John E. Moser (3:37)

Well, I tend to discount the idea that there were basic problems in the 1920s that did this. Recessions are nothing new. They. There were a lot of people who thought, maybe we're due for a recession. I think the question is what happens that turns this recession into something so much worse and something that really lasts for 10 years. But the real problem that was going on, well, there were two problems. There was what economists call a liquidity crisis. Money was just being drained out of the economy. And secondly, a confidence problem. People spend money. The economy works when people A, spend money and B, invest. And you need to have a certain level of confidence to do both. You're not going to make major purchases if you think that your job is in jeopardy. You're not going to invest in new enterprises if you think they're going to fail. Confidence was the reason why the Depression lingered as long as it did.

Don Wildman (4:40)

It's so interesting you say that because, I mean, now we have, just a day or so ago, a big drop in the stock market. I look at my phone and go, okay, you know, it'll be up in a couple days. I mean, that's the feeling that you have now of stability. Of course there's problems also, but for decades, and I guess a century since then, almost a century, there has been a sense of stability in this world that has kept something like the Depression happening. But there were laissez faire policies that, that were very laissez faire, right in the early decades of this country.

John E. Moser (5:11)

Sure, in the 1920s, there was a movement away from antitrust. Taxes were reduced drastically. There wasn't much in the way of regulation. There were some problems with investing. Much of the process of the sale of securities, stocks and bonds was almost entirely unregulated. And we know that there were shenanigans there. Whether that was enough to bring about the disaster of 1929 to 1939, I tend to doubt it. But it's a contributing factor. The thing is, there are so many contributing factors. There is a perfect storm of bad stuff that goes on from 1929 to 1933.

Don Wildman (5:56)

It's October 1929 when this actual crash occurs. On the 24th of October, now known as Black Thursday. There was a panic selling of shares, 12.9 million of shares. A sudden fall in share prices almost a week later. 29th of October is now known as Black Tuesday. 16.4 million shares were sold on the stock market. On Wall street markets lose $14 million in one day when $14 million really counted. A stock crash that led to a banking crisis, Right?

John E. Moser (6:29)

Yeah. Although the banking crisis took a little while longer to take place. The Federal Reserve reacted to the crash by pumping money into the banks and it probably saved them. The problem is they didn't keep doing that. And there were a wave of bank failures. The first of several waves of bank failures, major ones, because bank failure was also. Bank failures happened all the time. It was just part of life. There was a major wave in 1930, but that was tied more closely to a drought in the southeastern part of the United States. And a major investment house in Tennessee, Caldwell Co. Collapsed and pulled down a lot of other banks with them. There was another round of bank failures in 1931 in response largely to something to stuff happening in Europe. There was a third that happened toward the end of 1932 into 1933. That was probably the worst of the three. So there isn't a natural progression from the stock market crash to the bank failures. They're both critically important, they both contribute to the sense of crisis. But in a way, these are separate issues. Right.

Don Wildman (7:45)

And it sounds like these are things that of course have happened before, as you mentioned. I'm curious if we can get down to what really distinguished this from all those prior things and became, as you say, a perfect storm.

John E. Moser (7:57)

Yeah, yeah. So the crash is important. There's absolutely no doubt about that. But what's often forgotten is in the months that followed, the market recovered most of what it lost. The thing is, the crash had a ripple effect in that it convinced people that bad stuff was happening and that caused people to stop spending. There was a huge drop in spending on durables in the last quarter of 1929, and that would continue for the next several years.

Don Wildman (8:33)

Was there a sense, I mean, today we talk about the consumer economy like it's, you know, the weather. I mean, it's such an, of course about how America works. Was that not understood at that time and discussed the same way?

John E. Moser (8:45)

It was discussed a great deal, in fact, when Herbert Hoover, who is sometimes very falsely portrayed as a do nothing President Hoover jumped into action with this plan to keep wages high. He secured promises from most of the country's major corporations not to reduce wages, to let their profits be hit before their wages did. And most of those companies maintained that pledge until 1931. And at that point they said, we can't do this anymore. The idea was, if you keep wages high at a time of deflation, prices were going down. Hoover's thought was, this is going to cause a burst of consumption that's going to save the economy. And it didn't do it. Your average worker who was lucky enough to have a job between 1929 and 1933 had more money than they had before because their wages were the same, but prices were going down. So in real terms, they were doing better. But that didn't give them the confidence to spend it. They put that money aside rather than risk it on some major purchase like a car or a refrigerator or anything like that.

Don Wildman (10:01)

Right. There had also been factors in industrial America, unemployment was reaching a higher level, and things like the coal mining industry, textiles, railroads, shipbuilding. There was an overproduction of goods and.

