FDR and Morgenthau sell bonds on radio 1941, from FDRL
wages increased as 15 million left private sector for military sector
personal income rose from $72 billion in 1939 to $172 billion in 1945, a real growth rate adjested for inflation of 68% in 6 years
redistribution of income, from pyramidal structure of 1939 that showed top 5% of population earning 30% national income, to more even structure of 1945 that showed top 5 % earning 18%, with large shifts from lower incomes to middle incomes, with 53% population earning more than $3000
"the real victor" was American business. "Antitrust operations were suspended. Expansion had been underwritten with public money. Corporate assets had gone from $54 billion in 1939 to nearly $100 billion in 1945." (p. 403)
the economy became a "military-industrial complex" dependent on government defense programs, prone to corruption and profiteering without oversight or regulation
"No one had prospered more in wartime than the farmers had." (p. 404) Farm Bureau Federation sponsored Price Stabilization Acts to raise prices to 110% of parity
shortages of consumer goods and raw materials during war - no new autos, radios, TV, appliances; shortages of rubber, nylon, butter, sugar
cost of the war was $321 billion (10 times more than WWI) - financed 60% by credit, 40% by taxes - money supply tripled - national debt rose from $49 billion in 1941 to $260 billion in 1945
bond campaigns raised morale and unity, were "the spearhead for getting people interested in the war" (Henry Morgenthau) and sold best when based on basic human desires, emotions, hatred of enemy
Fed Open Market Committee bought all bonds offered, kept price stable, held $22 billion value
growing personal savings in banks transferred to bonds
income tax rate rose from 4% to 6%, plus special surtax of 10-60% and excess profits tax on profits over allowed 8%
income tax returns rose from 5 million in 1939 to 40 million in 1945, due in part to Beardsley Ruml's paycheck tax withholding system that started in 1944
Social Effects
Happy veterans head for harbor of Le Havre, France, the first to be sent home and discharged under the Army's new point system, 1945/05/25, from Patch-NA
increased mobility due to mobilization of 16 million men; 16 million women moved to get jobs
federal government provided services, extended the welfare state started in the New Deal
Lanham Act and Federal Works Agency built schools, housing, clinics, playgrounds
end of progressive education and rise of vocational training, military training, science
Veterans Administration became leading social welfare institution, founded in 1930, led by Omar Bradley after 1945
16 veterans with families were 1/3 population - helped by GI Bill, federal life insurance, $1300 bonus when left military service
total veterans cost was $100 billion, over 1/3 total cost of the war
rise in juvenile delinquency due to parental neglect during war; rise in teenage prostitution at bus depots and federal housing projects; urban schools became battlegrounds, young teachers terrified
zoot suit riots in Los Angeles, June 2, 1943 due to move of pachuco gangs from El Paso in 1942, wore long coats and long ducktail hair, blamed for crime increase in LA by Hearst press; city ordinance passed in summer 1942 prohibiting zoot suit, police began sweeps of barrio; death of Jose Diaz and arrest of 22 pachuco gang members in August 1942 in the Sleepy Lagoon case; riots in 1943 also in San Diego and Pasadena
race riots in Detroit, June 20, 1943 due to job discrimination, housing shortage, hot summer beach on Belle Isle crowded with 100,000; FDR sent federal troops; 34 killed, 700 injured, $2 million property loss
braceros and Philippine veterans never compensated - see articles
loss of civil liberties due to growth of federal government, requirements of war, national defense and security
Selective Service under Lewis Hershey reached into millions of homes, investigated, tested, drafted
FBI under J. Edgar Hoover began huge card file on citizens due to requirement that all defense workers be fingerprinted and carry ID card; FBI budget grew from $6 million in 1939 to $16 million in 1941; telephones tapped to uncover espionage and saboteurs, but also used against Harry Bridges, radical head of West Coast Longshoremen union, was deported
House Select Committee on Un-Americn Activities under Martin Dies of Texas investigated government employees who belonged to fascist and communist front organizations - guilt by association
Smith Act of 1940 required registration of 4 million aliens in U.S. and made sedition a crime, to advocate or conspire to teach the violent ovethrow of the government
Purpose of War
Wilsonian internationalism or imperialistic nationalism?
