Texas and the Great Depression Governor Dan Moody (1927-1931) Calvin Coolidge 1923-29 “The chief business of America is business” expressed his concept of the nation's.
Download ReportTranscript Texas and the Great Depression Governor Dan Moody (1927-1931) Calvin Coolidge 1923-29 “The chief business of America is business” expressed his concept of the nation's.
Texas and the Great Depression Governor Dan Moody (1927-1931) Calvin Coolidge 1923-29 “The chief business of America is business” expressed his concept of the nation's destiny. The Presidential Election of 1928. New York Governor Alfred E. Smith (1873 - 1944) Herbert Hoover 1929-33 UNDERLYING ECONOMIC WEAKNESSES IN A TIME OF APPARENT PROSPERITY: The prosperity of the 1920s camouflaged serious weaknesses in the U.S. economy. Agriculturists suffered from low prices, a fact that had been mitigated by expanding production. Big business held down wages and increased its profits at the expense of workers and the producers of raw materials. Wealth was unequally distributed: 2 percent of the population controlled 28 percent of the national wealth. The consolidation of money in the hands of the few depressed consumer purchasing power and limited savings, thus weakening most citizens’ ability to weather an economic downturn. By the mid-1920s, the railroad, textile, and coal industries were in trouble, and housing starts and automobile purchases had begun to decline. International trade dropped as the U.S. policy of protective tariffs limited the growth of an already weakened European economy. Consequently, European nations defaulted on their international debts and withdrew investments from the United States. Calvert, De León and Cantrell, 4th ed., 316. Main Street, Cisco, Texas in the 1920s Trade Days in Taylor, Texas, ca. 1920's THE COLLAPSE OF THE STOCK MARKET ON OCTOBER 23, 1929. Heavy speculation in the stock market in the late 1920s created an illusion of prosperity that disguised both industrial weaknesses and a shaky financial network, and although only about 2 percent of all Americans owned stock, the market’s collapse on October 23, 1929, exposed the nation’s economic weaknesses and threw its citizenry into a panic. Calvert, De León and Cantrell, 4th ed., 316. Bread lines during the Great Depression. By 1932, at least one of every four American workers was unemployed, median family income had dropped by 50 percent, a hundred thousand businesses had failed, corporate profits had plummeted from $10 billion to $1 billion, and the gross national product was cut in half. Calvert, De León and Cantrell, 4 ed., 316. th 1929 1933 Banks in operation 25,568 14,771 Prime interest rate 5.03% 0.63% Volume of stocks sold (NYSE) 1.1 B 0.65 B $45.5B $23.9B $15.3B $2.3B Privately earned income Personal and corporate savings Relief line waiting for commodities, San Antonio, Texas. March 1939. Photographer: Russell Lee. Countless thousands of honest, hard-working people lost their homes and farms to the foreclosure’s hammer. Breadlines formed, soup kitchens dispensed food, and apple sellers stood shivering on street corners trying to peddle their wares for five cents. Families felt the stress, as jobless fathers nursed their guilt and shame at not being able to provide for their households. Breadless breadwinners often blamed themselves for their plight, despite abundant evidence that the economic system, not individual initiative, had broken down. Mothers meanwhile nursed fewer babies, as hard times reached even into the nation’s bedrooms, precipitating a decade-long dearth of births. (The American Pageant, 13th edition, pp. 761-762.) Selling apples, Jacksonville, Texas. October, 1939. Photographer: Russell Lee. Many tried apple-selling to avoid the shame of panhandling. In New York City, there were over 5,000 apple sellers on the street. In the 1930s, countless thousands of honest, hard-working people lost their homes and farms to the foreclosure’s hammer. The federal government responded by paying farmers to leave their land fallow. This policy helped to reduce the oversupply of agricultural goods, but it also motivated landowners to evict tenant farmers. Many of these farmers then became migrant farm laborers. In the late 1930s, signs on Route 66 outside of Tulsa, Oklahoma proclaimed: NO JOBS in California Oklahoma Sharecropper Stalled on California Highway (1937) IF YOU are looking for work-KEEP OUT 6 Men for Every Job No State Relief Available for NonResidents From 1930 to 1940, the number of African American tenants in Texas decreased from 65,000 to 32,000, while the number of black farm laborers rose by 25,000; some 20,000 other blacks left