1933 - 1941Roosevelt and the New Deal

1933 - 1939

Chapter 18

Intro 1

Section 1-5

Roosevelt’s Rise to Power

• In 1932, the Republicans nominated Herbert Hoover to run for a second term as president.

• The Democrats selected New York Governor Franklin Delano Roosevelt. Roosevelt became the first to deliver an acceptance speech to a nominating campaign.

Section 1-6

• Roosevelt’s policies to end the depression became known as the New Deal.

• Roosevelt won the election in a landslide.

• Roosevelt came from a wealthy New York family; was educated at Harvard and Columbia Law School.

• He was a distant cousin of President Theodore Roosevelt.

• He married TR’s niece, Eleanor.

Section 1-7

• Roosevelt’s political career began in 1910, with a seat in the New York State Senate where he supported progressive reform and opposed party bosses.

• He was appointed Assistant Secretary of the Navy by Woodrow Wilson.

• In 1920 he caught polio, a paralyzing disease with no cure.

• Roosevelt did not give in to the crippling disease.

• He relied on his wife, Eleanor, to keep his name prominent in politics.

Section 1-8

• Roosevelt narrowly won the race for New York governor.

• During his term as governor, Roosevelt used government power to help people deal with the economic challenges of the time.

• His struggle with polio let people feel he could under- stand their hardships.

• His popularity in New York paved the way for his run for president.

Section 1-10

Roosevelt Is Inaugurated

• Franklin Roosevelt won the November 1932 presidential election, but his inauguration would not occur until March 1933.

• During this time, unemployment continued to rise, bank runs increased, and people began converting their money into gold.

Section 1-11

• Some bank runs occurred out of fear that Roosevelt would end the gold standard, which would reduce the value of the dollar.

• At that time, an ounce of gold equaled a set number of dollars.

• To reduce the value of the dollar, the United States would have to stop exchanging dollars for gold.

Section 1-12

• People began taking gold and currency out of banks, resulting in over 4,000 banks collapsing by March 1933.

• Many governors declared bank holidays, which closed the remaining banks before bank runs could put them out of business.

End of Section 1

Section 2-4

Will Rogers

Section 2-5

The Hundred Days Begins

• Between March 9 and June 16, 1933, referred to as the Hundred Days, FDR sent many bills to Congress.

• Congress passed 15 major acts to help the economic crisis.

• These programs made up the First New Deal.

Section 2-6

• To generate new ideas and New Deal programs, Roosevelt put together a group of advisers in the fields of academia, business, agriculture, government, law, and social work.

Section 2-7

• Roosevelt’s advisers were divided into three main groups.

• The first group supported the “New Nationalism” of Theodore Roosevelt and believed government and business should work together to manage the economy.

• The second group distrusted big business and wanted government planners to run key parts of the economy.

• The third group supported the “New Freedom” of Woodrow Wilson and felt it was the government’s responsibility to restore competition to the economy.

Section 2-10

Fixing the Banks and the Stock Market

• When Roosevelt took office, he knew the first thing he needed to do was to restore confidence in the banking system.

• He called a national bank holiday and called Congress into special session.

• Congress passed the Emergency Banking Relief Act, which required federal examiners to survey the nation’s banks and issue Treasury Department licenses to financially sound banks.

Section 2-11

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• In FDR’s first “fireside chat,” on the radio, he assured listeners that the banks were now secure.

• The following day deposits in every city outweighed withdrawals, ending the banking crisis.

Section 2-12

• New regulations for banks and the stock market were implemented with the Securities Act of 1933 and the Glass-Steagall Banking Act.

• Under the Securities Act of 1933, companies that sold stocks and bonds had to provide complete and truthful information to investors.

• The Securities and Exchange Commission (SEC) was created to regulate the stock market and prevent fraud.

Section 2-14

• The Glass-Steagall Act separated commercial banking from investment banking.

• It no longer allowed depositors’ money to be risked by speculating on the stock market.

• It created the Federal Deposit Insurance Corporation (FDIC); provided government insurance for bank deposits up to a certain amount.

Section 2-16

Managing Farms and Industry

• Roosevelt asked Congress to pass the Agricultural Adjustment Act – a plan that paid farmers not to raise certain crops to lower crop production.

• The act was administered by the Agricultural Adjustment Administration (AAA).

• While the plan reduced production, increased prices, and helped some farmers, thousands of tenant farmers were unemployed and homeless.

Section 2-18

• The National Industrial Recovery Act (NIRA) suspended antitrust laws and allowed business, labor, and government to cooperate in setting up voluntary rules, known as codes of fair competition, for each industry.

• The program was run by the National Recovery Administration (NRA), and it urged consumers to buy only from companies who signed agreements with the NRA.

