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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