John E. Moser (10:13)

Under consumption in certain areas, of course, these were. These were areas that had been struggling even before this point. For instance, New England textiles had been. Had been in bad shape. Coal mining was already starting to suffer even before the depression started. So you had. You had serious systemic unemployment in those areas. The, as the economy started to fail, they did worse, obviously. And corporations, they kept their wages high, but at the same time, they said, look, we don't have as much as much work as we did. So they did lay off people.

Don Wildman (10:48)

We also often hear these days about the wealth disparity in this country that was going on as well. At the same time, a large wealth disparity. 60% of Americans at the time were just below the poverty line. That really startled me, that figure. But that contributed, of course, to the consumer problem. Right.

John E. Moser (11:05)

That's been said for a while. Most economists today don't accept that inequality had a lot to do with the start of the problem. Consumption was doing very well until the crash, the crash. So this says to me that the problem is not that people didn't have money to spend, they just didn't have the confidence to spend it. And then that, of course, created a situation where, guess what? They also didn't have the money to spend because they were losing their jobs.

Don Wildman (11:38)

Does it drive you crazy that the depression is so often talked about in such generalities, when in fact, what we're already getting into is how specific these factors were, and it would just so happen that they collided all at the same time?

John E. Moser (11:50)

Yeah. In fact, I'm working on a Book now called the Great Depression, Facts and Fictions. Ten chapters, each dedicated to a popular myth about the Great Depression and seeking to debunk it. And a lot of the myths are not entirely wrong. But the thing is, as you say, it's complicated. There are lots of different factors at play. The cumulative effect of a series of disasters between 1929 and 1933 converted what otherwise would have been a blip in the economic history of the United States into an absolute catastrophe.

Don Wildman (12:28)

And what we're establishing is that there are all these different factors of sort of preconditions to this situation. That when this crash happened, which was probably more popularly known about just because media was a bigger factor at that time than prior bank crises or other things that happened. And it just. That ripple effect became a roar.

John E. Moser (12:48)

Right? Sure, yeah. Yeah, It. When studying any period in history, it's easy to forget that the people who lived through it didn't know what things were gonna be like in two years, two months, even two weeks. So the attitude in 1930 was, okay, this stuff happens in the economy. We're in a tough spot now. But within, you know, within a few weeks, within a few months, it's gonna improve. But then something else would happen, a round of bank crises. And it contributes to this overall mood of gloom that causes people who have large amounts of money not to want to invest and those with some money not to want to spend it on durable consumer goods.

Don Wildman (13:37)

It comes to mind It's a Wonderful Life, which everybody watches over Christmas. And that whole moment when everybody goes storming into his savings and loan and tries to take their thing, that was not. I mean, while that was a parody, of course, of the situation or an extreme version of it, that did happen, right? I mean, those crowded into those rooms and wanted their money.

John E. Moser (13:55)

And there was nothing unique about it to the Great Depression, except the scale of them. Bank failures happened, as I think I said earlier, they happened routinely starting in 1934. They became extremely rare. And a lot of it had to do with the banking policies put into effect in the early part of the New Deal. FDIC was. Was. Which, by the way, FDR opposed, but Congress insisted on it. FDIC really made bank crisis obsolete. Banks don't fail anymore.

Don Wildman (14:30)

Let's talk about Herbert Hoover Moore. I'm interested in your take. Elected president in 1928. 1928. He's inaugurated March 4, 1929. He's only in the White House for going on eight months when this crash happens. He is, however, painted with the brush of failure in the Face of this crisis. Why so? What has been the take that is right or wrong about Herbert Hoover?

John E. Moser (14:54)

Well, I think it's right to say he was a failure at addressing the Depression, but it's not for lack of trying. What's often forgotten is there was a huge difference. I think there was a bigger difference between Calvin Coolidge and Herbert Hoover than there was between Herbert Hoover and Franklin Roosevelt. Herbert Hoover was a Teddy Roosevelt supporter. He was from the progressive wing of the Republican Party. He had. It's also often forgotten there was a serious recession at the beginning of the 1920s. 1920, 1921. In fact, in terms of how quickly and how severely it came on, it was initially worse even than the Great Depression. It ended very quickly. But Hoover, who at the time was Secretary of Commerce, said, I have a plan. We should pump all this federal money into public works projects. It sounded in some ways like at least part of the New Deal. And then before any of this could get going, the economy improved. But he kind of put that idea aside and said, well, eventually there may be another opportunity to do it. And in fact, there was a huge jump in public works early on in the Depression. Hoover spent more money in peacetime than any previous president, not just in nominal terms, but in real terms. He put a lot of federal. He oversaw a vast increase in federal spending. And a lot of this was for public works project to soak up unemployment.

