FDR's re-election in 1936 was largely due to the robust economic growth of that year. And part of that growth, ironically, came from a bill which (1) FDR actually vetoed, and (2) was in part the product of his administration's disastrous handling of the September 1935 Florida hurricane:
"A small number of veterans marched on Washington for the third time in spring 1934. In response, Roosevelt offered them employment building the overseas highway from Miami to Key West - conveniently far from Washington. This led to tragedy in 1935. On September 2nd, the most powerful hurricane to ever make landfall in the United States struck the Florida Keys (Drye 2002). The hurricane, though powerful, was small, and it made landfall in the sparsely inhabited upper Keys. Thus only 250 non-veterans died. But the hurricane obliterated several camps for veterans working on the overseas highway, killing more than 250 veterans. The Roosevelt administration was widely blamed for not evacuating the veterans in advance despite ample warning from weather forecasters. An evacuation train was sent, but it arrived too late and was itself destroyed. The hurricane likely both inspired veterans to push harder for the bonus, and made it more diffocult for the administration to oppose payment. Public opinion swung in favor of veterans and the bonus amidst news stories questioning the administration’s handling of the disaster.17 A December 1935 Gallup poll found that a majority of Americans favored payment of the bonus.
"In addition to the hurricane, three other factors created a political climate more favorable for the veterans in late 1935. First, 1936 was an election year, making politicians understandably reluctant to alienate a large voting bloc (New York Times, 10/3/35, p. 22). Democratic party leaders, including Roosevelt, were concerned that the demagogic Catholic priest, Father Charles Coughlin, would run in 1936 to the left of Roosevelt. [Actually, of course Coughlin himself couldn't run for president becuase he was born in Canada--but even after the assassination of Huey Long, a Coughlin-*backed* ticket could be worrisome.--DT] Father Coughlin advocated payment of the bonus and had the potential for significant support among veterans (Ortiz 2010). Second, years of high New Deal relief expenditures had made it more difficult for the administration to argue that payment of the bonus was unaffordable (New York Times, 12/1/35, p. 7). Finally, whereas previous iterations of the bonus bill had proposed that the bonus be paid via money creation, the 1936 bill proposed more traditional deficit-financing (Daniels 1971).
"These factors made the passage of the bonus a nearly forgone conclusion. The house and senate passed the bill on January 10th and January 20th. Roosevelt vetoed the bill on balanced budget grounds, but Congress easily overrode the veto, and the bill became law on January 27, 1936. No one doubted this outcome: the administration even began printing bonus application forms before congress voted to override Roosevelt’s veto (Daniels 1971)..."
https://pdfs.semanticscholar.org/5fe6/9df4347b6492d8ed108401b4078897350bf5.pdf
What was the effect of the bonus? To quote the same paper:
"'The gov’t last week paid a soldiers’ bonus of over two billion and as a result the veterans have been buying cars, clothing, etc. Streets are crowded and the highways are jammed with new cars. It begins to look like old times again.'" - Benjamin Roth’s diary, 6/25/1936 (Roth 2009, p. 172).
"The U.S. recovery from the Great Depression was nearly as exceptional as the Depression itself. After falling 27 percent between 1929 and 1933, real GDP rose by 43 percent between 1933 and 1937. Indeed, the economy grew more rapidly between 1933 and 1937 than it has during any other four year peacetime period since at least 1869.1 The most rapid growth came in 1936, when real GDP grew 13.1 percent and the unemployment rate fell 4.4 percentage points.2 Conventional explanations of the rapid recovery emphasize the economy’s self-correcting mechanisms and the effect of expansionary monetary policy and resulting expectations of inflation. The literature almost universally dismisses fiscal policy as a primary source of recovery before World War II.3 Economists have generally accepted E. Cary Brown’s (1956) statement that 'Fiscal policy . . . seems to have been an unsuccessful recovery device in the ’thirties--not because it did not work, but because it was not tried' (pp. 863-866).
"In fact, this paper demonstrates that fiscal policy, though inadvertent, was tried in 1936, and a variety of evidence suggests that it worked. The government paid a large bonus to World War I veterans in June 1936, and I find that within six months veterans spent roughly 70 cents out of every dollar received. A back-of-the-envelope calculation suggests that absent the veterans’ bonus, GDP growth in 1936 would have been about 2.5 to 3 percentage points slower and the unemployment rate 1.3 to 1.5 percentage points higher...."
So--insofar as it made the passage of the veterans' bonus inevitable--the administration's failure to evacuate the veterans from the Florida Keys may have been one factor in FDR's landslide re-election! (I don't want to exaggerate here; the hurricane was only one reason for the passage of the bonus bill. Besides, if the economy in 1936 had grown by "only" 10 percent instead of 13, FDR would still have won, but it might have been closer...)
