History of Chicago from Trading Post to Metropolis
External Studies Program | University College

Module 3 Chapter 2
Chicago During the Great Depression

The greatest economic collapse in American history began shortly after the election of Herbert Hoover. Chicago, being the largest manufacturing city in the country, was especially hard hit and by 1932, the worst year, 750,000 Chicagoans were out of work and only 800,000 had jobs. Over 160,000 families received relief from private and local agencies. In one especially hard hit area of the city, some people were reduced to eating garbage. "Around the truck which was unloading the garbage," a witness reported," were about 35 men, women and children. As soon as the truck pulled away from the pile, all of them started digging with sticks, grabbing for garbage and bits of food." Thousands of men slept in parks or under cardboard boxes on Lower Wacker Drive. Winters were especially difficult. "I do not know how it may have been in other places. . . but in Chicago the city seemed to have died," a woman wrote, "there was something awful--abnormal--in the very stillness of the streets."

In the black areas of the city, already suffering from years of neglect and poverty, the added impact of the Depression led on at least one occasion to violence and death. Leaders of "unemployment councils," generally dominated by Communist party members, had been haranguing a crowd in Washington Park early in August 1931. They demanded that action be taken to prevent the eviction of an elderly woman who had been unable to pay her rent. During the course of the speeches the landlord and municipal court bailiffs had already begun to remove the woman's belongings. Notified of these actions, the crowd in the park, estimated at two thousand, moved to the scene of the eviction, physically prevented the further removal of furniture and began moving things back into the woman's apartment. Soon the police arrived and took action to disperse the protectors; three young men were killed. Over 25,000 people turned out for the funeral in the black community. The incident so shocked the Thompson administration that it persuaded the courts to declare a moratorium on all future evictions.

Chicago, in any case, had enough problems without having to face renewed racial incidents. By late 1930, Chicago was on the verge of bankruptcy brought about by the crude financial policies of the city government and by the added burden of supplying relief for its unemployed. City employees, including teachers, had been working for months without pay. The situation in Chicago was not unique. Most Americans still believed that relief and welfare were local responsibilities and that the federal government should stay out of local affairs. The United States had weathered many severe depressions under this philosophy, and most people saw no reason to break with past practice; Herbert Hoover continued to preach that the Depression would end quickly if people could avoid panic. Thus, assistance remained in the hands of local charities like the Red Cross and the Salvation Army. Many churches also established welfare bureaus, as did almost every ethnic group. The severity of the depression, however, outmatched that of any other in history. By the winter of 1931-32 private funds had been exhausted, and chaos seemed around the corner.

State Government refused to deal with the crisis. Rural elements in Illinois, because of mal-apportionment, dominated the legislature, and legislators voted against the new taxes necessary to pay for massive relief. They defeated a proposal for a state income tax and agreed only on a $20 million land issue to raise funds for the unemployed. The lands were quickly bought but the money was spent within three months as unemployment in Chicago rose to over 42%.

One of the few taxes Illinois had was the property tax, but at the outbreak of the Depression, to add to the state's woes, thousands of Illinoisans were on strike against the tax and refused to pay it. The situation arose from a taxpayer's suit brought against a recent re-evaluation of property values. The assessors had used faulty arithmetic, the suit charged. Only after a three year court battle in which the state supreme court decided the re-evaluation had been properly made was the full amount of taxes collected. The failure to pass an income tax, or to even raise the one cent sales tax, plus the failure to collect full property taxes, indicated that the state government was no more able to handle the consequences of the Depression than were local government and private charities.

The election of 1931 came during the depths of the disaster. Big Bill Thompson, who now hailed himself as "Big Bill the Builder", defeated two opponents in the Republican primary by stressing ethnic and racial issues to become the nominee of the Grand Old Party for a fourth time.

The Democrats turned to Anton "Tony" Cermak, longtime leader of the city's Czechs and secretary of the anti-prohibitionist United Society for Local Self-Government. Cermak had not won the nomination without a fight against the Irish faction that had challenged him but had lost. Many Irish politicians were so disgusted, fearing that Cermak would take over the party and they would lose control of the patronage, that they did not support him during the election. A Republican mayor, they knew, would have little control over local Democratic organization--which is where the Irish had the power and could maintain it.

