Chapter  34  -­‐  The  Great  Depression  and  the  New  

Deal  

FDR:  A  Poli+cian  in  a  Wheelchair    

 1921-­‐  FDR  stricken  with  polio-­‐  humbled  him  

 Eleanor  Roosevelt-­‐  another  of  FDR’s  great  personal  and  poliFcal  assets-­‐  she  would  become  the  most  acFve  First  Lady  in  history  

 FDR’s  background-­‐  Democrat,  Gov.  of  New  York  (followed  same  path  as  TR)  

Presiden+al  Hopefuls  of  1932    •  FDR-­‐    

–  Preached  “New  Deal  for  the  forgoPen  man”  

–  Speeches  were  constructed  by  his  “Brain  Trust”  

–  “Happy  Days  are  Here  Again.”  •  Hoover  

–  FDR  would  plunge  naFon  deeper  into  the  depression  

–  “The  Worst  Is  Past”  –  Hard  to  compete  with  FDR’s  

opFmism  and  promises  

ElecFon  Results  of  1932  

Hoover's  Humilia+on  in  1932    •  Striking  feature  of  the  ElecFon  

of  1932-­‐TransiFon  of  the  Black  vote  from  the  Republican  to  the  DemocraFc  Party.    

•  During  the  lame-­‐duck  period,  Hoover  tried  to  iniFate  some  of  Roosevelt’s  plans,  but  was  met  with  resistance.    

•  Hooverites  would  later  accuse  FDR  of  leXng  the  depression  worsen  so  that  he  could  emerge  as  an  even  more  shining  savior.    

FDR  AND  THE  THREE  R’S:  RELIEF,  RECOVERY,  AND  REFORM    

•  “The  only  thing  we  have  to  fear  is  fear  itself.”    

•  Called  for  a  naFonwide  bank  holiday  (March  6-­‐10)  to  eliminate  paranoid  bank  withdrawals  

•  New  Deal  Programs  had  3  goals-­‐  RELIEF,  RECOVERY,  REFORM  –  Relief  and  Recovery  were  

short-­‐range  goals,  especially    in  the  first  2  years  

–  Long-­‐range  goals  were  permanent  recovery  and  reform  

•  First  Hundred  Days  of  FDR’s  administraFon,  Congress  passed  many  essenFals  of  the  New  Deal  –  Congress  gave  FDR  blank-­‐check  

powers  –  Most  reforms  were  from  the  

Progressive  movement  of  pre-­‐WWI  •  Unemployment  insurance  •  Old-­‐age  insurance  •  Minimum  wage  regula+ons  •  Conserva+on  and  development  of  natural  resources  

•  Restric+ons  on  child  labor  

Roosevelt  Manages  the  Money    •  The  Emergency  Banking  

Relief  Act  of  1933  –  Treasury  officials  to  

examine  the  banks  and  reopen  only  those  that  could  pay  their  debt  

•  Glass-­‐Steagall  Banking  Reform  Act  –  provided  for  the  FDIC  

(insured  individuals  up  to  $5,000)  

Crea+ng  Jobs  for  the  Jobless  •  1  in  4  workers  were  jobless  when  

FDR  became  president-­‐  began  creaFng  agencies  and  organizaFons  to  help  the  workers  

•  Civilian  Conserva+on  Corps  (CCC)  –  Provided  employment  in  fresh-­‐air  

government  camps  for  about  3  million  uniformed  young  men.    

–  Reforested  areas,  fought  fires,  drained  swamps,  controlled  floods,  etc.    

Crea+ng  Jobs  

•  Federal  Emergency  Relief  Act-­‐    –  looked  for  immediate  relief  rather  than  long-­‐term  recovery  

–  Created  the  Federal  Emergency  Relief  Administra+on  (FERA)-­‐  headed  by  Harry  L.  Hopkins.    

•  Agricultural  Adjustment  Act  (AAA)    –  ONE  aspect  made  available  many  millions  of  dollars  to  help  farmers  pay  their  

mortgages.    