the state for better job opportunities. Squatters in Mexican section in San Antonio, Texas. House was built of scrap material in vacant lot in Mexican section of San Antonio, Texas. March 1939. Photographer: Russell Lee. Dust storm in the Panhandle, April 14, 1935. Prints and Photographs Collection, Panhandle--sandstorm file, The Center for American History, The University of Texas at Austin; CN 02655. In 1935 the Dust Bowl covered 100 million acres across the western United States. Visibility in Amarillo that year dropped to zero seven times during the first three months, with one blackout lasting eleven hours. Dust Storm near Dalhart, Texas, 1936 Dust storm approaching Stratford, Texas. Dust bowl surveying in Texas Image ID: theb1365, Historic C&GS Collection. Location: Stratford, Texas. Photo Date: April 18, 1935. Credit: NOAA George E. Marsh Album Hoover believed that charities and local government should provide limited relief to the needy. The dole, he said, diminished a man’s character. As the depression worsened, however, many Americans realized that optimism, private charities, and local and state governments could not cope with the impact of the mass unemployment. Calvert, De León and Cantrell, 4th ed., 317. Herbert Hoover, Financing Relief Efforts (1931) Main Points: 1. The best way to help people during times of national difficulty is through mutual self-help and voluntary giving. My own conviction is strongly that if we break down this sense of responsibility of individual generosity to individual and mutual self-help in the country in time of national difficulty and if we start appropriations of this character we have not only impaired something infinitely valuable in the life of the American people but have struck at the roots of self-government. (p. 109) Herbert Hoover, Financing Relief Efforts (1931) 2. Federal aid to the hungry and poor encourages expectations of future paternal care and weakens Americans’ self-reliant character. It also weakens Americans’ willingness to help each other and give to each other, and thus enfeebles the bonds of common brotherhood. Quotation of President Grover Cleveland by President Herbert Hoover: The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encouraged the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood. (p. 110) President Herbert Hoover: The help being daily extended by neighbors, by local and national agencies, by municipalities, by industry and a great multitude of organizations throughout the country today is many times any appropriation yet proposed. The opening of the doors of the Federal Treasury is likely to stifle this giving and thus destroy far more resources than the proposed charity from the Federal Government. (p. 110) Franklin Delano Roosevelt Roosevelt consciously abandoned the term “progressive” and chose instead to employ “liberal” to define himself and his administration. In so doing, he transformed “liberalism” from a shorthand for weak government and laissez-faire economics into belief in an activist, socially conscious state, an alternative both to socialism and to unregulated capitalism. (Foner, The Story of American Freedom, pp. 201-204.) Redefining Liberalism Freedom, Hoover insisted, meant unfettered economic opportunity for the enterprising individual. Far from being an element of liberty, the quest for economic security was turning Americans into “lazy parasites” dependent on the state. For the remainder of his life, Hoover continued to call himself a “liberal,” even though, he charged, the word had been “polluted and raped of all its real meanings.” (Foner, The Story of American Freedom, p. 205.) Governor Ross Sterling, (1931 – 1933) Former President of Humble Oil and Refining. East Texas Oil Field In 1930, Columbus Marion "Dad" Joiner drilled an oil well near Kilgore that tapped into one of the greatest oil discoveries in history. Believing that the area held no oil reserves, the "majors" had not leased mineral rights from local land owners. Therefore, "independents" controlled 80 percent the Great East Texas field. Economic effects of the East Texas oil boom 1. 2. 3. Helped the poorest part of the state Kilgore a boom town Drove down the price of oil from over one dollar per barrel in 1930 to eight cents per barrel in 1931 Why did independents continue to pump high amounts of oil? 1. 