The Great Depression and the New Deal 1933-1939 Chapter 34

FDR: Politician in a Wheelchair

Polio

  1921 Changed his character • Courageous • Patience • Tolerance • Compassion • “after trying to wiggle my big toe for

two years, everything else was easy”

Eleanor Roosevelt        FDR asset “Conscience of the New Deal” Traveled for him Most active first lady Influenced policies of national government Battled for impoverished and oppressed Controversial figure • Loved by liberals and hated by conservatives

FDR political appeal

     Amazing Turn on the charm Great speaker Sponsored heavy spending in New York to overcome Depression “Forgotten Man” FDRs deep concern for the Depressed • “Traitor to his class”

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

  Smith cast aside for FDR Platform • Repeal of Prohibition • Against the Hoover Depression • Balanced budget • Social and economic reforms

Presidential Hopefuls of 1932

Campaign of 1932

 FDR wants to be seen as robust and eager  Attacks Republican

Brain Trust

   Small group of reform minded intellectuals, mostly college professors Later authors of the New Deal Wrote speeches that contradicted themselves or went against later

“Happy Days Are Here Again”

  FDRs theme song Fit his style • Optimistic • Promises bold experimentation

Hoover

    Remains isolated in White House “Prosperity is just around the corner” Tried to produce fear if FDR elected Has to finally campaign

Hoover’s Humiliation in 1932

Results

  FDR • 22.8 million • 472 electoral votes Hoover • 15.7 million • 59 electoral votes

New Voting Blocks

   Blacks vote Democrat Suffered worst from the Depression Vital element in Democratic Party

Depression hurt Republicans

 Americans want a new deal not the new deal   Any democratic candidate could have won Anti-Hoover election

Lame Duck Period

 Hoover could not start any long range projects    FDR uncooperative Hoover tries to bind FDR to anti inflationary policies to make New Deal impossible Washington deadlocked • American economy comes to a halt

FDR and the Three Rs: Relief, Recovery, Reform

Inauguration 1933

   Nationally broadcast Government must wage war on the Depression

“Let me assert my firm belief that the only thing we have to fear is fear itself”

Bank Holiday

   March 6-10, 1933 Democratic Congress in special session Hundred Days • Unprecedented legislation to deal with crisis • “If he set the White House on fire we

would say at least he got a fire started somewhere”

Three Rs

   Relief • Short range • Help for people and economy Recovery • Short range • From Depression Reform • Long range • Reform abuses in system

Congress

   Felt panic in America Rubber stamp FDRs policies Gave President more power

Intuition

   FDR worked off the cuff Next move depended on outcome of last move Public desperate for any movement, even in wrong direction

Many essential New Deal programs passed in Hundred Days   Owed reforms to Progressive movement Many long overdue • Unemployment insurance • Old age insurance • Minimum wages • Conservation and development of natural resources • Child labor restrictions

Roosevelt Tackles Money and Big Banking

Emergency Banking Relief Act  Gives President power to • Regulate banking transactions • Foreign exchange • Reopen solvent banks

Fireside Chats    35 million listen Gave assurances that it was now safe to keep money in banks Banks begin to reopen

Glass-Steagall Banking Reform Act  Creates the Federal Deposit Insurance Corporation (FDIC) • Government insures your money up to $5,000

Beer-Wine Revenue Act

  Government needed tax money Later the 21 18 th st Amendment repeals Amendment

Gold Standard

   Orders all private holdings of gold turned in and redeemed in paper money Takes nation off gold standard Managed currency on its way

Managed Currency

     Wants inflation for debtor relief Stimulate new production Price of gold goes up to $35 an ounce Amount of money in circulation increases Back on limited gold standard in 1934

Creating Jobs for the Jobless

Prime the Pump

 Using government money to get the economy rolling  FDR would use government money to give jobs to unemployed • 25% in 1933

CCC       Civilian Conservation Corps Most popular of New Deal programs Government camps offer employment Mostly young men Reforestation, fire fighting, flood control, swamp drainage Required to send money home

FERA     Federal Emergency Relief Act Give adults jobs Harry Hopkins $3 billion to states for direct dole or state works projects

AAA    Agricultural Adjustment Act Millions given to farmers to help them meet their mortgages Gave farmers subsidies for every acre they did not sew  Later declared unconstitutional

HOLC    Home Owners Loan Corporation Provided refinancing of small homes to prevent foreclosures Bolted middle class homeowners to Democratic party

CWA     Civilian Works Adminstration Branch of FERA Temporary jobs during winter Boondoggling

A Day For Every Demogogue

Demagogues

 Appear to relieve suffering of Americans  Basically conservative

Father Charles Coughlin      Catholic Priest Inflated currency and nationalize banks Attacks New Deal Becomes anti-Semitic and Fascist Radio broadcasts popular until told to stop