"A small number of veterans marched on Washington for the third time in spring 1934. In response, Roosevelt offered them employment building the overseas highway from Miami to Key West - conveniently far from Washington. This led to tragedy in 1935. On September 2nd, the most powerful hurricane to ever make landfall in the United States struck the Florida Keys (Drye 2002). The hurricane, though powerful, was small, and it made landfall in the sparsely inhabited upper Keys. Thus only 250 non-veterans died. But the hurricane obliterated several camps for veterans working on the overseas highway, killing more than 250 veterans. The Roosevelt administration was widely blamed for not evacuating the veterans in advance despite ample warning from weather forecasters. An evacuation train was sent, but it arrived too late and was itself destroyed. The hurricane likely both inspired veterans to push harder for the bonus, and made it more diffocult for the administration to oppose payment. Public opinion swung in favor of veterans and the bonus amidst news stories questioning the administration’s handling of the disaster.17 A December 1935 Gallup poll found that a majority of Americans favored payment of the bonus.
"In addition to the hurricane, three other factors created a political climate more favorable for the veterans in late 1935. First, 1936 was an election year, making politicians understandably reluctant to alienate a large voting bloc (New York Times, 10/3/35, p. 22). Democratic party leaders, including Roosevelt, were concerned that the demagogic Catholic priest, Father Charles Coughlin, would run in 1936 to the left of Roosevelt. [Actually, of course Coughlin himself couldn't run for president becuase he was born in Canada--but even after the assassination of Huey Long, a Coughlin-*backed* ticket could be worrisome.--DT] Father Coughlin advocated payment of the bonus and had the potential for significant support among veterans (Ortiz 2010). Second, years of high New Deal relief expenditures had made it more difficult for the administration to argue that payment of the bonus was unaffordable (New York Times, 12/1/35, p. 7). Finally, whereas previous iterations of the bonus bill had proposed that the bonus be paid via money creation, the 1936 bill proposed more traditional deficit-financing (Daniels 1971).
"These factors made the passage of the bonus a nearly forgone conclusion. The house and senate passed the bill on January 10th and January 20th. Roosevelt vetoed the bill on balanced budget grounds, but Congress easily overrode the veto, and the bill became law on January 27, 1936. No one doubted this outcome: the administration even began printing bonus application forms before congress voted to override Roosevelt’s veto (Daniels 1971)..."
https://pdfs.semanticscholar.org/5fe6/9df4347b6492d8ed108401b4078897350bf5.pdf
What was the effect of the bonus? To quote the same paper:
"'The gov’t last week paid a soldiers’ bonus of over two billion and as a result the veterans have been buying cars, clothing, etc. Streets are crowded and the highways are jammed with new cars. It begins to look like old times again.'" - Benjamin Roth’s diary, 6/25/1936 (Roth 2009, p. 172).
"The U.S. recovery from the Great Depression was nearly as exceptional as the Depression itself. After falling 27 percent between 1929 and 1933, real GDP rose by 43 percent between 1933 and 1937. Indeed, the economy grew more rapidly between 1933 and 1937 than it has during any other four year peacetime period since at least 1869.1 The most rapid growth came in 1936, when real GDP grew 13.1 percent and the unemployment rate fell 4.4 percentage points.2 Conventional explanations of the rapid recovery emphasize the economy’s self-correcting mechanisms and the effect of expansionary monetary policy and resulting expectations of inflation. The literature almost universally dismisses fiscal policy as a primary source of recovery before World War II.3 Economists have generally accepted E. Cary Brown’s (1956) statement that 'Fiscal policy . . . seems to have been an unsuccessful recovery device in the ’thirties--not because it did not work, but because it was not tried' (pp. 863-866).
"In fact, this paper demonstrates that fiscal policy, though inadvertent, was tried in 1936, and a variety of evidence suggests that it worked. The government paid a large bonus to World War I veterans in June 1936, and I find that within six months veterans spent roughly 70 cents out of every dollar received. A back-of-the-envelope calculation suggests that absent the veterans’ bonus, GDP growth in 1936 would have been about 2.5 to 3 percentage points slower and the unemployment rate 1.3 to 1.5 percentage points higher...."
So--insofar as it made the passage of the veterans' bonus inevitable--the administration's failure to evacuate the veterans from the Florida Keys may have been one factor in FDR's landslide re-election! (I don't want to exaggerate here; the hurricane was only one reason for the passage of the bonus bill. Besides, if the economy in 1936 had grown by "only" 10 percent instead of 13, FDR would still have won, but it might have been closer...)
Last edited: