by Adam Cohen
Although he had backed the FERA, Roosevelt remained ambivalent about the new role the federal government was assuming for relief. When he signed the bill into law, he again emphasized that the “first obligation” to provide relief remained “on the locality.” That Roosevelt continued to minimize the federal role in relief greatly troubled progressives. Edith Abbott, writing in The Nation, called Roosevelt’s emphasis on local responsibility “probably the most reactionary pronouncement that has come from the White House since the New Deal was inaugurated.” His hesitancy was based partly on his long-standing feelings about the role of states in the federal system, but it was also pragmatic. He was concerned that with the FERA in place state and local governments would stop their own relief efforts, putting the entire burden of caring for the nation’s poor on him.8
Hopkins stood by his boss on the question of local responsibility. In his public statements and his management decisions, he was vigilant about pressing the states and localities to do their part. “Every department of government that has any taxing power left has a direct responsibility to help those in distress,” he insisted. All of the money Hopkins gave out on his first day was in the form of matching grants, which required the states to put in $3 for every $1 in federal funds. When states pled poverty and asked Hopkins to send them money that they would not have to match, he often ordered them to try harder. Hopkins told Governor Ruby Laffoon of Kentucky that his state would be cut off unless he came up with an appropriate share of relief costs. When West Virginia’s governor insisted that his state had no more money for relief, Hopkins investigated and announced that the governor “simply does not want to face the music.”9
Hopkins’s immediate goal, besides quickly getting money to those in need, was to build a professional relief organization. The Hoover administration’s relief program had simply functioned as a bank, lending money to the states to use as they wished. The FERA—as the statute that Hopkins helped to write established—was to be a single national program. To ensure that it was, Hopkins issued Regulation No. 1, directing that all federal relief money had to be administered by units of government. If private welfare agencies wanted to be involved, their staff had to become public employees. It was in some ways a surprising edict, since it was a rebuff to the sort of charities, like AICP and the Tuberculosis Association, in which he had spent much of his career. But Hopkins was intent on establishing that providing relief to the poor was a government responsibility. He also wanted to ensure that FERA workers, whether in Washington or in the states, would have to follow whatever rules he put in place.10
Hopkins was especially eager to establish national standards for benefit levels. The tradition of local responsibility for welfare programs meant that levels of support varied greatly across the country. The average monthly grant for a family in New York was $33.22. In Mississippi, it was $3.86. In Illinois, the standard for relief was the amount necessary to “prevent suffering,” which, as Samuel Goldsmith of the Jewish Charities of Chicago told the La Follette Committee, meant that the poor were often denied money for clothing and other necessities. The registration forms that marchers submitted for the national hunger march of December 1932 revealed how inadequate relief was. One marcher from Oregon, M. J. Somers, a twenty-four-year-old unemployed laborer, reported that he was receiving $2.50 a month from county welfare. Another, Oscar Ruutul, said he was receiving $4 a month in scrip from the Salvation Army. Now that relief was a national program, Hopkins had the leverage to force states and localities to do better. “We are not going to allow relief agencies to starve people to death with our money,” he declared. In his first month, Hopkins instructed the states that they had to provide for the recipients’ basic needs—including food, shelter and utilities, and medical care—and he vowed to cut off aid to states whose benefit levels were “so low as to degrade the recipients.” Southern states, in particular, objected that Hopkins was meddling with their local decisions, but he held firm. After Hopkins took charge of the FERA, average benefits began rising steadily. By January 1935, they had doubled.11
On June 14, Hopkins convened a conference of governors and state relief executives at the Mayflower Hotel. Forty-five states sent representatives, along with the territories of Alaska, Hawaii, the District of Columbia, and Puerto Rico. The group discussed federal relief, and then visited the White House, where Roosevelt spoke to them extemporaneously. He emphasized again that localities and states had to do their “fair share.” Although the FERA had just sent out its first relief checks, Roosevelt made clear that the administration’s focus had already shifted to public works. He spoke warmly of the CCC, boasting that there were now more than 235,000 men in camps, and that soon there would be 275,000 unemployed people out working in nature. He also noted that the National Industrial Recovery Act, which had passed Congress a day earlier, would usher in far larger public works programs. Roosevelt had officially gone from skeptic to booster. The new public works program would, he said, “provide a bridge by which people can pass from relief status over to normal self-support.”12