2. Many lacked the capital necessary to limit production until prices rose. They could not stop production if others did not or the oil would be pumped from under their lease. The East Texas Oilfield covers 140,000 acres and is located in the east central part of the state. It was discovered in 1930 and is one of the largest and most prolific oil reservoirs in the United States. The field encompasses 5 counties in North East Texas. It is 45 miles long and 18 miles wide, and has 11,000 existing wells. (2007) C.M. "Dad" Joiner (third from left) shakes the hand of Dr. A.D. Lloyd, his geologist, in front of the No. 3 Daisy Bradford, discovery well of the East Texas oil field. H.L. Hunt is third from right. East Texas Field Kilgore became the greatest boom town of all oil strikes. In 1931, the immense output drove the price of oil down from over $1 a barrel to 8¢. The Texas Railroad Commission (TRC) had the authority to "prorate" oil to maintain prices, conserve oil, and to protect the environment. In 1931, the TRC issued proration order for East Texas because overproduction threatened to ruin the market for oil. Because majors refused to refine East Texas crude, independents built their own "teakettle refineries" which produced low-grade gasoline sold at independent stations. Because these refineries handled oil pumped above proration levels, their product was termed "Hot Oil." The TRC had no power to enforce its proration guidelines and producers could not agree to limit production voluntarily. Governor Sterling, formerly president of Humble Oil, sent troops into East Texas to enforce the proration order. General Jacob F. Walters, an attorney for the Texas Company (later Texaco), commanded the National Guard troops. Understandably, most East Texans considered Sterling's actions to be supportive of the majors' efforts to destroy the independents. The National Guard and Texas Rangers confronted resistance (sometime violent) as it attempted to stop the production of Hot Oil. Federal and state laws restricted the production of Hot Oil. By 1940, the majors owned 80 percent of East Texas field. Texas Rangers Gladewater during the oil boom Factors which brought conflict to a conclusion 1. 2. 3. 4. 5. Texas Rangers The National Recovery Administrations established codes for the oil industry Majors produced inexpensive gas Law regulated refineries Connally Act made it illegal to transport Hot Oil across state lines Impact of the East Texas Field 1. 2. 3. 4. 5. By 1935, the combination of federal and state laws enforced the TRC's power to prorate oil to maintain prices By 1939, the majors owned 80 percent of the East Texas Field The stronger independents survived. Independents established offices in Dallas The boom helped Texans survive the Great Depression When farmers planted their cotton crop in 1931, the market price of cotton averaged 9 to 10 cents per pound; by harvest time, it had fallen to 5.3 cents per pound, where it remained for the next year. p. 325. A farmer needed at least three times the amount of production in 1931 than he needed in 1928 to pay off the same amount of loan. p. 326. A farmer needed at least three times the amount of production in 1931 than he needed in 1928 to pay off the same amount of loan. p. 326. Early efforts to reduce the production of cotton and raise the price failed. The 1931 cotton crop of 17 million bales was the second largest in history, which only added to the existing surplus of 4.5 million bales held over from 1930 production. (See pp. 326-327.) Texas Governor Ross S. Sterling Louisiana Governor Huey P. Long Huey Long, governor of Louisiana, proposed a “drop a crop” plan. Under this plan farmers would plant no cotton in 1932, thus solving the cotton-glut problem and raising cotton prices. Huey Long’s proposal to “drop a crop” failed to due opposition from Texas and other states. Overproduction continued to be a problem. The Texas Cotton Association, an organization of shippers and buyers, and most of the big city dailies opposed Long’s “drop a crop” plan. The cotton-restriction failure and the issue of having sent troops to the oil field damaged Sterling’s reelection campaign. Cotton Problem: Over Production & Low Prices THE RETURN OF “FERGUSIONISM,” 1933-1935 Governor Sterling attributed “Ma” Ferguson’s victory in 1932 to voter fraud. In 132 counties, 40,000 more votes were cast than poll taxes paid. Many of these votes came from East Texas, where the Fergusons had strength and Sterling was disliked. Although there was fraud, Ferguson’s victory also lay in the continued support of her husband by poor folk and in the political despair generated by the widening depression. (See pp. 327-328) Miriam “Ma” Ferguson Miriam "Ma" Ferguson is elected governor of Texas for the second time. In protest over political patronage and corruption, 40 Rangers quit the force and the remainder are fired. Political appointees replace them. The governor issued “Special Ranger” commissions