Hard Times (47 page)

This was difficult to sell the accountants and the bankers. But the Banking Act of ’33 was passed, and they started to follow that theory. It permitted the Federal Reserve to lend on any sound asset. Before, they had the commercial paper theory—you could lend on certain things. And banks ran out of collateral for borrowing purposes.

Then the FDIC
¹¹⁹
was established. It gave confidence to the man on the street that his bank would not fail, and if it did, he was insured up to $10,000. That was part of the Banking Act of ’33.

The Banking Act of ’34 was much more fundamental. It gave our whole Federal Reserve System a better basis. This caused a fight between Marriner Eccles and Carter Glass.
¹²⁰
They had different philosophies. Mariner was one of the original advocates of pump-priming. Glass was of the older school. Marriner loves an argument, and he was able to get most of his recommendations approved. It was a great victory for him.

 

1937 and 1939 were interesting periods. We hadn’t come out of the Depression. It was deep-set. The Board increased reserve requirements of member banks because they had large excess reserves. We made studies showing that only a very few banks would be affected by this increase in requirements. Then we got a real turn-down.

There was a very, very serious recession in ’37. Marriner spent a good share of his time trying to prove to the public that it was not caused by the Federal Reserve action. Critics said it was.

We had a serious break in the market, when war broke out in Europe in 1939. A problem in securities. The Federal Reserve Board said it would buy all the securities that were offered, no matter what the volume, at the market price. That stopped the avalanche of sales. The market settled down, and we got through that.

We really had not made a substantial recovery from the deep Depression of the early Thirties. Unemployment was still very high. The New Deal programs were not stimulating the way people thought. There was sort of a defeatist attitude—that the Government just had to do all this for the people. It was not until the war, with its economic thrust, that we pulled out of it. The war got us out of it, not the New Deal policies.

As a matter of fact, the policies pursued could have thrown us into real trouble. It was changing our way of life. You’re spending money and going into debt, but you’re not really finding ways and means to explore new projects. Like today, we’re in an explosion of ideas.

 

Despite all the programs
—
PWA,WPA,FSA
… ?

 

It took care of immediate suffering in part of the areas. I’m not criticizing it in that sense. But it didn’t pull the thing up so that private enterprise could take its place and replace it.

 

 

Roosevelt gave us quite a bit of hope, early. He probably saved us from complete collapse, in that sense. But he did not answer the things. Many of his programs were turned on and off, started and stopped … shifting gears. Because we had never been in anything like this.

Planning had not been done. So they’d go out and sweep the mountains and clean up the debris, and then the wind comes along and blows it back again. It gave some work. But the people that got the money, in some ways were benefited and in other ways were hurt. They didn’t like to see the waste…. They had mixed reactions.

We have a ranch in Utah. In 1933, we had a serious drought. Anyone that lived out there can tell you it nearly broke all the ranches in the area. I was on the ranch this day with my father. We had cattle coming in from the range land, thirsty, without food, getting down to the water. We’d
gather these up and sell them to the Government. They’d pay from $4 to $20 a head. If the animal was alive, you’d get $4. If it was a good animal, you’d get up to $20.

They drove up, the buyers from the agricultural department. There were seven of them in this one car, on Government pay. There was an argument over the value of one steer, which was as perfect an animal as any I’d ever seen. They didn’t want to give but $16. My father said it was $20 or nothing. After some argument with the seven men, they gave it. Before the Government was in on this, we’d sell all our cattle to a buyer, one man. Here were seven. The people out there got the feeling this was just Big Government, a make-work thing. These things tended to create a defeated attitude.

 

 

In the last days of Hoover, it was very gloomy. The financial collapse had just dampened everything. They didn’t know which way to turn. Mr. Hoover, as a man, took a good deal of this blame personally upon himself. It was unjustifiable. Roosevelt, with his silver tongue, brought words of hope. He started many things going, but they were turned on and off. We had the NRA, the WPA and these things—they’d come and go. You never could get clear-cut decisions. One day, one thing; the next day, another. It was bedlam and confusion in Washington.

Ickes and those fellows not knowing which way to go. One day, he was in good grace; the next day, it was Morgenthau. And the next day, everybody was questioning Harry Hopkins and those fellows, because they had the ear of the President, and they were getting in there on the side. We’d get stories about tossing a coin in the air to decide the price of gold…. Whether it’s true or not, I don’t know. But we’d get these stories.

I was enthusiastic when Roosevelt came in. I thought: We’re in serious trouble. Something has to be done, and here’s a man that’s going to do it. I voted for him his first term and his second. After that, I voted against him. It wasn’t just on the two-term basis, although that was important. The packing of the Supreme Court and the fact that we were not making the progress I thought our country was capable of making…. I became terribly disenchanted.