Putting in place a program to provide relief to 15 million people proved to be hard work. “We did not have a single chart to go by,” Hopkins later recalled. “It was almost as if the Aztecs had been asked suddenly to build an aeroplane.” Hopkins started out simply dispensing funds to the states, which in turn gave it to the unemployed to meet basic needs. He was, however, an innovator by nature, and he quickly found ways to spend the money more creatively. He hired unemployed teachers to teach adult literacy and vocational training classes and sent them to work in financially strapped rural schools. By the end of 1933, ten thousand teachers had signed up. Another program targeted college and graduate students who were at risk of dropping out, offering them jobs in laboratories, libraries, and museums. A “rural rehabilitation” program provided poor farm families with seed, fertilizer, and livestock so they could produce their own food. Another program encouraged nonfarm families to grow vegetables in “subsistence gardens,” both to save money and to promote better nutrition. Hopkins authorized state relief administrators to provide lunches in the schools for children of relief families, many of whom were suffering from malnutrition. These lunches, which were often prepared and served by women on work relief, were a forerunner to the federal school lunch program.13
Ever the social worker, Hopkins was particularly concerned about two of the nation’s most overlooked groups, transients and the homeless. The hard times had thrown hundreds of thousands of Americans off the land. Many rode the rails or trekked from town to town in search of work. In 1932, Southern Pacific, a single railroad, ejected 683,457 people from its trains. These transients “were not bums, although in many communities they inherited the opprobrium that attaches to bums,” Hopkins said. The towns they stopped in, which were struggling themselves, generally offered little in the way of assistance. “A bowl of soup grudgingly given, a place to sleep on the jail floor, and an urgent invitation to be out in the morning, was about as far as they could customarily go,” Hopkins observed. The FERA issued grants, through a program called Transient and Homeless Relief, to provide direct aid to transients and to build camps around the country where they could spend the night. Urban homelessness was an even bigger problem. A nationwide survey in early 1933 estimated that there were 1.5 million Americans without homes. Many were living in Hoovervilles or sleeping on streets or in open fields. Hopkins used FERA money to encourage localities to provide them with a place to stay. He significantly improved conditions in homeless shelters, which had long been among the grimmest parts of the relief network. To receive federal funds, shelters had to meet standards for beds, food, health care, recreation, bathing facilities, and laundry.14
Almost as soon as he set up the federal relief program, Hopkins was looking to make it obsolete. Although he insisted that cash benefits were often necessary, Hopkins believed that they were a poor substitute for work. “There is nothing nice about this relief business from beginning
to end,” he said. “None of the relief officials like it, but you may bet the unemployed like it a lot less.” Even though it was more costly and more administratively difficult, Hopkins was committed to finding ways to provide the unemployed with the dignity of earning their own living. Perkins would later say that he “understood intuitively the moral gain” of providing jobs to people on relief. “Yes, work relief was more expensive than cash relief,” she observed. “Yes, both were more expensive than soup kitchens and barracks. But Harry Hopkins thought it was the people that mattered.” Once the FERA was up and running, Hopkins began pushing to transform it into a work relief program. In this effort, he had the strong support of Roosevelt, who had always preferred relief programs that put the recipients to work. By the fall, Hopkins had won Roosevelt’s approval for the Civil Works Administration, which put onetime relief recipients to work on a wide array of government projects. Hopkins’s conviction that people wanted to work proved correct. When he made two million jobs available through the CWA, nine million people applied.15
