Governments, State, Impact of the Great Depression on

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GOVERNMENTS, STATE, IMPACT OF THE GREAT DEPRESSION ON

The New Deal policies enacted by the Franklin D. Roosevelt administration during the 1930s in response to the Great Depression are traditionally interpreted in terms of how they affected the nation as a whole. However, New Deal policies also had a dramatic impact at the state and local level. Because many officials of state and local governments were unwilling to work in cooperation with the federal government, their response to New Deal policies often did not help the nation to recover as quickly and fully as it could have.

During the 1920s the states, rather than the federal government, led social reform efforts by improving schools and highways, establishing minimum labor standards, and regulating corporations. During this decade, state and local governments accounted for about three-fourths of public spending, while the federal government discouraged most reform efforts, concentrating only on such major reforms as prohibition, immigration restriction, and tariff revision.

State reform efforts, however, could not accurately be called progressive. Most state officials were only willing to spend money on necessities, such as hospitals and bridges, and rarely were eager to fund such non-essentials as factory inspections and public housing. More importantly, whatever legislation was enacted by the states was usually poorly financed, incompetently administered, and indifferently enforced. Still, the readiness of most states to go into debt for these social programs meant that they were poorly prepared for the Great Depression.

WHY STATE GOVERNMENTS FAILED

Historians offer several explanations for the failure of state governments to deal with the magnitude of the Depression: (1) diminishing tax revenues, (2) constitutional/statutory debt restrictions, such as a balanced budget requirement, (3) localism, (4) outdated administrative organizations, and (5) inefficient and weak political leadership. The latter three reasons are most relevant to the Depression.

The southern states were especially immersed in localism. The South persisted in clinging to its traditional "southern way of life" throughout the Depression. Their region having been forced to suffer defeat and humiliation from the federal government during the Civil War and Reconstruction, southern politicians fought to preserve what they considered a superior way of life, which they saw embodied in racial segregation, fundamentalist religion, and one-party politics. Because political groups in each southern state were based primarily in localities, coordinated state action at the federal level was difficult even under normal conditions. Similarly, in the fiercely independent West, the recurring comment from county officials was similar to this statement from a Colorado report: "We will not need nor ask for any help outside our county as we have a great deal of local pride and will not ask for outside help as long as we can help ourselves."

Archaic administrative structures were rampant in state legislatures where inexperienced men, who were poorly prepared and paid, operated under outdated constitutions. For example, Pennsylvania's relief agencies broke down completely as 425 state boards under the control of 920 directors handled all public relief.

States benefited significantly from liberal New Deal programs, yet state politicians often blocked specific federal initiatives that did not parallel their conservative views. These defenders of states' rights did not appreciate the federal government delving into state matters, but during the Depression relief funds, employment, and construction overrode most concerns. Although most politicians continued to support Roosevelt's general policies, they increasingly disagreed with his New Deal policies. Because of this, state politicians often used corrupt or anti-federal methods against New Deal programs. In fact, historian Lyle W. Dorsett stated that politicians could be dishonest and incompetent, but little was said about their behavior as long as they remained loyal to the president. Mayor Ed Crump of Memphis, Tennessee, for example, supported nearly all of Roosevelt's New Deal measures because they brought thousands of jobs to Memphis. But all federal money first had to pass through Crump's organization, which was empowered to appoint local dispensing agents, who distributed to constituents. Crump's political organization was the frequently object of federal investigation into such practices as using federal jobs and relief to coerce voters. Even though newspapers such as the Memphis Press-Scimitar regularly published articles on the chicanery of the Crump machine, little action was taken against Crump because he was a strong Roosevelt supporter.

FEDERAL GOVERNMENT TO THE RESCUE

From the end of 1929 to 1933, most state governments clearly demonstrated that they were incapable of dealing with the economic conditions that left millions of Americans destitute. Social programs were often studied rather then implemented, and most governors were unwilling to call special sessions to handle the problems. Many governors and state legislators simply made reassuring, but hollow, public statements about self-sufficiency. Unfortunately, many states were deep in debt from deficit spending during the 1920s, and during the Depression they strained under rising welfare costs and falling tax revenues.

State governments eventually called on the federal government for help, albeit reluctantly. Roosevelt decisively called for broad executive power in 1933 and Congress responded quickly. Such a positive response was primarily due to the growing realization that national problems, such as the Great Depression, required national remedies.

After 1933, federal government programs were much more successful than state efforts in providing relief and promoting recovery. However, the New Deal programs were often hampered by the partnership between federal, state, and local governments. For the most part, conflict occurred more frequently than cooperation between the federal government and state governments. That conflict occurred primarily within three areas: (1) the requirement of state matching funds for many New Deal programs, (2) the federal requirement to centralize and professionally manage welfare administration, and (3) the efforts by state and local politicians to exploit federal money and programs for their own political advantage.

Various improvements to state governments helped support the impression that federal matching funds strengthened the states. Eleven states passed reorganization statutes during the decade, while others removed administrative control and financial responsibility from archaic local units. Most matching funds came from the newly created (in 1933) Federal Emergency Relief Administration (FERA), which initially distributed a total of about $500 million, of which $250 million was targeted for matching grants, with states contributing $3 for every $1 of federal funds, and the remaining $250 million earmarked for states facing immediate emergencies. Over the next two years a total of about $3 billion was distributed.

In 1933 the FERA offered relief funds, for example, to Louisiana. Louisiana officials had requested additional money, pleading that state funds were insufficient, while, at the same time, local parishes exploited the FERA money by inappropriately using portions of it for unemployable people (FERA's federal money was reserved solely for employable people who were out of work, while state money was meant for people who were unemployable). By mid-1939, Louisiana had received about $750 million in federal grants and loans, but as the flow of funds increased, so did state political corruption. The federal government initiated investigations into the use of federal relief funds, and numerous indictments were levied against Louisiana officials. A number of politicians in other states, including Governor William Langer of North Dakota, were convicted of misusing funds and served time in jail.

A variety of relief and recovery measures were introduced into Colorado, including approximately $330 million dollars each month from FERA as long as state and local funds contributed their share. However, the Colorado legislature did not approve any such funds. Because of Colorado's failure to contribute, the federal government threatened to remove all federal aid, and pressure from citizens forced the state to divert highway funds and tax gasoline sales in order to match federal funds.

Before the Great Depression, politicians all too often were elected on the basis of their ability to control the state and demolish opposition. Such political machines included those of Huey Long of Louisiana, James Michael Curley of Massachusetts, and C. Ben Ross of Idaho. Because of New Deal programs, the 1930s saw noticeable expansion of performance-based merit systems within the states. Five states passed workable statutes in 1937 and 6 others applied the merit system to various departments. After nearly two decades of ignoring performance-based policies, the trend toward improving state merit systems continued throughout the forties, fifties, and sixties. The insistence of FERA administrators on merit in order to professionally manage state governments and later requirements in 1939 with regard to civil service procedures helped to increase state administrative efficiency. Most governors, however, resented federal stipulations calling for merit appointments.

FEDERAL-STATE PARTNERSHIP

Roosevelt's New Deal relief efforts rested largely on the development of a strong federal-state partnership. A state's support of federal expenditures had little to do with the acceptance or rejection of the New Deal or any reinterpretation of federalism. When a state desperately needed immediate help for relief and recovery, it usually received it. In the short-term, the New Deal helped the states survive the Depression. In the long-term, the states lost authority to a more powerful federal government. With a stronger federal government now in charge, state and local officials had to account to powerful federal entities for their actions, and corrupt or inefficient officials were consequently more likely to lose office.