The New Deal

Franklin Delano Roosevelt

• Ran against Herbert Hoover in the 1932 election

• FDR was a Democrat and before being elected president he had different political positions.

• Unlike Hoover he was ready to experiment with government roles and had genuine compassion for ordinary people

1932 Election

• FDR won the 1932 election and had big plans when he took office

• He called these plans the New Deal

• At the time he was not sure exactly how the New Deal would work

2nd Bonus March

• Soon after FDR was elected there was a 2nd Bonus March planned

• Eleanor Roosevelt approached the protesters and discussed their concerns

• By this act she soothed popular fears and demonstrated the new administration’s approach to unrest

The First Hundred Days

• From March – June 1993, a period known as 100 days, FDR pushed program after program through Congress to provide relief, create jobs, and stimulate economic recovery

Closing the Banks

• FDR’s first step was to close the banks.

• On March 5, 1933 all banks were closed

• Congress passed the Emergency Banking Act, which authorized the government to inspect the financial health of all banks

Closing the Banks cont…

• These acts reassured the American people who had been afraid of the prospect of losing their savings

• Government inspectors found that most banks were healthy, and 2/3s of the banks were reopened by March 13, 1933

Glass-Steagall Act

• Congress also took another step by passing the Glass-Steagall Act, which established the Federal Deposit Insurance Corporation (FDIC) to insure deposits up to $5,000

• It also required banks to act cautiously with their customer’s money

Federal Securities Act

• The President also hoped to regulate the stock market and passed the Federal Securities Act in May of 1933

• This required corporations to provide complete information of stock offerings and made them liable for any misrepresentations.

Securities and Exchange Commission (SEC)

• In June of 1934, Congress created the SEC to regulate the stock market.

• One goal was to prevent people from rigging the stock market for their own profit.

Public Relief Programs

• FDR’s next step was to give money to local relief agencies

• The Federal Emergency Relief Administration (FERA) sent funds to local agencies and was immediately given $5 million.

Public Works Programs

• The federal government also put federal money behind public works programs – government-funded projects to build public facilities

Civil Works Administration (CWA)

• 1st public works project was the Civil Works Administration (CWA), which gave the unemployed jobs building or improving roads, parks, airports, and other facilities

• It was a morale booster and gave 4 million people jobs

Civilian Conservation Corps (CCC)

• FDR believed in conserving the environment

• The CCC put 2.5 unmarried male workers into forest, beach and park maintenance and restoration projects

• The workers only made $1 a day, but were boarded in camps and received job training

The National Industrial Recovery Act (NIRA)

• The NIRA sought to increase prices of industrial goods, which would help businesses and individuals

• The NIRA allowed trade associations to make codes to regulate wages, working condition, production, and prices

• This act set a minimum wage and gave organized labor collective bargaining rights

National Recovery Administration (NRA)

• The NRA controlled businesses

• Many businesses complained that the codes were too complicated and the NRA was too rigid

Effect of Industrial Codes

• For some time the codes were effective, but when the wages increased, so did the price of goods.

• The cycle of overproduction and underconsumption continued

Public Works Administration (PWA)

• PWA was directed by Secretary of Interior Harry Ickes

• PWA launched projects, such as the Grand Coulee Dam on the Columbia River in Washington to the causeway connecting Key West to Florida and New York’s Triborough Bridge

Keeping Big Business’ in Check

• Congress passed the Federal Securities Act, which required businesses to give full disclosure of information about stocks for sale

• Next year Congress set up the Securities and Exchange Commission (SEC) to regulate the stock market

• Congress also gave the Federal Reserve Board power to regulate the purchase of stock on margin

Saving Homes and Farms

• The Home Owners’ Loan Corporation (HOLC) refinanced mortgages of middle-income home owners

• The Agricultural Adjustment Administration (AAA) tried to raise farm prices. The asked farmers not to grow certain crops or raise certain animals

• They hope was that it would limit over production and raise farm prices

Tennessee Valley Authority (TVA)

• The TVA was one of the most popular programs

• It helped farmers and created jobs in one of the country’s least modernized regions.

• By reactivating a hydroelectric power facility, the TVA provided cheap electric power, flood control, and recreational opportunities to the entire Tennessee River valley

New Deal – 100 Days Later

• By the end of the 100 days, millions of Americans had benefitted from the New Deal policies

• FDR was able to accomplish this by deficit spending or spending more money then the gov’t had.

• He considered this necessary because of the economic crisis the country was in.

New Deal Successes

• Several factors contributed to the overall early success of FDR’s New Deal

1.Both Republicans and Democrats were eager to enact legislation quickly

2.FDR received information from a diverse group of Cabinet advisors who he called the “Brian Trust”

3.He won the public support through his fireside chats

Fireside Chats

• FDR tried to restore the nation’s confidence by speaking weekly to the nation over the radio

• Speech writers wrote informal, personable talks that FDR delivered to millions

• FDR explained the “simple ideas” behind his legislation

• http://www.youtube.com/watch?v=62u8lj2HotY

New Deal Critics

• Liberals argued that the New Deal did not go far enough to help the poor and reform the nation’s economic system

• Conservatives argued that FDR spent too much money on direct relief and used New Deal policies to control businesses and socialize the economy

• Conservatives especially did not like programs such as the AAA and NIRA

The American Liberty League

• One of the primary groups that attacked FDR and the New Deal was big business

• Many business leaders were alarmed at FDR’s “socialist” leanings and disregard for the federal deficit.

• They formed the American Liberty League to protect themselves against excessive government involvement

Farm Program Critics

• Many people, including the Secretary of Agriculture, were unhappy with the AAA.

• For it caused farmers to throw away food that could have been used to feed the poor

• Its crop reduction policy also impacted tenant farmers, who were ineligible for large federal subsidies

Father Coughlin

• He originally agreed with FDR, but changed his mind

• He convinced listeners that FDR was on the side of big business

• His ideas soon became strongly fascist and anti-Semitic

• http://www.youtube.com/watch?v=RzLMRAz5G_4

Huey Long

• He preached on the radio that greedy businessmen had upset the balance of the nation’s wealth and the banks were using FDR

• He proposed the “Share Our Wealth” program.• He felt that the government should seize through

taxation all incomes over $1 million and inheritances over $5 million and give $2,000 annually to all Americans

• http://www.youtube.com/watch?v=_7IdgoXzi24&feature=related

• http://www.youtube.com/watch?v=v2PTn7Tfxq8&feature=related

Francis Townsend

• In Long Beach, CA, Dr. Francis Townsend led a group of elderly people who became known as “Townsendites”

• They felt that FDR neglected the elderly and advocated for an extensive old-age pension plan

Supreme Court Cases

• In 1935 the NIRA was found to be unconstitutional

• The Supreme Court declared the law gave legislative powers to the executive branch and the enforcement of industry codes within the states went beyond the federal government’s constitutional powers

• In 1936, the AAA were declared unconstitutional on the grounds that agriculture is a local matter and should be regulated by the states

Francis Perkins

• Was named Secretary of Labor

• She was the first woman ever to hold a cabinet post in a presidential administration

• She was one of thirty women who held key New Deal positions

Eleanor Roosevelt• She was a key advisor to

her husband• She took an active role

supporting the New Deal, by traveling around the country drumming up support for FDR’s programs

• Some people in America felt that as first lady she should take care of her husband, not campaign for him

The Second New Deal

• The midterm election of 1934 showed that there was nationwide support for FDR

• In 1935, he decided to launch a new legislation

• Some have called this period the Second New Deal

• The Second New Deal included more social welfare benefits, stricter control over businesses, stronger support of unions and higher takes on the rich

The Works Progress Administration (WPA)

• This agency was established in 1935 and provided work for 8 million people

• The WPA constructed or improved over 20,000 playgrounds, schools, hospitals, and airfields, and supported the creative work of artists

Help to Farmers

• Rexford Tugwell set up the Resettlement Administration to give money to small farms and it also helped resettle tenants and sharecroppers on productive land

• In 1937, the Farm Security Administration (FSA) replaced Tugwell’s agency.

• It loaned over $1 billion to farmers

Labor Unions

• Labor Unions liked the NIRA because it gave them rights to organize and bargain collectively

• When it was declared unconstitutional, labor unions wanted more rights

Wagner Act

• In July 1935 Congress passed the National Labor Act, which was also known as the Wagner Act.

• The Wagner Act legalized closed shops and collective bargaining

• It also outlawed spying on union members and blacklisting

• It established the National Labor Relations Board to enforce its provisions

Fair Labor Standards Act

• In 1938 the Fair Labor Standards Act banned child labor and set a minimum wage

Social Security Act

• Congress passed this act, which established a system that provided old-age pensions for workers; survivors’ benefits for victims of industrial accidents; unemployment insurance; and aid for dependant mothers and children, the blind and the physically disabled

• http://www.youtube.com/watch?v=5xaHX5EBwXc&NR=1

President Roosevelt signing Social Security Act of 1935 in the Cabinet Room of the White House. Also shown, left to right: Rep. Robert Doughton (D-NC); Sen. Robert Wagner (D-NY); Rep. John Dingell, Sr. (D-MI); Unknown man in bowtie; Secretary of Labor, Frances Perkins; Senator Pat Harrison (D-MS); Congressman David L. Lewis (D-MD). Library of Congress photo, LC-US262-123278

New Deal Shapes the Presidency

• FDR’s charisma, skillful use of the media, long tenure in office, and firm belief in the power of the federal government resulted in centralization of power in the Oval Office

Federal Government’s Direct Role in Citizen’s Lives

• The role of the federal government grew dramatically as it played a larger and more direct role in the lives of Americans and regulated more aspects of society than ever before

• From the New Deal forward the federal government would not deny that it had a primary responsibility for caring for the needy

Women Take A More Prominent Role in Government

• Both FDR and Eleanor Roosevelt ushered women into more influential roles in government

Assessing the New Deal: Did It Work?

• The most fundamental assessment of the New Deal concerns the extent to which it rescued Americans from the Great Depression

• From 1929 – 1939, the New Deal was partially effective • The rate of unemployment dropped every year, the overall business

failures decreased, farmers economically benefitted and the public’s confidence in banks improved.

• The New Deal’s successes were limited. • Unemployment was a high 19%, the GNP grew slowly, and the

federal debt increased• Only WWII, which stimulated production needs and created millions

of service and industrial jobs, shifted the US economy.•

1936 Election

• FDR won the 1936 election in a landslide victory over Republican candidate Alfred Landon

• He won every state except Maine and Vermont