The Great Depression and the New Deal

The Country needs and demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.

Nobody likes Hoover

• 1932• 11 million unemployed• Reps unexcitedly re-

nominate Hoover- campaigned saying that his policies preventedthe Great Depression from being worse than it was.

• End prohibition and return liquor control to the states

FDR: A Politician In A Wheelchair• The Democrats nominated Franklin Delano Roosevelt, a tall,

handsome man who was the fifth cousin of famous Theodore Roosevelt and had followed in his footsteps.

• Commanding and electric personality with incredible charm.• Strong believer in the need of government to relieve the suffering of

the “forgotten man”• FDR had been stricken with polio in 1921, and during this time, his

wife, Eleanor, became his political partner.• Franklin also lost a friend in 1932 when he and Al Smith both sought

the Democratic nomination.• Eleanor “conscience of the New Deal” was to become the most active

First Lady ever. Fought segregation.

FDR: A Politician In A Wheelchair

• Rich call FDR a “traitor to his class”

• Platform- balanced budget and sweeping reform

• “I pledge to you, I pledge to myself a new deal for the American people”

Presidential Hopefuls of 1932• New deal for forgotten man but

vague and contradictory • Brain Trust- small group of

reformers, ghost writes his speeches (later huge in New Deal)

• Balanced budget- “Throw out the spenders”- even though he was spend more money than Hoover

• Theme Song- “Happy days are here again”

• HH- “The worst is past” “Prosperity just around the corner”- nobody listens

Hoover’s Humiliation in 1932• Electoral count FDR 472-

HH 59• African Americans begin to

shift to Democratic vote• As a lame duck, HH wants

to start working with FDR, FDR only meets with him twice

• Hooverites claim FDR did this to worsen the depression and make him look like the savior

FDR and the 3 R’s

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

• Declares bank holiday • Special session to

cope with national emergency- 100 days

FDR and the 3 R’s• Three Rs:

– Relief-short term (2years)

– Recovery (2 years)

– Reform(Long term)

• Congress gave president extraordinary blank check powers, some of the laws it passed expressly delegate legislative authority to the chief executive

• Many of the reforms were old ideas from the Progressive Movement

Roosevelt Manages the Money

• Emergency Banking Relief Act of 1933.

• Fire side chats- get people confident in banks

• Glass-Steagall Banking Reform Act, that provided the Federal Deposit Insurance Corporation (FDIC) which insured individual deposits up to $5000, thereby eliminating the epidemic of bank failure and restoring faith to banks.

Roosevelt Manages the Money• “Managed Currency” • Wants to protect gold reserves

and prevent hoarding• He urged people to turn in gold

for paper money and took the U.S. off the gold standard.

• He wanted inflation, to make debt payment easier, and urged the Treasury to buy gold (at higher rates) with paper money

• 1934- US limited gold standard, only for international trade, domestic gold coin circulation is still prohibited

Jobs for the Jobless • Unemployment rate = 25%• FDR not afraid to use fed

money to create jobs• Civilian Conservation Corps

(CCC), which provided employment in fresh-air government camps for about 3 million uniformed young men.

• They reforested areas, fought fires, drained swamps, controlled floods, etc.

• However, critics accused FDR of militarizing the youths and acting as dictator.

Jobs for the Jobless• Federal Emergency Relief

Act – immediate relief, establishes FER Admin.- Money for states for jobs programs

• Immediate Relief – The Agricultural Adjustment

Act (AAA) made available many millions of dollars to help farmers meet their mortgages.

– The Home Owners’ Loan Corporation (HOLC) refinanced mortgages on non-farm homes and bolted down the loyalties of middle class,Democratic homeowners.

Jobs for the Jobless • The Civil Works

Administration (CWA) was established late in 1933, and it was designed to provide purely temporary jobs during the winteremergency.

• Many of its tasks were rather frivolous (called “boondoggling”) and were designed for the sole purpose ofmaking jobs.

A Day for Every Demagogue

• FDR Haters– Father Charles Coughlin- 40

million listeners at height, but anti-Semitic and rants bring his popularity down

– Francis E Townsend- everybody over 60 gets $200 a month

– Senator Huey (Kingfish) Long- “Share the Wealth Program” every family gets $5000

A Day for Every Demagogue• People begin to fear the

link with fascism and economic recessions

• Works Progress Administration (WPA)-Employment on useful projects

• 11 Billion spent building public buildings and parks, bridges and roads.

• Over 8 years, 9 Mill. given jobs.

New Visibility for Women

• First Lady Eleanor Roosevelt was the most visible, but other ladies shone as well: Sec. of Labor Frances Perkins was the first female cabinet member and Mary McLeod Bethune headed the Office of Minority Affairs in the NYA, the “Black Cabinet”, and founded a Florida college.

• Ruth Benedict- Patterns and Cultures- study of cultures as collective personalities

Helping Industry and Labor

• National Recovery Administration (NRA)

• Most ambitious of the early New Deal programs (all three R’s)

• There were maximum hours of labor, minimum wages, and more rights for labor union members, including the right to choose their own representatives in bargaining.