Don Wildman (16:27)

Nothing less than Hoover Dam, which is why it's named for him, right? Yeah.

John E. Moser (16:31)

Although in the short term it was not named Hoover. When it first opened, it was called Boulder Dam. And then later on they said, well, you know, Hoover deserves some credit. Hoover was so unpopular in the 1930s that. Yeah, they didn't want to name the dam after him even though he was responsible for its construction.

Don Wildman (16:50)

We've done a piece on Hoover. I like the man myself. I've always enjoyed his story. And you know, he's a Quaker. He's got. His heart's in the right place and the things he's trying to do.

John E. Moser (17:00)

Yeah.

Don Wildman (17:00)

Tell me about the Garner Wagner relief bill. It was a plan by Congress which talks about. Which addresses what you're talking about. Yeah.

John E. Moser (17:08)

So they proposed a relief bill in 31. I wanna say it was late in 31. That would've spent far more money than Hoover was comfortable with. And the money was to come through the Reconstruction Finance Corporation, which Hoover himself had created. This was actually. Would end up being one of the most important agencies of the New Deal. But it was in fact a Hoover creat. Hoover envisioned the RFC as a vehicle for bailing out the most important economic institutions in the country, banks, railroads, insurance companies, et cetera, on the theory that if those go down, they're gonna completely tank the economy. Yeah, well, the problem with that was it opened up the Hoover administration to the accusation that he just cared about his buddies in big business. What about, you know, Joe Sixpack on Main street and struggling families? So the Garner Wagner relief bill was going to have RFC put all sorts of money into relief. Hoover said, this is the most economically irresponsible thing I've ever heard of. I'm absolutely gonna veto it. And he did. Although just a few weeks later, he signed another bill that was smaller. So he wasn't definitely not opposed in principle to large scale federal spending. He just believed that Garner Wagner crossed the line.

Don Wildman (18:42)

Yeah. And would this have been the first time that people in Congress especially were considering this on a large scale? The federal government stepping in and funding these programs that normally would have been state run things, Right?

John E. Moser (18:54)

Yeah, absolutely. One thing that you could say about the Great Depression, it totally changed Americans expectations of what the federal government's supposed to do. The idea that the federal government is responsible for the health of the economy, that's a product of the 1930s.

Don Wildman (19:11)

Exactly. It also has these ideas of helping charity, all these ideas that the government is taking part in, which is a first. I mean, that was the world of the churches and social organizations.

John E. Moser (19:26)

And it was very controversial, even for fdr. FDR hated what he called the dole. He was all in favor of work. Relief programs put people to work on works projects and pay them for that at a low scale. But he believed, no less than Hoover, that what we would call today welfare would destroy the initiative of the American people and their independence.

Don Wildman (19:54)

I'll be back with more American history after this short break.

John E. Moser (20:01)

Lunch was great, but this traffic is awful. Can we stop at a bathroom? Are you all right? I keep having stomach issues after eating, like diarrhea, gas and bloating, abdominal pain.

Dan Snow (20:11)

And sometimes oily stools.

Don Wildman (20:13)

Sound familiar? Those stomach issues may actually be a pancreas issue called exocrine pancreatic insufficiency, or epi. Creon pancrelipase may help manage ep.

John E. Moser (20:23)

Creon is a prescription medicine used to.

Don Wildman (20:25)

Treat people who can't digest food normally because their pancreas doesn't make enough enzymes.

Dan Snow (20:30)

Creon may increase your chance of fibrosing colonopathy, a rare bowel disorder. Tell your doctor if you have a history of intestinal blockage or scarring or.

Don Wildman (20:35)

Thickening of your bowel wall.

John E. Moser (20:36)

If you are allergic to pork or.

Dan Snow (20:37)

If you have gout, kidney problems or worsening of painful swollen joints, call your doctor if you have any unusual or severe gastrointestinal symptoms or allergic reactions. Take Creon as directed by your doctor and always with food. Do not chew capsules, as this may cause mouth irritation. Other side effects may include blood sugar changes, gas, dizziness, sore throat and cough. These are not all the side effects of Creon. Call 800-633-9110 or visit Creonin to learn more.

Don Wildman (20:56)

That's c r e o-ninfo.com I'm asking.

John E. Moser (20:58)

My doctor about epi and if creon.