to 2,344 men, thus making the force a venue for political patronage. Vice President John Nance Garner (1933-1941) A prominent Texans becomes Vice President A Brief Era Of Cooperation Between An Old Texan Democrat And A New Deal Democrat Vice President Garner offered President Franklin D. Roosevelt (FDR) advice on a wide range of matters. However, Garner and FDR gradually split over the New Deal’s swing to the left and the president’s decision to run for a third term. Nonetheless, the crusty West Texan remained a life-long Democrat, if not a supporter of Roosevelt. (p. 329) SHORT BIOGRAPHY: John Nance Garner was born in Red River County, Texas, on 22nd November, 1868. After studying law he was admitted to the bar in 1890 and became a lawyer in Texas. A member of the Democratic Party Garner served as a judge in Uvalde County (1893-1896) and in the Texas house of representatives (1898-1902). Garner was elected to Congress in 1903. He served as minority floor leader in the 71st Congress and as Speaker of the House of Representatives in the 72nd Congress. In 1932 Franklin D. Roosevelt selected Garner as his running mate and on 8th November was elected as Vice President of the United States. Roosevelt upset Garner when in 1940 he announced that he intended to stand for a third term. Garner resigned and Henry Wallace took his place. running mate. FDR made the Houstonian Jesse H. Jones chairman of the Reconstruction Finance Corporation (1933-1939). He also expanded Jones responsibilities with assignments to the Export-Import Bank (1936-1943), the Federal Loan Agency (1939-1945), and as secretary of commerce (1940-1945). Jones was more conservative than were most of his New Deal colleagues, and his disagreement with Roosevelt’s policies led in 1945 to his break with the Democratic Party. (See p. 329.) JESSE H. JONES: AN INFLUENTIAL TEXAN IN THE FDR ADMINISTRATION. JESSE H. JONES Jesse Jones, businessman and New Deal official, with President Franklin D. Roosevelt at the opening of the Texas Centennial, Dallas, 1936. Jones helped save the nations' banking system as chairman of the Reconstruction Finance Corporation. Texan Congressman Sam Rayburn Texan Congressman Sam Rayburn chaired the important Interstate and Foreign Commerce during the FDR Administration. Rayburn went on to become majority leader and Speaker of the House for most of the time from 1940 to 1961. His ability to manipulate legislation and to work out political compromises won him respect on both sides of the House aisle. (See p. 330.) Texan Congressman Maury Maverick Congressman Maury Maverick received national acclaim as a New Deal Democrat. After his defeat in the congressional race of 1938, he became mayor San Antonio, and then served as an able administrator of wartime mobilization agencies. (See p. 330.) Congressman Maury Maverick The Maverick political family - Congressman Maury Maverick, Sr., a liberal New Dealer, is sworn in by his father as San Antonio mayor, as Maverick, Jr. looks on. Texarkana congressman Wright Patman Texarkana congressman Wright Patman won acclaim as a progressive, particularly concerning bank legislation and benefits for veterans. Patman, Johnson (who went to congress in 1937), and Rayburn were the most consistent supporters of Roosevelt throughout his administration. (See p. 330.) ESTABLISHMENT OF THE FDIC & THE FEDERAL RESERVE SYSTEM RESTORES CONFIDENCE IN BANKING RUN ON BANKS "Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work.” --FDR President Roosevelt used executive emergency powers granted in World War I to close the nation’s banks for a “bank holiday,” a hiatus that stopped runs on banks. When the bank reopened, they fell under government regulations. The Federal Deposit Insurance Corporation (FDIC) guaranteed deposits up to $5,000 and periodically audited the insured banks. By 1935, the Federal Reserve System controlled interest rates, thereby limiting competition from new (and possibly shaky) banks that might offer more attractive deals to prospective customers. The government also mandated the periodic auditing of banks by various state and federal agencies. These measures restored public confidence in banking. (See p. 330.) Wagner Act In 1935, Congress passed the Wagner Act, which guaranteed the right of unions to organize peacefully. The New Deal legislation spurred the growth of unions in Texas. Civil Works Administration (CWA) Work Progress Administration (WPA) Civilian Conservation Corps (CCC) National Youth Administration (NYA) The CWA, WPA, CCC, and NYA all were New Deal agencies that provided employment to the unemployed. FDR The CCC at work Governor Alfred LBJ FDR, LBJ and Governor Alfred The 26-year-old Lyndon Johnson served the Roosevelt administration for two years as state director of the National Youth Administration. The Agricultural Adjustment Act (AAA) The Agricultural Adjustment Act (AAA), passed in 1933, applied restrictions to cotton, wheat, corn, rice, tobacco, dairy products, and hogs; cattle products were soon added to the list. In Texas, more farmers than in any other state took advantage of crop-reduction contracts. The most significant result for the Texan economy was a dramatic reduction in the amount of cotton produced. Texans sold over 4 million head of cattle, sheep, and goats to the AAA, which spent $27 million to buy these surplus animals, making Texas stockmen by far the largest recipients of this type of aid. Approximately 1,750,000 of the animals were destroyed, with the remainder going to the Federal Surplus Relief Corporation for distribution to the needy. (See pp. 334-335.) The Rural Electrification Administration (REA) The Rural Electrification Administration (REA) provided lowinterest loans and WPA labor to electric cooperatives to lay power lines to rural dwellings. Through these efforts, 17,712 miles of power lines reached 54,000 new customers in Texas at a cost of $16 million. The work of the REA moved Texas farmers into the era of modern amenities and communications and helped break down the isolation of rural dwellings. (See p. 335.) The New Deal helped induce most African Americans to switch their political allegiance to the Democrats. LULAC's principal purpose was to fight discrimination against Texas Mexicans. James V. Allred As attorney general, James V. Allred earned a reputation as an opponent of monopolies and political lobbies. His image as a trust-buster made him popular in Texas. As governor, Allred strongly supported the New Deal and cooperated closely with federal programs for combating the Depression. In 1937, Hatton Sumners in the House and John Nance Garner in the Senate combined to defeat the President Roosevelt’s plan to increase the number of Supreme Court justices. Texan Representative Hatton Sumners and Texan Senator Tom Connally help to defeat an anti-lynching bill in Congress in 1937. John Nance Garner led the new southern Democrat-Republican coalition that opposed further expansion of New Deal programs in the late 1930s. Martin Dies assumed the chairmanship of the House Un-American Activities Committee, and used his committee to attempt to link FDR and his program to Communist subversion in government and labor unions. W. Lee "Pappy" O'Daniel became prominent in Texas (and was later elected governor) because of his popularity as a radio personality. Rural Texans were O’Daniel’s strongest supporters. In a controversial 1941 race for the United States Senate, Governor O'Daniel defeated Lyndon B. Johnson by a razorthin margin. "Texas furnished proportionally a larger percentage of men and women for military service than did any other state.“ (p. 351) Thirty-six Texans won the Medal of Honor. The two most decorated American servicemen were Audie Murphy and Samuel Dealey. Other Texans included Dwight D. Eisenhower, Chester A. Nimitz, and Oveta Culp Hobby, who commanded the Women's Army Corps. TEXANS IN WORLD WAR II Mrs. Oveta Culp Hobby, first commander of the Women's Auxiliary Army Corps (WAC's) is shown in front of a World War II U.S. Army Recruiting Poster. Black troops stationed in Texas were expected to conform to demands of Jim Crow segregation. Training camps had separate and inferior facilities for African Americans. Doris Miller won a Navy Cross for his service at Pearl Harbor. (p. 352.) "Negro messmen aboard a United States Navy cruiser who volunteered for additional duty as gunners. They have been doing proficient work under battle conditions on a task force in the Pacific under the instruction of the officers at the right." July 10, 1942. 80-G-21743. "The Negro janitors of the plant maintenance department in North America's Kansas City factory in V-formation as they start out on their daily tasks." February 4, 1942. Carl Conley. 208-NP1KK-1. "Fliers of a P-51 Mustang Group of the 15th Air Force in Italy `shoot the breeze' in the shadow of one of the Mustangs they fly." Left to right: Lt. Dempsey W. Morgan, Jr.; Lt. Car roll S. Woods; Lt. Robert H. Nelson, Jr.; Capt. Andrew D. Turner; and Lt. Clarence P. Lester. Ca. August 1944. 208-NP-6XXX-1. "Christmas Dance at Negro Service Club #3. The dance was sponsored by the 1323rd Engineers. They had their own orchestra. Camp Swift, Texas." December 23, 1943. Pvt. Greene. 