•  Home  Owners’  Loan  Corpora+on  (HOLC)  –   Refinanced  mortgages  on  non-­‐farm  homes,  helped  about  one  million  families    

•  Civil  Works  Administra+on  (CWA)    –  Established  late  in  1933,  designed  to  provide  purely  temporary  jobs  during  the  

winter  emergency-­‐  also  headed  by  Hopkins  

Cri+cs  of  the  New  Deal  

•  Father  Charles  Coughlin  

•  “Social  JusFce”  •  Catholic  priest  from  Michigan  

•  AnF-­‐SemiFc,  fascist  • Would  be  silenced  by  his  superiors  in  1942  

A  Day  for  Every  Demagogue    

•  Huey  P.  Long  –  Senator  from  Louisiana  –  “Share  the  Wealth”  promised  each  family  $5,000  at  the  expense  of  the  rich  

–  Later  shot  by  an  assassin  in  1935  

A  Day  for  Every  Demagogue    

– Dr.  Francis  E.  Townsend  •  ReFred  physician  •  Support  of  5  million  “senior  ciFzens”    •  Plan  for  each  senior  ciFzen  to  receive  $200  month  

HELPING  INDUSTRY  AND  LABOR  

•  The  Na+onal  Recovery  Administra+on  (NRA)  –  Most  complicated/far-­‐reaching  

of  the  programs    –  Designed  to  assist  industry,  

labor,  and  the  unemployed.    –  There  were  maximum  hours  of  

labor,  minimum  wages,  and  more  rights  for  labor  union  members  •  right  to  choose  their  own  representaFves  in  bargaining.    

•  Yellow  Dog  Contracts  forbidden  

•  RestricFons  on  child  labor  

Helping  Industry  and  Labor    •  NRA  declared  uncons+tu+onal  

by  US  Supreme  Ct.    –  Schechter  Case  (1935)-­‐  “sick  

chicken”  case  –  Congress  cannot  delegate  

legislaFve  powers  to  the  execuFve  branch  (president)  

–  Congress  tried  to  control  commerce  within  a  state  (NY)  

•  Prohibi+on  was  repealed  with  21st  Amendment  (1933)  –  Need  to  raise  money  –  Provide  employment  

–  The  Public  Works  Administra+on  (PWA)  •  Intended  both  for  industrial  recovery  and  for  unemployment  relief.    

•  Headed  by  Secretary  of  the  Interior  Harold  L.  Ickes    

•  Aim-­‐  long-­‐range  recovery  by  spending  over  $4  billion  on  some  34,000  projects  that  included  public  buildings,  highways,  and  parkways  (i.e.  the  Grand  Coulee  Dam  of  the  Columbia  River).    

Paying  Farmers  Not  to  Farm    •  Farmers  had  been  suffering  ever  since  the  end  of  WWI  •  Congress  established  the  Agricultural  Adjustment  

Administra+on  (AAA)  –  Paid  farmers  to  reduce  their  crop  acreage  and  

would  eliminate  price-­‐depressing  surpluses.    –  Would  raise  money  by  taxing  processors  of  farm  products-­‐  increased  cost  of  

products  for  consumers  –  Increased  unemployment.    –  Ended  by  Supreme  Ct.  in  1936-­‐  taxaFon  provisions  were  unconsFtuFonal    

•  Soil  Conserva+on  and  Domes+c  Allotment  Act  of  1936  –  Paid  farmers  to  plant  soil-­‐conserving  plants  (soybeans)  or  to  let  their  land  lie  

fallow.    •  The  Second  Agricultural  Adjustment  Act  of  1938  

DUST  BOWLS  AND  BLACK  BLIZZARDS  

•  Dust  Bowl  Causes  –  Drought  of  1933    –  Furious  Winds    –  Dry-­‐farming  techniques  (steam  

tractor  and  disk  plow)  –  LOCATION:  Parts  of  Missouri,  Texas,  

Kansas,  Arkansas,  and  Oklahoma  

•  Forced  many  farmers  to  migrate  to  California  and  inspired    

•  Steinbeck’s  The  Grapes  of  Wrath    

Dust  Bowls  and  Black  Blizzards    •  Frazier-­‐Lemke  Farm  Bankruptcy  

Act  (1934)  –  suspension  of  farm  mortgage  

foreclosure  for  five  years  –  Voided  in  1935  by  the  Supreme  

Court.    •  Reseblement  Administra+on  

(1935)-­‐  –  Charged  with  the  task  of  removing  

near-­‐farmless  farmers  to  bePer  land.  