Dan Snow (21:00)

Could help Hi there, I'm Dan, host of Dan Snow's History At Podcast. I can imagine on these dark winter nights, all you're going to do is curl up with a cup of tea and get lost in an amazing story. Well, I can help you with that. Twice a week I tell you the most dramatic and extraordinary stories from history, with details I can guarantee you've never heard before. Feeling the frostbite of that grisly failed American invasion of Canada in the dead of winter. Imagine every clash and blow at the Battle of Bosworth. Follow Eleanor of Aquitaine, one of the most powerful women in the medieval world, as she goes on crusade to the holy land with 300 handmaidens in tow.

John E. Moser (21:40)

She leads her own army.

Dan Snow (21:41)

Everyone goes gaga for Eleanor and trace the voyage of the first Vikings as they arrive on Iceland's lonely shores. For the best historical stories to get lost in, check out Dan Sn History here.

Don Wildman (22:05)

So are we saying that those steps that Hoover blocked mitigated by that which he was trying to do also? But those were the steps that got him so unpopular that that were are the reason that we paint him with this brush?

John E. Moser (22:17)

Yeah, well, he tried and he failed. And a lot of his popularity simply comes from the fact that the economy was worse at the end of his far worse than it was at the end of his administration, than it was when it started. But beyond that, the guy was there was something unlikable about him as a public figure. Yes, he was an engineer, and I don't want to cast any shade on engineers, but engineers often are perceived, rightly or wrongly, as just caring about facts, facts, facts and statistics. We're going to go in, we're going to tackle this, we're going to solve problems, but they're not really good at the human aspect.

Don Wildman (23:00)

Yes.

John E. Moser (23:01)

So Hoover could go on the radio or give a speech where he says, recovery is right around the corner. But he didn't sound convincing. Franklin Roosevelt, probably his greatest asset is he had lots of what we would today call emotional intelligence. He could identify what his listeners needed emotionally and could provide that. So long before Bill Clinton, FDR could say, I feel your pain, and people believed it.

Don Wildman (23:36)

There's such a unique characteristic of people that can read a room like he could, you know, and run a room then as a result. But he really had that radar that is rare in, in human beings to the degree that he had it. Anyway, I want to understand. I mean, this is a lot of what we're doing here is storytelling our way through the Great Depression, which is so misunderstood as, like, the day it crashed, everybody was on the soup line. It wasn't like that. It was a growing story that was unfolding. When do things get really bad? Like the pictures tell us?

John E. Moser (24:07)

The very worst stage was not long before election day 1932, and for roughly the four or five months that followed. And a big part of the problem was the interregnum. Today, presidents elected in early November is inaugurated in early to mid January. Back then, inauguration wasn't until March. So there was this five, let's see, December, January, February, March. So, like four months of uncertainty about what was going to follow. Hoover was a lame duck. There was very little that he could do at that point. He was calling on Roosevelt to make guarantees that he wouldn't abandon the gold standard or do stuff like that. FDR says, I'm not going to tie myself in advance of anything. Fact is, FDR wasn't sure what he was going to do in those months, but meanwhile, there's almost chaos. And it's during this point that unemployment shoots up to like 25%. That has never been exceeded in American history. That at least where we've kept records. It was during that period that you saw the worst wave of bank failures. You had states announcing that all the banks in their states are going to close. And you have to think about in a day before debit cards and ATMs, where everybody paid by cash, or I guess they could write a check, but most people paid with cash. If the banks were closed, you were not going to get money. You were not going to be able to buy stuff.

Don Wildman (25:48)

Right.

John E. Moser (25:49)

So this was a really terrifying several months.

Don Wildman (25:52)

And is this, you know, the image of guys jumping out of windows because the savings are gone or this was that time period?

John E. Moser (26:00)

Yeah. That's more associated with the actual stock market crash. The ideas of brokers jumping out of Windows because they've lost everything. It happened. It's definitely exaggerated. If you look at the suicide rate, it doesn't really make a difference in the overall suicide rate.

Don Wildman (26:17)

Gotcha. Now the images that tell the truth in my mind are the burning, you know, the searing images of Dorothea Lange in the Midwest and all these sort of things that she tells these stories with. It's just an extraordinary picture of a country that had prided itself on its steady rise and suddenly every. The trust rug is pulled out from under him. That's the sense that you get.

John E. Moser (26:39)

Yeah. Especially the most memorable images are from rural America. And rural America was suffering from a number of problems. The 1920s weren't all that good for farmers either because the high prices for agricultural products that characterized World War I, those were. The prices throughout the 20s were much lower than they had been during the war. And then during the Depression, they fell even further. I think the price of wheat, the price of wheat in 1933 fell to its lowest price ever recorded. And a lot of these bankers had taken on debt, debts that they couldn't pay. And by the way, this is a big contributor to bank failure. People who were stuck with bad banks who had made, in effect, bad loans.

