After the economic boom of the 1920s, the Great Depression hit the country hard. President Norris continued his efforts to guide economics reforms aimed at curbing the economic downturn during the rest of his presidency. Understanding the unprecedented nature of the stock market collapse, President Norris surrounded himself with a number of trusted advisers. Most notably, these included agricultural economists Henry A. Wallace and Rexford Tugwell in the Department of Agriculture, as Norris’s early plans to revitalize the American economy were centered around restoring the confidence of American farmers. First and foremost, Norris issued an executive order and later guided legislation through Congress that established the Rural Electrification Administration. The REA served multiple purposes in its role in the Great Depression. Firstly, its efforts to bring electricity to farmers and poorer rural areas modernized much of the country that was lagging behind the cities. Second, it established a greater government involvement in utilities management, as Norris had urged with the creation of the TVA. Lastly and most importantly in terms of the Great Depression, the construction of power infrastructure in rural areas was the first of a string of grand public works projects that would provide employment for millions of Americans during the Depression.
As part of the ambitious rural electrification scheme, the REA established several projects similar to the TVA, including river management authorities in the Columbia River Valley, the Colorado River system1, and the Hudson Valley. This brought the REA into competition with privately owned utility companies, especially those affiliated with Edison’s subsidiaries. The Hudson Valley project became the most contentious, as the New York Edison Company already had factories up and down the Hudson River. As the main provider of electricity to New York City, NYEC soon took the REA to court, claiming the government had no right to compete with private enterprise. This position was echoed by a number of influential businessmen including Edison, Henry Ford, and others. However, it was countered by other progressive leaders in all parties, from the Progressive Party platform to Democratic New York governor Franklin D. Roosevelt. The Supreme Court case of New York Edison vs. the Hudson Valley Authority also saw unexpected support for the federal program from former president Herbert Hoover. While Hoover was against government competition with business, he asserted the constitutional right of the federal government to establish flood control and regulation of interstate commerce. In 1931, the Supreme Court ruled that the Hudson Valley Authority and the other watershed management authorities were constitutional. Hoover’s support for the program and his engineering history led to his appointment as Director of the Colorado River Authority later in the decade.
Through these and other programs, the Norris administration helped the nation weather the worst brunt of the Great Depression. While the Norris administration promoted federal spending on public works projects as a method of maintaining employment, the question of government revenue dogged the president and Progressives. In 1930, Republicans Reed Smoot and Willis Hawley put forth a bill that would increase tariffs in order to reduce the country’s deficit. The bill passed both houses of Congress, but Norris vetoed it. Coming from the largely agrarian state of Nebraska, Norris had seen the effect previous tariff increases had in devaluing farm production. That, combined with the consensus of economists and many businessmen united against the Smoot-Hawley Tariff Bill confirmed Norris’s decision. Even Henry Ford publicly acknowledged his agreement with President Norris in opposition to the bill. Thus when it came to Norris’s desk, the president vetoed the tariff bill.
The Great Depression hit the United States hardest during 1930 through 1932. The employment figures for the country fell from a peak of over 31 million to below 26 million, a workforce nearly as bad as that of the worst of the post-WWI recession. The total production of the United States had been at over a trillion dollars for the first time ever just before the stock market crash. By 1932 it had plummeted by nearly a third. Unemployment, hovering around 5.0%, skyrocketed as banks and businesses collapsed in the wake of the Depression to over 20% in June of 1932. While keeping the tariff burden low and increasing public spending on infrastructure and other government projects helped, the Federal Reserve’s raising of interest rates to match that of European countries hit by the Depression did not. With the Depression still in full swing, it was naturally the major issue of the 1932 presidential election.
The Democratic and Republican primaries for the 1932 election were full of potential candidates, with President Norris looking vulnerable as the Depression loomed like a dark cloud over the country. The Democratic Party was marred by struggling between the conservative Southern coalition led by House Speaker John Nance Garner of Texas and the Tammany and Chicago machines backing Illinois Senator J. Hamilton Lewis. After several ballots, neither side had budged. To break the deadlock, the two sides agreed to nominate Henry Ford as a compromise candidate. They touted Ford’s business acumen to lead the country out of the Depression, and to appease the more progressive wing of the party, nominated Cordell Hull of Tennessee for Vice President. The main candidate for the Republicans appeared to be a resurgent Herbert Hoover, who claimed that Norris was not creating enough cooperation between government and business. However, many Republicans felt Hoover was too close to Norris on policy. Instead the convention selected former Massachusetts governor Calvin Coolidge as the candidate, and based their campaign around attacking Norris’s increase in government spending and the imbalance in the federal budget.
At the start of the general election campaign, the Democratic and Republican parties were both confident of victory despite each of their internal struggles. As unemployment rose with the Depression, Norris’s popularity sank. After the landslide victory unseating Hoover in 1928, it already looked like the Progressive Party would only have a short berth in the presidential spotlight before fading to obscurity once more. Ford and Coolidge both attacked President Norris on his expansion of the federal government with business regulations and increased spending on public projects. Coolidge, a moderate when it came to Prohibition, restored a lot of Republican confidence in the Northeast by advocating the repeal of the 18th Amendment. Norris shot back on Prohibition, unable to resist continuing one of his most deeply held values. However, in the economic downturn, Prohibition was becoming increasingly unpopular amid the stress of the Depression as both a social issue and as a potential revenue boost.
Up until early October of 1932, it looked increasingly likely that Norris would lose reelection. However, Norris’s popularity began to slowly bounce back as the Depression started easing up. For the first time since the Great Depression began, the United States had an increase in GDP in the final quarter of 1932. After the votes were counted, George Norris won reelection as President with a slim majority of 276 electoral votes. Norris’s popularity numbers were correct though; the president won reelection with only 43 percent of the popular vote, the lowest winning popular vote since Woodrow Wilson’s 1912 victory. Both the other major parties were shocked. The Democrats saw the President’s numbers dwindling in the South and had hoped to capitalize on that. While they did take back much of the Solid South, Progressive support stayed strong in Tennessee and Kentucky, where the TVA had been most effective in alleviating some of the poverty in the region. The Republicans gained back much of the Northeast, but Hoover’s bitterness toward Coolidge in the campaign hurt the Republicans elsewhere. Norris’s slim reelection did come at a price of Progressive representation in Congress, forcing the President to cooperate even more with the other two parties.
President George Norris (NE)/Vice President C. C. Young (CA), Progressive Party: 276 electoral votes
Businessman Henry Ford (MI)/Senator Cordell Hull (TN), Democratic Party: 143 electoral votes
Governor Calvin Coolidge (MA)/Senator2 Charles E. Hughes (NY), Republican Party: 112 electoral votes
1 The Colorado River Authority extends the Colorado River Compactand coordinates construction of dams on the river including the Hoover Dam.
2 Hughes is not made Supreme Court Justice in this history, and instead is elected senator in 1928, defeating incumbent Royal S. Copeland.