Huey Long      Kingfish from Louisiana Most dangerous man in America “Share Our Wealth” program • $5,000 for every family • Luxury tax on wealthy • Maximum wealth Candidacy for President Assassinated

Dr. Francis Townsend  Plan for guaranteeing a secure income   2% federal sales tax Everyone over 60 receive $200 a month   Stimulate the economy by making them spend it Becomes social security

A Helping Hand For Industry and Labor

National Recovery Administration    NRA Most complex and far reaching Assist industry, labor and unemployed

Industry

   Work out fair competition Anti trust laws suspended Codes for wages, hours, levels of production and prices

Labor  Right to organize and bargain collectively   Yellow dog contracts forbidden Child labor restrictions

NRA Movement

    Patriotic parades Blue Eagle in store windows “We Do Our Part” – slogan Upswing in business activity

Problems     Too much sacrifice National Run Around Violations of codes Supreme Court rules unconstitutional in Schechter v. US

Public Works Administration      PWA Industrial recovery and unemployment relief Headed by Harold Ickes $4 billion on 34 projects Grand Coulee Dam • More electric power than the TVA • Irrigated farms and increased production • Appreciated after WWII

Paying Farmers Not To Farm

1. Have you completed your Chapter 33 Concept Checks?

2. Have you Completed your Third Practice EOI?

AAA of to wobbly start

 Started after cotton crop planted in 1933   Much plowed under and many animals killed to stop surplus Looked sinful

Subsidized scarcity effect

   Raised farm income Increased unemployment Hurt many parties involved

Soil Conservation and Domestic Allotment Act of 1936   Farmers given money to plant soil conserving crops rather than to lie fallow Emphasis on conservation

Second Agricultural Adjustment Act     1938 Acreage restrictions on certain commodities Parity payments Farmers get larger share of national income

Dust Bowls and Black Blizzards

Dust Bowl    1933 drought Texas up to Nebraska Tore topsoil off land

Causes

 Marginal land under cultivation during WWI   Dry farming techniques Mechanization

Okies    Thousands leave ruined farms Many move to California looking for migrant jobs on farms Depicted in Grapes of Wrath by John Steinbeck

Attempts to help

  Frazier-Lemke Farm Bankruptcy Act • Suspension of mortgage foreclosures for 5 years • unconstitutional Resettlement Act • Remove marginal farmers to better land • Trees planted in plains to keep soil down

Native Americans

   Indian Reorganization Act Indian New Deal Reverse Dawes Assimilation • Encourages tribes to establish self government • Preserve native crafts • Returns lands to their control • Some Indians thought it demeaning

Battling Bankers and Big Business

Truth in Securities Act  Stop abuses brought on in speculation  Tell truth about stock values

Securities and Exchange Commission    SEC Regulate the stock market Limits on speculation

Public Utility Holding Company

 Stopped being able to hold huge shares in utilities with a minimum amount of money

The TVA Harnesses the Tennessee River

TVA      Huge experiment in regional development and public planning Government corporation Thousands given jobs in poor region Build dams, operate electric power plants, control flooding and erosion, manufacture fertilizer Sold electricity well below other power companies • Set standard for prices around the country

Results

        Full employment Cheap electric power Low cost housing Restoration of soil Flood control Improved navigation of Tenn River Would stimulate more dams being built Socialistic???

Housing Reform and Social Security

FHA    Federal Housing Administration Boost to homeowners and builders Insuring bank loans for new houses and repairing old ones

USHA     United States Housing Authority Lend money to local areas to build low cost housing Fell short of need Opposition to expansion

Social Security        Affect lives for generations 1935 Federal insurance program Collected through payroll deductions Monthly payments to elderly (65) Unemployment compensation Blind, disabled, dependent children and mothers

Result in the 1930s

 Republicans insist on a cult of work not leisure   Inspired by European nations Government now recognizes its responsibility for welfare of its citizens

New Deal For Unskilled Labor

Labor becomes assertive

   NRA allows them to organize Walk outs in 1934 San Francisco turned bloody

National Labor Relations Act of 1935 – Wagner Act  Creates National Labor Relations Board   Asserts labor’s right to organize Union memberships shoots up from 3 million to over 10 million by 1941  Unskilled labor begins to organize

Committee For Industrial Organization - CIO     John L. Lewis Began under the AF of L Unskilled labor Split

General Motors Strike - 1937       Sit down strike – closed plant Could not hire scabs Troops not given by governor or President Union wins United Auto Workers formed Leaders of union were driven off

Steel Strike in 1937

 US Steel had voluntarily agreed to recognize CIO    Strikes in smaller firms Violence broke out Agree to recognize CIO

Fair Labor Standards Act   Last major New Deal measure Victory for unions 1.

2.

3.

