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CHAPTER 33 - THE GREAT DEPRESSION AND THE NEW DEAL
FDR: A POLITICIAN IN A WHEELCHAIR
1921- FDR stricken with polio- humbled him
Eleanor Roosevelt- another of FDR’s great personal and political assets- she would become the most active First Lady in history
FDR’s background- Democrat, Gov. of New York (followed same path as TR)
PRESIDENTIAL HOPEFULS OF 1932 FDR-
Preached “New Deal for the forgotten man”
Speeches were constructed by his “Brain Trust”
“Happy Days are Here Again.”
Hoover FDR would plunge nation
deeper into the depression “The Worst Is Past” Hard to compete with FDR’s
optimism and promises
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HOOVER'S HUMILIATION IN 1932
Electoral college- 472 to 59. Striking feature of the Election
of 1932-Transition of the Black vote from the Republican to the Democratic Party.
Great Depression ruined the GOP
During the lame-duck period, Hoover tried to initiate some of Roosevelt’s plans, but was met with resistance.
Hooverites would later accuse FDR of letting the depression worsen so that he could emerge as an even more shining savior.
ELECTION RESULTS OF 1932
FDR AND THE THREE R’S: RELIEF, RECOVERY, AND REFORM “The only thing we have to
fear is fear itself.” Called for a nationwide bank
holiday (March 6-10) to eliminate paranoid bank withdrawals
New Deal Programs had 3 goals- RELIEF, RECOVERY, REFORM Relief and Recovery were
short-range goals, especially in the first 2 years
Long-range goals were permanent recovery and reform
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First Hundred Days of FDR’s administration, Congress passed many essentials of the New Deal Congress gave FDR blank-
check powers Most reforms were from
the Progressive movement of pre-WWI Unemployment insurance Old-age insurance Minimum wage regulations Conservation and
development of natural resources
Restrictions on child labor
ROOSEVELT MANAGES THE MONEY The Emergency
Banking Relief Act of 1933- Treasury officials to examine the banks and reopen only those that could pay their debt
Glass-Steagall Banking Reform Act- provided for the FDIC (insured individuals up to $5,000)
FDR took the nation off of the gold standard and achieved controlled inflation by ordering Congress to buy gold at increasingly higher prices.
CREATING JOBS FOR THE JOBLESS 1 in 4 workers were jobless
when FDR became president- began creating agencies and organizations to help the workers
Civilian Conservation Corps (CCC) Provided employment in
fresh-air government camps for about 3 million uniformed young men.
Reforested areas, fought fires, drained swamps, controlled floods, etc.
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CREATING JOBS
Federal Emergency Relief Act- looked for immediate relief rather than long-term recovery Created the Federal Emergency Relief Administration (FERA)-
headed by Harry L. Hopkins.
Agricultural Adjustment Act (AAA) ONE aspect made available many millions of dollars to help farmers
pay their mortgages.
Home Owners’ Loan Corporation (HOLC) Refinanced mortgages on non-farm homes, helped about one million
families
Civil Works Administration (CWA) Established late in 1933, designed to provide purely temporary jobs
during the winter emergency- also headed by Hopkins
CRITICS OF THE NEW DEAL
Father Charles Coughlin “Social Justice” Catholic priest from
Michigan Anti-Semitic, fascist Would be silenced by his
superiors in 1942
A DAY FOR EVERY DEMAGOGUE
Huey P. Long Senator from Louisiana “Share the Wealth”
promised each family $5,000 at the expense of the rich
Later shot by an assassin in 1935
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A DAY FOR EVERY DEMAGOGUE
Dr. Francis E. Townsend Retired physician Support of 5 million “senior
citizens” Plan for each senior citizen to
receive $200 month
HELPING INDUSTRY AND LABOR
The National Recovery Administration (NRA) Most complicated/far-
reaching of the programs Designed to assist industry,
labor, and the unemployed. There were maximum hours
of labor, minimum wages, and more rights for labor union members right to choose their own
representatives in bargaining.
Yellow Dog Contracts forbidden
Restrictions on child labor
HELPING INDUSTRY AND LABOR NRA declared
unconstitutional by US Supreme Ct. Schechter Case (1935)- “sick
chicken” case Congress cannot delegate
legislative powers to the executive branch (president)
Congress tried to control commerce within a state (NY)
Prohibition was repealed with 21st Amendment (1933) Need to raise money Provide employment
The Public Works Administration (PWA) Intended both for industrial
recovery and for unemployment relief.
Headed by Secretary of the Interior Harold L. Ickes
Aim- 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).
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PAYING FARMERS NOT TO FARM Farmers had been suffering ever since the end of WWI Congress established the Agricultural Adjustment
Administration (AAA) Paid farmers to reduce their crop acreage and
would eliminate price-depressing surpluses. Would raise money by taxing processors of farm products- increased
cost of products for consumers Increased unemployment. Ended by Supreme Ct. in 1936- taxation provisions were
unconstitutional Soil Conservation and Domestic Allotment Act of 1936
Paid farmers to plant soil-conserving plants (soybeans) or to let their land lie fallow.
The Second Agricultural Adjustment Act of 1938
DUST BOWLS AND BLACK BLIZZARDS
Dust Bowl Causes Drought of 1933 Furious Winds Dry-farming techniques (steam
tractor and disk plow) LOCATION: Parts of Missouri,
Texas, Kansas, Arkansas, and Oklahoma
Forced many farmers to migrate to California and inspired Steinbeck’s The Grapes of Wrath
DUST BOWLS AND BLACK BLIZZARDS Frazier-Lemke Farm
Bankruptcy Act (1934) suspension of farm
mortgage foreclosure for five years
Voided in 1935 by the Supreme Court.
