THE GREAT DEPRESSION AND THE NEW DEAL

Chapter 34

FDR: A Politician In A Wheelchair

Voters in a foul mood in 1932. Numerous businesses closed; 11 Mill. out of

work. Depression is deepening. No one could receive a bank loan. The

unemployment rate was 25% and higher in major industrial and mining centers. The agricultural sector was possibly in worse shape than the industrial sector. Farmers were having difficulties selling their products and a part of the country known as the dust bowl . Mortgages were being foreclosed by tens of thousands

Hoover renominated by Republicans without great enthusiasm.

Dems nominate FDR.

Eleanor Roosevelt

Eyes of FDR Early Civil Rights advocate Lefty Probably the most active

first lady in history

Do what you feel in your heart to be

right- for you'll be criticized anyway. You'll be damned if you do, and damned

if you don't. Eleanor Roosevelt

FDR FDR easily nominated by Dems. Premier orator of his generation. Commanding and electric

personality with incredible charm. Strong believer in the need of

government to relieve the suffering of the “forgotten man”

Roosevelt broke precedent by giving acceptance speech to convention. Called for a “New Deal” for America.

1932 Campaign FDR’s campaign is long on energy but vague on details.

Preached a New Deal and new benefits and hope.

Brain Trust Theme song (and

theme): Happy Days are Here Again.

Hoover: “It Could be Worse”

Hoover campaigns on idea that prosperity is just around the corner—stay the course. Doesn’t generate much enthusiasm.

Hoover has been beaten down by

Depression

Runs on the idea that Roosevelt will make things worse.

Hoover doesn’t stand a chance.

The Humiliation Of Hoover In 1932

FDR wins 22 Mill to 15 Mill; 472-59 in EC. Hoover carries only 6 staunchly republican states.

Beginning of shift of black voters from Rep. party to Democratic Party.

Was an easy win. Public blamed Republicans for Depression and were crying out for change.

Depression worsens during the lame-duck period. (Nov. to March)

Hoover-Roosevelt deadlock 20th Amendment adopted in 1933.

Election of 1932

FDR And The Three Rs

Hundred Days FDR has an unprecedented

mandate FDR’s philosophy. Three Rs:

Relief Recovery Reform

Many of the reforms were old ideas from the Progressive Movement

Roosevelt Tackles Money

Banking Crisis most immediate problem

Emergency Banking Relief Act of 1933. Act allowed a plan that would close

down insolvent banks and reorganize and reopen those banks strong enough to survive

Fire-side chat. The fireside chats were a series of

thirty evening radio speeches given by United States President Franklin D. Roosevelt between 1933 and 1944.

Roosevelt Tackles Money

Glass-Steagall Banking Reform Act. FDIC

Included banking reforms, some of which were designed to control speculation.[1] Some provisions such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings account.

Prohibited a bank holding company from owning other financial companies

Roosevelt Tackles Money

Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce.

Violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. Most citizens who owned large amounts of gold had it transferred to countries such as Switzerland

Bank Failures Before and after the Glass-Steagall Banking Reform Act of 1933

Unemployment, 1929–1942

Creating Jobs For The Jobless

Unemployment is 1-in-4, highest in nation’s history, before or after.

Civilian Conservation Corps. Unemployed, unmarried men, ages 18–25,

between 1933-42 Members received a base pay of $30 per

month and lived in work camps that were generally operated by the Department of War.

About 3 million men received employment on projects that included such work as reforestation, construction of fire-observation towers, laying of telephone lines, and development of state parks.

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Creating Jobs For The Jobless

Federal Emergency Relief Act Money for states for jobs programs FERA's main goal was to alleviate adult

unemployment. In order to achieve this goal, FERA provided

state assistance for the unemployed and their families.

From when it began in May 1933 until it closed its operations in December 1935, it gave states and localities $3.1 billion to operate local work projects and transient programs.

FERA camp in Pennsylvania

Creating Jobs For The Jobless Agricultural Adjustment Act

Restricted agricultural production paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops.

The farmers were paid subsidies by the federal government for letting a portion of their fields lay fallow.

The Act created a new agency, the Agricultural Adjustment Administration, to oversee the distribution of the subsidies.

It is considered the first modern U.S. farm bill. tax underwriting the AAA was declared

unconstitutional by the Supreme Court in the case United States v. Butler, because, among other stated reasons, it taxed one farmer in order to pay another.

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Rise of Demagogues Huey Long-Louisiana Governor/Senator who advocated a Share the Wealth program

Father Charles Coughlin

National Recovery Administration

Most ambitious of the early New Deal programs

NRA allowed industries to create "codes of fair competition and to help workers by setting minimum wages and maximum weekly hours. It also allowed industry heads to collectively set minimum prices.

Enforcement Massive publicity campaigns

designed to make selfless participation in NRA seem patriotic.

NRA, Cont.

Led to short-term rise in production and economy. About 23,000,000 people worked under the NRA fair code.

However, violations of codes became common and attempts were made to use the courts to enforce the NRA.

The NRA was discovering it could not enforce its rules. Black markets grew up

Schecter Poultry Corp. v. US 295 U.S. 495 (1935), the Supreme Court declared the NRA as unconstitutional because it attempted to regulate commerce that was not interstate in character, and that the codes represented a unacceptable delegation of power from the legislature to the executive

Work Progress Administration

Created in 1935 Harry Hopkins.

Employment on useful projects 11 Billion spent building public

buildings and parks, bridges and roads.

