FDR and the New

DealAP US - Unit 13

Chapter 36

Election of 1932

• Hoover received the Republican nomination– Though despised by many

• Franklin Delano Roosevelt won the Democratic nomination

• FDR won (a lot) with 472 electoral votes to 59 - ouch!

• The 1932 elections showed that Americans were ready for a change.

• FDR was the governor of New York and a distant cousin of former president Teddy Roosevelt.

• FDR had been struck by polio in 1921, but fighting to overcome it made him a great man and leader, similar to his cousin TR – Am I biased? Is your book? At least it

says “great crises often call forth gifted leaders”

• Four months would pass between FDR’s election and his inauguration – (it wasn’t until 1933 that the 20th amendment

which moved presidential inaugurations to January took effect and it did not cover the 1932 election).

• During that time, FDR gathered with a carefully picked group of advisors and formulated a plan to alleviate the problems of the Depression. This plan became known as The New Deal, which would focus on three main goals:

• relief for the needy• economic recovery• financial reform

2-2 Clip 8: FDR and the New Deal

The Hundred Days – • Upon entering office, FDR immediately

jumped into intense activity to initiate new programs. This became known as the Hundred Days and lasted from March 9 to June 16, 1933.

• During this time Congress passed more than 15 major pieces of New Deal legislation that greatly increased the federal government’s role in the national economy. – Congress overwhelmingly supported FDR

because of their fear about the country’s economy

The Hundred Days – Saving the Banks

• One day after taking office, FDR declared a bank holiday and closed all of the banks to prevent further withdrawals and to end the increasing rate of bank failures.

The Hundred Days – Saving the Banks

• He convinced Congress to pass the Emergency Banking Relief Act – authorized the Treasury Department to

inspect banks around the country •Those that were stable could reopen • those that were unable to pay their debts

would remain closed •Banks that needed help would receive loans •This caused the public to trust banks again

since those that were open were in good shape.

The Hundred Days – Saving the Banks

• Congress also establishes the Federal Deposit Insurance Corporation (FDIC). – This insured individual accounts and

allowed people to have faith in their deposits.

Fireside Chats• On March 12, the day before the first banks

would reopen, Roosevelt gave the first of his many radio talks about issues of public concern. He explained in clear and simple language the policies of his New Deal Program.

• These radio speeches would become known as “fireside chats.” In the first speech he explained the new banking programs and that the nation’s recovery depended on people not demanding all of their savings from banks at once – as this led to the downfall of many banks.

FDR’s Fireside Chat

• Over the next few weeks, many Americans returned their savings to the banks; FDR’s fireside chat had returned their faith in the banks.

The 100 Days - Bye Bye Gold

• All private holdings of gold were to be surrendered to the Treasury in exchange for paper money

• America was removed from the gold standard

• Congress canceled the gold-payment clause in all contracts - now all would be paid with paper money

Goal of Managed Currency

• INFLATION– Would relieve debtors’ burdens and

stimulate economy• Treasury would buy gold for

increasing prices to fix the price of gold from $21/oz to $35/oz by 1934– Increased bills in circulation as gold

owners sold it for increased prices• Gold standard was returned for

foreign transactions only in February 1934

The 21st Amendment

• Roosevelt persuaded Congress to approve a bill allowing the manufacture and sale of some alcohol.

• His intent was to increase government revenue by taxing alcohol.

• The 21st amendment quickly followed by the end of 1933 and repealed Prohibition altogether.

The Agricultural Adjustment Act (1933)

• The Agricultural Adjustment Act (AAA) tried to raise farm prices by lowering production (and therefore supply) of farm goods. – Farmers were paid to leave a certain amount of

every acre unseeded. – Some crops were too far along for the “no

seeding” policy to work. In these cases, the government paid cotton growers $200 million to plow under 10 million acres of cotton. Hog farmers were paid to slaughter 6 million pigs.

– The destruction of so much food during a time of hunger shocked many Americans, but it did help raise farm prices and put money into farmers’ pockets.

AAA

Work Projects – CCC (1933)

• The Civilian Conservation Corps (CCC) put young men between the ages of 18-25 to work building roads, creating parks, planting trees, and controlling soil-erosion and flooding.

CCC• By the end of the

program in 1942, 3 million young men had been employed by it. – Workers received

$30 a month, $25 of which was automatically sent home to their family.

– Free food, uniforms, and lodging were supplied in the work camps.

CCC Workers Thinning Trees

• 200 million trees were planted in the Great Plains by CCC workers – this project was to control erosion and prevent another Dust Bowl. The CCC also built Timberline Lodge on Mt. Hood!

Work Projects• The Public Works Administration

(PWA – June 1933) provided money to states to create jobs in the construction of schools and community buildings.

• This program was not terribly successful and changed to the Civil Works Administration (CWA) in November of 1933. – provided 4 million jobs over the winter – built 40,000 schools– paid the salaries of 50,000 schoolteachers in

rural schools– built more than half a million miles of roads.

Promoting Fair Practices – NRA 1933

• The National Recovery Administration (NRA) was created to interrupt wage cuts, falling prices, and layoffs.

• drafted codes of “fair practice” which limited production and established prices

• Workers were also guaranteed the right to unionize

Basic Needs –HOLC (1933) and FERA

(1933)• The Home Owners Loan Corporation

(HOLC) provided government loans to home owners who faced foreclosure.