Despite the crisis, with the city on the verge of bankruptcy, both candidates stressed issues of ethnic pride and recognition. Late in the 1920's, a World's Fair and Century of Progress Exposition had been authorized by the state legislature. Chicago was to celebrate its one hundredth birthday in 1933 with a giant exhibition of all the latest in science and technology. Big Bill Thompson claimed he would be a much better host to such a world-wide gathering than would the ex-coal-miner's son and street vendor, Tony Cermak. "Tony, Tony" Thompson shouted, "where's your pushcart at? Can you imagine a World's Fair mayor with a name like that?"

Cermak responded by remarking, "It's true I didn't come over on the Mayflower. But I came over as soon as I could." Cermak received support of most reformers and good-government people simply because Thompson's record was so bad that almost any Democrat could have run as a champion of virtue. Yet, Cermak too had his ties with the underworld. As a tough ward politician and leader of the anti-prohibition campaign, he had come into contact with many gangsters and bootleggers. But most voters did not know of this connection in 1931, while they knew that Thompson had openly cavorted with hoodlums during his tenure. "Cermak is bad", a Methodist minister proclaimed, "but Thompson is worse."

An event towards the end of the campaign seemed to bear out this assessment. On the eve of the election, the state's attorney--a reform Republican--led a raid on the offices of the city sealer, Daniel Seritella. Seritella, though he worked for the city, had been a close associate of Al Capone. He also served as a ward committeeman and state senator. After the raid it was recalled that Seritella's office, the responsibility of which was to check scales in butcher shops and food markets, had been riddled with bribe-taking. Crooked scales had cost consumers $54 million since Seritella had taken office.

Such scandals turned many voters away from Thompson, but probably what hurt him most was that the Republican party had been in power when the Depression broke out. During times of economic crisis voters simply did not have much interest in ethnic issues; they could not afford to have that interest. Cermak defeated Thompson by the greatest majority in the city's history--671,189 to 476,922.

ANSWER QUESTION 4 IN THE REPLY BOOKLET. (Provided after registering for courses through the External Studies Program.)

Cermak took over the city at a time when only 51 of the city's 228 banks still remained open. "Tough Tony" immediately set out to balance the city budget by cutting payrolls. In his first act as mayor, he dismissed over 2,000 of Thompson's "temporary employees." Politics and patronage proved more important than balancing the budget, however, for within a month of the election most of these positions had been refilled with 2,000 Democratic "temporary employees", thus helping to establish the Democratic machine. In another action to save money, Cermak cut most city employees' salaries by 20% and eliminated sick leaves and vacations.

Also, the mayor had recently accepted the concept of temporary unemployment relief. Before becoming mayor he had believed, like most Americans, that relief of any sort destroyed initiative and therefore was bad and should be avoided. But as he told a committee of Congress late in 1931, it was "relief of troops." Cities would have to wait two more years, however, before any direct federal relief funds were available.

The presidential election of 1932 played a significant role in the development of the Chicago Democratic party. At the convention, Cermak at first hoped that Al Smith would again lead the party as he had done in 1928 because he feared that Roosevelt was not a strong enough opponent of prohibition, an issue which still dominated many people's thinking. Cermak and the Chicago delegation finally jumped on the Roosevelt bandwagon but by that time the nomination had already been assured. Roosevelt was slow in forgiving Cermak for his lack of support at a critical time.

After the voters defeated Herbert Hoover by a wide margin and elected F.D.R. on his promise of a "New Deal," Cermak went to Florida to talk with the new president about patronage. Cermak was not impressed. "Roosevelt is not only weak in the legs, he's also weak in the head," he told a friend.

A second meeting had been planned, but on February 15, 1933, an assassin's bullet, aimed at Franklin Roosevelt, struck Cermak instead. That Roosevelt was the intended target cannot be doubted; "I hate all presidents," the assassin, Guiseppe Zangara, an Italian immigrant and anarchist, told police, "no matter where they came from, just like I hate all officers and everybody who is sick." Cermak lingered for 19 days after the attack but died on March 6. Over half-a-million Chicagoans turned out to witness his funeral. Zangara was executed shortly thereafter.