He was a dramatic leader. He had charm, personality, poise and so on. He could inspire people. But to me, he lacked the stick-to-it-iveness to carry a program through.

 

 

I felt we were relying too much on the Government to save us. There was not enough involvement in the private area to carry its share of the
burden. I felt people were losing their initiative to get out on their own instead of: Please hand it to me. Of course, we hadn’t seen anything then compared to what we have now in this respect. But today, we have all this private involvement that is so interesting and expansive. It offsets the other. I don’t want to be too critical of Mr. Roosevelt, because he did, in our period of history, do something.

 

 

We had to have some of them. If he hadn’t done it, someone else could have. In one way, you could say he saved it because he was our leader and he surely had the support.

Not as it is today. It is a different sort of thing. It was bewilderment. Of course, we hadn’t been used to the affluence we have today. I didn’t think our people were poor, many of them. They ate well, and so on. But the unemployment continued on and on and on.

Today, attitudes have changed. There’d be some rebellion that you didn’t have then. It was peaceful then. It was law-abiding. You could walk down the street and have money in your pocket, and no one would take it from you. You might have a beggar ask you for something. But there wouldn’t be the kind of feeling that you’d have it taken away from you. There was more respect for law. Now there is this demanding thing. It’s general, it’s in all the world now.

 

POSTSCRIPT:
“When I first came to Washington, Doc Townsend visited me. He was a nice looking gentleman, gray-headed, thin. A good country doctor, I felt. Well, he had a crazy idea which you couldn’t talk him out of: a tax on all the desposits that went through the banks. I said, ‘Somebody would have to pay for it.’ He said, ‘Look at all those billions of dollars. We don’t have to take but a small amount of it.’ He didn’t realize, however, you raise it, it’s going to be a burden on somebody. But he was a spokesman for a great lot of older people, and he gave them hope. I thought he was a little daft on this concept. On the other hand, he served a purpose at the time. He gave old people the idea of a pension. And now they’re organized.” (Laughs.) “I respected the old man.”

Poet.
Two of his anthologies,
To Live And Die in Dixie
and
Hear The Wind Blow,
concern the Depression in the South.

 

I HAD my first job in the steel mills, back in the Twenties. You could say the Depression commenced in this town, Ainsley, Alabama, a steel mill suburb of Birmingham. We had the first bank to go bust in the early days of the Depression. All the workingmen trusted the banker.

In the fall of 1929, I left my job as metallurgist on the open hearth to teach at the University of Wisconsin. For Alexander Meiklejohn’s Experimental College. Of course, the students became turned on very rapidly during the Depression. At commencement, you’d see fellows in caps and gowns selling apples at the doors of the stadiums, where they were handing out the programs. This was kind of a demonstration, just to show … highly gifted chaps, you know, going to work in dime stores, after they got their degrees. And lucky to get the work. So they were radicalized by the Depression the way kids are radicalized today by the Vietnam war and the whole drift of our society….

In the summer of ’32, I played hookey from the academic rat race. I was doing a doctoral dissertation on the novels of Dickens and hard times
back in 1832. I decided to find out what was happening in my own time. In my home town. I found out with a vengeance. This led, actually, to my going out into the Depression. First, as a volunteer social worker and then as a New Deal administrator.

For eight years, starting in ’34, I worked as field administrator all over the South … with white and black, rural people, coal miners, steel workers, textile workers, a fertilizer plant people, turpentine camp workers and sharecroppers.

 

 

No, indeed. The ferment I discovered in Birmingham was just tremendous. The people were ready, really, to take action. They, of course, didn’t know which way to turn. Few people believed, in ’32, that Roosevelt was going to be the answer.

I remember passing through Chicago on my way to the South. I stopped off at Hull House to see my literary idol, John Dos Passos.
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He thought we were on the road to revolution … that Roosevelt would, of course, be re-elected, but that he wouldn’t rise to the occasion. He seemed to believe some kind of anarcho-syndicalist solution would be found. The American labor unions would lead the way. Of course, they were not leading the way. And Roosevelt surprised everyone by coming up with emergency programs which did take most of the bite out of popular discontent.

I remember in Ainsley that year, in the relief headquarters, a woman had been arguing and arguing to get some milk for her baby. You should have seen the things they were giving babies instead of milk. I remember seeing them put salt-pork gravy in milk bottles and putting a nipple on, and the baby sucking this salt-pork gravy. A real blue baby, dying of starvation. In house after house, I saw that sort of thing.