Both Your Houses (Historical Context)

Historical Context

The Great Depression

America experienced a time of great economic prosperity in the 1920s; World War I, from 1914 to 1918, decimated European manufacturing facilities and reorganized much of the Western world in such a way that America was in a position of unusual stability when it was over. Throughout the twenties, unemployment and inflation were both low, which meant that people had money, lived comfortably, and were able to invest. Many invested in speculative ventures, which continued to raise profits through sales to other investors even when they were not connected to any actual products. The phrase “Roaring Twenties” was coined to capture the sense of excitement and fun that characterized the decade.

The fun stopped on October 29, 1929, one of the most significant dates in American history. This was the date of the stock market crash. In that one day, the Dow Jones Industrial Average, which had been slowly losing its momentum, dropped sharply, creating a rush to sell off stocks quickly, at a loss. By the end of the year, the United States economy had lost fifteen billion dollars, a number that eventually rose to fifty billion — about the entire cost of World War I.

People who had started the year with secure investment portfolios ended it looking for any low-wage jobs that became available. The sudden loss of investment capital had a rippling effect throughout the economy. People could not repay loans, and banks closed; companies could not borrow from banks and went out of business; when businesses closed, they left their workers without any incomes, and when workers could not pay the mortgages on their houses, it hurt the banks that had survived the first wave of the Depression.

The president at the time was Herbert Hoover, who had come into office in April of 1929, when the economy was strong. After the crash, he resisted calls to use federal funds to ease unemployment, insisting that the situation would correct itself. He eventually used money to aid endangered banks, but his refusal to create new jobs made him immensely unpopular. In 1933, Franklin Delano Roosevelt took over the presidency. His economic program, dubbed the “New Deal,” included billions of dollars to provide jobs for Americans through such agencies as the Tennessee Valley Authority, responsible for, among other things, building and managing Wilson Dam; the Civilian Conservation Corps, which employed about three million young men to tend the nation’s resources; and the Works Progress Administration, which employed unskilled laborers as well as talented artists. Unemployed Americans who did not pay taxes — that is, the vast majority — appreciated Roosevelt’s efforts and did not mind the huge expenditures from the treasury. Roosevelt was the only American president to be elected to four terms.

Compare & Contrast

• 1933: The workings of Congress take place behind closed doors. Newspapers cover important stories when they can get information from members.

  Today: There are cable television stations devoted to covering Congress. Although some meetings still occur in secret, there are many more educated reporters examining the fine details of bills as well as many more congressional staffers and lobbyists willing to provide background information.

• 1933: America is in the midst of the Great Depression. The year that Both Your Houses is first performed, the Roosevelt administration passes the Federal Emergency Relief Act, granting $500 million to the states in order to help ease unemployment.

  Today: The economy is fine-tuned, to a degree, by the Federal Reserve Board, which uses its power to raise and lower interest rates to try to keep the economy growing and stable.

• 1933: Steel is one of America’s most powerful industries, and people are concerned that the steel companies have unfair influence with the government.

  Today: Many of America’s steel companies have closed their U.S. plants, as production has shifted to cheaper overseas locations. Energy and telecommunications are the industries that spend the most lobbying for government influence.

• 1933: There have only been two women in the Senate and four in the House of Representatives, three of whom have taken office within the past year.

  Today: Thirty-one women have served in the Senate, with thirteen of these serving currently. One hundred and eighty-four women have served in the House of Representatives.