Minimum wage (40 cents an hour) Maximum work week (40 hours) Child labor restrictions (under 16)

Unions thrive under FDR

    Built a solid voting block CIO renamed Congress Blacks and whites in CIO Feuds with AFL for years

Landon Challenges “the Champ” in 1936

FDR re-nominated

  Democrats feel confident Millions of Americans felt relief

Republicans

 Hard to find someone to challenge FDR     Alfred Landon of Kansas Moderate Platform condemns New Deal American Liberty League • Conservatives who fight against the New Deal programs

“I welcome their hatred”

 Denounced those who would hide behind the flag and Constitution

Landslide

   Republicans carry 2 states FDR • 27.7 million • 523 Landon • 16.6 million • 8 electoral votes • Democratic majorities in Congress

Class warfare

 Economic needy against greedy economic groups    Third parties turn to FDR Lincoln was dead to Blacks Socialists turn to FDR

Forgotten Man    FDR appeals to “forgotten man” Don’t bite the hand that doled the $ Powerful coalition forms • Southern blacks • Urbanites • Poor • New immigrants (Catholics and Jews) • 1 of every 4 new judges were Catholic

Nine Old Men on the Supreme Bench

20

th

Amendment

 Moves the inauguration to the 20 th January instead of March of  Congress takes office on January 3 rd  Sweeps away the post election lame duck period by six weeks

Mandate

 FDR sees reelection as mandate for the New Deal  Supreme Court stood in his way • They went against 7 of 9 New Deal cases • FDR did not appoint 1 member in first term

Conservative Bench

   Old guard justices Felt it their duty to curb socialistic tendencies Majorities in both houses show what Americans wanted  Court should get in line

Court Reform Bill  FDR wants to expand the court from 9 members to 15    Appoint new member for everyone over 70 years old Six new justices would give FDR majority on court FDR does not read the public who believes the Court a sacred cow

The Court Changes Course

Court Packing

 Congress and nation do not like the scheme to pack the Court     Voted against it Basic liberties seemed in jeopardy FDR loses Hurt his reputation for a while

Court changes course

   Conservative Justice Owens begins to support New Deal 1937 support minimum wages for women and reverse decision from last year Congress votes Justices full pay after 70 • Conservative retires and Hugo Black appointed

Court reform bill passed

  Dealt with lower courts only FDR loses first major battle • Don’t tamper with Supreme Court!

• FDR will make 9 appointments later on • Aroused conservatives in both parties • New Deal slows down

The Twilight of the New Deal

First Term

 New Deal does not end Depression • Unemployment at 15% • Pump priming works modestly • Nation moving forward

Roosevelt Recession    1937 Economy takes a down turn Government policies cause this • Social security begins • Cut back on government spending

John Maynard Keynes     Economist FDR embraces his ideas of deficit spending Planned deficit spending Turning point in government’s relation to the economy

Remaining New Deal reforms

 Reorganization Act • To reorganize National Administration to make it more efficient • Finally passed 2 years later

Relief checks

 Usually came right before an election

Hatch Act     Administrative officials could not campaign politically and solicit money Forbid use of government funds for political purposes Could not collect campaign contributions from people receiving relief payments Limited campaign contributions and expenditures in 1940

New Deal losing momentum

   By 1938 1938 elections saw Republicans cut into Democratic majority International crisis coming into play

New Deal or Raw Deal?

Foes of the New Deal

 Waste, incompetence, confusion, contradictions, graft   Leftists and communists in government Roosevelt was too Jewish

Business community shocked

  Don’t confuse noise with movement Leap before you look attitude of FDR

Bureaucracy

 US government becomes largest business in the country  States fade into background

Balanced budget dies

     $19 billion to $40 billion Handout state Trying to squander itself into prosperity Undermine virtues of thrift and initiative Instead of going west, Americans went on relief

Business bitter

    Labor and agriculture pampered Felt business could get us out of Depression if government would get off their backs Private enterprise being stifled by government planning States rights being ignored

FDR criticized

   One man super government Browbeat Supreme Court and Congress Opposed Congressmen who opposed his policies

Failed to cure the Depression

    Need more deficit spending?

Gap between production and consumption not closed Many still unemployed WWII gets us out of Depression but also increase national debt to $258 billion

FDRs balance sheet

New Dealers defend their record   Relief was their main goal at first Graft yes, but haste was needed and makes for waste

Government morally responsible to prevent mass hunger by managing the economy      Balance the human budget Use the government – don’t fear it Collapse of the economy avoided Fairer distribution of wealth Citizens retain self respect

May have saved capitalism

 War not against capitalism but capitalists   Purged America from some of its worst abuses Mild dose of socialism may have saved US from moving all the way

Bold reform without a revolution

  Left thinks they did not go far enough Right thinks they went too far   Hamiltonian in believing in government Jeffersonian in concern for forgotten man  Helped preserve democracy in America when democracies were disappearing around the world