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FRANKLIN D. ROOSEVELT AND THE NEW DEAL
Econ Weaknesses
• 1920s optimism drives increase in expectations of a better way of life
• Low savings level
• Installment plans
• Farming depressed all decade
• Int’l trade weak
The Great Crash
• 1928--soaring stock prices attract individual, corporate investment
• 1929--stock market crashes– directly affects 3 million– credit crunch stifles business
• Businesses lay off workers
• Demand for consumer goods declines
Unemployment, 1929-1942
Effects of the Depression
• Hardship affects all classes
• The middle class loses belief in ever-increasing prosperity
• 1000s of young homeless, jobless
• Suicide rate up, fertility rate down
• Fathers leave
Fighting the Depression
• Hoover – moral response
• Asks for business cooperation
• Smoot-Hawley Tariff
• Reconstruction Finance Corporation – bailouts to big businesses
Hoover and Voluntarism
• Hoover initially seeks solution through voluntary action, private charity
• Eventually aids farmers and bankers
• Resists Democratic efforts to give direct aid to the unemployed– perceived as indifferent to human
suffering– programs seen as incompetent
Bank Failures, 1929-1933
The Emergence of Roosevelt
• Franklin Roosevelt– born to wealth and privilege– 1921--crippled by polio– 1928--elected governor of New York– talented politician
• 1932--defeats Hoover with farmer- worker-immigrant-Catholic coalition
Election of 1928?
• Al Smith
• Urban
• Wet
• Lost Solid South
• Dem Party vacillates – rural-nativist, urban-immigrant
The Hundred Days
• Banking system saved from collapse -- FDIC
The Tennessee Valley Authority – jobs, cheap
hydro, soil conserv, flood control, etc.
Roosevelt and Recovery
• National Recovery Administration– codes to eliminate cut-throat competition,
ensure labor peace– favor big business, unenforceable– 1935 ruled unconstitutional
• Agricultural Adjustment Act of 1933– farmers paid to take land out of cultivation– prices increase– sharecroppers, tenant farmers dispossessed
Roosevelt and Relief
• 1933--Harry Hopkins in charge of RFC to direct aid to unemployed
• 1933--Civilian Conservation Corps employment to young
• 1935--Works Progress Administration place unemployed on federal payroll
• Programs never sufficiently funded
Roosevelt and Reform
• 1933-34--focus on immediate problems
• 1935--shift to permanent economic reform
Challenges to FDR
• Father Charles Coughlin advocates nationalizing banks, cheap money, anti-Semitism
• Francis Townsend calls for wealth redistribution from young to elderly
• Huey Long calls for redistribution of wealth (Share the Wealth)
Social Security
• 1935--Social Security Act passed
• Criticisms– too few people would collect pensions – unemployment package inadequate
• Establishes pattern of government aid to poor, aged, handicapped
Labor Legislation
• 1935--Wagner Act – allows unions to organize – outlaws unfair labor practices
• 1938--Fair Labor Standard Act – maximum hour – minimum wage
Impact of the New Deal
• Had a broad influence on the quality of life in the U.S. in the 1930s
• Helps labor unions most
• Helps women, minorities least
Rise of Organized Labor
• 1932--National Recovery Act spurs union organizers
• Congress of Industrial Organization (CIO) formed by John L. Lewis
• CIO unionizes steel, auto industries
• 1940--CIO membership hits 5 million, 28% of labor force unionized
The New Deal Record on Help to Minorities
• Crop reduction program allows whites to fire or evict blacks, Hispanics
• Public works programs help by providing employment
• New Deal figures convince minorities that govt is on side
• 1934--Indian Reorganization Act
• “Black Cabinet”
Women at Work
• Position of women deteriorates in ‘30s– jobs lost at faster rate than men– hardly any New Deal programs help
• Progress in government– Frances Perkins, Sec of Labor, first woman
cabinet member– women appointed to several other posts– Eleanor Roosevelt a model for activism
End of the New Deal
• 1936--New Deal peaks with Roosevelt’s reelection
• Congress resists programs after 1936
The Election of 1936
• FDR’s campaign– attacks rich – promises further reforms – defeats Republican Alf Landon– lopsided majorities in Congress
• FDR coalition: South, cities, labor, ethnic groups, African Americans, poor
The Supreme Court Fight
• Supreme Court blocks several of FDR’s first-term programs
• 1937--FDR seeks right to "pack" Court
• Congressional protest forces retreat
The New Deal in Decline
• 1936--cutbacks for relief agencies
• 1937--severe slump hits economy
• Roosevelt blamed, resorts to huge government spending
• 1938--Republican party revives