In the event of a mayor's death, Chicago's charter provided for a special election to select a new mayor, but in the interim the city council was to elect a temporary mayor. After Cermak's death, the council followed the prescribed procedure; it elected an elderly, feeble alderman who would not threaten the plans of the Democratic leadership, now in the hands of the Irish. Instead of calling a special election, however, party leaders made a deal with Republican members of the state legislature that allowed a change in the charter giving the council the power to select a permanent mayor. This procedure, the Democrats argued, would make it unnecessary to hold an expensive election in the midst of a severe depression. It also assured a return to power of the Irish faction since it controlled a majority of the ward offices.

The aldermen promptly elected Edward J. Kelly, president of the patronage-rich South Park Board. Kelly had served as chief engineer of the sanitary district during the 1920's, his chief sponsor having been Patrick Nash, a sewer contractor, alderman, and multi-millionaire, whose company had done much work for the sanitary district while Kelly served on it. As president of the Park Board, Kelly had been responsible for the building of Soldier's Field, a project which had cost $8 million, and as evidence of the type of administrator he would be, many people pointed out that a similar stadium in Los Angeles had cost $1,700,000. But voters had no choice in 1933 because the Democratic party had decided that a popular vote was not needed in the selection of their mayor. Thus, the Kelly-Nash machine was born.

Kelly faced immediate issues of a new sort. Relief funds in the city were exhausted but the unemployed would not have to depend on the anti-relief state legislature for funds. The "Hundred Days" of Franklin Roosevelt were under way--the national government had taken on responsibilities that local government would no longer handle. The massive problem necessitated a massive response, and the federal government was the only institution large enough to raise the vast sums of money needed to combat the Depression. Late in 1933, Congress and the President created the Federal Emergency Relief Administration (F.E.R.A.) to distribute funds to local communities. Like most New Deal programs, FERA was to be a temporary agency, in existence only as long as the problem of massive unemployment remained. It also, like most programs, was framed so that not all responsibility for relief was transferred to Washington. States had an obligation to provide a minimum of matching funds. This led to great difficulty in the Illinois legislature because it would have to pass new taxes and it was still extremely reluctant to do so. Only after the director of F.E.R.A. threatened to suspend all federal relief payments to Illinois did the state law-makers act, and then only by passing another bond issue. An increase in the 1 cent sales tax or the approval of an income tax remained politically impossible. Most legislators still believed the Depression would end if everyone remained calm and if the legislators themselves refused to be panicked into increasing the tax burden.

Secretary of the Interior Harold Ickes, a former Chicago lawyer, handled F.E.R.A. funding. He opposed giving federal money outright to city machines for two reasons; first he believed they would use it to increase their own power, and secondly he feared that, given their past history, machine controlled money would be involved in scandals that would embarrass the entire New Deal program. Ickes wanted to retain control of the relief program in Washington because he felt administration at the federal level tended to be more honest than that of local machine bureaucrats. For these reasons, F.E.R.A. money entered Chicago at a very slow rate.

Another agency, however, the Civil Works Administration, was established to provide emergency relief. Created later in 1933, to get the unemployed through the winter, the C.W.A. spent $933 million nationwide on almost 200,000 work relief projects. Harry Hopkins, a former social worker from New York, was put in charge. Hopkins felt it was his duty to spend as much money as fast as possible to ease the situation during the winter. In 1933-34, over 76,000 people in Chicago went to work for the C.W.A. Projects were created rapidly because of the crisis atmosphere, and there was little supervision over the quality of work. Much of it was street repair and snow-shoveling, but the idea was to get money into the hands of people so they could spend it and avoid starvation; in those terms the projects were very successful. Congress terminated the C.W.A. in 1934 because it was only supposed to be a temporary program.

In 1935, after it became apparent that unemployment was still very high, the Roosevelt Administration got Congress to approve the Works Program Administration, also to be headed by Harry Hopkins. Again the idea was to get as many people working as quickly as possible. Unemployment in Chicago stood at almost 385,000 in 1934. W.P.A. projects included highways, subways, airports and the improvement and construction of bridges, schools, and parks. Some of the projects were attacked as boon doggling and unnecessary, but the central idea was to increase purchasing power of consumers. Unless consumers had money to spend, the theory went, factories would continue to lay idle while if consumption increased, so would production and employment. The whole cycle started with the consumer's ability to buy.

