Transcript Chapter 26
The New Deal U.S. 2 - Honors
I.
A.
Restoring Confidence
Franklin Delano Roosevelt soundly defeated Herbert Hoover in the election of 1932. He promised “Action & Action Now” to the American people. In his inaugural speech he said “the only thing we have to fear is fear itself”. He gave Americans hope for the first time in four years.
1) 2) During the first 100 days in office, FDR sent 15 messages to congress and all 15 became law. FDR’s program of RELIEF, RECOVERY & REFORM became known as the NEW DEAL. (the 3 Rs of the new deal) March 6, two days after taking office, FDR issued a proclamation closing all American banks for 4 days until congress could meet in special session to consider banking reform legislation.
Hoover & FDR on their way to the Capitol for the Inauguration “the ONLY thing we have to Fear is Fear itself.”
a) b) c) d) Emergency Banking Act remain closed until they could prove they were sound to conduct business.
– March 9, 1933 – all banks will i.
90% of all banks that reopened under the provisions of this act did NOT fail for the rest of the depression The Federal Deposit Insurance Corporation (FDIC), (still in existence insures up to $100,000) June 1933 – insured each bank deposit up to $2, 500.00 Farm Credit Administration buy back lost farms).
, March 1933 – provided low interest long term loans to farmers (these loans were to enable farmers to pay back mortgages, loans, taxes & Home Owners Loan Corporation (HOLC) , April, 1933 – allowed people to borrow money at low interest rates for a longer period of time. (Over 1 million American families were saved from homelessness as a result of the HOLC)
RUN ON THE BANK
WITH BANKS CLOSED PEOPLE BARTERED FOR WHAT THEY NEEDED.
B.
In addition to helping the banks, FDR knew that something needed to be done for the 1 in 3 Americans out of work. He had Congress authorize a number of large scale programs of Direct and Work Relief for the 13 million unemployed.
1.
Federal Emergency Relief Administration (FERA) , May 1933 – provided for ½ Billion dollars to go directly to the states & local agencies for the people. a) By 1935 $3 Billion was spent on direct relief & 8 million families were surviving on public assistance.
2.
Civil Works Administration (CWA), Headed by HARRY L. HOPKINS. A “temporary” organization under FERA to provide jobs for unemployed workers (make work).
Civil Works Administration workers repaving road in front of the Philadelphia Zoo's administration building, Philadelphia, PA, June, 1934.
Credit: Courtesy of Temple University, Urban Archives, Philadelphia, Pa When Mayor J. Hampton Moore refused federal assistance, WPA state administrator Edward Jones moved 12,000 Philadelphia WPA employees to the suburbs. After S. Davis Wilson became mayor in 1937, federal relief poured into the city; the WPA alone employed more than 47,000 people. Moore's opposition, however, had cost the city millions of dollars in relief and lost it construction projects that benefited other municipalities throughout the state.
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Civilian Conservation Corps (CCC), 1933 brothers and sisters.
a) – provided jobs for unmarried men between the ages of 18 & 25, part of their salaries were sent home to help their mothers with younger At its’ peak it had between 300,000 & 500,000 members.
b) Men worked at jobs to save the countries’ natural resources & were given 3 meals a day, clothes & lived in army type camps.
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Built fire trails Cleared swamps Built small dams for flood control iv.
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Built parks Planted trees National Youth Administration (NYA), a) Had 400,000 members in its 1 st 1935 – provided jobs for boys & girls who were still in school. Students worked in & around their school making a minimum wage.
year alone. (today would be similar to the Work-Study Program)
A.
The initial actions of FDR were largely stopgaps, to buy time for more comprehensive programs. FDR began with the Farmers who had been suffering since the end of World War I.
1.
AGRIUCLTURAL ADJUSTMENT ACT, May 1933 - the purpose was to pay farmers to reduce their output of products & increase their income. This act established the AGRIUCLUTRAL ADJUSTMENT ADMINISTRATION (AAA) whose purpose was to enforce the act.
a) Farmers who agreed not to plant ¼ to ½ of their land would receive gov’t. Subsidies.
i.
Subsidies – benefit payments raised by putting taxes on food processors & given to farmers not to plant.
The New Deal's Needy Family Program distributed farm produce to poor families (Source:
Wikimedia Commons
--public domain)
B.
New Dealers felt that the farm program was a success because farmers’ income did go up & they were spending their new found wealth on industrial products.
1) Severe criticism of the AAA also existed b/c the food processors that were taxed to pay for the subsidies passed that payment onto consumers. a) This means that the working men were paying more for food while farmers were being paid to work less) 2) 3) UNITED STATES V. BUTLER, 1936 – Supreme Court found the AAA unconstitutional a) Ruling stated that congress did not have the right to regulate agriculture ONLY the states had that right.
