On May 7, 1933, President Franklin D. Roosevelt gave his second national radio "fireside chat," outlining New Deal reforms in farming and manufacturing.
Both industries had been afflicted by overproduction, low prices and low wages as the Great Depression dragged on. In response, Roosevelt was now proposing that the government intervene in the economy on a new scale.
The Farm Relief Bill would increase returns to farmers and prevent disastrous overproduction, which had kept prices low in the past. New manufacturing policies would give industrial workers fair wages, prohibit cut-throat competition and unduly long hours, and prevent overproduction.
After Roosevelt's radio address, Montana wheat farmer Tom Campbell wired the White House: “You have the confidence of 120,000,000 citizens. Your courage and frankness have thrilled the people." Business leaders "are deeply appreciative and very thankful for the constructive work you are doing in our interests," wrote Thomas J. Watson, the head of International Business Machines Corp.
Roosevelt abolished the host of agencies handling agricultural financing and created a consolidated Farm Credit Board, which would manage $2.5 billion in current loans and a $2 billion fund for future lending. The Agricultural Adjustment Act reduced acreage and output, processed taxes on farm produce to increase prices and compensate farmers, and controlled marketing through licenses and supervised agreements among producers, processors and distributors.
Agriculture Secretary Henry Wallace summarized the imperative as "adjusting our agriculture to the market that actually exists and doing it as rapidly as possible."
Conducting industrial policy was tough given vast differences among the mining, textiles, steel, oil, auto and machinery sectors. But every industry had experienced falling wages and soaring unemployment. Even hard-headed Henry Ford, who normally opposed government intervention in the economy, admitted that "nothing can be right in this country until wages are right. If the government can help in these matters, well and good."
The National Industrial Recovery Act proposed that industry associations create codes of fair competition that would end the race to the bottom and increase employment and prices. These codes also would affirm workers' rights to organize and collective bargaining.
In addition, the bill would add $3.3 billion in federal public works, reducing unemployment and improving infrastructure. It even had a provision to tame the oil industry's wild behavior.
As the debate over the bill continued into June, the anti-union National Association of Manufacturers mounted an opposition campaign. General Electric Co. President Gerard Swope announced his support, criticizing trade associations for their inaction and hostility to the emergency regulation.
The act’s passage was certain, but the industrial fight was just beginning.
(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, 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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