Hopkins tried to give people more to do than wield a rake or a shovel. Millions of white-collar workers were unemployed, including large numbers of artists and writers. The American Federation of Musicians surveyed its members and found that two-thirds were without work. Ninety percent of architects, according to a Columbia University study, were unemployed. Hopkins supported projects that used their talents. He used CWA funds to hire architects and draftsmen to work on the Historic American Buildings Survey. He put painters, musicians, and writers to work on artistic and literary projects, forerunners of the public art programs the Works Progress Administration would later sponsor. Relief funds were used to pay actors in New York, through a project sponsored by the Actors Equity Association, to put on plays in hospitals, libraries, and schools. In communities nationwide, the CWA paid musicians to put on public performances. “In Missouri,” Time magazine reported, “a group of professional singers headed by Miss Edna Haseltine was hired at 35¢ an hour, sent out into the Ozark hills to give grand opera—only it was not called that for fear the natives would not attend.”16
Critics charged that FERA money was being wasted on “leaf-raking” or dispensed as patronage, and some of it was poorly spent. Most of it, however, went where it was intended to go, and it made an enormous difference in people’s lives. Not long after the FERA began, Hopkins hired veteran journalist Lorena Hickok, Eleanor Roosevelt’s close friend, to travel the country reporting on how relief was working. Hickok did not hesitate to tell Hopkins when she saw bureaucratic ineptitude, political infighting, or needy people who were not being served. “All I can say is that these people have GOT to have clothing—RIGHT AWAY,” she wrote in one dispatch from North Dakota. “It may be Indian Summer in Washington, but it’s Winter up here.” At the same time, Hickok collected examples of what federal relief was doing for ordinary Americans. In West Virginia, she found nearly four thousand undernourished children being cared for in two National Guard camps staffed by men and women on relief. She discovered that the infusion of relief funds had increased the prosperity in cities and towns across the South. The proprietor of one country store told her business was more than twice what it had been a year earlier. A white Baptist minister in Augusta, Georgia, said that before federal relief arrived, as many as fifteen beggars had come to his study each day. In the past month, he said, almost none had. Hickok found that some of the best programs were in New York, where Hopkins’s TERA work had laid the groundwork. The relief in Corning, Rochester, and Syracuse was “what the Federal Emergency Relief Administration is aiming at for the rest of the country,” she wrote.17
Other observers brought back similar reports. Roosevelt had Frank Walker, a friend who would later become postmaster general, examine Hopkins’s early efforts. Walker did his own relief tour and came back with a glowing report. “I saw old friends of mine—men I had been to school with—digging ditches and laying sewer pipe,” Walker related of a trip to his home state of Montana. “They were wearing their regular business suits as they worked because they couldn’t afford overalls and rubber boots. If I ever thought, ‘There, but for the grace of God—’ it was right then.” One of his old friends told him: “I hate to think what would have happened if this work hadn’t come along. The last of my savings had run out. I’d sold or hocked everything I could. And my kids were hungry. I stood in front of the window of the bake-shop down the street and I wondered just how long it would be before I got desperate enough to pick up a rock and heave it through that window and grab some bread to take home.”18
Statistics about how much money was dispensed and how many millions of people were helped could not convey what the FERA and other relief programs meant to people who had been beaten down by the Depression. In her memoir The Roosevelt I Knew, Frances Perkins told of what a relief job had done for an “almost deaf, elderly lawyer” she knew, a Harvard graduate whose legal practice had failed. He had been hired as an assistant caretaker at a small seaside park. The lawyer did “double the work anyone could have expected of him,” Perkins recalled. “He made little extra plantings, arranged charming paths and walks, acted as guide to visitors, supervised children’s play, and made himself useful and agreeable to the whole community.” When Perkins saw him, she said, “he would always ask me to take a message to the President—a message of gratitude for a job which paid him fifteen dollars a week and kept him from starving to death. It was an honorable occupation that made him feel useful and not like a bum and derelict, he would say with tears in his eyes.”19