Don Wildman (27:25)

Yeah, Part of the problem is that you've got this emergency crisis happening that is very unfamiliar to the extreme they're in. But then there's also no experience on how we get out of this. You know, there's no tools that people naturally fall back on. Now we have the federal government, all these things. And so that's really why it becomes such a dark hour for America, isn't it?

John E. Moser (27:48)

Yeah. So there is this high wage theory that Hoover buys into. So if we. So if we keep wages high, it's going to work. Well, it didn't. FDR was motivated by that as well. So a lot of FDR's policies were aimed at raising wages and prices. By the way, way that didn't work so well either. John Maynard Keynes, his theories would really become popular more. It really became popular after World War II. But he's writing in the 1930s and Keynes offers a pretty important criticism of the New Deal. It's friendly criticism because he definitely sympathizes. He likes the idea that FDR is willing to try new things, but FDR is not spending nearly as much as Keynes thinks needs to be spent. Moreover, fdr, believe it or not, hates deficits. So when he does spend more money, he wants to raise taxes too. So taxes go up. So money is being taken out of the economy. As it's being put in in a different way and it doesn't end up having the desired effect. Yes, there is progress from 1934, especially starting in 1935, until 1937. There's really rapid economic growth, but unemployment, it's less, but unemployment is still 15% even in 1937. And then 1937 comes along and the economy tanks again. They call that the recession of 1937. 38.

Don Wildman (29:26)

I want to circle back to the farming issue so widespread in America in those days. The Depression really marks the end of the small scale farming economy, doesn't it? I mean, they hadn't been part of the previous boom that had been happening. It'd been a struggle for farms for a long time. Tell me about the effect on agriculture from the Great Depression. That leads us to Grapes of Wrath essentially.

John E. Moser (29:47)

Yeah. So the fact is there were far too many people involved in farming in the 1930s. Right. Going back to the old Jeffersonian idea that the backbone of of America is the small farmer, that there were probably lots of people in farming who should have gotten out of the business earlier and they were forced out in the 1930s. So you have these low agricultural prices and then the Dust bowl, you start to see the problems that would develop during the dust bowl. In 1930, I talked about this major drought in the southeastern part of the United States. Drought conditions would continue for the next several years, especially more toward the Midwest. It just. Crops are being completely wiped out. The weird thing is, on the one hand, prices are too low because too much is being produced. On the other hand, in certain areas of the country, very little is being produced because of the Dust Bowl.

Don Wildman (30:45)

Right.

John E. Moser (30:46)

So both of these are major problems.

Don Wildman (30:48)

Which was really a land management problem and a farming science problem of just not rotating your crops and all that sort of thing. And that ends up blowing the soil away essentially. As a result, prices of food go way up, but those farmers aren't getting that money.

John E. Moser (31:03)

Well, the price of agricultural products does increase somewhat, but not nearly as much as farmers wanted it to. Thanks to the Agricultural Adjustment Act. This allotment plan is set up so that farmers are actually paid to take land out of production to produce less. This had the effect of increasing farm income because obviously they're getting checks for producing less. But it mostly helped the larger farmers. If you had a very small farm that didn't help you very much, if you were a sharecropper in the south, you were in big trouble. Because if a landowner is going to take land out of production, he's Just going to go to the sharecroppers and say, sorry, don't need you anymore. And they're left with nothing.

Don Wildman (31:59)

Yep. Right. All of this, these various instabilities in this storytelling that we're doing here leads to epic homelessness. As we talked about 250,000 people unable to pay their mortgages by 1932. Shanty towns are called Hoovervilles, sarcastically about Hoover. Those are up everywhere, including Central park in New York. There's a general sense of migration in the country as people are going to look for work, especially in the agricultural sector. Around 2 million men traveled in America. This is kind of. My point is this is the cultural impact of this, of this economic crisis. And it's a fascinating element to the discussion because you end up with a different kind of American look, you know, a feeling like there's a certain realism to this country that perhaps we weren't thinking about so much before. It's really interesting to me. But what goes with economic collapse is social unrest, of course, big protests. Let's talk about that in terms of, you know, how did people articulate their anger or their unsettled feelings? What was. What did it look like in that regard?