Section 2-19

• The gains of the NRA were short-lived and actually caused industrial production to fall.

• It was declared unconstitutional by the Supreme Court in 1935.

Section 2-21

UnemployedAmericans during the worst of the Depression years.

Providing Debt Relief • Several policies were introduced by FDR to

help Americans deal with their debt.

Section 2-22

• The Home Owners’ Loan Corporation (HOLC) bought the mortgages of homeowners behind on payments and restructured them with longer terms of repayment and lower interest rates.

• The HOLC gave loans only to those employed. • It foreclosed on property if payment could not be

made. • The result was 100,000 foreclosures. However,

the HOLC refinanced 1 out of every 5 mortgages in the United States.

Section 2-23

• The Farm Credit Administration (FCA) was established to help farmers refinance their mortgages.

• While the FCA loans helped many farmers in the short term, the loans may have slowed overall economic recovery by giving money to poor inefficient farmers instead of to businesses.

Section 2-25

Spending and Relief Programs

• Roosevelt supported a series of government agencies to begin work programs for the unemployed.

• The Civilian Conservation Corps (CCC) gave unemployed men aged 18 to 25 the opportunity to work with the national forestry service planting trees, fighting forest fires, and building reservoirs.

• By the time it closed in 1942, the CCC had employed three million men.

Section 2-26

• The Federal Emergency Relief Administration (FERA) was created to channel money to help state and local agencies fund relief projects.

• In 1933 Congress authorized the Public Works Administration to begin a series of construction projects, creating additional jobs.

Section 2-27

• Harry Hopkins, the head of FERA, set up the Civil Works Administration (CWA), which hired workers directly and put them on the government payroll.

• It was shut down when Roosevelt became fearful of the amount of money spent on the program.

Section 2-28

• The most important aspect of Roosevelt’s New Deal was the change in the spirit of the American people.

• People became hopeful and optimistic, and their faith in America was restored.

M/C 2-1

M/C 1-1a

End of Section 2

Section 3-4

Harry

Hopkins

Section 3-5

Challenges to the New Deal

• Support of Roosevelt and his New Deal began to fade in 1935.

• The effectiveness of the New Deal was questioned by right and left wing politicians.

• Roosevelt used deficit spending to pay for the New Deal.

• He abandoned a balanced budget and borrowed money to pay for his programs.

Section 3-6

• The American Liberty League was created as business leaders and anti-New Deal politicians from both parties organized to oppose the New Deal.

Section 3-7

• Left-wing Democratic senator Huey Long proposed taking property from the rich and dividing it up among the poor.

• Charles Coughlin, a Catholic priest in Detroit, gave further support to Huey Long through his popular radio broadcast.

Charles Coughlin

Huey Long

Section 3-8

• Dr. Francis Townsend, a former public health official, proposed that the federal government pay citizens over the age of 60 a pension of $200 a month.

• This would increase spending and create additional jobs for younger people.

Dr. Francis Townsend

Section 3-10

Launching the Second New Deal

• In 1935 Roosevelt’s second New Deal began with a series of programs and reforms to speed up recovery and provide economic security to every American.

• Roosevelt hoped the plan would increase his chances of being reelected in 1936.

Section 3-11

• The Works Progress Administration (WPA) was a federal agency headed by Harry Hopkins.

• It spent $11 billion over several years creating jobs for workers.

The Riverwalk in San Antonio was one of many WPA projects.

A mural painted on a wall in a public building. The artist’s work was financed by the Works Progress Administration with

tax dollars.

• The WPA’s most controversial aspect was offering work to artists, musicians, theater people, and writers.

Section 3-12

• In the Supreme Court case Schechter v. United States, the court struck down the National Industrial Recovery Act.

• The Court ruled that the Constitution did not allow Congress to delegate its powers to the executive branch.

• It ruled the NIRA codes unconstitutional.

Section 3-13

• Roosevelt feared that the Court would strike down the New Deal.

• He ordered Congress to remain in session until his new bills were passed.

• This was nicknamed the “second hundred days” by the press.

Section 3-15

The Rise of Industrial Unions

FDR believed that:

More labor unions

Higher wages

More spending

Better economy!!!

Section 3-16

• 1935 - National Labor Relations Act (Wagner Act) was passed, guaranteeing workers the right to organize unions without employer interference.

• The law set up the National Labor Relations Board (NLRB), which organized factory elections by secret ballot to determine if workers wanted to form a union.

Section 3-17

• Binding arbitration was also set up. A neutral party would listen to both sides and decide the issue.

• This gave dissatisfied union members a process to voice their complaints.

• In 1935 the Committee for Industrial Organization (CIO) was formed to organize industrial unions.