SOUTHERN TENANT FARMERS UNION, 1934 – formed by the poorest white & black sharecroppers in Arkansas. It became a lobby group that asked the gov’t to stop tenant evictions & to force landowners to share payments w/ the farmers who rented land.
Texas tenant famer on the way to California, 1937 Ex-Tenant farmer on relief, 1937
A.
B.
Since 1931 businesses approached government to develop an “anti-deflation” scheme that would permit trade associations to cooperate in stabilizing prices within their industries. Existing antitrust laws clearly forbade such practices.
FDR and the New Dealers were willing to try this scheme as long as it included rights for the workingmen to form unions and be guaranteed a minimum wage.
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NATIONAL INDUSTRIAL RECOVERY ACT (NIRA), jobs. It established the 1933 was designed to stimulate industrial & business activity & reduce unemployment by stabilizing prices, raising wages, limiting workers’ hours & providing NATIONAL RECOVERY ADMINISTRATION (NRA was headed by General Hugh S. Johnson who got 95% of all US industry to adopt the fair practices codes. According to these codes: a) b) c) d) e) LIMIT PRODUCTION BY SETTING QUOTA’S PROVIDE FOR COMMON CONTROL OF PRICES & SALES OUTLAWED CHILD LABOR ESTABLISHED A 40 HOUR WORK WEEK FOR ADULTS EST. A MINIMUM WAGE ($12 TO $15 PER WEEK) ) whose purpose was to write “fair practice codes” for all industry. NRA The NIRA included Section 7a which guaranteed workers the right to bargain collectively.
SCHECHTER V. UNTIED STATES, 1935 a) every aspect of business.
– Supreme Court ruled that the NIRA was unconstitutional. According to the ruling: The constitution did NOT give the Federal Gov’t. the authority to regulate b) c) d) Congress had given too much of its authority to the President The President did NOT have the authority to approve or disapprove of industry codes.
Fair Practice codes were NOT legally BINDING.
Hugh S. Johnson on the cover of TIME
C.
In addition to the NIRA/NRA the New Dealers continued to work on ideas that would take Americans back to work.
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PUBLIC WORKS ADMINISTRATION (PWA), a) i.
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70 municipal power plants Several hundred schools & hospitals 1500 water works 1933 – HAROLD ICKES, Sec. of the Interior was chosen to head up the PWA, its purpose was to contract with private firms for the construction of public works.
Among the public works projects completed were: Numerous federal, state, county & municipal buildings.
2.
RECONSTRUCTION FINANCE CORPORATION (RFC), stated under Hoover’s administration & continued under FDR’s – it’s purpose was to give huge loans to railroads & other companies so they could get back on track & begin hiring workers again.
A.
Most New Dealers believed that the gov’t needed economic planning but that private interests needed to dominate the planning process. One of the most successful accomplishments of the New Deal was a plan where the government itself was the chief planning agent in the economy.
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TENNESSEE VALLEY AUTHORITY a) (see map on page 696), May 1933 – transformed the economic and social life of the Tennessee Valley region by taking over where private utility companies failed The TVA was authorized to finish the dams at Muscle Shoals & build others in the region.
b) c) To generate & sell electricity from these dams to the public at reasonable rates, To provide for a comprehensive redevelopment plan for the entire region .
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38 dams were build w/ power stations Flooding in the region came to an end Malaria, illiteracy & soil erosion were improved as well as the regions standard of living.
I.
Critics of the New Deal
A.
Some critics accused the New Deal of pushing government power too far, while others wanted to expand it further. After the Congressional elections of 1934 FDR continued to provide Relief, pursue Recovery & increasing emphasize Reform. (Read about the critics & their causes on pages 699 700)
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Works Progress Administration (WPA) – April, 1935 --- headed by HARRY HOPKINS it replaced the CWA. Its’ purpose was to “make work” for the millions still unemployed. Congress allotted $5 Billion for the WPA to create jobs. Among the work done by the WPA was: a) b) c) d) 6,000 new schools were built (including GRENLOCK in WT) Sewage treatment plants were build in 5,000 communities 128,000 miles of secondary roads were built Unemployed actors, musicians & writers were put to work performing free concerts & plays for the public & painted murals, writing guidebooks, etc.
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Social Security Act provide: – August, 1935 – Money for Social Security come s from payroll taxes on employers & employees. It’s purposed was to a) b) c) Old age pensions Supplemental income for handicapped & dependent children Unemployment insurance Rural Electrification Administration (REA) May, 1935 –provided electricity to rural areas lacking public utilities.
4.
Public Utility Holding Co. Act, 1935 (aka: The Wheeler-Rayburn Act) – its’ purpose was to regulate public utility companies by delegating its authority to already formed governmental commissions.
a) FEDERAL POWER COMMISSION (FPC) transmission & sale of electricity.
