Transcript The Great Depression and the New Deal The Country needs and demands bold, persistent experimentation.

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 renominate Hoovercampaigned saying that his
policies prevented
the 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
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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 472HH 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
• Three Rs:
FDR and the 3 R’s
– 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 nonfarm 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 winter
emergency.
• Many of its tasks were
rather frivolous (called
“boondoggling”) and were
designed for the sole
purpose of
making 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 BenedictPatterns and Culturesstudy 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 1933repeals 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 plant
soil-conserving plants like
soybeans or to let their land lie
fallow.
• The Second Agricultural
Adjustment Act of 1938 was a
more
comprehensive substitute that
continued conservation payments
but was
accepted 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 overtilling 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 windbreaks
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 Oklahoma
into 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 reestablish 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 Actpromoters 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 FranBloody 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 Boardencourages 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 CIOMemorial 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
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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
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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
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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 laborerthus 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
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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