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Chapter 2: The 1920s and the Start of the Depression, 1921-1933



The period from 1921 to 1933 roughly encompassed an economic cycle that catapulted the nation to unprecedented heights of prosperity and then, in the great Depression, plunged it into unparalleled and seemingly intractable misery. After the activism of the administration of Woodrow Wilson and particularly the explosion of government programs and government regulation of the economy during World War I, in the 1920s there was a complete turnaround. Under Presidents Harding, Coolidge and Hoover, government's role was greatly reduced, and expanded only modestly during the early Depression.

The Department of Labor in this period reflected the Administration's, and the Nation's, desire for less government. At the same time it continued its permanent functions, with a few additions as dictated by policy or legislation. The Secretaries who provided the leadership in this period were James J. Davis, 1921-1930, and William N. Doak, 1930-1933.

James Davis was a nationally prominent figure who had risen from being an "iron puddler" in a steel mill to directing an enormously successful fund-raising effort for the Loyal Order of the Moose, a fraternal and charitable organization. He was widely known as the only man who could "milk a moose."

Although Davis was a union member, during his incumbency the Department followed a neutral course toward organized labor and was less involved with labor problems than during the Wilson Administration. Instead, the Department's attention was focused on other areas. Responding to isolationism and other pressures, Congress enacted a series of restrictive immigration laws that reduced to a trickle the flood of immigrants that had resumed after the war. Administration of these laws was the major activity of the Department in these years.

Reflecting the Secretary's charitable involvements, the Department also emphasized and expanded the activities of the Children's Bureau. It administered a grant-in-aid program to the states for child care and maternity health care. It distributed millions of bulletins on child care. It was a leader in the fight for a constitutional amendment limiting child labor. Although the amendment never was ratified, it paved the way for later legislation regulating the labor of children under 18 years of age.

While the employment service operated with greatly reduced staff in the 1920s, it performed much useful service during a time when jobs were relatively plentiful. While employment offices were considered a state responsibility, the federal service assisted and cooperated with the state offices. The farm labor function continued as a major activity. Directing seasonal farm workers to areas of labor shortage, the service developed a tradition of aid to migrant farm workers that has been an enduring strand in the Department's history. A junior division of the service promoted better vocational training for youths under age 21.

Like the employment service, the Conciliation Service was less in demand in the 1920s but still made a contribution. Labor unions were declining as firms promoted company unions and provided increased benefits to workers under what was known as "welfare capitalism." Strikes had declined after the post-World War I strike wave. In this environment, the Conciliation Service quietly worked to reduce labor-management tensions through diplomatic mediation and contributed greatly to the labor peace of the period. Continuing an earlier trend, the Service enhanced its reputation, encouraging more and more parties to voluntarily bring their disputes to it for settlement.

Just after World War I the Women's Bureau had been established and placed in the Department of Labor. The Bureau was set up as an investigative and reporting agency with the goal of promoting the welfare and opportunities of working women. Throughout the 1920s the Bureau, though constantly short of staff, gathered and disseminated information on diverse topics, ranging from the effects of night work and toxic substances on women to the relation between work and women's family life. In 1923 a Women's Industrial Conference was held in Washington to discuss the extensive and increasing problems faced by women in the workplace. Well attended and widely publicized, the conference helped to unify interested groups and raise public consciousness on these issues.

By 1930 the "Golden Decade" of the prosperous 1920s was over, the stock market had seen its "Black Tuesday", unemployment was reaching alarming proportions and the Great Depression had begun. Following the Hoover Administration's policy of humane but limited intervention in the economy, the Labor Department took a number of positive steps to cope with catastrophe under the leadership of William Doak, replacing Davis who resigned in 1930 to serve in the U.S. Senate. An official with the Brotherhood of Railway trainmen, Doak was the first Secretary of Labor who was born in this country (Wilson was born in Scotland, Davis in Wales).

One of the principal policies supported by the Department for fighting the steadily worsening Depression was to avoid wage cutting. Secretary Doak worked with the unions and the Congress to bring about the enactment in 1931 of the Davis-Bacon Act which fought cut-throat wage slashing by setting wage levels on federal construction projects at the prevailing local rates. The principal Senate sponsor was James Davis, who after resigning as Secretary had been appointed to an empty Senate seat in 1930 (and went on to serve until 1945). The Conciliation Service administered the Act.

The Department's bureaus focused their energies and limited resources on Depression problems. A bill to establish a large-scale national employment service was vetoed, but the existing employment service was expanded and reorganized. By 1932 there were over 150 placement offices and 2 million persons were placed. The Children's Bureau began to collect information on relief supplied to families and to the homeless in the nation's cities. It also studied provision of unemployment insurance in the states, problems of transient youths, and the effects of the Depression on child labor. Likewise, the Women's Bureau studied and publicized problems of unemployed women, seen unfairly at the time by many as less crucial than those of unemployed male breadwinners.

In the midst of the growing Depression, immigration duties still used the lion's share of the Department's resources. Further restrictions had virtually cut off immigration from anywhere but Western Europe. Spurred by a national atmosphere of social and economic uncertainty the Department focused on deporting undesirable aliens.

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