– HAD THE authority to regulate the interstate production, b) FEDERAL TRADE COMMISSION (FTC) authority to regulate the interstate production, transmission & sale of gas.
– HAD THE c) d) SECURITY & EXCHANGE COMMISSION (SEC) holding companies.
– regulates the finances & financial practices of public utility DEATH SENTENCE CLAUSE be dissolved.
– gave public utility companies 5 years to re-adjust their financial affairs. At the end of 5 years, if they could not prove they were distributing gas or electricity in a given area, they would
5.
The Revenue Act of 1935, aka – THE WEALTH TAX ACT
measures.
- its purpose was to increase taxes on the nation’s richest people & tax corporations if they made an annual profit greater than 10%. The money was then used for public works projects & other relief
A.
After the Supreme Court declared the NIRA unconstitutional a group of Progressive lawmakers led by NY Senator ROBERT E. WAGNER pushed though congress a new law to help workers & FDR signed it because the working men & women had themselves become a large force in politics.
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NATIONAL LABOR RELATIONS ACT (aka: THE WAGNER ACT) – This act guaranteed labor: a) b) c) The right to organize unions The right to bargain collectively for better wages & working conditions Condemned as unfair to labor discrimination against a worker because he/she was a union member.
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The Wagner Act helped labor organize rapidly & promoted industrial recovery by giving workers higher wages so they could buy more products. This act was strongly supported by FRANCES PERKINS , the Secretary of Labor & the first woman on a President’s cabinet.
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With the rise in union memberships came the rise of a new industrial union & a new way of striking.
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b)
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The American Federation of Labor continued to organize workers by their craft (skilled workers). However during the 1930’s more workers were not skilled and needed a different kind of union.
JOHN L. LEWIS
– leader of the United Mine Workers left the AFL and formed the
CONGRESS OF INDUSTRIAL WORKERS (CIO)
IN 1936.
ii.
The CIO organized workers by industry NO matter what job they did in that industry.
CIO organized blacks & women along with white workers.
c) d)
iii.
CIO was much more militant that the AFL
SIT DOWN STRIKE
– was first used in 1936 when GM workers & members of the UAW refused to leave the factories until management met their demands. After 6 weeks GM gave in & the UAW was allowed to organize GM workers throughout the country.
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STEEL WORKERS
suit
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In March, 1937 United States Steel Corporation recognized the Steel Workers’ Organizing Committee (SWOC) later to become United Steel Workers. The smaller steel companies refused to follow
THE MEMORIAL DAY MASSACARE
1937 strike to fail.
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a group of striking steel workers were legally marching toward the Republic Steel Plant when Chicago police opened fire on the group killing 10 & wounding 90. This brutality caused the ii.
However, by 1941 there were more than 10 million members of the steel workers union. & they were recognized by Little Steel as well as US steel.
Ten demonstrators were killed by police bullets during the "Little Steel Strike" of 1937
B.
In addition to all of the work helping labor, the New Deal also continued to help the farmers. After the AAA of 1933 was found unconstitutional the New Deal came up with a new program.
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THE AGRIUCLUTRAL ADJUSTMENT ACT OF 1938 – provided that: a) b) c) Farmers got paid to withdraw land from production to practice conservation.
Dept. of Agricultural set limits on the amount of specific crops that could be brought to market each year Gov’t. bought up any surpluses until prices rose; farmers could get government loans based on the value of their stored crops.
FARM SECURITY ADMINISTRATION (FSA), could buy their own farms.
1937 – was created by Congress to make low-interest long term loans to tenant farmers & sharecroppers so they a) FSA also established camps were migrant farm workers could find shelter & medical care.
A.
FDR decided that no program of reform could long survive the conservative justices who had already struck down the NRA & the AAA of 1933. So Roosevelt proposed what his critics called “The Court Packing Scheme” 1. According to the “scheme” for each justice on the Supreme Court over the age of 70, the President would be able to appoint another justice.
2. The justices themselves began to validate some of the progressive reforms a. Chief Justice Charles Evans Hughes & Associate Justice Owen J. Roberts began to side with the progressives on the court and voted to uphold a state minimum wage law, the Social Security act & the Wagner Act.
b. Congress overwhelming disapproved of the court packing idea and FDR lost votes in Congress from Southern Democrats & other conservatives who had voted for reform in the past.
c.
By 1945
, through death & retirement,
8 of the 9 justices
on the Supreme Court had been appointed by FDR.
B.
After the congressional elections of 1938 and the failure of his court packing scheme, FDR decided not to propose any new reforms in 1939 marking an end to the New Deal era.
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The threat of world crisis hung heavy in the air and FDR was gradually growing more concerned w/ persuading a reluctant nation to prepare for war than with pursuing new avenues of reform.
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World War II broke out in Europe in September of 1939 and the American economy picked up by selling weapons & other armaments to the Allied Nations in Europe.