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By Root 1813 0

to Miss Perkins and the Department of Labor, the original draft included a wish list of projects that totaled $5 billion—roughly $400 million more than the entire federal budget in 1932–33.59 Roosevelt reviewed the proposal with his principal cabinet officers on Saturday afternoon, April 29, and pared it to $1 billion. According to Charles Wyzanski, the Labor Department solicitor who had drafted the bill, FDR took the New York projects one by one “and showed a remarkable knowledge of every single item. It was a masterly demonstration, and he convinced everyone how unsound most of the projects were.”60 By the time the bill was presented to Congress in May, the cost of the projects included had risen to $3.3 billion, a figure the Bureau of the Budget thought was sustainable. It was passed in the early morning hours of June 16, 1933, the final piece of legislation enacted during the hundred days.61*

At the end of March, as the relief measures took shape, Roosevelt shifted the administration’s focus to Wall Street. Reflecting public demand for reform of the stock market, the Democratic platform had pledged legislative action to require full disclosure of all pertinent financial information whenever stocks and bonds were issued.62 On March 29 FDR sent the securities legislation forward. “This proposal,” he said, “adds to the ancient rule of caveat emptor, the further doctrine ‘let the seller also beware.’ ” Roosevelt told Congress that the bill put the burden of truth on the seller. “It should give impetus to honest dealing in securities and thereby bring back public confidence.”63 As with the Agricultural Adjustment Act and the CCC, the proposal for federal regulation of securities broke new ground. The bill required that complete information on new stock issues be filed with the Federal Trade Commission, which was empowered to stop the sale if the data were found defective. Company officials were made personally responsible, subject to both criminal and civil penalties. The legislation was put into final form for FDR by Felix Frankfurter and shepherded through Congress by Sam Rayburn, chairman of the Interstate Commerce Committee. Roosevelt signed it into law May 27, 1933. “If the country is to flourish,” said FDR, “capital must be invested in enterprise. But those who seek to draw upon other people’s money must be wholly candid regarding the facts on which the investor’s judgment is asked.”64

Two weeks after sending the securities bill to Congress, FDR shifted gears by asking for the creation of a Tennessee Valley Authority to develop the economic potential of one of the nation’s great river basins—and one of the most poverty-stricken regions of the country. The Tennessee River and its tributaries, spilling into seven southern states,* drained an area of 640,000 square miles. Flooded might be more precise. The once-fertile bottomland was sadly depleted; the forests were cut over; the thin soil of the uplands was eroded, crisscrossed with gullies, barren of serious vegetation, and unable to contain the annual runoff from devastating spring rains. Income in the region was less than half the national average. Only two out of every hundred farms had electricity. Infant mortality was four times greater than elsewhere, pellagra and tuberculosis were endemic, medical care was sparse, and sanitation was primitive. There was no industry to speak of, little commercial life, and few prospects other than further descent into squalor.65

It was a scene Roosevelt knew well from his exposure to similar rural poverty at Warm Springs. But the Tennessee valley had resources lacking in southern Georgia: specifically, the giant hydroelectric dam on the Tennessee at Muscle Shoals, Alabama, constructed by the federal government during World War I to produce power for the manufacture of munitions. Since the war, the great productive capacity had remained idle, water falling uselessly through its spillways. Twice progressives in Congress, led by George Norris of Nebraska, had passed legislation authorizing the government to operate the dam to produce