A New Deal Fights the Depression

Chapter 15-1

Americans Get A New Deal• By the 1932 election it was clear that

Americans were ready for a new leader

• The election would pit the Democratic candidate Franklin Roosevelt against Hoover

• By this time had come to blame Hoover for the economic crisis as well as for lack of relief by the government

• FDR was a reformed minded Governor from NY

• In the end FDR won an overwhelming victory over Hoover

• The Democrats also won the majority in both the House & in the Senate as well

Waiting For Roosevelt To Take Over• It would be four months before FDR

would enter the White House but he would not sit idlely by as he would begin assembling his advisors

• He would draw from all aspects of society; business, education. Lawyers, journalists, etc.

• His advisors would become known as the “Brain Trust”

• His plan was to create & try everything that could be conceived of, keeping what worked & discarding what did not

• His programs would become known as the New Deal

• This New Deal would focus on three general goals

1. Relief for the needy2. Economic recovery3. Financial reform

The Hundred Days• Once in office FDR launched a period of great activity which became known as

the Hundred Days• It was during this period that FDR & Congress passed more than 15 pieces of

major New Deal Legislation• These new laws & programs would expand the governments role into our

nations economy like never before• His first step was to address the crisis in the banking & finance area• On the day after taking office FDR closed all banks declaring a “bank holiday”• He then persuaded congress to pass the Emergency banking Relief Act which

would allow examiners to inspect the books of all banks allowing only those that were sound to reopen

• Those that were insolvent, unable to pay their debts, were closed• This generated great confidence in the system

An Important Fireside Chat• On March 12, a day before the banks

were to reopen, FDR went over the radio to give the first of what was to become many “fireside chats”

• These charts were informal speeches informing the public on new policy & what was being done to combat the crisis at hand

• The speeches made Americans feel as though they were having a personal conversation with the President

• The first chat would be over the importance of keeping their savings in a newly opened bank

Regulating Banking & Finance• Congress took another step in shoring up

the banking system as they passed the Glass-Steagall Act

• This act would establish the Federal Deposit Insurance Corporation (FDIC)

• This would insure all deposits up to $5,000 by the federal government

• Congress also worked to regulate the stock market as the Federal Securities Act was passed that required corporations to provide complete information on all stock offerings

• The Securities Exchange Commission (SEC) was also created to prevent inside trading

• In addition FDR was able to convince congress to allow the manufacture of some alcohol in order to gain revenue

• Prohibition would later be repealed by the 21st Amendment in 1933

Rural Assistance• Along with banking reform FDR

would also attempt to help those most hit by the Depression……the farmers

• The Agricultural Adjustment Act was passed

• The AAA sought to raise crop prices by paying farmers to leave fields unplanted as well as destroying crops & even livestock ready for market

• Another government venture was the Tennessee Valley Authority which would build a series of dams that would produce electricity, create jobs as well as assist in flood control

Providing Work Projects• Other work projects were created to aid in the recovery• The Civilian Conservation Corps was one such project• It was here that young men between the ages of 18 & 25 were put to work

building parks, roads, planting tress, etc…• By the end of the program more than 3 million men had been employed• The men were paid $30 a month & out of that $25 was automatically sent home

to assist the family• The men were also given uniforms, room, & food• The Public Works Administration (PWA) was also created as part of the National

Industrial Recovery Act• The PWA provided money to states for the purpose of constructing new schools

& public buildings• When this didn’t make a great enough dent in the unemployment rate FDR

created the Civil Works Administration (CWA) to create more jobs

Promoting Fair Business Practices• The NIRA also sought to

establish fair business practices by establishing new codes or laws

• The National Recovery Administration (NRA) would also be established to set prices & establish standards

• The goal of the NRA was to slow layoffs, falling prices, & wage cuts

• Many would criticize the NRA as serving the interests of big business

Food, Clothing, & Shelter• A number of programs would

deal with the housing crisis• The Home Owners Loan

Corporation (HOLC) would be created to make low interest loans to homeowners

• In addition the Federal Housing Agency (FHA) was also created to furnish home mortgages

• Another program was Federal Emergency Relief Administration (FERA) which would supply over $300 million in direct relief to those in need

The New Deal Comes Under Attack• By the end of the Hundred days

millions od Americans had benefited form the New Deal Programs

• In addition confidence in the nations ability to recover had been restored

• Although FDR knew the policy of deficit spending, spending more than you have, was not the long term answer he knew it was a necessary evil

• Many opposed this tactic in spite of the challenges

• Opposition would come from both the liberal side, who believed that he did not go far enough, & the conservatives who believed he went to far

The Supreme Court Reacts• Some New Deal legislation would be

challenged in the courts• The Supreme Court would rule the NIRA

unconstitutional as well as the AAA• The court said the Federal government

had encroached on state powers as well as gave legislative powers to the executive branch

• In fear that the court may try to influence or strike down further New Deal legislation FDR proposed a reorganization of the Supreme Court

• He proposed appointing six new members, all that would support his ideas for recovery

• This “court-packing” idea created a storm of protest

• In the end FDR would get hiss way as he would appoint seven new justices through the established method

Three Fiery Critics• Some of the toughest critics would

come from the conservative side• Father Charles Coughlin who was a

priest from Detroit who conducted a weekly radio show

• Dr. Francis Townsend who would propose a health plan for the elderly

• Huey Long who would propose a share the wealth plan of giving some to all

• Long was achieving the most success as he coveted the White House but he would be assassinated

• FDR knew by this time that he had accomplished many things but he also knew the toughest road to recovery still lie ahead