The DepressionThe Depression
Hoover and FDRHoover and FDR
Herbert HooverHerbert Hoover
Elected in 1928 Elected in 1928 primarily because primarily because the Republicans the Republicans were associated were associated with prosperitywith prosperity
Believer in Believer in individualism, free individualism, free enterprise, and enterprise, and laissez-fairelaissez-faire
Conditions which helped Conditions which helped produce or intensify the produce or intensify the
DepressionDepression OverproductionOverproduction Unequal distribution of wealthUnequal distribution of wealth Overexpansion of creditOverexpansion of credit The depressed condition of agricultureThe depressed condition of agriculture Stock Market speculation: buying on Stock Market speculation: buying on
marginmargin Unwise government policiesUnwise government policies
High tariff, no curbs on Stock MarketHigh tariff, no curbs on Stock Market
Hoover PoliciesHoover Policies Calls for voluntary Calls for voluntary
cooperationcooperation Asks leading Asks leading
industrialists not to cut industrialists not to cut pay, production, or pay, production, or workersworkers
Asks labor leaders to Asks labor leaders to discourage demands for discourage demands for strikes and higher paystrikes and higher pay
Asks governors and Asks governors and mayors to spend more mayors to spend more on public works to on public works to create jobscreate jobs
But economy continues But economy continues to tumbleto tumble
HooverHoover
Optimistic: “prosperity just around Optimistic: “prosperity just around the corner”the corner”
Agricultural Marketing Act Agricultural Marketing Act
19291929 To help farmers help To help farmers help
themselves, largely themselves, largely through producers’ through producers’ cooperativescooperatives
Established Federal Established Federal Farm Board which Farm Board which had no real power to had no real power to reduce production.reduce production.
Hawley-Smoot TariffHawley-Smoot Tariff
19301930 Increased prices on foreign-made Increased prices on foreign-made
goodsgoods Intended to increase buying of Intended to increase buying of
American-made goodsAmerican-made goods European countries responded with European countries responded with
tariffs on American-made goods.tariffs on American-made goods. Not successful.Not successful.
FDR and the New DealFDR and the New Deal ““I pledge you, I pledge I pledge you, I pledge
myself, to a new deal myself, to a new deal for the American for the American people.”people.”
Election of 1932 Election of 1932 ushered in an era of a ushered in an era of a different kind of a different kind of a politician.politician.
Master politician: Master politician: intelligent, confident, intelligent, confident, charmingcharming
Master communicator: Master communicator: fireside chatsfireside chats
Preparing to LeadPreparing to Lead
The Cabinet: Frances The Cabinet: Frances Perkins was the first Perkins was the first woman to hold a woman to hold a Cabinet post (Labor).Cabinet post (Labor).
The “Brain Trust”: The “Brain Trust”: Informal group of Informal group of advisors consisting of advisors consisting of intellectuals, lawyers, intellectuals, lawyers, and economistsand economists
Humanitarian wife Humanitarian wife Eleanor had a great Eleanor had a great deal of influence.deal of influence.
New Deal in ActionNew Deal in Action
RELIEF for those RELIEF for those people who were people who were suffering.suffering.
RECOVERY for the RECOVERY for the economy so that it economy so that it could grow again.could grow again.
REFORM measures REFORM measures in order to insure in order to insure against future against future depressions.depressions.
Stages of the New DealStages of the New Deal
1933-1935: dealt with relief and recovery; 1933-1935: dealt with relief and recovery; most passed in the “First Hundred Days”most passed in the “First Hundred Days”
1935-1936: The “Second New Deal”: 1935-1936: The “Second New Deal”: focused more on social reformfocused more on social reform
1936 election: high point of the N.D.1936 election: high point of the N.D. 1937-1938: recession due in part to New 1937-1938: recession due in part to New
Deal cutbacks in spendingDeal cutbacks in spending 1938: N.D. ended to opposition in 1938: N.D. ended to opposition in
Congress and WWIICongress and WWII
New Deal StrategiesNew Deal Strategies
Use of commerce and elastic clauses of the Use of commerce and elastic clauses of the Constitution to take direct government action.Constitution to take direct government action.
Fiscal action to stimulate economy and lower Fiscal action to stimulate economy and lower unemployment by lowering taxes and unemployment by lowering taxes and increasing government spending.increasing government spending.
