Congressional “share the work” schemes, farm proposals for cost of production legislation, retrenchment, public works spending, and above all demands for currency inflation were all in this “start-up” mode. Similarly, Roosevelt and others had a fatal attraction for one-off, quick-fix solutions that would kick-start the economy into recovery without the permanent expansion of the bureaucracy and constant state intervention. As a result, bankers themselves had to decide which banks were sound enough to reopen, farmers had to operate the crop control program, businessmen dominated the formulation and the implementation of the NRA industrial codes, existing state agencies had to administer the relief program, and the Army had to organize the Civilian Conservation Corps. The federal government, observed one historian, “had almost no institutional structure to which Europeans would accord the term ‘the State.’” It had neither the information nor the personnel to implement the policies launched in 1933. The government had to act quickly but there simply was not any established “state capacity” for the government to do so. But, in fact the emergency in 1933 led to constraints on rather than opportunities for federal power. Many officials who had served in government then returned to Washington in 1933. Wartime agencies from 1917to 1918 served as models for agencies like the NRA. There was much talk of the emergency as the equivalent of war and a justification for emergency presidential powers as in a time of war. Forty days into the Hundred Days there was no indication that there was to be an industrial recovery program-congressional action forced Roosevelt’s hand over that and over public works spending. Only when existing appropriations for relief were exhausted did he devise a temporary relief administration. He really only had definite plans for farm policy, the Tennessee Valley, and the Civilian Conservation Corps. There was no great federal blueprint that FDR wanted to impose on the country. In the Hundred Days, the New Deal established a farm program that told farmers what they could and could not plant (the Agricultural Adjustment Administration), created an industrial recovery program that set minimum prices and wages (the National Recovery Administration), launched the biggest public works program in the nation’s history (Public Works Administration), set up a national relief program (Federal Emergency Relief Administration), refinanced farm and home mortgages, regulated the stock market and banking, guaranteed bank deposits, and established the Tennessee Valley Authority. Eventually Congress passed an unprecedented sixteen pieces of major legislation. The response to FDR’s inaugural and from congressional leaders to his banking proposals encouraged him to ask Congress to stay in session. There was no Plan B if that appeal failed. The gamble paid off when people deposited more than they took out. It was still a tremendous gamble when the President went on the air on Sunday, March 12, to explain the crisis and make a “man-to-man appeal” for confidence when the banks reopened the next day. The key was not more credit (the banks had had plenty of that) but recapitalization through the Reconstruction Finance Corporation buying preferred stock in the banks. When he took office and shut the banks, he had to turn to held-over officials in the Treasury and Federal Reserve to dust off legislative proposals that they had devised in the Hoover years. He certainly had no plans to deal with the rapidly escalating banking crisis. The haste dictated by the economic crisis profoundly shaped the New Deal response in the Hundred Days.ĭespite the four months between election and inauguration, Roosevelt had few worked-out legislative or recovery plans. Roosevelt took advantage of the need to reopen the banks to ask Congress to stay in session to pass recovery and reform legislation. Walter Wyatt, Federal Reserve official, amazed at how unprepared the incoming Roosevelt administration was for the situation they faced on inauguration day, March 4, 1933. There wasn’t anybody in that entire Brains Trust apparently that had given any thought-they had absolutely no plans-or any real study to the problem created by this banking situation.
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