John E. Moser (33:04)

I tend to think that given how bad the situation was, is it's surprising that there wasn't more unrest. The Communist Party of the United States definitely saw an increase in support. Of course, if you go, it could double in size. It'd still be extremely, extremely tiny. But the Communists got involved in protests on the part of the unemployed Major march and started in Detroit and marched on Ford's facilities. That got a lot of attention and that ended up in violence. In a lot of times when the violence took place, the violence was on the part of factory owners who. Who would send armed guards to break. To break things up. There were violent protests on the countryside. This guy, Milo Reno, started the Farm Holiday Association. We where the idea was, well, the prices are so low because people are sending too much stuff to market. So we are going to get farmers voluntarily to not send their stuff to market. And if some decided they wanted to send their stuff to market anyway, members of the Farm Holiday association would actually seize shipments of milk and stuff and dump them out in order to keep prices from falling.

Don Wildman (34:28)

There was the World War I veterans who came to Washington and demanded the payment, early payment of their bonuses. This was the Bonus Army 1932 that had been meant to be accessed in 1945, but they wanted it now. They sent up a whole camp, didn't they?

John E. Moser (34:44)

Yeah. This was a disaster. For Hoover, in terms of public relations, they camped out in this area called Anacostia Flats. They were there. They learned they weren't going to get what they wanted. Many at that point left, but not everyone. And Hoover wanted them gone. But his instructions were not to use violence. The U.S. army, the unit that was involved, was under the command of General Douglas MacArthur.

Don Wildman (35:13)

There you go.

John E. Moser (35:14)

He flatly disobeyed orders, and he sent in tanks and used tear gas. And the result was. It would just. It looked terrible. Hoover could have said, macarthur, this is not what I intended at all. MacArthur exceeded his orders, but for whatever reason, he decided that it would play better for him to portray himself as Mr. Law and Order. And so he defended the acts of MacArthur and implied that MacArthur was acting under his orders.

Don Wildman (35:48)

Wow.

John E. Moser (35:49)

FDR, after he heard about this, said, so that's it. I've won. The election's over.

Don Wildman (35:53)

Yeah, exactly. Two veterans and two babies were killed in that. In that protest. I mean, real bad press. The other element of this is fascinating to me. Always I'm constantly talking about this. The rise of radio and this sudden availability of information to Americans in their home. How much did this new medium play in. In undoing the Depression? Because it was really an intersection, wasn't it?

John E. Moser (36:19)

Yeah. I mean, by the time of the Depression, radio was pretty well established. People were relying on radio for a lot of their news. And I think that it was really Franklin Roosevelt who understood the potential of radio. Hoover went on the radio, but Hoover had a terrible voice. I mean, I don't know. It wasn't a terrible voice. Who had a terrible voice was Al Smith, who was Hoover's challenger. He sounded like he. Like he was a New York mobster in a radio age. You can imagine Midwesterners listen to that and say, well, I'm not gonna vote for this guy Hoover. It wasn't a terrible voice. I was wrong. But it's just. It was very boring. He was not much of a public speaker. He kind of spoke with a monotone. But FDR was a master at the use of radio. And his fireside chats, which began. His first one was just a week or so after he became president, which is credited, really, with saving the banking system. Because he's explaining to the American people in words that they can understand, not using lofty political, legal language, but explaining it in a way that ordinary people understood it, and saying, you can trust me. When these banks reopen, they're safe. You can put your money back in there and it will be okay. And that's exactly what happened.

Don Wildman (37:50)

And that speaks to the sort of theme of this conversation, that what was needed most of all, even within the crisis, when it was happening, was a sense of trust that it would all work out okay.

John E. Moser (38:00)

Right.

Don Wildman (38:01)

And it's really not until people believe in FDR's presence and the effectiveness of the federal government and the steps that are being taken that that sort of comes back into play. And that is really the most important factor in recovering from this.

John E. Moser (38:15)

It is. He does manage to restore consumer confidence, but he doesn't do as good a job of promoting investor confidence. In fact, starting in 1935, he takes a turn that is very anti wealth, anti big business, anti bank, casting them as villains. And to a certain extent, he did that earlier, but his rhetoric really became almost class warfare in 1935 and 1936. And so you saw this phenomenon where there's an uptick in consumption and businesses are replenishing their inventories because they're selling stuff, but they are not interested in expanding factory capacity and they're not interested in hiring. And that's the big reason why, one of the big reasons why unemployment remains so high during this period. And then 1937, the economy tanks once, once again. So there is a. There's a problem here. FDR is saying what ordinary people want to hear, but he is not saying what investors want to hear.

Don Wildman (39:34)

Interesting. I'll be back with more American history after this short break.

