The Great Depression (21 page)

EDITOR’S NOTE

 

In June 1933 Congress passed one of the centerpieces of the New Deal legislation, the National Industrial Recovery Act. This law profoundly changed the way business and work were conducted in America. It organized businesses into industries that would volunteer to adhere to codes designed to eliminate unfair competitive practices and to standardize wages paid and hours worked. In return for this cooperation, industries were exempt from antitrust provisions. Consumers were then asked to do business only with companies that adhered to the National Recovery Act (NRA) policies, as signified by a blue eagle logo. The act also, as Roth notes, granted for the first time the permanent right of American workers to organize into labor unions. As a result, union membership expanded dramatically—it tripled over the course of the 1930s—but strikes also became more frequent as unions began to assert their power. Many industries vital to the region around Youngstown—autos, coal, and steel—were adamantly opposed to unions in their plants. Roth notes in particular a series of violent coal miner strikes in Pennsylvania that preceded that industry’s acceptance of an NRA code.

 

In fairly short order, it became clear that the NRA was too sweeping, and government enforcement too weak, for the NRA to make any sustained improvement in the overall economy. Roth himself was skeptical of the NRA from the very beginning yet, in what is clearly a transforming moment in his life, agrees to give multiple speeches on its behalf, all around the Youngstown area. It was, he wrote, “the only patriotic thing to do.” Roth’s diary from mid-1933 is filled with indications (including rising stock prices and increased steel production) that the worst of the Depression had ended. And indeed, after forty-three punishing months, the U.S. economy did stop contracting in March 1933, but the impact for nearly all Americans was minimal and the NRA—much of which would be struck down in 1935 as unconstitutional—did not live up to the administration’s predictions.

 

Another critical aspect of Roosevelt’s economic policy—and one that vexed Roth for years—was the desire to inflate the currency. This was in large part an attempt to revive the depressed commodities markets, which were particularly hurting American farmers. In order to achieve this, Roosevelt by early 1933 saw the need to take the U.S. dollar off the gold standard, on which it had operated since 1900; as Roth notes in earlier entries, many major global economies—including the U.K. and much of western Europe—had already taken this step. Many in Congress favored a policy of bimetalism, which would have fixed the value of the dollar at a certain weight of gold and a certain weight of silver, a policy Roosevelt opposed. The Emergency Banking Act of 1933, which passed in March and allowed 90 percent of the banks to reopen by June, temporarily took the dollar off the gold standard. A later act of Congress—which Roth refers to as the “inflation bill”—allowed the president to revalue the dollar-gold ratio from $20.67 an ounce to $30 an ounce.

 

 

1. The President has been given the powers of a dictator and Congress is a mere rubber stamp.

2. We are off gold standard and will probably have inflation and a managed economy.

3. The industrial control bill is very far-reaching. It puts the government in business so that wages, prices, quantity of production etc. will be managed and controlled.

4. The greatest power producing area in the U.S. (Muscle Shoals) will be owned and operated by the gov’t.

5. We are becoming “internationally minded” by promising to lower tariffs and participate in European wars of aggression.