Democratic politicians in Chicago found other uses for the large influx of federal capital. Mayor Kelly and his advisor Pat Nash spent the federal funds to build the first true political machine in the city's history. "Big Bill" Thompson had not really had a machine because most of his appeal had come from his personality and his understanding of ethnic insecurities. When he was defeated he left behind nothing in the way of an organization. The Kelly-Nash machine, on the other hand, was the foundation of the Democratic organization that had controlled the city since 1933.

Fortune magazine studied the Kelly-Nash organization in 1936 and concluded that a machine could be defined as "an organization that trades philanthropy (with other people's money) for votes." Democratic politicians did exactly that during the Depression. Jobs and relief provided a much more long-lasting base for political support than did the vagaries of personality. Unemployment, economic insecurity, and the fear of poverty laid the foundation of the Chicago Democratic machine. The New Deal of Franklin Roosevelt provided the funds while local politicians administered the programs and hired workers on what was, according to many complaints, a strictly political basis.

The Kelly-Nash organization wanted to show the national Democratic party that it had the power to produce enormous numbers of votes. The more votes produced, the more the Administration would remember the city when handing out relief funds. The first opportunity to show the organization's power came in the mayoral election of 1935. Kelly ran on the issue of no new taxes. The Chicago delegation in the state legislature led the attack against Governor Henry Horner's proposal for a 1 cent sales tax. Kelly said he could get 100,000 new jobs for the city by going "after all the money we can get" in Washington. Federal funds appealed to the local politician for three reasons: first, there were more of them; second, any increase taxes could be blamed on national politicians; and third, the individual's tax bite appeared low because it was spread among so many more people. Kelly's anti-tax campaign was therefore based on passing the buck to the national administration.

The Republican party interviewed half-a-dozen prominent individuals but all refused to run for mayor, including William Hale Thompson. Finally it had to settle on Emil C. Welton, a businessman who had been Thompson's campaign manager in 1931. Welton made six speeches during the campaign, received no money from the Republican party, and paid for the little advertising he did with his own money. Kelly received the support of every major newspaper and every ethnic group. During a time of major economic insecurity, few people could afford to be concerned about ethnic identity.

Kelly carried every ward in the city and won 75.3% to 17.2%. On the day after election, Welton told reporters that "the Republican party in the city is completely disintegrated," but he was a bit premature in that estimation as the election of 1939 would show. Still, the city council had only five Republican members and the future of the party did look grim.

Political consideration in Washington benefited the Chicago organization. Many of the President's advisors felt that Roosevelt would have a difficult time getting re-elected in 1936 and that every vote would be needed to offset defections to left-wing politicians like Henry Long. The vote totals of 1935 impressed the President's advisors. Public works projects were speeded up and expanded. Yet, despite all the money and all the projects, over fifty thousand men lived in vacant lots, in parks, or under Lower Wacker Drive, and thousands of others scraped by on minimal relief payments.

Washington was far more responsive to the economic conditions in Chicago than were politicians in Springfield who steadfastly refused to pass a sales tax or any other taxes to pay for matching funds. Chicago legislature had opposed the new taxes because it had been politically expedient to do so in 1935, but Republican and rural legislators had traditionally fought tax increases arguing that "cheats and chiselers" had to be removed from relief rolls before any new taxes would be passed. As had happened on a previous occasion, the legislature acted only after federal officials threatened to cut off relief funds to the state.

In 1936, the Kelly-Nash organization decided to run a candidate in the gubernatorial primary. Henry Horner, the incumbent, had defied the Chicago machine in 1935 by vetoing an off-track betting bill. Horner also offended Cook County Democrats when he declared that local agencies would have to pick up part of Illinois' relief burden. Such an increase would have meant a hike in the property tax, and that the machine did not want. Several relief offices in the city closed while state and local officials debated on how much each level of government would have to pay.