Section 3-18

• After two union men were demoted at the General Motors auto-body plant in Cleveland, Ohio, workers protested with a sit-down strike where they stopped working but refused to leave the plant.

• Workers at the company’s plant in Flint, Michigan, did the same.

Section 3-19

• The United Auto Workers (UAW) was formed and quickly became one of the most powerful unions in the United States.

Section 3-21

The Social Security Act

• The Social Security Act, passed in 1935, provided security for the elderly, unemployed workers, and other needy people.

• It would provide a monthly retirement benefit and unemployment insurance.

• Workers earned the right to receive the benefits by paying premiums.

Section 3-22

• Social Security helped many people, but initially it left out many of the neediest members of society, such as farmers and domestic workers.

Unemployed men signing up for

Social Security benefits.

End of Section 3

Section 4-4

Section 4-5

FDR’s Second Term• Millions of voters owed their jobs, homes, and bank accounts to the New Deal. • By the election of 1936, Democrat Party membership shifted from mainly white Southerners to include farmers, laborers, African Americans, new immigrants, ethnic minorities, women, progressives, and intellectuals. • First Lady Eleanor Roosevelt persuaded her husband to address some of their concerns in his New Deal programs. Ex: Secretary of Labor, Frances Perkins, was the first woman appointed to a cabinet post.

Section 4-6

• Roosevelt won the 1936 election in one of the biggest landslides in American history.

Section 4-7

• The Supreme Court did not support the FDR’s New Deal programs.

• In January 1936, the Court declared the Agricultural Adjustment Act to be unconstitutional.

• After the election, FDR tried to change the political balance of the Supreme Court with a court-packing plan.

Section 4-8

• Roosevelt sent Congress a bill to increase the number of justices on the Supreme Court.

• It was a political mistake and split the Democrat Party.

• Americans felt it would give the president too much power.

Section 4-9

By 1937, FDR had another problem….the government was spending too much money on New Deal programs, so he cut some of them.

Unemployment skyrocketed AGAIN!

Debate on what to do……..

Section 4-10

• Treasury Secretary Henry Morgenthau wanted to balance the budget and cut spending.

• The opposition pushed for more government spending.

• They supported “Keynesianism,” the theories of British economist John Maynard Keynes.

• In his book, he argued that the government needed to spend heavily during a recession to jump-start the economy. (deficit spending)

• In 1938 Roosevelt asked Congress for $3.75 billion for the PWA, WPA, and other programs.

Section 4-13

The Last New Deal Reforms

• Roosevelt’s successes were limited in his second term in office.

• The Farm Security Administration gave loans to tenant farmers to purchase farms.

• The Fair Labor Standards Act of 1938 gave protection to workers, abolished child labor, and created a 40-hour workweek for workers.

• New Deal legislation began to get blocked as Congress began to turn against the New Deal.

• The New Deal era ended by 1939.

M/C 3-1

Section 4-17

The Legacy of the New Deal

• The New Deal had limited success, but…..

* Gave Americans a stronger sense of security

* Helped to balance competing economic interests

* Established the broker state, which helped work out conflicts among different

interests

* New public attitude toward government

* Gave Americans a safety net that provided safeguards and relief programs to protect

them from economic disaster

End of Section 4

Chapter Summary 1

Chapter Assessment 1

Reviewing Key TermsDefine Match the terms on the right with their definitions on the left.

__ 1. process whereby a neutral party hears arguments from two opposing sides and makes a decision that both must accept

__ 2. role of the government to work out conflicts among competing interest groups

__ 3. a monetary standard in which one ounce of gold equaled a set number of dollars

__ 4. method of boycotting work by refusing to work but refusing to leave the establishment

A. gold standard

B. fireside chats

C. deficit spending

D. binding arbitration

E. sit-down strike

F. Social Security Act

G. broker state

H. safety net

G

A

D

E

Chapter Assessment 2

Define Match the terms on the right with their definitions on the left.

__ 5. radio broadcasts made by FDR to the American people to explain his initiatives

__ 6. something that provides security against misfortune; specifically, government relief programs intended to protect against economic disaster

__ 7. government practice of spending borrowed money rather than raising taxes, usually an attempt to boost the economy

H

C

B A. gold standard

B. fireside chats

C. deficit spending

D. binding arbitration

E. sit-down strike

F. Social Security Act

G. broker state

H. safety net

Chapter Assessment 3

Define Match the term on the right with its definition on the left.

__ 8. a law requiring workers and employers to pay a tax; the money provides a monthly stipend for retired people

F A. gold standard

B. fireside chats

C. deficit spending

D. binding arbitration

E. sit-down strike

F. Social Security Act

G. broker state

H. safety net