The Architecture of New Deal Capitalism

Bringing together an innovative history of architecture, capitalism, and the state, Gabrielle Esperdy’s Modernizing Main Street shows how the business conditions and political programs during the Great Depression intersected and produced a new retail landscape in Main Street America. Through storefront facades—literally the changing face of retail—Esperdy shows how an obscure New Deal finance program, the Modernization Credit Plan (MCP), enabled small business owners to update their storefronts and, in the process, help to prime the pump of the economy. Esperdy emphasizes the capitalist orientation of the New Deal, showing how business-friendly programs like the MCP successfully achieved their goals, and she correctly criticizes much of the existing literature on the New Deal for overly focusing on large-scale monumental architecture, avant garde painting, and socialized public housing. To understand the New Deal’s impact on architecture, we must look to the ubiquitous storefront, not the occasional stadium. Storefronts, she points out, were everywhere. Small business owners, already under pressures that had been mounting in the late 1920s, embraced modern facades, if not always modern business practices, as a way to draw reluctant shoppers into their stores. Manufacturers embraced this financing to sell new materials like structural glass and extruded aluminum. Synthesizing the fiscal and the formal, Esperdy offers a wide variety of historians a new perspective on their own sub-disciplines, while offering a genuinely new perspective on New Deal-era America. Facades might be on the surface but this history of facades is not.

New Deal policymakers seized on business construction as a way to prime the pump of the economy and, to that end, created a novel financing scheme to enable businesses to modernize their buildings. Except for chain stores, during the Great Depression most businesses stopped investing in business construction, which helped to paralyze the economy. At the same time, however, the government did not have the resources to pay for the rebuilding of America’s commercial building stock. Signed into law as Title I of the National Housing Act of 1934, the Modernization Credit Plan emerged within the New Deal as a way to promote building without direct federal spending. As Marriner Eccles, the future Fed chairman and co-author of the MCP, said, the MCP’s aim was to “generat[e] a maximum degree of private spending through a minimum amount of public spending” (p. 56). Rather than fund building directly, the Federal Housing Administration, which administered the MCP, simply insured the loans of banks and other financial institutions. For the lender, the loans were virtually risk-free and for the borrower, they were low-cost. While the program initially emphasized the modernization of private housing, with low loan limits of $2,000, Esperdy shows how within a year—by 1935—the program expanded to include long-term tenants and lessees and to expand the loan limit to $50,000. Creating a supply of capital was not the same as creating the demand for the capital, however.

Businesses still had to be convinced to borrow and to build. Promoted for homeowners as the Better Housing Program, many businesspeople did not realize, at first, that funds were available for them. In an exceptional contortion of language, the FHA began to promote the MCP for business loans with the slogan: “Modernize Main Street: Better Housing for American Business” (p. 84). Simple slogans were not enough, however, to convince businesses to borrow. If their buildings were not falling apart, why should they borrow in the midst of a depression? Though market-oriented, the success of the MCP relied not on the natural operations of the market but on an active marketing campaign, based on the hard work of FHA-paid salesmen as well as the enthusiasm of local businesses and civic organizations. The FHA cultivated the ambitions of local businesspeople to lead in their communities, enabling the MCP initiatives to appear local while at the same time marshalling the resources of...