In the Democratic primary, Horner, a former Chicago judge and the first Jewish governor of Illinois, campaigned against "boss rule" and machine corruption, a campaign not unusual for a candidate trying to attract downstate votes. The Kelly-Nash candidate, Herman Bundeson, ran well in the city itself, but Horner received huge majorities in areas outside the city. For voters in these areas, Chicago symbolized everything large and evil that rural people hated. It represented crime, corruption, huge banks, blacks, dirt and grime, and political domination by the machine's faceless men. The polarization between Chicago and downstate continues in Illinois elections to this day.

In the presidential race, Roosevelt swept to victory in city and state. Even black voters, for the first time, left the party of Abraham Lincoln and gave a majority of their votes to the Democrats. Of Chicago's ethnic groups, only the Germans and Swedes supported Alf Landon of Kansas.

In 1937, Roosevelt responded to improved economic conditions by cutting back heavily on federal spending. He, too, wanted to get the government out of the economy and return to a free market and a balanced budget. Roosevelt's action led to a recession and unemployment almost as severe as that of 1929-31. In Chicago, application for relief rose so rapidly that allotments had to be cut for all recipients in order to have enough to go around, and still payments came to only 85% of the amount required to support a minimum standard of living. In 1938, two hundred thousand families were on relief, and over one hundred thousand worked for the W.P.A. Almost one in every six Chicagoans received some form of public aid. The renewed recession again pushed the city to the verge of bankruptcy. Federal spending and federal programs had done little to improve the financial standing of the city. The events of 1937-38 indicated, however, the central role of the federal government in the economy. A conservation resurgence in Congress in 1938 precluded the extension of many of the New Deal programs and many were reduced in size. By 1939, though, something new was priming the pump of production--the war in Europe had begun and orders for weapons were increasing. Actually, the war with its limitless demand for materials did more to tap the vast production capacities of the American economy than the New Deal relief programs ever had.

For many people, however, the short-term relief provided by the New Deal during a frightening period of their lives tied them strongly to the Democratic party. Over one million Chicagoans benefited, at one time or another, from the New Deal. These people would not forget the generosity of the Roosevelt administration. Others would not forget the labor reform programs, the housing programs, Social Security, the minimum wage, and other programs introduced during the Depression. The beneficiaries of these programs formed the backbone of the national Democratic party, and the Kelly-Nash machine prospered from this loyalty.

Republicans attempted a comeback in the 1939 election and made the New Deal a major issue. Heading their ticket was Dwight Green, a former federal district attorney who had led the prosecution of Al Capone for income tax evasion. Green went on the attack as leader of "the people versus the payrollers" and the bosses. He accused the Kelly-Nash machine of preying on human misery and desperation to build its political power. Kelly remained silent through most of the race, only asking voters to elect him in order to show Washington that Chicagoans had confidence in the Democratic party. "Show that Chicago is behind President Roosevelt," read Kelly's campaign literature. Roosevelt helped the city administration by announcing an $18 million appropriation for the construction of a subway shortly before the election. Green surprised many people by receiving 43.7% of the votes. He did especially well in wards in which people owned homes, despite Kelly's claim that a vote for him would keep down property taxes because Federal money, not state or local, would be used to relieve unemployment. Kelly received his support from the working-class and black areas which had benefited most from the New Deal. The election showed that the Republican party was not really dead and that ethnicity was no longer the most important question. Economic security had become the most important determinant in politics. The Democratic party had been turned into a home for ethnic and black voters. Religious questions subsided, and the prohibition question had dried up in 1933 with the repeal of the 18th Amendment. The War would soon lead to a semblance of economic security. Politics would then revolve around the question of how one felt about the increasing power of the federal government. Thus, ironically, the local political organization gained the most power from the growth in federal spending.

Summary

1. The Depression led to the end of William Hale Thompson's political career.

2. Anthony Cermak led the Democratic party in 1931, until his assassination in 1933.

3. Federal spending increased the power of the Kelly-Nash machine.

4. The New Deal created great loyalty towards the Democratic party among the unemployed and the people it supplied with jobs and aid.

5. The organization that the Kelly-Nash team created with federal funds formed the basis of the present Democratic machine.