• Massive publicity campaigns designed to make selfless participation in NRA seem patriotic.

Helping Industry and Labor

• Too much self sacrifice was expected of labor

• Schechter Poultry Corp. vs. US– Congress can’t delegate

legislative powers to the executive

– National Industrial Recovery Act is un unconstitutional

Public Works Administration

• Headed by Secretary of the Interior Harold L. Ickes, it aimed at 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).

FDR and Demon Rum

• Cullen Harrison Act – legalized light wine and beer with alcoholic content of 3.2% or less

• Raise federal revenue and provide jobs

• 21st amendment 1933- repeals prohibition

Paying Farmers not to Farm • Since WWI farmers on the

decline • Agricultural Adjustment

Administration, which paid farmers to reduce their crop acreage and would eliminate price-depressing surpluses.

• Doesn’t start off well, caused some unemployment, and slaughtering pigs angers hungry population

Paying Farmers not to Farm• 1936- Supreme Court declares

AAA un-constitutional• Soil Conservation and

Domestic Allotment Act of 1936, which paid farmers to plantsoil-conserving plants like soybeans or to let their land lie fallow.

• The Second Agricultural Adjustment Act of 1938 was a morecomprehensive substitute that continued conservation payments but wasaccepted by the Supreme Court.

Dust Bowl 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 and Black Blizzards• The Frazier-Lemke Farm

Bankruptcy Act, passed in 1934, made possible a suspension of mortgage foreclosure for five years, but it was voided in 1935 by the Supreme Court.

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

Dust Bowl and Black Blizzards• After the drought of

1933, furious winds whipped up dust into the air, turning parts of Missouri, Texas, Kansas, Arkansas, and Oklahomainto the Dust Bowl and forcing many farmers to migrate west to California and inspired Steinbeck’s classic The Grapes of Wrath.

• “Okies” and “Arkies”

Indian New Deal • Indian Reorganization Act

of 1934.• Essentially does away with

the Dawes Act. • Allows tribes to re-

establish tribal governments and to preserve their culture.

• Not all Natives pleased with it “back to the blanket measure” make natives museum pieces – 75 tribes don’t sign

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- promoters must give investors sound information of stocks and bonds

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

• Also strict regulations of public Utility holding companies

Tennessee Valley Authority

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

• Dam Tennessee river and tributaries to build electric power stations.

Tennessee Valley Authority

• 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 and Social Security

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

• 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 Labor

• NRA blue eagles are more assertive

• Summer of 1934 lots of walkouts- (San Fran-Bloody Thursday)

• National Labor Relations Act (Wagner Act) Magna Carta of American Labor - guaranteed the right of unions to organize and to collectively bargain with management.

A New Deal for Labor• National Labor Relations Board-

encourages unskilled workers to unionize• John L. Lewis- forms Committee for

Industrial Organization (CIO) (part of AFL)

• Goes after auto mobile industry• Sit down strike method in General

Motors (Flint Michigan) 1936• GM finally recognizes Union• US Steel- avoids problem, voluntarily

grants rights to unionization to CIO organized employees

• Smaller steel Companies still fight CIO- Memorial Day Massacre

A New Deal for Labor• Fair Labor Standards Act

1938 - setting up minimum wage and maximum hours standards and forbidding children under the age of sixteen from working.

• South hates it• Excludes ag, service and

domestic workers- thus blacks, Mexican Americans, and women didn’t benefit from act

A New Deal for Labor

• 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. (Franklin Deficit Roosevelt) • Was a bitter campaign. Shades of class warfare.• Roosevelt wins easily• Demos now have both house and senate • CIO and blacks vote Democrat “Lincoln was finally

dead”

FDR and the Supreme Court

• 20th amendment- shortens lame duck time

• FDR sees election as proof in support for New Deal

• Supreme court biggest obstacle- 9 major cases, SC shot down FDR seven times- filled with ultra conservatives, 6 were over 70 years old

FDR and the Supreme Court

• FDR- democracy is about the people, and the people favored the new deal

• Wants to add a judges to court, totaling 15

• Known as court packing scheme

• Lots of back lash- people felt he was trying to become a dictator

FDR and the Supreme Court• FDR’s “court-packing scheme”

failed, but he did get some of the justices to start to vote his way, including Owen J. Roberts, formerly regarded as a conservative.

• So, FDR did achieve his purpose of getting the Supreme Court to vote his way.

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

New Deal or Raw Deal

• Critics – Roosevelski- trying to making America communists

– FDR is Jewish (many Jewish man formed his brain trust)

– Business owners

– Growth of bureaucracy and federal government

– National debt increases (Hand out states of America)

– Conservatives- New deal is pampering farmer and laborer- thus FDR is trying to create class wars

– Didn’t cure great depression- merely giving band aids and sedatives

FDR’s Balance Sheet

• Democrats stance– Relief was the primary goal

– Federal government is now morally bound to prevent mass hunger and starvation by managing the economy

– Purged corruption out of capitalism

• Left wing- FDR didn’t do enough• Right wing- FDR is doing too much• Like AH- supports big government• Like TJ- concern for the forgotten man