Dan Snow (39:45)

Hi there. I'm Dan, host of Dan Snow's history podcast. I can imagine on these dark winter nights, all you want to do is curl up with a cup of tea and get lost in an amazing story. Well, I can help you with that. Twice a week, I tell you the most dramatic and extraordinary stories from history, with details I can guarantee you never heard before. Feel the frostbite of that grisly failed American invasion of Canada in the dead of winter. Imagine every clash and blow at the Battle of Bosworth. Follow Eleanor of Aquitaine rather than most powerful women in the medieval world as she goes on crusade to the holy land. With 300 handmaidens in tow, she leads her own army. Everyone goes gaga for Eleanor. And trace the voyage of the first Vikings as they arrive on Iceland's lonely shores. For the best historical stories to get lost in, check out Dan Snow's history.

Don Wildman (40:49)

Politically, and I mentioned before, militarily, of course. The Great Depression starts in America, then spreads worldwide and results in so much tectonic change. Obviously, the collapse of the Weimar Republic, unseated by the National Socialists, the Nazis. Same happens in Japan. Why is it that our government did not go the way of dictatorship? Was it simply the Constitution and people believed that we would be okay?

John E. Moser (41:13)

Yeah, that's a great question. I think the fact that there was such a long, small r. Republican tradition probably did that. I mean, you think about the case of the Weimar Republic, there were not deep democratic roots in Germany. Sure, there were plenty of people around who wanted the Kaiser back in the 1920s. So there was this sense that from the start with a huge chunk of the German population, that the Republic was illegitimate. Now, looking at the American version, I don't think there was ever any scenario where a dictator was gonna take over. But under fdr, the presidency became more powerful than it ever had been before. I'm not calling FDR a dictator, but that's what dictators do, right? They. They take on most of the power of the federal government. He had, certainly for the entirety of his first term, he had a very pliable Congress. Congress gave him whatever he wanted. The Supreme Court he did not have on his side. The Supreme Court struck down some of his big initiatives of his first term. But in 1937, FDR suggested that he wanted to expand the size of the Supreme Court, that, well, these guys were too old, their course load was too heavy, and so he wanted to add more members. Well, people was, wait a minute, we see what you want to do. You don't like the current makeup of the Supreme Court, so you're going to pack it with people who support you. And Congress said, absolutely no way or we're going to let this happen. This was FDR's first big legislative defeat was over the court packing plan. And the accusations that were being made against FDR was he's becoming a dictator. He's already had Congress doing whatever he wanted. He wants to have a pliable Supreme Court. And look, in retrospect, these accusations were overblown. But you can understand why Americans looking abroad at what's going on in the fall of democracy over in Europe, that America could be going that same direction.

Don Wildman (43:33)

Right. It's too broad a question, but what the heck? What finally brings the Great Depression to an end? And when is the traditional moment when we could say, ah, we're out of it?

John E. Moser (43:43)

Yeah. So one of the myths I'm trying to bust in this book is that it was World War II. And true enough, if you look at World War II, the official GDP is off the charts. Unemployment vanishes to nothing. But here's the deal. Everybody understands that you could get rid of unemployment by drafting millions of People, there's no trick to that. The fact is, between 1939 and 1941, before the United States was in the war, you saw dramatic improvement in the US Economy. Did the Depression end then? I don't know. It all depends on how you define an end to an economic crisis. If it's the point where GDP returns to where it was before, well, that was 36. If you define it like people say, what's a recession? It's what, two, two consecutive quarters of economic contraction? Well, the economy stopped contracting in 1933. Okay, so you could say, well, maybe the Depression was over, but. So there's no universally agreed to definition of when the Depression ended because we don't even know what the standard would be for determining that. We do know that between 1939 and 1941, there was rapid economic growth. Unemployment was falling. We know that it went to. Unemployment went to zero during World War II. But here's what's critical. World War II, there's huge amounts of government money being pumped into the economy to produce all the stuff that's necessary for the war effort. The predictions that were being made in 1944 were at some point this war's going to end. And if we don't find other ways of pumping money into the economy for stuff other than tanks and bombers and other things you need for war, we're going to see a return to the Depression. Guess what? There was no return to the Depression. There was a very small uptick in unemployment. When the troops came home, there was a little dip in terms of gdp, but then the economy just took off and kept growing in the post war period. So I would say with confidence, it's after World War II that the Depression is over.

Don Wildman (46:06)

Partly because we had such huge markets available to us. Right?

John E. Moser (46:09)

Yeah, that's a big part of it.

Don Wildman (46:10)

Right.

John E. Moser (46:11)

Most of the other world's industrial powers were flat on their back.

