Beer, Bonds and Other Depression Employment Schemes: Echoes
January 1932 saw a widening recognition that reversing the tide of the Great Depression was America’s No. 1 priority. And there was no shortage of ideas about how to get people back to work.
Financier Bernard Baruch, a close adviser to New York Governor Franklin D. Roosevelt, argued for balancing the federal budget, “which would mean renewed confidence, which, in turn, would effect business improvement," he said, according to the Wall Street Journal.
More frequent, however, were calls for large-scale public-works projects to directly employ the needy.
In Pittsburgh, the Rev. James Cox called on Congress to authorize $5 billion in federal bonds “for creation of work in public construction, including highways, public buildings, hospitals in rural districts, reforestation, flood control and water power conservation.”
President Herbert Hoover disagreed, according to the New York Times, saying “The real victory is to restore men to employment through their regular jobs.”
Several days later, a group of university economists advising publisher William Randolph Hearst reported that, despite popular belief, "expenditures on public works in the United States have not been greatly increased during the depression.” They argued that an outlay of $4 billion to $6 billion could mean "much more than immediate unemployment relief,” as it would produce facilities with lasting public benefits.
Wisconsin Senator Robert La Follette Jr. joined the chorus, declaring in a nationwide radio broadcast that “efforts of cities and local charities to aid the unemployed have failed.” He advocated a $5.5 billion bond issue "after the manner of World War Liberty Loan drives," that would raise money for public works.
“A well-balanced program of this magnitude will stimulate production all along the line from raw materials to finished products," he said, according to the Times. "It will immediately change the entire psychology of the consumer. Merchants will be encouraged to stock their stores instead of carrying the lowest inventories in modern times. Consumers will purchase millions of dollars worth of goods.”
New York Senator Robert Wagner noted that Hoover “says that he is opposed to any direct or indirect government dole. These are hollow words of opposition. He knows that 70 percent of the relief administered is provided through government taxation."
Given the stalemate between Congress and the president, no federal action could be taken. So cities and towns did their best to create work-for-relief programs that could keep families intact and yield lasting benefits for the community. Grand Rapids, Michigan, a furniture-making center devastated by collapsing demand, set people to work building roads, sewers and a swimming pool. (See a related film clip here.) Workers' pay was in scrip -- currency issued locally and redeemable at special shops for food, supplies and services. The program created thousands of jobs.
But local solutions, however imaginative, wouldn't be enough.
(Philip Scranton is a Board of Governors Professor of the History of Industry and Technology at the University of Rutgers at Camden and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)
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