The Wall Street Crash: Roosevelt’s Progressive Presidency

Due to the complexity of social, political, and economic layers within the USA in the years 1919-41, there cannot be considered a singular dominating force in the shaping of the nation, as progressivism and conservatism inextricably played a significant role. Following the First World War, the 1920s signaled an era of progressive social reform yet the conservative Republican presidency more dominantly shaped the nation. The Wall Street Crash of 1929 and its aftermath saw the prevailing rise of progressivism as Roosevelt’s policy of government economic intervention responded to the immediate implications of the banking crisis. Such progressivism continued from the years 1933-41, particularly with the ‘psychological lift’ that Franklin D. Roosevelt’s Democratic presidency provided, however, the strong undercurrent of conservatism in society meant that neither conservatism nor progressivism can be deemed more dominant. Thus, it may be regarded as simplistic to establish a sole controlling force in the shaping of America from 1919-41, as both conservatism and progressivism concurrently influenced the period in history.

Although the 1920s was underpinned by American social reform, conservative theory dominated political and economic policy and thus was more significant to shaping America. The nation was shaped by Republic politicians such as Harding, who adopted ideas of minimal government intervention in the economy; ‘laissez faire’ policy. Isolationist foreign policy was imposed in an attempt to uphold American sovereignty and the economic ‘normalcy’ that had preceded Wilson’s years in power. The Fordney-McCumber tariff passed by Congress in 1922 aimed to raise import duties on farm products, textiles and other industrial goods. This economic policy was in accordance with conservative ideals surrounding lower taxes on business and private income; the building of a capitalist economy that appealed to a nation recovering from World War I. Another key feature of the conservatism dominating US politics was racial fear following World War I and the Second Industrial Resolution, with immigration acts of 1921 and 1924 limiting Southern and European immigration. This demonstrates the nature of conservativism in the 1920s, which infiltrated government policy and consequently enacted societal transformation. However, progressive social reform was also evident within the period. Despite the conservative Volstead Act of 1919 which prohibited the manufacture and sale of alcohol, speakeasies became popular social venues. Such venues demonstrate progressivism in that they were host to the new feminine ideal of the ‘flapper girl’: a revolutionized image of femininity entailing orthodox gender norms. The women’s vote was also granted in 1920, demonstrating further societal progressivism. Within the Harlem Renaissance, African American art, music, literature, and poetry also became key features of public entertainment. These ideas of progressive social reform must be considered at ‘surface-level’ value, however, as racial tensions remained rife, particularly under the conservative policy, and the Republican government authorized legislation that had a more substantial and lasting impact on the economy and society. Consequently, the 1920s was a period in which the USA was more largely shaped by a conservative government before the Wall Street Crash indicated the rising strength of progressivism.

The Wall Street crash of 1929 and its aftermath signaled the rise of progressivism as the dominant force, as where conservative leadership failed, Franklin D. Roosevelt’s interventionist policies alleviated the initial impacts of the US banking crisis. Hoover unsuccessfully repaired the immediate economic devastation of the Wall Street Crash. The 1930 Hawley-Smoot Act which raised tariffs by 50% to increase the sale of home-produced goods, and Hoover’s 1932 backing of the establishment of the Reconstruction Finance Corporation in the attempt to help bank and industry recovery, were similarly ineffective. It was evident that more interventionalist government economic action was needed, which is the reason for which Roosevelt’s progressivism proved more dominant in its short-term success. In 1933, under Roosevelt, the Emergency Banking Relief Act and Glass-Steagall Banking Act were put in place. Such policies gave the president power over the US banking system, as FDR called a ‘bank holiday’ for the evaluation of all banks and the close of insolvent ones. After Roosevelt’s first ‘fireside chat’ nationwide address on 12 March, some banks began reopening the next day, whilst within a month, the public and redeposited approximately 2/3 of cashback into such institutions. This demonstrates the effectiveness of such progressive governmental intervention that diverged from prior conservative economic policy. As evidenced in the success of his 1933 speech: “the only thing we have to fear is fear itself” Roosevelt was able to provide to the American people the ‘psychological lift’ that was needed in one of the worst economic disasters in history. The faith he restored in the banking system pertained to progressive economic policy. Thus, FDR’s progressive government leadership in the aftermath of the Wall Street Crash was more dominant than conservative policy in shaping the US’s economic recovery, before his leadership in the ensuing years showed the continual overtone of conservatism.

Roosevelt’s Democratic leadership of America from 1933-41 was a period in which neither progressivism nor conservatism was more dominant, as while progressive policies impacted the nation’s societal and economic spheres, the strong conservative undercurrent remained. Despite the short-term success of Roosevelt’s progressive governmental intervention in the American economy, the extension of his policies has been deemed as somewhat conservative, as stemming from an isolationist foundation. Williams writes of FDR: “He drew upon the Progressive tradition… to fashion a moderate program of governmental action” and that “the Depression loosened its grip on the nation only after the outbreak of World War II”. Such ideas hold credibility, particularly in reference to the unemployment of the Depression which only fell from 12 million in 1932 to 10 million in 1939. Roosevelt’s isolationist policy can be demonstrated in the Neutrality Acts from 1935 to 1939 which limited US involvement in other wars, although revised at the beginning of World War II. This provides evidence for the conservative views that continued to inform Congress and consequently the period of FDR’s leadership. However, it must also be considered that Roosevelt enacted progressive change in America evident in the longstanding impacts of the Civilian Conservation Corps initiative, which provided employment to over 2 million young people in the improvement of public facilities and contributed to both the familial and national welfare of America. Further, Eleanor Roosevelt is credited with having concerned herself greatly with “the ‘forgotten’ woman”, through her work with the Women’s Trade Union to guarantee women equal pay in federal projects, and ensure female journalist employment. Eleanor also ensured that New Deal programs worked to target racial issues that were exacerbated under conservative leadership, through seeking African American inclusion in federal projects, and lobbying for their employment in administrative programs. These progressive pursuits of social justice enabled societal improvement during the period. Thus, the FDR years represent a period in the USA in which neither progressivism nor conservatism can be considered more dominant, as both were integral to shaping the nation during the Great Depression until World War II.

The forces of conservatism and progressivism were both dominant in shaping the USA from 1919-41, in their social, political, and economic impacts on the nation during the 1920s, the Wall Street Crash, and the Great Depression. The 1920s was a period in which progressive social reform was evident, yet due to consecutive Republican presidencies, conservatism was more dominant in its political and economic formation of the country. The implications of the 1929 Wall Street Crash were more effectively resolved in the short term by progressive intervention, signaling its dominance over the conservative policy of the era. During the years 1933-41, Roosevelt’s progressive presidency enacted both economic and political change, yet the similar influence of conservatism attested that neither force was more significant. Therefore, the two movements molded America throughout the period to varying degrees over time.   

07 July 2022
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