The Great Depression in Texas: East Texas Oil Boom and New Deal Programs - Prof. Michael H, Study notes of World History

Download The Great Depression in Texas: East Texas Oil Boom and New Deal Programs - Prof. Michael H and more Study notes World History in PDF only on Docsity! HIST 460 1 Chapter 11 Weaknesses of the United States Economy in the 1920's 1. Low prices for agricultural products 2. Low wages for workers 3. Unequally distributed wealth 4. Protective tariffs 5. European nations defaulted on debts and withdrew investments in the United States. 6. Unregulated stock speculation 7. Bank failures By 1932 one in four American workers were unemployed, family income had dropped by fifty percent, one hundred thousand businesses had failed, and the gross national product was cut in half. Herbert Hoover advocated a "cooperative state" to solve the problems of the Great Depression: 1. Business owners pledged to maintain wages and production levels. 2. Workers pledged not to strike. 3. Local governments and charities would provide temporary relief. 4. The national government would offer loans to businesses and create an air of optimism. Hoover opposed a dole and government-sponsored work-relief. Franklin D. Roosevelt's New Deal programs used the resources of the federal government to attack the immediate problems of poverty and despair. The New Deal did not end the depression or work fundamentalism changes in the capitalist economy. It did apply the resources of the federal government to attacking the immediate problems of poverty and despair. Early in his administration, Roosevelt's program and personality attracted the support of most Texans. Because few Texans were invested in the stock-market, the immediate impact of the crash did not affect most Texans. Initially, Texans looked to private charities for relieve, but by 1931 private organizations announced they were inadequate to the task. Local government assumed more responsibility for the poor: 1. Provided public works and "hire-the-unemployed" campaign 2. Provided free garden space 3. Provided soup kitchens 4. Used public buildings to house transients 5. West Texas cities sponsored rabbit hunts 6. Some cities encouraged "back-to-the-farm" movements 7. Some cities denied assistance to minorities 8. Some cities stationed police at train stations to prevent transients from staying in the community. 9. All cities instituted austerity programs, often resulting in the discharge of women employees. 10. School districts cut teachers' salaries and reduced educational appropriation. 11. Most cities eliminated some services. 12. Most cities froze employees' salaries. In Texas, many believed that 1) government aid sapped the willingness to work and that 2) white men should come first. Women and minorities were the last hired and first fired. Mexican Americans outnumbered all others in percentage of unemployment. Twenty-five percent of the unemployed had no resources. Dan Moody (1927-31) did little to address the problems of the depression. Ross Sterling (1931- 33), president of Humble Oil and Refining (later Exxon) until 1925, defeated Miriam Ferguson in the election of 1930. During his administration, two controversies (East Texas oil and cotton prices) weakened his political support. HIST 460 2 Chapter 11 East Texas oil boom In 1930, Columbus Marion "Dad" Joiner drilled an oil well near Kilgore that tapped into one of the greatest oil discoveries in history. Believing that the area held no oil reserves, the "majors" had not leased mineral rights from local land owners. Therefore, "independents" controlled 80 percent the Great East Texas field. Economic effects of the East Texas oil boom 1. Helped the poorest part of the state 2. Kilgore a boom town 3. Drove down the price of oil from over one dollar per barrel in 1930 to eight cents per barrel in 1931 Why did independents continue to high amounts of oil? 1. Many lacked the capital necessary to limit production until prices rose. 2. They could not stop production if others did not or the oil would be pumped from under their lease. The Texas Railroad Commission (TRC) had the authority to "prorate" oil to maintain prices, conserve oil, and to protect the environment. In 1931, the TRC issued proration order for East Texas because overproduction threatened to ruin the market for oil. Because majors refused to refine East Texas crude, independents built their own "teakettle refineries" which produced low-grade gasoline sold at independent stations. Because these refineries handled oil pumped above proration levels, their product was termed "Hot Oil." The TRC had no power to enforce its proration guidelines and producers could not agree to limit production voluntarily. Governor Sterling, formerly president of Humble Oil, sent troops into East Texas to enforce the proration order. General Jacob F. Walters, an attorney for the Texas Company (later Texaco), commanded the National Guard troops. Understandably, most East Texans considered Sterling's actions to be in support of the majors efforts to destroy the independents. The National Guard and Texas Rangers confronted resistance (sometime violent) as it attempted to stop the production of Hot Oil. Federal and state laws restricted the production of Hot Oil. By 1940, the majors owned 80 percent of East Texas field. Factors which brought the conflict to a conclusion 1. Texas Rangers 2. The National Recovery Administrations established codes for the oil industry 3. Majors produced inexpensive gas 4. Law regulated refineries 5. The Connally Act made it illegal to transport Hot Oil across state lines Impact of the East Texas Field 1. By 1935, the combination of federal and state laws enforced the TRC's power to prorate oil to maintain prices 2. By 1939, the majors owned 80 percent of the East Texas Field 3. The stronger independents survived. 4. Independents established offices in Dallas 5. The boom helped Texans survive the Great Depression Sterling's effort to regulate cotton production also cost him political support. As the prices for farm products declined, voluntary limits on production failed. State plans under governors Moody and Sterling to limit production of cotton were ineffective. In the election of 1932, Miriam "Ma" Ferguson (1933-35) defeated Sterling. She confronted 1) state debt, 2) a failed welfare system, 3) compulsory New Deal legislation that complicated state actions, 4) a legislature that resisted cooperation with the Fergusons. Charges of corruption focused on pardons, tampering with Texas Rangers, and the use of relief monies and patronage to build a Ferguson machine. John Nance Garner, former Speaker of the House of Representatives, was Franklin Delano Roosevelt's vice president from 1933 to 1941. Roosevelt appointed Houston banker Jesse H. Jones as chairman of Reconstruction Finance Corporation (RFC). Among Texans, the most consistent supporters of Roosevelt and the New Deal were Wright Patman, Texarkana congressman, Sam Rayburn, Speaker of the House of Representatives, and Lyndon Johnson. Maury Maverick, a liberal New Dealer, became mayor of San Antonio and administrator of wartime mobilization agencies during the Second World War.