–  200  million  trees  planted  as  windbreakers  

•  Na+ve  Americans  –  Commissioner  of  Indian  Affairs  was  

headed  by  John  Collier    –  Sought  to  reverse  the  forced-­‐assimilaFon  

policies  in  place  since  the  Dawes  Act  of  1887.    

–  He  promoted  the  Indian  ReorganizaFon  Act  of  1934  which  encouraged  tribes  to  preserve  their  culture  and  tradiFons.    

–  77  tribes  refused  to  organize  under  its  provisions  (200  did).    

Babling  Bankers  and  Big  Business    

•  ProtecFng  Consumers  –  Federal  Securi+es  Act  

(“Truth  in  Securi+es  Act”)  •  Required  promoters  to  transmit  to  the  investor  sworn  informaFon  regarding  the  soundness  of  their  stocks  and  bonds.    

–  Securi+es  and  Exchange  Commission  (SEC)  •  Would  protect  the  public  against  fraud,  decepFon,  and  inside  manipulaFon  inside  the  stock  market  

Tennessee  Valley  Authority  

•  Tennessee  Valley  Authority-­‐  TVA  (1933)  –  Purpose-­‐  develop  hydroelectricity  to  an  enFre  area-­‐  govt  

could  put  thousands  to  work,  reform  the  power  monopoly  

–  Network  of  29  power-­‐producing  hydropower  faciliFes  –  Nebraska  Senator  George  Norris  

Effects  –  Employment  –  Cheap  electric  power  –  Low-­‐cost  housing  –  Restora+on  of  soil  –  Reforesta+on  –  Flood  control    –  Tennessee  Valley  flourished  –  Would  be  the  drive  for  the  growth  of  the  West  

Housing  Reform  

•  Federal  Housing  Administra+on  FHA  –  1934-­‐  to  sFmulate  the  building  industry  through  

small  loans  to  householders.    –  It  was  one  of  the  “alphabeFcal”  agencies  to  

outlast  the  age  of  Roosevelt.    

•  United  States  Housing  Authority  (USHA)  –  1937-­‐  designed  to  lend  money  to  states/

communiFes  for  low-­‐cost  construcFon  (was  meant  for  low  income  families,  but  opposed  by  slumlords  

–  This  was  the  first  Fme  in  American  history  that  slum  areas  stopped  growing.  

Social  Security  

•  Social  Security  Act  of  1935  –  Greatest  victory  for  New  

Dealers    –  Created  pension  and  insurance  for:  

•  old-­‐aged    •  the  blind    •  physically  handicapped  •  delinquent  children    •  Other  dependents  by  taxing  

employees  and  employers  –  Republicans  aPacked  this  biPerly  –  Importance-­‐  govt  was  now  

recognizing  its  responsibility  for  the  welfare  of  its  ciFzens    

A  New  Deal  for  Labor    •  Wagner  Act-­‐  Na+onal  Labor  

Rela+ons  Act  of  1935    –  Guaranteed  the  right  of  unions  to  

organize  and  to  collecFvely  bargain  with  management.    

–  Milestone  for  the  US  labor  movement  

–  NaFonal  Labor  RelaFons  Board  encouraged  unskilled  workers  to  organize  •  Led  by  John  L.  Lewis,  boss  of  United  Mine  Workers  

–  Na+onal  Labor  Rela+ons  Board  encouraged  unskilled  workers  to  organize  •  Led  by  John  L.  Lewis,  boss  

of  United  Mine  Workers  •  Formed  the  CIO-­‐  

CommiPee  for  Industrial  OrganizaFon  

Fair  Labor  Standards  Act  

•  In  1938,  the  Fair  Labor  Standards  Act  (AKA  the  “Wages  and  Hours  Bill”)  was  passed,  seXng  up  minimum  wage  and  maximum  hours  standards  and  forbidding  children  under  the  age  of  sixteen  from  working.    

•  Roosevelt  enjoyed  immense  support  from  the  labor  unions.    