Government responsibility for the general Government responsibility for the general welfare of citizens.welfare of citizens.
Increase regulatory role over banks, Increase regulatory role over banks, businesses, and the stock exchange.businesses, and the stock exchange.
Deficit spending: Keynesian EconomicsDeficit spending: Keynesian Economics
Relief LegislationRelief Legislation
Emergency Banking Act (1933)Emergency Banking Act (1933) Federal Emergency Relief Act (FERA) Federal Emergency Relief Act (FERA)
(1933)(1933) Public Works Administration (PWA) Public Works Administration (PWA)
(1933)(1933) Civilian Conservation Corps (CCC) (1933)Civilian Conservation Corps (CCC) (1933) Works Progress Administration (WPA) Works Progress Administration (WPA)
(1935) (1935)
Recovery LegislationRecovery Legislation
National Industrial Recovery Act (NIRA) National Industrial Recovery Act (NIRA) 19331933
Home Owners Loan Corporation (HOLC) Home Owners Loan Corporation (HOLC) 19331933
Federal Housing Administration (FHA) Federal Housing Administration (FHA) 19341934
First and Second Agricultural Adjustment First and Second Agricultural Adjustment Acts (AAA) (1933 and 1937)Acts (AAA) (1933 and 1937)
Tennessee Valley Authority (TVA) (1933)Tennessee Valley Authority (TVA) (1933)
Reform LegislationReform Legislation
Glass-Steagall Banking Act (1933): Glass-Steagall Banking Act (1933): created the FDICcreated the FDIC
Securities Exchange Act (1934)Securities Exchange Act (1934) Social Security Act (1935)Social Security Act (1935) National Labor Relations Act (1935): National Labor Relations Act (1935):
also known as the Wagner Act; also known as the Wagner Act; collective bargainingcollective bargaining
Fair Labor Standards Act (1938) set a Fair Labor Standards Act (1938) set a minimum wageminimum wage
Reactions to the New DealReactions to the New Deal
FDR built up a “New Deal coalition”FDR built up a “New Deal coalition” ““Solid Democratic South”Solid Democratic South” ““new immigrant” workersnew immigrant” workers Big citiesBig cities African-AmericansAfrican-Americans Organized laborOrganized labor ElderlyElderly Business peopleBusiness people farmersfarmers
Criticism to the New DealCriticism to the New Deal
Strongest opposition came primarily from Big Strongest opposition came primarily from Big BusinessBusiness
American Liberty League: attacked FDR for using too American Liberty League: attacked FDR for using too much power; free enterprise was being attackedmuch power; free enterprise was being attacked
Dr. Francis Townsend: provide government pensions Dr. Francis Townsend: provide government pensions for the elderlyfor the elderly
Father Charles E. Coughlin: blamed business owners, Father Charles E. Coughlin: blamed business owners, especially Jewish ones, for the economic crisisespecially Jewish ones, for the economic crisis
Senator Huey Long: income and inheritance taxes on Senator Huey Long: income and inheritance taxes on wealthy to give each American a $2500 income, a wealthy to give each American a $2500 income, a car, and a college educationcar, and a college education
Supreme Court Reacts to New Supreme Court Reacts to New DealDeal
NIRA declared unconstitutional in NIRA declared unconstitutional in Schecter Poultry Corporation v. United Schecter Poultry Corporation v. United StatesStates (1935): law illegally gave power (1935): law illegally gave power to Congress to regulate intrastate to Congress to regulate intrastate commerce commerce
United States v. ButlerUnited States v. Butler (1936) ruled that (1936) ruled that AAA was unconstitutional on grounds AAA was unconstitutional on grounds that agriculture was a local matterthat agriculture was a local matter
FDR Reacts to New DealFDR Reacts to New Deal
““Court-Packing”: FDR asked Court-Packing”: FDR asked Congress to increase the number of Congress to increase the number of judges from 9 to 15judges from 9 to 15
Aimed at making the S.C. approve Aimed at making the S.C. approve the N.D.the N.D.
Andrew MellonAndrew Mellon
Secretary of the TreasurySecretary of the Treasury Believed course of depression had to Believed course of depression had to
be runbe run Depression a good thing because Depression a good thing because
values would be adjusted, people will values would be adjusted, people will work harderwork harder