
The way the NRA worked, this agency, this sort of
enforcement agency worked was to enforce codes.
These codes, so called Blanket Codes, were to be
worked out under the an NIRA the National Industrial Recovery Act.
These codes were be worked out
with government operating as sort of the cooperative partner,
bringing together interested parties like
business, management, labor,
competitors in business, to try and arrive
at standards for various industries.
In other words, each industry would be asked to sit, all the groups
that were invested would be asked to sit down and work out these so-called
Blanket Codes.
Business initially held this idea because like Herbert Hoover's
ideas of associationalism, Herbert Hoover's ideas as Secretary of Commerce,
you are in some sense eliminating risk
when you agree to work cooperatively to establish
standards. You're eliminating some competition.
The competition that lacks the money to meet the standards, but
you're also establishing
standards that help you decide how much is worth producing. And if you do that,
you cut down, you limit the potential for overproduction.
Plus, if you're working with labor to establish the standards for contracts
then you eliminate some of the risk that can be caused by labor unrest.
So, in that sense, it's a pretty
appealing idea to business, it's a pretty appealing idea to labor unions
that don't necessarily want the overflow of capitalism, but they want to ensure a
better hours and better wages,
limited goals.
Under the National Recovery Administration,
competing businesses within an industry met with workers to establish, then,
Blanket Codes.
These codes established floors,
minimal limits for
hours and wages.
Low prices, what's the limit?
Fair competition is the byword.
How many people will be employed? How many people will be needed to do certain
jobs?
All these Blanket Codes cover.
Out of this piece of legislation we get, in this country,
the minimum wage. I told you before that Henry Ford had offered to pay his
workers
$5 dollars for an eight-hour day. That's
pretty good. It was twice what other competitors,
other automobile manufacturers, were willing to pay for a nine-hour day.
Well, this minimum wage that's instituted will be 30 to 40 cents per hour.
It would be dependent upon region, because there was a wage differential.
People,
workers tended to be paid less for the same job in the South,
but a minimum wage standard set for the country.
Also agreements over
the work week, a shift in the work week to 35 to 40 hours.
Most industries.
What this means is you're assuring a minimum wage that will arguably
increase the confidence of America's workers. Now, the wage will be different
based on the industry and based on region,
but the idea that there will be a minimum wage for work done,
that removes risk, that asserts or opens the door for greater confidence.
The other thing, this 35 to 40 hours a week, that's a pretty good deal
too, because what it means is,
if you work five days a week and you divide 40 by 5, you get 8.
Henry Ford had moved to the eight-hour day. Well guess what?
If I'm running 12 hour shifts or 10 hour shifts what that mean is...
what that means, sorry, is that
I can run two shifts in a 24-hour period.
That would mean that working the same machine two people would have jobs.
If I set the minimum wage to assure a basic rate of pay
and then I restrict people to 8 hours a day
well in a 24-hour day if I'm running the machines 24 hours,
that would mean three shifts.
People would work a little less in terms of total hours but guess what?
I could bring in an entirely extra person, a new person,
on a third shift and that's one more person in the United States who has a job.
It's another nod toward employment just as it was a nod with a minimum wage
toward getting
money in people's pockets.
That's huge but in some ways the establishment of these blanket codes
which would allow then businesses and industries to display the symbol of
the Blue Eagle,
that was the symbol of the NIRA,
that may not have been the most important part or important element
because
the NIRA, that legislation, the National Industrial Recovery Act,
dealt as well with child labor within industries, 0:28:13.980,0:28:17.649, with wages for females within industries
and it also offered broad protections for labor.
Remember the pattern, there were exceptions but by and large government
had consistently come out in resistance to
labor unrest. Going
all the way back to the Civil War, to the rail strike of 1877
and the early 1920's when miners many of them former veterans had struck in West
Virginia,
the federal government had once again, you know, used force
and I don't have time to talk about it really but let me suggest that you
consider looking up
the Battle of Blair Mountain
in West Virginia where miners arm themselves
and essentially a mini war broke out
and the government actually brought in bombers
left over from World War one to, you know,
deal with this outburst through this insurgency.
I use that just as an example here but that had been the pattern by and large
throughout the US history.
The government will side with property
and that businesses, managers may by and large be able to avoid
recognizing organizations which intended to bargain collectively on behalf of
workers.
Well, Section 7A
of the NIRA, section 7A
guaranteed workers in the United States the right
to unionize and bargain collectively.
Boom! I mean that's huge!
It's huge! The federal government, the New Dealers,
Roosevelt is recognizing in this legislation the right of
workers to bargain collectively.
Why? Well in part its part of this new system...
this new system that combines or seeks to bring coordinated effort among
businesses and between business and labor,
to coordinate this economy. to avoid overproduction,
unemployment, the very problems that lay at the heart
of the Depression. One more thing the NIRA
will do, I don't know if it's as important, but it's important,
is establish the Public Works Administration, the so-called PWA,
federally-funded public works projects,
federally-funded Public Works project
will be... we'll have the Public Works Administration, the PWA,
the WPA, the Works Progress Administration.
The government, by late in the first 100 days
is expressing a willingness to operate programs for the relief
and for job creation directly by the people
or for the people of the United States.
The results of these pieces of legislation
of the first 100 days, we'll take up
in the next segment when we continue
with The New Deal.