Don Wildman (46:14)

John, the New Deal, I don't want to get into the whole intricacies of it, but do you attribute the recovery from the Depression to those many laws that were passed and ideas and programs?

John E. Moser (46:26)

I give the New Deal some credit. The handling of the banking crisis in 1933 was masterful. The departure from the gold standard, not the entire departure, but allowing the gold content of the dollar to decrease, that was very important because that, that, that allowed for an expansion of the money supply. Those were the, those were the really important things that the New Deal did. A lot of other New Deal programs were counterproductive. National Recovery act, which was invalidated by the Supreme Court in 1935. But that was tremendously counterproductive. Some of the, like the Wagner act propped up wages. I mean, it was good for unions, but I think that was probably harmful for the economy at large. Something else. FDR did a move toward free trade, getting away from the really high tariff regime of the 1920s. So it's going back to something you asked earlier. Is there something wrong with the 1920s? Well, yeah, there are some things wrong. One of them was the really high tariffs, which hurt the country and hurt international trade. Fdr, it took them a little while to get onto the free trade bandwagon, but there was definitely freer trade in the second half of the 1930s. And, and that helped the economy big growth in U.S. exports in this period. So those are the things that I think FDR did right. If you ask me, what really more than anything else led to economic improvement in the 1930s was the fact that gold from Europe was flowing into the United States and that gold allowed for a tremendous increase in the supply of money. If you were wealthy in Europe in the 1930s and you're looking down the road, it looks like there's going to be another war. And what is a safe haven for your. For your gold or foreign currency? Send it to the United States. Nothing's going to happen to it there.

Don Wildman (48:25)

To this day, enormous amounts of foreign gold are kept in New York City, you know, down in those vaults. It's amazing. But in the same period, we go off the gold standard, Right? That's a big, big part of this.

John E. Moser (48:35)

As well, though not entirely. FDR left gold in 1933, and then for a while, he wasn't really sure what to do with it. He kept dictating the price of gold day by day. That was probably a really dumb strategy that didn't work. But in early 1934, Congress, at FDR's urging, passed the Gold Reserve act, which repegged the dollar to gold, but at a different rate. So the dollar was not worth as much in gold as it had been before. And so that freed up for greater growth in the money supply as well.

Don Wildman (49:10)

So in this darkest hour of America, there seems to be a dawn. And to my mind, the difference in this country from prior to the Depression to afterwards is the presence, and, I don't know viability of effectiveness of the federal government or ineffectiveness. It just plays a bigger role in, in the dynamic of this country, which has only grown in the many, many years since then. It also changes the Depression, also changes the social dynamic of the country, doesn't it? I mean, it guts so much of what this country was, the assumptions behind what this country's life was about. And then suddenly there's this whole sort of new social dynamic, as I say, and the middle class is rising up at that point. And it all kind of meets the World War II period and helped create an entirely different kind of country. Is that fair to say? Sweeping statements like that.

John E. Moser (50:01)

There's no doubt that the federal government plays a more important role in the post war period. There is a consensus that develops that the basics, that the federal government has responsibilities that were not expected before the New Deal never goes away. There were some conservatives in the Republican Party who really wanted it to, but when Eisenhower becomes president, he says, no, I'm not, you know, I want to spend less, but we're not gonna get rid of Social Security. 1964, a conservative Republican, Barry Goldwater, runs for office saying, oh, yeah, we're gonna privatize Social Security. We're gonna roll back a lot of these things. The conservative wing of the Republican Party loved it. The American people didn't. And the New Deal has been safe ever, has been safe ever since. They used to say Social Security was the third rail of American politics. You don't. You don't touch.

Don Wildman (50:54)

It still is. Professor John E. Moser teaches at Ashland University in Ohio and is the author of many historical works, a list of which just please look them up. What's new on your horizons, Professor?

John E. Moser (51:07)

So I've got this book called the Great Depression Facts and Fictions. I'm working on the last chapter of that. So within the next year or so I expect that's going to be published. And then this summer, I'm moving to Knoxville, Tennessee. I'm going to be teaching starting, starting fall of 2026 at the University of Tennessee.

Don Wildman (51:23)

Thank you very much.

John E. Moser (51:24)

Okay, thank you.

Don Wildman (51:27)

Hey, thanks for listening to American History hit. You know, every week we release new episodes, two new episodes dropping Mondays and Thursdays. All kinds of content from mysterious missing colonies to powerful political movements to some of the biggest battles across the centuries. Don't miss an episode by hitting like and follow. You help us out, which is great, but you'll also be reminded when our shows are on. And while you're at it, share it with a friend. American History hit with me, Don Wildman, so grateful for your support.