•  In  1938,  the  CIO  broke  completely  with  the  AFL  and  renamed  itself  the  Congress  of  Industrial  OrganizaFons  (the  new  CIO).    

LANDON  CHALLENGES  “THE  CHAMP”  1936  PRESIDENTIAL  ELECTION    

•  The  Republicans  nominated  Kansas  Governor  Alfred  M.  Landon  to  run  against  FDR.    

•  523-­‐8  in  the  electoral  college  

•  Roosevelt’s  support  –  CIO  

–  African  Americans  

–  The  “forgoPen  man”  –  Catholics  and  Jews  

LANDON  CHALLENGES  “THE  CHAMP”    1936  PRESIDENTIAL  ELECTION  

LARGEST MARGIN OF VICTORY IN 116 YEARS

“PACKING  THE  COURT”  

•  The  20th  Amendment  had  cut  the  lame-­‐duck  period  down  to  six  weeks,  so  FDR  began  his  second  term  on  January  20,  1937,  instead  of  on  March  4.    

•  He  controlled  Congress,  but  the  Supreme  Court  kept  blocking  his  programs  (7  Fmes)  

•  Supreme  Court-­‐  6/9  were  over  the  age  of  70  

•  Roosevelt’s  plan-­‐  for  every  exisFng  member  over  the  age  of  70,  add  a  new  JusFce,  for  a  maximum  possible  total  of  15  total  members.    

–  Congress  voted  against  him  because  it  did  not  want  to  lose  its  power  

–  Court  Packing  Plan  would  be  one  of  his  most  costly  poliFcal  misjudgments.    

The  Court  Changes  Course    

•  FDR’s  “court-­‐packing  scheme”  failed,  but  he  did  get  some  of  the  jusFces  to  start  to  vote  his  way,  including  Owen  J.  Roberts  

•  However,  his  failure  of  the  court-­‐packing  scheme  also  showed  how  Americans  sFll  did  not  wish  to  tamper  with  the  sacred  jusFce  system.  

•  Roosevelt  would  eventually  be  able  to  replace  all  9  (deaths,  resignaFons)  

•  Few  New  Deal  reforms  would  be  passed  aoer  1937  ($,  Congress’  views  of  this  scheme)  

Twilight  of  the  New  Deal    •  During  Roosevelt’s  first  term,  the  

depression  did  not  disappear,  and  unemployment,  down  from  25%  in  1932,  was  sFll  at  15%.    –  In  1937,  the  economy  took  

another  brief  downturn  when  the  “Roosevelt  Recession,”  caused  by  government  policies.    

  Finally,  FDR  embraced  the  policies  of  BriFsh  economist  John  Maynard  Keynes.    

•  In  1937,  FDR  announced  a  bold  program  to  sFmulate  the  economy  by  planned  deficit  spending.    

•  In  1939,  Congress  relented  to  FDR’s  pressure  and  passed  the  Reorganiza+on  Act,  which  gave  him  limited  powers  for  administraFve  reforms,  including  the  key  new  ExecuFve  Office  in  the  White  House.    

•  The  Hatch  Act  of  1939  barred  federal  administraFve  officials,  except  the  highest  policy-­‐making  officers,  from  acFve  poliFcal  campaigning  and  soliciFng.    

New  Deal  or  Raw  Deal?    

•  Foes  of  the  New  Deal  condemned  its  waste,  ciFng  that  nothing  had  been  accomplished.    

•  CriFcs  were  shocked  by  the  “try  anything”  aXtude  of  FDR,  who  had  increased  the  federal  debt  from  $19.487  million  in  1932  to  $40.440  million  in  1939.    

•  It  took  World  War  II,  though,  to  really  lower  unemployment.  But,  the  war  also  created  a  heavier  debt  than  before.    

FDR’S  BALANCE  SHEET    

•  New  Dealers  claimed  that  the  New  Deal  had  alleviated  the  worst  of  the  Great  Depression.    

•  FDR  also  deflected  popular  resent  against  business  and  may  have  saved  the  American  system  of  free  enterprise,  yet  business  tycoons  hated  him.    

•  He  provided  bold  reform  without  revoluFon.    •  Represented  both  Hamilton  and  Jefferson