111-SC-18834. Coke Stevenson 1941-47: conservative financial policies and limiting the power of the national government. Stevenson's administration: 1. Improved the state highway system 2. Raised teachers' salaries 3. Building program at the University of Texas 4. Improved soil conservation 5. Sympathy for the labor movement 6. Manford Act (1943) labor organizers must register, no union political contributions 7. Showed concern for discrimination against Mexican Americans; no sympathy for African Americans 8. Turned the state's deficit into a surplus TEXAS REGUARS: Anti-New Dealers worked to control the state Democratic conventions, send uninstructed delegates to the national convention, and nominate independent presidential electors. When that strategy failed, they bolted the party and organized a third one, the Texas Regulars. Its plans included a return to states’ rights “which have been destroyed by the Communist-controlled New Deal” and a “restoration of the supremacy of the white race….” pp. 356-357. Texas Regulars: 135,444 votes The wartime economy benefited all Texans. Fifteen army posts. Forty air bases. Over thirty prisoner of war camps. German Prisioner of War Camp Fort Sam Houston, Texas New aircraft factories; shipyards, steel mills, tin smelter plant, oil fields, paper and lumber products. Need for new refineries and synthetic rubber turned the Gulf Coast near Houston into the largest petrochemical industry in the world. A new industry that helped to turn the Gulf Coast into the home of the world's largest petrochemical industry was synthetic rubber. By 1950, Houston had become the second leading port in the nation. The number of wage earners tripled. 500,000 moved from rural areas to cities. There was new work for blacks and women, and the standard of living rose for many Texas families. During World War II, Texas farms became larger, fewer, and more valuable. Power farming displaces tenants. Texas panhandle. Photographer: Dorothea Lange. During World War II, the center of the cotton industry shifted to South Texas and the High Plains. Acres Planted: 1 dot = 1,000 acres. Cotton had always required a large amount of hand labor. The perfection of the mechanical cotton picker revolutionized the cotton farm. Harvest scene in the Corn Belt - a large combine quickly unloads grain to a high-capacity grain cart Number of Farms and Acres per Farm 1850-1997 The number of farms has decreased since 1935, while the size of farms has increased Source: Census of Agriculture, various years. The Bracero Program The term bracero (from the Spanish brazo, which translates as "arm") applies to the temporary agricultural and railroad workers brought into the United States as an emergency measure to meet the labor shortage of World War II. The Bracero Program, also referred to as the Mexican Farm Labor Supply Program and the Mexican Labor Agreement, was sanctioned by Congress through Public Law 45 of 1943. Bracero card issued to Jesús Campoya in 1951 in El Paso, Texas. Why the number of Mexicans working in Texas increased: 1. Many Tejanos moved to cities because of low agricultural pay and urban job opportunities. 2. Bracero program: contract labor agreement between the USA and Mexico 3. Rise of corporate, vertically integrated farms that preferred cheap migratory labor from Mexico Operation Wetback In 1949 the Border Patrol seized nearly 280,000 illegal immigrants. By 1953, the numbers had grown to more than 865,000, and the U.S. government felt pressured to do something about the onslaught of immigration. What resulted was Operation Wetback, devised in 1954 under the supervision of new commissioner of the Immigration and Nationalization Service, Gen. Joseph Swing. Swing oversaw the Border patrol, and organized state and local officials along with the police. The object of his intense border enforcement were "illegal aliens," but common practice of Operation Wetback focused on Mexicans in general. The police swarmed through Mexican American barrios throughout the southeastern states. Some Mexicans, fearful of the potential violence of this militarization, fled back south across the border. In 1954, the agents discovered over 1 million illegal immigrants. In some cases, illegal immigrants were deported along with their American-born children, who were by law U.S. citizens. The agents used a wide brush in their criteria for interrogating potential aliens. They adopted the practice of stopping "Mexican-looking" citizens on the street and asking for identification. This practice incited and angered many U.S. citizens who were of Mexican American descent. Opponents in both the United States and Mexico complained of "police-state" methods, and Operation Wetback was abandoned.