Over 8 years, 9 Mill. given jobs. It fed children and redistributed

food, clothing and housing. Almost every community in America has a park, bridge or school constructed by the agency

Creating Jobs For The Jobless Home Owners’ Loan Corp.

established in 1933 by the Homeowners Refinancing Act

Its purpose was to refinance homes to prevent foreclosure. It was used to extend loans from shorter loans to fully amortized, longer term loans (typically 20-25 years).

Through its work it granted long term mortgages to over a million people facing the loss of their homes.

The HOLC stopped lending circa 1935, once all the available capital had been spent.

Creating Jobs For The Jobless

Civil Works Administration— Established to create manual labor jobs for

millions of unemployed. The jobs were merely temporary, for the duration of the hard winter.

The CWA was a project created under the Federal Emergency Relief Administration (FERA). The CWA created construction jobs, mainly improving or constructing buildings and bridges. It ended on March 31, 1934, after spending $200 million a month and giving jobs to 4 million people.

CWA provided much employment there were many taxpayers who saw leaves being raked but nothing of permanent value. society

Public Works Administration

Public Works Administration (PWA) designed to help industries and the unemployed.

Under the Sec. of Interior Harrold Ickes Primary purpose 4 Billion to be spent on 34,000 public

projects such as buildings, highways and parks.

Dust Bowls And Black Blizzards

Late in 1933 prolonged drought hits the trans-Miss. Great Plains.

No rain, high heat, high winds and over-tilling of land Great storm clouds of dust that would sweep over towns.

Dust Bowl

Diaspora of farmers from Kansas, Oklahoma Texas and Eastern Colorado. Grapes of Wrath.

Frazie-Lemke Farm Bankruptcy Act (1934).

Resettlement Administration relocates farmers to better land and plants trees across the prairie to act as wind-breaks

Indian New Deal

Indian New Deal Wheeler-Howard Act Indian Reorganization Act of 1934. Essentially does away with the Dawes Act. Allows tribes to re-establish tribal governments

and to preserve their culture.

Battling Bankers And Big Business

Congress determined to fix the problems in the financial sector that had led to the stock crash.

Truth in Securities Act. Securities and Exchange

Commission (SEC) to help enforce and to act as a watchdog.

Also strict regulations of public Utility holding companies

The TVA

Two problems: Electric utilities. Tenn. River valley.

Hundred Days Congress passes an Act creating Tennessee Valley Authority (TVA).

Damn Tennessee river and tributaries to build electric power stations.Goals?

Map 34.2: TVA Area

TVA Assessed

Although criticized as socialism, was a huge success Brought employment Brought recreational area Flood Control Cheap Power Soil restoration and reforestation

Led to similar federally-funded flood control projects on other rivers Columbia, Colorado, and Missouri.

Power and water from these projects helped the development of the west.

Housing Reform

Federal Housing Authority (1934). Very successful and popular. Outlives the New

Deal. to improve housing standards and conditions; to

provide an adequate home financing system through insurance of mortgage loans; and to stabilize the mortgage market

Social Security Social Security Act of 1935 one of

most significant New Deal achievements. Federal and state unemployment

insurance to cushion the blow of future economic downturns.

Old-age pensions to give a security net to the elderly

Financed by payroll taxes paid by both employers and employees.

Criticized by Republicans as Socialism.

A New Deal For Unskilled Labor

Wagner (National Labor Relations) Act of 1935. Milestone victory for Labor.

Right to organize unions Prompts new union organization

by unskilled workers. Creates the National Labor

Relations Board NLRB.

A New Deal For Unskilled Labor

John L. Lewis. Boss of United Mine Workers, he formed the CIO within the AFL in 1935.

Lewis takes the CIO out of the AFL. Sit-Down strike against GM

Rise and Decline of Organized Labor

Roosevelt’s Coddling Of Labor Unskilled workers pressed their advantage and took

on US Steel. Little Steel savagely resisted. 1937, Memorial Day

Massacre, 20 or so killed 1938 Fair Labor Standards Act.

The FLSA established a national minimum wage,[3]

guaranteed 'time-and-a-half' for overtime in certain jobs,[

and prohibited most employment of minors in "oppressive child labor," a term that is defined in the statute

CIO broke completely with the AFL in 1938 and becomes the Congress of Industrial Organizations, By 1940 has 4 Mill, including 200,000 blacks.

Election of 1936

Democrats were riding high. Republicans nominate Alf

Landon of Kansas. Democrats blame

Republicans for depression Republicans claim New

Deal is inefficient and waste of money.

Was a bitter campaign. Shades of class warfare.

Roosevelt wins easily

Court-Packing

Roosevelt saw the Supreme Court as biggest obstacle to New Deal.

Reasons Court had ruled against Roosevelt In 7

of 9 New Deal cases Court had many ultra-conservative

hold-overs from Laissez faire. Six were over 70. None had been appointed by FDR.

Appoint an additional Justice to the U.S. Supreme Court for every sitting member over the age of 70½, up to a maximum of six.

Court-Packing

Roosevelt misjudged badly. Roosevelt is resoundingly

vilified. Court, though, did respond.

Owen Roberts "the switch in time that saved

nine”?

One of the oldest conservatives resigns.

Undercuts support for Roosevelt plan.

The Twilight Of The New Deal

In FDR’s first term recovery had been modest.

1937. “Roosevelt” recession. Causes

John Maynard Keynes; deficit spending.

The deficits run are still much too small to cure the depression.

But major departure in the practice of government spending that lasts for many years.