Article about New Deal in NC

This source is a description of the Federal Emergency Relief Act. It describes how FERA worked and what impact it had on North Carolina.

Excerpt: 

Great Depression

The Great Depression in North Carolina caused immeasurable hardship for a large percentage of citizens and, by way of President Franklin D. Roosevelt’s New Deal programs, brought the federal government into the lives of average North Carolinians more than ever before, fundamentally changing the relationship between individuals and government. The Depression was quantitatively the single largest economic downturn the United States and the world had ever experienced. It began in August 1929 and did not effectively end until December 1941 with U.S. involvement in World War II. In 1933, when Roosevelt took office, the nation was plagued by relentless economic depression. Between August 1929 and March 1933 industrial production had fallen by more than 50 percent, deeply damaging the world’s economy. The money supply had dropped by more than 30 percent, as had the general level of prices, and the financial system had been decimated by a series of banking crises and panics.

In North Carolina, then primarily an agricultural state, the deflation of crop prices was devastating. In 1933 gross farm income was only 46 percent of its 1929 level. The banking community that was so closely linked to the farming community consequently grew weaker and more desperate, and the absence of credit for farmers compounded an already miserable situation. Mass unemployment had become increasingly widespread across the state and nation. By 1933 in North Carolina, 27 out of every 100 persons were on relief; mountain and coastal regions were hardest hit. As one editor of an eastern North Carolina newspaper put it, “a trail of poverty” ran through Northampton, Martin, Bertie, Gates, and Halifax Counties.

North Carolina industries saw the decline in manufacturing value added by more than 50 percent-from $1.3 billion in 1930 to $878 million in 1933. From 1929 to 1933 North Carolina cotton and textile industry wages declined 25 percent. Falling wages and mass unemployment led to substantial labor unrest across the state.

New Deal Agencies in North Carolina

On becoming president, Roosevelt immediately instituted many reforms that had an instant positive impact in North Carolina and throughout the nation. These expedients included removing the gold standard for U.S. currency, instituting a bank holiday for a three-day period in 1933, and establishing federal deposit insurance and a series of measures to provide financial rehabilitation for the banking community, debtors, and individuals seeking credit. Perhaps most important to North Carolina and other states, the Roosevelt administration established New Deal programs that greatly aided the economy, made needed improvements to North Carolina’s transportation and other infrastructures, built numerous public-use and cultural facilities, and created employment opportunities for thousands of citizens.

…Federal Emergency Relief Administration (FERA). Created to give direct cash relief for states and local governments to distribute, FERA funds between 1933 and 1935 provided relief payments to about 300,000 North Carolinians per month. Governor Ehringhaus established the North Carolina Emergency Relief Administration (NCERA) to distribute the federal funds, but local state welfare personnel often were FERA officers. Ehringhaus selected Annie Land O’Berry to direct the NCERA. She eventually administered the NCERA with 220 state office employees and about 2,000 county level assistants.

From 1933 to 1935 the NCERA administered relief remarkably free from corruption, spending almost $40 million in federal dollars and about $700,000 in local money. In addition to general relief, it funded public works, rural rehabilitation, education projects, a cattle program, distribution of surplus commodities, a fishing cooperative, and an urban vagrancy program.

In 1935 Congress stopped grants to states for direct relief, ending the NCERA, and in its place created work relief under the Works Progress Administration. From 1933 to 1935 about 10 percent of North Carolina’s population was on relief, but these funds proved inadequate in both urban and rural areas, despite the millions of dollars that the FERA poured into the state. Per capita, North Carolina ranked a lowly forty-third nationally in FERA grants…

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