Transcript The Great Depression and The New Deal

The Great Depression and
The New Deal
Who is FDR?
Background on FDR
• Was a 5th cousin of Teddy Roosevelt
• Had a long political career before
becoming President
• Contracted Polio and lost use of his legs
• FDR came from a privileged background
but became a heroic symbol for the
ordinary man.
• Why?
The Election of 1932
The Banking Crisis.
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Upon taking office Roosevelt’s administration was faced
with a banking system on the verge of collapse as
panicked depositors rushed banks to withdraw their
savings.
Between 1929 and 1933 one in three U.S. banks failed
causing a loss of tens of millions to depositors.
By 1933 banking in most states was suspended which
meant that people had no access to their accounts.
In the first 3 months of his Presidency, FDR, and his
administration of reform minded advisors, embarked on
an active campaign known as the first 100 days.
The Banking Crisis
FDR and the First 100 Days
• Roosevelt declared a “bank holiday” and called congress
into a special session.
• During this period congress passes the Emergency Banking
Act which provided funds to support threatened
institutions.
• It also passed the Glass-Steagall Act which prevented
commercial banks from buying and selling stocks in the
stock market. (How does this help?)
• The Federal Deposit Insurance Corporation (FDIC) was
created to insure the accounts of individual depositors.
(Does this still exist?)
The First 100 Days Cont’d
• Along with the Emergency Banking Act, FDR persuaded
congress to create a series of government agencies that he
hoped would promote economic recovery.
• The most important of these was the National Industrial
Recovery Act which established the NRA (National
Recovery Administration).
• The NRA worked with business leaders to set standards for
prices and production in a number of different industries
(steel, mining, autos), it also recognized workers’ right to
organize unions.
• With over a 750 codes as part of the NRA, it was almost
impossible for the government to police and ultimately did
not lead to economic recovery.
The First 100 Days cont’d
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Along with the NRA, the first hundred days created an
alphabet soup of government programs:
FERA (Federal Emergency Relief Administration)made grants to local agencies to help impoverished
people.
CCC (Civilian Conservation Corps)- gave unemployed
young men jobs on projects like forest preservation,
flood control and improving national parks. (employed
over 3 million men at $30 a month)
PWA (Public Works Administration)- built roads,
schools, and other public facilities.
CWA (Civil Works Administration)- employed over 4
million people in the construction of highways, tunnels,
courthouses and airports.
The CCC in action
The CWA in Action
The PWA in Action
Alphabet Soup Cont’d
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TVA (Tennessee Valley Authority)- built a series of dams
to prevent floods and deforestation on the Tennessee
River and to provide cheap electric power to people and
businesses in a seven-state area of the south.
AAA (Agricultural Adjustment Act)- aimed at helping
farmers by authorizing the federal government to set
production quotas for major crops and paying farmers
not to plant more. (6 million pigs were ordered
slaughtered as a result of the AAA).
Tennessee Valley Authority
New Deal and Agriculture
• The problems farmers faced during the depression were
compacted by drought, which when combined with
mechanized agriculture destroyed topsoil creating
dustbowl conditions.
• Dust storms could make the day as dark as night and one
storm carried dust from the plains as far as Washington DC
• The AAA helped farmers who owned property by
artificially raising prices for crops and cattle, it adversely
affected tenant farmers and sharecroppers who were forced
off the land because farmers were being paid by the
government to cultivate less land.
• This resulted in a mass migration of people from places
like Oklahoma to California. (these “okies” were made
famous in John Steinbeck’s The Grapes of Wrath.
Woody Guthrie’s The Great Dust Storm
On the 14th day of April of 1935,
There struck the worst of dust storms that ever filled the sky.
You could see that dust storm comin', the cloud looked deathlike black,
And through our mighty nation, it left a dreadful track.
From Oklahoma City to the Arizona line,
Dakota and Nebraska to the lazy Rio Grande,
It fell across our city like a curtain of black rolled down,
We thought it was our judgement, we thought it was our doom.
The radio reported, we listened with alarm,
The wild and windy actions of this great mysterious storm;
From Albuquerque and Clovis, and all New Mexico,
They said it was the blackest that ever they had saw.
From old Dodge City, Kansas, the dust had rung their knell,
And a few more comrades sleeping on top of old Boot Hill.
From Denver, Colorado, they said it blew so strong,
They thought that they could hold out, but they didn't know how long.
Our relatives were huddled into their oil boom shacks,
And the children they was cryin' as it whistled through the cracks.
And the family it was crowded into their little room,
They thought the world had ended, and they thought it was their doom.
The storm took place at sundown, it lasted through the night,
When we looked out next morning, we saw a terrible sight.
We saw outside our window where wheat fields they had grown
Was now a rippling ocean of dust the wind had blown.
It covered up our fences, it covered up our barns,
It covered up our tractors in this wild and dusty storm.
We loaded our jalopies and piled our families in,
We rattled down that highway to never come back again.
Dust Bowl Conditions
Dust Storm
Dust Bowl Migrants
Dust Bowl Migrants
Dust Bowl Migrants
Laissez-Faire is Dead
• By the end of the first New Deal in 1934 it was clear that
Roosevelt’s plan had failed to pull the country out of
depression. This failure, combined with the call for greater
economic equality, led Roosevelt and the Congress to work
on a second New Deal.
• While the first New Deal focused on economic recovery,
the second focused on economic security-a guarantee that
Americans would be protected from unemployment and
poverty.
• Rather than trying to plan business recovery (like the NRA
did) the Government’s objective in the second New Deal
was to re-distribute national income through a system of
taxes and welfare programs.
The Second New Deal
• While many of the programs of the first New Deal drifted
off, the legacy of the second New Deal still resonates
strongly today.
• The second New Deal’s most important legislation were
the WPA (Works Progress Administration), the Social
Security Act and the Wagner Act.
• Like the first New Deal, the second New Deal require
Government intervention in the economy and society on a
scale that the U.S. had not seen before. The question now
wasn’t whether the government should intervene in the
economy, but how it should intervene.
WPA (The Works Progress
Administration)
Aspects of the WPA
• WPA hired 3 million Americans from all walks of life
including professionals like dentists and doctors.
• Like the CWA and PWA it built public facilities, but the
WPA also had an artistic element that ensured that even at
a time when money was short the arts would be supported.
• The WPA put artists (painters, dancers, writers, actors and
musicians) to work in a variety of jobs from painting
murals, to writing local histories and guidebooks, to
recording oral slave narratives, to putting on orchestras,
ballets and plays for public performance.
Examples of WPA Art
WPA Ar
Social Security
• The Social Security Act was the centerpiece of the second
New Deal
• It was an example of Roosevelt’s belief that government
had a responsibility to ensure the material well-being of
ordinary Americans.
• It created a system of unemployment insurance, old-age,
aid to the disabled, poor and families with dependent
children.
• Was a shift from temporary support to permanent support.
• Was funded through tax revenues on businesses and
employees.
• Represented a radical departure from the usual functions of
the U.S. government. IS THIS GOOD OR BAD?