The beginning of the year 1936 found the Confederate States of America mired, like most of the rest of the world, in the great depression which had brought the markets crashing from New York to Berlin in 1929. Though economic conditions had somewhat improved through the early 1930's, the state of the nation was such that a populist firebrand like Huey Long could sweep into the Gray House on his 'Every Man a King' program in 1934. Despite bombastic rhetoric, and some real progress, especially in the Tennessee Valley where the states of Tennessee, Arkansas, Mississippi, and Louisiana pooled resources in extensive hydroelectric damming projects through 1931 - 1935, as the new year dawned, the CSA was still searching for a way out of the depression, and some sign of what their place would be in a rapidly transforming world.
As President Long convened his cabinet on January 2, 1936, there were many items on the meeting's agenda. The President had commissioned in the last quarter of 1935 an analysis of the armed forces, their capabilities and current technical levels. These analyses all eventually came together in the Graves Report, as it was presented by Chief of Staff William Sidney Graves, and its' findings did not fill the President with confidence. Of the 4 divisions of the Confederate Army, all were still armed with equipment dating back to the Great War, save for the cavalry division of the Confederate Expeditionary Force, currently billeted in Hermosillo. The Air Corps was diminuitive, with a single squadron of interceptors, based in Hermosillo as well, and one squadron of tactical bombers currently based in Norfolk. The Confederate Navy boasted quite a few submarines and warships, but most of the ships had been built either at the end of the Great War, or in the naval building programs initiated in the mid 1920's. In short, the equipment, ships, planes, and in some ways training of the Confederate Armed Forces were all very outdated and in serious need of revision. With this in mind, the Presdient authorized sweeping research programs to improve the arms and equpiment of both infantry and cavalry divisions. He asked researchers at Duke University to begin looking into an update of the venerable old 'Cipher' encryption systems of the Great War. Executives from the Gulf Oil Corporation agreed to expand their agrichemical researches, and ship designers from the Norkolk Naval Yards were commissioned with drawing up designs for a new class of destroyer.
The needs of the military were not the only things on the President's mind as 1936 dawned. As part of his economic revitilization program, President Long authorized two new factory complexes to be built under federal government supervision but using labor and materials from the states where the construction was to take place. Though response in the Congress was lukewarm, owing to the long held and somewhat sacrosanct doctrine of state's rights and federal noninterference, the bill had great popular support as the Southern people wer looking for any way out of a depression that seemed to have some spots of relief but no end in sight. By the middle of January, Long had received the go ahead for his new factories, one near the capital of Richmond, the other in Columbia, South Carolina.
Though none of these moves had any sort of immediate impact on the economic malaise, most of the population of the Confederacy were encoraged by a president who was at least willing to do something, even if there was no precedent or if the move was unpopular politically. Despite having no real concrete progress to show, as 1936 went on, the people of the Confederate States were filled with if not optimism, then at least quiet hope.