1934 - Commerce

Commerce

President Roosevelt tells Congress January 4 that costs of the national economic recovery program will reach $10.5 billion by June 20, 1935.

The U.S. Treasury stabilizes the price of gold in January at $35 per ounce, a price that will hold for 40 years. The price has risen progressively since late October 1933 from its long-maintained level of $20.67 per ounce.

The Export-Import Bank of Washington created February 12 with $11 million in capital helps to finance and facilitate exports and imports of commodities; $10 million has come from the Reconstruction Finance Corp. (RFC) created in 1932.

The Civil Works Emergency Relief Act passed by Congress February 15 appropriates another $950 million for the continuation of civil works programs and direct relief aid.

Prime Minister Ramsay MacDonald refuses February 22 to see 500 Scottish hunger marchers who have trudged from Glasgow to London.

U.S. Relief Administrator Harry L. Hopkins reports April 13 that 4.7 million families are on relief.

The Johnson Debt Default Act passed by Congress April 13 forbids additional loans to any country in default of debt payments to the United States.

The United States joins the International Labor Organization (ILO) started in 1919.

Congress creates a National Railroad Adjustment Board to guarantee railway workers the right to organize and to bargain collectively through representatives of their own choosing (see 1926).

The Corporate Bankruptcy Act adopted by Congress June 7 allows corporations to reorganize if they can obtain support from two-thirds of their creditors.

A National Labor Relations Board (NLRB) created June 19 by a joint resolution of Congress replaces the National Labor Board established under the NRA last year (see Labor Relations Act, 1935). Paris-born Philadelphia lawyer Francis (Beverley) Biddle, 48, campaigned against his fellow Republican Herbert Hoover 2 years ago and President Roosevelt rewards him for his political support, making him chairman of the NLRB, but Biddle will return to his practice next year (see energy [TVA], 1938).

Secretary of State Cordell Hull persuades Congress that the high tariffs of the 1930 Smoot-Hawley Act have contributed to world depression and should be replaced by mutual tariff relaxation. The Reciprocal Trade Agreement Act passed by Congress June 12 gives the president power to negotiate trade pacts without advice or consent of the Senate, and the first such pact is signed August 24 with Cuba under terms of what is called a "Good Neighbor Policy" (see politics, 1933). Reciprocal tariff-cutting agreements with 18 foreign nations in the next 4 years will bring an increase in world trade.

The Federal Credit Union Act signed into law by President Roosevelt June 26 provides for government regulation of credit unions. A Federal Savings & Loan Association is created June 27, and the Federal Deposit Insurance Corp. (FDIC) makes its first payment (to an East Peoria, Ill., woman) July 3.

A summertime wave of strikes takes U.S. workers off the job and includes the nation's first general strike, called at San Francisco July 16 to show sympathy for a strike of 12,000 International Longshoremen's Association stevedores led in part by Australian-born U.S. organizer Harry Bridges, 32, of the left-wing "Albion Hall" group. Gov. Frank F. Merriam, 68, calls out the state militia to control the situation, but the strikes succeed in ending the shape-up system under which corrupt pier bosses have decided who shall and shall not get jobs. The ILA wins the right to have union-controlled hiring halls (see Bridges, 1937).

Minneapolis police shoot striking truck drivers July 20 in what will be remembered as "Bloody Friday." The city has been a non-union town. Local 574 of the International Brotherhood of Teamsters tested its strength in February with a strike against coal-yard operators; it carefully prepared its members for a larger strike against trucking companies, and it struck for union recognition May 15. The strike was settled May 25 with a small wage increase, trucking companies agreed to recognize the Teamsters, but when they tried to scrap the agreement the Teamsters struck again July 16 with roving picket squads. Sympathy strikes have shut down some businesses, farmers in the surrounding area have provided food for the union's commissary, and support for the Teamsters increases after the police have killed four strikers and wounded more than 55. Minnesota's governor calls in the National Guard, but the strikers fight the guardsmen and by year's end Minneapolis is a union town.

The American Liberty League formed in August opposes New Deal economic measures; a bipartisan group, its members include the du Ponts, Alfred P. Sloan Jr., and William Knudsen of General Motors, J. Howard Pew of Sun Oil, Sewell Avery of Montgomery Ward, stockbroker E. F. Hutton, and politicians such as Democrats Alfred E. Smith and John Jakob Raskob.

