The Great Depression and the New Deal 1933-1939

Objective: Students will understand the purposes and effectiveness of the New Deal and the shift

of power from state to federal government.

FDR: Politician in a wheel ChairPolio helped build his characterEleanor his wife, was a champion of the poorTheir relationship was rocky at best, he had several affairsFDR was a great speaker and he used speeches often to

communicate directly to the people over the radioNominated in 1932 on a wet platform that also promised to

balance the budget FDR toured the country assailing Hoover while Hoover

stayed in the White House trying to consul the people22-15 million for FDR and 472 to 59 1932 election saw the shift of blacks to the Democratic partyIn the lame duck period Hoover and FDR refused to work

together and it made the Depression much worse

FDR and the 3 R’s: Relief, Reform, and RecoveryNationwide Banking Holiday March 6-10100 days March 9-June 16 1933

Passed much of his alphabet legislationBrain Trust

Congress gave FDR more power than the Constitution allows, Americans were just happy they were moving even if it was in the wrong direction

Roosevelt Manages the MoneyBanking Holiday was ready in 8 short hours

Gave the president power to regulate bank transactions and reopen solvent banks when they were ready

Glass-Steagall Banking Reform Act 1933FDIC—insured individual investments up to $5,000Gave Americans their faith back in the banking

systemTook the nation off the gold standard

Was hoping inflation would occur to help the debtors

Creating Jobs for the Jobless ¼ of Americans were unemployed Civilian Conservation Corps (CCC) 1933

Employed more than 3 million young men: reforestation, firefighting, flood control, etc

Federal Emergency Relief Act (Agency) 1933 (FERA) Harry Hopkins at the head Gave $3 billion to states to distribute to the poor

Agricultural Adjustment Act (AAA) 1933 Helped farmers pay their mortgages

Homeowners Loan Corporation (HOLC) 1933 Refinanced mortgages on non farm houses Helped 1 million families Helped banks from closing and made many homeowners democrats

Civil Works Administration (CWA) 1933 Temporary jobs during the 1933-34 winter

Helping Industry and Labor National Recovery Administration (NRA) 1933

Designed to help industry, labor, and unemployed Long term and short term goals Industry were to work out codes of fair competition, reduce hours of labor

thus spreading out employment, set minimum wages Labor was guaranteed the right to organize and bargain collectively Philadelphia Eagles were created and named after the NRA—eagle was the

NRA’s mascot Schechter decision

Supreme Court declared NRA unconstitutional Public Works Administration (PWA)

Intended for industrial recovery and unemployment relief Headed by Secretary of Interior Harold L. Ickes $4 billion spend on 34,000 projects, buildings, highways, etc Grand Coulee Dam on the Columbia River

Liquor Industry was one of the few that recovered Repeal of Prohibition

Paying Farmers not to FarmAgricultural Adjustment Act (AAA) 1933

Establish parity prices through artificial scarcity Paid farmers to reduce acreage Declared unconstitutional in 1936Actually did bring prices up

Soil Conservation and Domestic Allotment Act of 1936Paid farmers to plant crops that conserved soil like

soybeans or let it lie fallow, unplantedSecond AAA

Still focused on conservation but had parity price bonuses on specific crops—wheat and cotton

Dust Bowls and Black BlizzardsDrought in great plains from Colorado to Missouri

Dust BowlMade worse by overproduction, dry farming

Hundreds of thousands fled the dust bowl to CaliforniaFrazier-Lemke Farm Bankruptcy Act 1934

Allowed a suspension of mortgage payment for 5 years, declared unconstitutional by courts until it was changed to 3 years

Resettlement Administration 1935Moved farmers onto better land and planted 200 million trees

by CCC to act as wind breaksIndian Reorganization Act 1934

Tribes could establish local gov’t and preserve native culturesHelped stop loss of Indian lands due to the Dawes Act

Battling Bankers and Big BusinessFederal Securities Act

Had to prove the soundness of stocks and bonds sold on the market

Securities and Exchange Commission (SEC)Watchdog for stock market

TVATennessee Valley Authority was created in

1933Most revolutionary of all New Deal programs

—“planned economy”Government owned utilities, cheap, no taxes

Couldn’t be done privately—too expensiveFull employment to the area along with

cheap electricity, low cost housing, cheap fertilizer, stopped erosion, reforestation, etc

Housing and Social SecurityFederal Housing Administration (FHA) 1934

Loans to homeowners for improvements or new houses

Very popular and outlasted FDR’s administrationUnited States Housing Authority (USHA) 1937

Money to states or communities for low cost construction—low income housing

1st time in America slum areas shrankSocial Security Act 1935

Federal state unemployment insurancePensions for retired workers and disabled

A New Deal for Labor 1934 saw a lot of strikes as the New Deal legislation helped

unemployment 1935 Wagner or National Labor Relations Act

Created the National Labor Relations Board (NLRB) Rights to labor to organize and bargain collectively Milestone in the labor movement

John L. Lewis—boss of United Mine Workers 1935 he formed the Committee for Industrial Organization (CIO) inside

the AF of L AF of L pushed out the CIO and the CIO headed to the auto industry CIO used sit in strikes in Michigan CIO was recognized by GM as the sole bargaining agent for its

employees This was followed by several others granting CIO right to bargain

collectively for it employees Fair Labor and Standards Act 1938

Minimum wage and maximum hours Ended child labor in dangerous occupations Left agriculture out

Landon Challenges the ChampLandon vs. FDR in 1936Republican platform against the debt of the

New DealRepublican carried only 2 states—Maine and

Vermont27-16 million 523-8 for FDR

Rich vs. PoorFDR formed a coalition with blacks, South,

urbanites, and poor that lasts today

9 Old Men on the BenchSupreme Court stood in FDR’s way

Turned down 7 of 9 New Deal legislation Ultraconservative, none appointed by FDR

Court packingFDR asked congress to allow him to appoint a new judge

for everyone over 70—6 raising the court to 15FDR’s most costly political mistake

Seen as a dictator, tried to end separation of powers

Some of the judges started voting more liberal“A Switch in Time Saves Nine”

Upheld minimum wage, Wagner Act, and Social SecurityOne judge also resigned and was replaced by Hugo Black

Twilight of the New DealUnemployment dropped from 25-15%1937 economy took another downturn, depression in

a depression dubbed the Roosevelt recessionGov’t cut back on spending to balance the budget

Keynesianism—deficit spendingBecame the policy of the gov’t

Hatch Act 1939Barred federal administrators from campaigning

activelyCouldn’t use gov’t money for campaigningLimited campaign contributions

By 1938 the New Deal lost steam and was all but over

New Deal or Raw Deal?Many criticized FDR for not doing enough

while others said he did too muchDebt rose from 20 billion in 1932 to 40 billion

in 1939Business was frustrated at FDR for his

planned economy programsFailed to cure the depression only acted as a

band aid to itWWII ended it not the New Deal

FDR’s Balance SheetWaste and graft was fairly commonMost $ spent under the New Deal was on

reliefHelped relieve the worst crises in US, saved

economy, led to fairer distribution of wealth, gave people self respect, etc

FDR carried out a bold reform without revolution