Resettlement Administration (1935)- Charged with the task of
removing near-farmless farmers to better land.
200 million trees planted as windbreakers
Native Americans Commissioner of Indian Affairs was
headed by John Collier Sought to reverse the forced-
assimilation policies in place since the Dawes Act of 1887.
He promoted the Indian Reorganization Act of 1934 which encouraged tribes to preserve their culture and traditions.
77 tribes refused to organize under its provisions (200 did).
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BATTLING BANKERS AND BIG BUSINESS
Protecting Consumers Federal Securities
Act (“Truth in Securities Act” Required promoters to
transmit to the investor sworn information regarding the soundness of their stocks and bonds.
Securities and Exchange Commission (SEC Would protect the
public against fraud, deception, and inside manipulation inside the stock market
Tennessee Valley Authority
Tennessee Valley Authority- TVA (1933) Purpose- develop hydroelectricity to an entire area-
govt could put thousands to work, reform the power monopoly
Network of 29 power-producing hydropower facilities
Nebraska Senator George Norris
Effects Employment Cheap electric power Low-cost housing Restoration of soil Reforestation Flood control Tennessee Valley flourished Would be the drive for the growth of the West
HOUSING REFORM
Federal Housing Administration FHA 1934- to stimulate the building industry
through small loans to householders. It was one of the “alphabetical” agencies to
outlast the age of Roosevelt.
United States Housing Authority (USHA) 1937- designed to lend money to states/
communities for low-cost construction (was meant for low income families, but opposed by slumlords
This was the first time in American history that slum areas stopped growing.
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SOCIAL SECURITY
Social Security Act of 1935 Greatest victory for New
Dealers Created pension and insurance for:
old-aged the blind physically handicapped delinquent children Other dependents by taxing
employees and employers Republicans attacked this
bitterly Importance- govt was now
recognizing its responsibility for the welfare of its citizens
A NEW DEAL FOR LABOR Wagner Act- National
Labor Relations Act of 1935 Guaranteed the right of
unions to organize and to collectively bargain with management.
Milestone for the US labor movement
National Labor Relations Board encouraged unskilled workers to organize Led by John L.
Lewis, boss of United Mine Workers
National Labor Relations Board encouraged unskilled workers to organize Led by John L. Lewis,
boss of United Mine Workers
Formed the CIO- Committee for Industrial Organization
FAIR LABOR STANDARDS ACT
In 1938, the Fair Labor Standards Act (AKA the “Wages and Hours Bill”) was passed, setting up minimum wage and maximum hours standards and forbidding children under the age of sixteen from working.
Roosevelt enjoyed immense support from the labor unions.
In 1938, the CIO broke completely with the AFL and renamed itself the Congress of Industrial Organizations (the new CIO).
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LANDON CHALLENGES “THE CHAMP” 1936 PRESIDENTIAL ELECTION
The Republicans nominated Kansas Governor Alfred M. Landon to run against FDR
523-8 in the electoral college
Roosevelt’s support CIO African Americans The “forgotten man” Catholics and Jews
LANDON CHALLENGES “THE CHAMP” 1936 PRESIDENTIAL ELECTION
LARGEST MARGIN OF VICTORY IN 116 YEARS
“PACKING THE COURT”
The 20th Amendment had cut the lame-duck period down to six weeks, so FDR began his second term on January 20, 1937, instead of on March 4.
He controlled Congress, but the Supreme Court kept blocking his programs (7 times)
Supreme Court- 6/9 were over the age of 70
Roosevelt’s plan- for every existing member over the age of 70, add a new Justice, for a maximum possible total of 15 total members.
Congress voted against him because it did not want to lose its power
Court Packing Plan would be one of his most costly political misjudgments.
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THE COURT CHANGES COURSE
FDR’s “court-packing scheme” failed, but he did get some of the justices to start to vote his way, including Owen J. Roberts
Failure of the court-packing scheme also showed how Americans still did not wish to tamper with the sacred justice system.
Roosevelt would eventually be able to replace all 9 (deaths, resignations)
Few New Deal reforms would be passed after 1937 (Congress’ views of this scheme)
TWILIGHT OF THE NEW DEAL During Roosevelt’s first term, the
depression did not disappear, and unemployment, down from 25% in 1932, was still at 15%. In 1937, the economy took
another brief downturn when the “Roosevelt Recession,” caused by government policies.
Finally, FDR embraced the policies of British economist John Maynard Keynes.
In 1937, FDR announced a bold program to stimulate the economy by planned deficit spending.
In 1939, Congress relented to FDR’s pressure and passed the Reorganization Act, which gave him limited powers for administrative reforms, including the key new Executive Office in the White House.
The Hatch Act of 1939 barred federal administrative officials, except the highest policy-making officers, from active political campaigning and soliciting.
NEW DEAL OR RAW DEAL?
Foes of the New Deal condemned its waste, citing that nothing had been accomplished.
Critics were shocked by the “try anything” attitude of FDR, who had increased the federal debt from $19.487 million in 1932 to $40.440 million in 1939.
It took World War II, though, to really lower unemployment. But, the war also created a heavier debt than before.
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FDR’S BALANCE SHEET
New Dealers claimed that the New Deal had alleviated the worst of the Great Depression.
FDR also deflected popular resent against business and may have saved the American system of free enterprise, yet business tycoons hated him.
He provided bold reform without revolution. Represented both Hamilton and Jefferson
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