The position of federal relief administrator agreed with Hopkins, as his friends were quick to recognize. “He is a bigger, better and more serious man,” said his old mentor John Kingsbury, who had employed him two decades earlier at the Association for Improving the Condition of the Poor at a salary of $40 a month. “I don’t mean that he seems cocky, but he has the air of a man who has great power, who is enjoying it.” One reason for Hopkins’s good spirits was that, despite all of the opposition and criticism, he was making real progress. Millions of people were benefiting from his work and, as Hopkins saw it, something larger was happening. “A new standard of public decency was being set,” he would later write.20
Hopkins approached his job with the manic energy of someone who thought it might be taken away at any minute. He knew that Roosevelt had only hired him provisionally. He also understood that by aggressively championing relief, he was making himself a lightning rod for the New Deal’s critics. Hopkins warned an economist who applied to the FERA that he was signing on to an unpopular mission. “One of the disagreeable things I will have to do,” he said, “will be to keep reminding the American public of the serious problem of unemployment and destitution and they won’t want to hear it.” Hopkins “was determined to do what he could as long as he lasted,” Rexford Tugwell noted in his diary. “This, he always said, would not be long.”21
Hopkins’s fears of an early dismissal did not come to pass. He not only kept his position as federal relief administrator; he expanded it greatly. Between May 1933 and the end of 1935, Hopkins would hand out more than $3 billion in grants. At the FERA’s peak, in January 1935, more than 20 million people, fully 16 percent of the population, were being helped by it. “A curious person,” Collier’s observed, “this Harry Hopkins, who has spent more money personally than any other man in history.” He “is heart and soul in the New Deal,” journalist John Franklin Carter declared. “If the New Deal achieves the conquest of poverty through the conquest of unemployment,” Carter predicted, “Harry Hopkins will be one of the men who did the most to make possible the final victory.”22
As the Hundred Days began to wind down, there was still work to be done on the banking system. Walter Lippmann had written in March that “there are good crises and there are bad crises.” The banking crisis was a good crisis, he said, because Roosevelt was prepared to use it to push for fundamental reforms. That had not happened in the administration’s first f
renzied days, when the focus had simply been on passing emergency legislation to get the banks up and running again. There was strong sentiment now for doing more. The public put much of the blame for the Crash of 1929 on the banks, both for their own stock speculation and because they pushed unsophisticated depositors into buying overpriced stocks. This popular anger was fanned in early 1933 by Senate hearings into the financial industry, led by former New York prosecutor Ferdinand Pecora. The picture of Wall Street that emerged from the Pecora hearings was as unsavory, one journalist noted, as “the inside of Tammany Hall.” The hearings put a particular spotlight on National City Bank, among the nation’s largest, which had blurred the line between commercial and investment banking. National City, as the hearings made abundantly clear, had profited handsomely by pushing its customers into reckless stock purchases. One victim, Edgar Brown of Pottsville, Pennsylvania, testified that his portfolio had fallen from $225,000 to $25,000, leaving him indigent. “If you steal $25, you’re a thief,” The Nation explained. “If you steal $250,000, you’re an embezzler. If you steal $2,500,000 you’re a financier.”23
At long last, the time was right for reform. Senator Glass had been trying for several years to get a banking bill through Congress, but Hoover had opposed it and it had stalled in the House. With Roosevelt in office, lopsided Democratic majorities in Congress, and the headlines generated by the Pecora hearings, Glass saw an opportunity. The bill he introduced on May 10, and the companion House bill from Representative Steagall, took on an array of abuses. It raised minimum capital requirements for new banks, and it provided that bank officers could be removed and imprisoned for up to five years for engaging in unsound practices. Banks would be barred from lending to their officers, a common cause of bank insolvency. The bill also included a provision separating deposit banking from investment banking, so banks could never again be, as one contemporary account put it, “the chief tom-tom beaters for the speculative frenzy.” This separation, which Moley had recommended in his May 1932 Brain Trust memo, had long been popular with progressives. Wall Street had opposed it, but after the revelations of the Pecora hearings the opposition waned. The bill also gave large banks more leeway to open branches that competed with small, state-chartered banks. Glass, who viewed undercapitalized, poorly managed banks as the system’s greatest vulnerability, would have gone further, but he faced stiff resistance from Southern and Western senators, who championed their home-state banks.24