The largest strike in U.S. history begins September 4 (the day after Labor Day) as 500,000 textile workers in 20 states walk off the job, demanding higher wages and union recognition (see 1933). Wages that were low to begin with have fallen even lower, many mills in Massachusetts and elsewhere have been forced to close, and those that remain open have imposed "stretch-outs," forcing workers who once operated six or eight machines to operate as many as 20. Flying squads of union organizers fan out in automobile caravans half a mile long through Georgia and South Carolina, urging other "lintheads" to join the strike, which becomes violent only after millowners such as Spencer Love of Burlington Mills bring in police, strike breakers, and the National Guard. Seven rioting strikers are shot dead and 20 left wounded at Honea Path, S.C., September 6; three are killed in Rhode Island, and the governor of Georgia declares martial law, carting strikers off to a camp that was used to hold German prisoners of war in 1918. President Roosevelt appoints a committee to investigate the situation September 20, but the committee's report guarantees nothing, not even the right to organize; hunger has eroded the power of the workers, they see that the owners can easily replace them with machines or with unemployed people eager for jobs, and they return to work on orders from union secretary Francis Gorman at Washington, D.C. Strikers lose not only their jobs but also their company-owned homes, and in many cases are blackballed for life from working in the cotton and rayon mills.

Demagogic welfare schemes proliferate. Royal Oak, Mich., radio priest Father Charles Coughlin organizes a National Union for Social Justice based on radical inflation (see religion, 1926). Sen. Huey P. Long (D. La.) presents his Share Our Wealth Program, an "every man a king" wealth redistribution scheme. Elected governor in 1928, Long raised taxes on oil companies and cotton barons to finance his programs, which paved thousands of miles of dirt roads, built bridges, and distributed textbooks to schoolchildren. He insists that the New Deal is not doing enough to alleviate distress, but while sharecroppers and textile workers admire him there is widespread fear that Long is a potential Adolf Hitler or Benito Mussolini.

Long Beach, Calif., physician Francis E. (Everett) Townsend, 67, urges an Old Age Revolving Pension Plan to be financed by a 2 percent transaction tax. The Townsend Plan is to assure $200 per month for every unemployed American over age 60; some 5 million older Americans will join Townsend clubs to support the plan.

Upton Sinclair campaigns as Democratic candidate for governor of California on an End Poverty in California (EPIC) Plan, but President Roosevelt refuses to support a man who is now widely viewed as a crackpot and is easily defeated.

Massachusetts Democratic Party boss James Michael Curley wins election as governor at age 59; the large, costly public works programs that he will undertake in the next 2 years will be compared to those of Huey Long.

The British Iron and Steel Federation (BISF) is created in an effort to centralize the nation's industries in order to negotiate both with the government and with rival foreign cartels and companies on issues of pricing, quotas, tariffs, and the like (see 1949).

The Swiss Parliament enacts a Bank Secrecy Law to protect the accounts of Jews in Nazi Germany. Numbered accounts have four- or five-digit numbers that depositors write out in script, the number in script becomes the depositor's signature, only two or three senior bank officials know the name of the depositor, and while Swiss law says that banks may not furnish information about such accounts even to Swiss tax authorities (tax evasion is not a criminal offense in Switzerland) and while numbered accounts will be used to safeguard the fortunes of U.S. racketeers, communist espionage agents, and Latin American and Oriental dictators, the Swiss banks will insist on background knowledge of depositors and cooperate with police or authorized investigators in cases of criminal fraud and forgery.

Security Analysis by London-born New York investor Benjamin Graham (originally Grossbaum), 40, and his Columbia University colleague David J. Dodd, 39, pioneers modern security analysis; it creates the first rational basis for evaluating stock and bonds and will remain the standard text for more than 55 years and have sales of more than 100,000 copies. Emphasizing the importance of a stock's book value (the physical assets of the company issuing the stock) the book aims in part to revive investing in the moribund equities market.

Speculator Jesse L. Livermore files for bankruptcy in March (see 1929). His lawyer tells a congressional investigating committee that Livermore has been bankrupt four times but has always repaid his creditors 100 cents on the dollar (see 1940).

A Securities and Exchange Commission (SEC) created by Congress June 6 limits bank credit for speculators and polices the securities industry. Boston-born Wall Street speculator (and erstwhile bootlegger) Joseph P. Kennedy is appointed in July to head the new commission despite opposition from New Dealers and from leading newspapers. Now 45 and the father of nine, Kennedy will hold the post for 431 days before being named to head the U.S. Maritime Commission. He asks Yale's Minnesota-born Sterling Professor of Law William O. (Orville) Douglas, 35, for a memorandum on the abuses of corporate reorganization and ways they can be remedied; Douglas produces an eight-volume report and will be appointed to the SEC in 1936 (see 1937; Williams Act, 1968).

Wall Street's Dow Jones Industrial Average closes December 31 at 104.04, up from 99.90 at the end of 1933.