• The Federal Emergency Relief Administration (FERA) used $500 million to provide direct relief for the needy. – Some paid for work relief programs – the rest provided food and clothing to those

in need through state grants

Attacks on the New Deal• Many people came out to criticize the New

Deal. – Liberals felt that it was not doing enough to help

the poor and reform America’s economic system. – Conservatives felt that the New Deal policy of

deficit spending went too far and that the government now had too much control over the economy.

• DEFICIT SPENDING: When a government spends more money than it receives in revenue. This is often done during times of economic depression to stimulate the economy by putting money into the hands of the average person.

Three Strong Critics

• Three men arose out of this time period to criticize FDR’s policies not for going too far, but for not going far enough to help the poor.

Father Charles Coughlin

1. Father Charles Coughlin, a priest from Detroit, broadcast radio sermons every Sunday that combined economic, political, and religious ideas.

He wanted a guaranteed income and the nationalization of banks.

Increasing anti-Semitic statements lost Coughlin a large part of his following.

Dr. Francis Townsend

2. Dr. Francis Townsend, a physician from Long Beach, CA, believed that FDR should do more to help the poor and elderly.

He devised a pension plan that would provide money to the elderly and would require them to spend it. This would feed more cash into the economy.

Huey Long

3. Senator Huey Long (D-LA) was FDR’s largest challenger. This self-proclaimed “kingfish” of Louisiana created a social program called “Share Our Wealth.”

Under the Share Our Wealth program, people could have a maximum of a certain amount of wealth and anything above that would be split among the people.

Huey LongLong’s ideas became

popular even though he never instituted much social reform in his own state of Louisiana.

Long was running for President in the 1936 elections against FDR, but was assassinated by a lone gunman in 1935.

2-2 Clip 9: Attacks on the New Deal

• The first Hundred Days brought about an improvement in the economy during FDR’s first two years in office, but the gains were not as much as had been expected.

• To improve on the situation, Roosevelt launched another group of programs to help those in need; this is often referred to as the Second New Deal or the Second Hundred Days.

• FDR’s goals were to help farmers and workers in need.

From the 1st New Deal to the 2nd New Deal

2-2 Clip 11: 2nd 100 Days

• FDR’s wife, Eleanor Roosevelt, was a devoted activist who traveled the country, observed social conditions, and informed the president of the suffering in America.

• Her information and compassion frequently aided FDR in his decisions about improving the economy.

Eleanor Roosevelt

Eleanor Roosevelt Visits Miners

Helping Farmers – Soil Conservation - 1936

• In the mid-1930’s, two out of every five farms in the U.S. were mortgaged and thousands of small farmers lost their farms. The New Deal tried to help farmers with the AAA, but it had been deemed unconstitutional by the Supreme Court in early 1936.

Helping Farmers – Soil Conservation - 1936

• The Soil Conservation and Domestic Allotment Act was passed to replace this. – This act paid farmers for cutting

production of soil-depleting crops (like cotton) and rewarded farmers for practicing soil conservation methods.

• In 1938, Congress approved a second AAA that simply removed the part found unconstitutional by the Supreme Court (a federal tax to pay for farm subsidies).

Helping Farmers – FSA 1935

• There were many agricultural workers who were not farm owners and the Second New Deal tried to help them as well.

• The Farm Security Administration (FSA - 1935) loaned more than $1 billion to tenant farmers so that they could buy their own land.

• It also established camps for migrant workers who typically had terrible housing.

• The FSA also hired photographers, such as Dorothea Lange, to photo document rural towns, farms, and their inhabitants.

Photos from FSA

Migrant Mother by Dorothea Lange

Pea Picking Camp by Dorothea Lange

The FSA Helped Many

FSA Sharecropper

Migrant Workers

Relief Programs Grow

• A large part of the Second New Deal were programs to help youths, professionals, and other workers. The Works Progress Administration (WPA) was the largest of these. – The WPA tried to create tons of jobs as

quickly as possible. – From 1935-1943, the WPA spent $11 billion

to give jobs to more than 8 million workers, most of whom were unskilled.

Relief Programs Grow• These workers built 850 airports, constructed or

repaired 651,000 miles of roads, and put up more than 125,000 public buildings.

• Women workers in sewing groups made 300 million garments for those in need.

• The WPA also employed many professionals who painted murals on public buildings, performed in acting troupes around the country, or even collected oral history slave narratives.

• Not only did the WPA give people work, but the results of it are of lasting value to America.

WPA Housing Project

Relief Programs Grow

• The National Youth Administration (NYA) provided student aid to high school, college, and graduate students.

• In return, the students worked at their schools part-time.

• These work-study programs allowed people to receive an education and job training; they also helped place the students in jobs once they completed the program.

The Dust Bowl• The land of the Great Plains had already

been damaged through heavy use of plowing and tilling and overproduction of crops that destroyed the delicate soil structure.

• When a drought began in the early 1930’s, there was little plant matter to hold the soil down. Wind scattered the precious topsoil and exposed sand underneath.

• The dust traveled hundreds of miles – a 1934 dust storm carried dust from the plains to the East Coast cities.

Dustbowl

Pictures of the Dustbowl

The Dust Bowl• The region that was hardest hit by soil

erosion and dust storms came to be known as the Dust Bowl.

• Many of the families that could not make it in the Dust Bowl or had been evicted packed up their families and moved west, following Route 66 to California. – Some found work as farmhands and others

continued to wander. – By the end of the 1930’s, hundreds of

thousands of farm families had migrated to California, Oregon, and Washington.

Leaving the Dustbowl

2-2 Movie Clip 2 - The Dust Bowl

Improving the Stock Market

• The Federal Securities Act – required corporations to provide

complete information on their stock offerings and made them liable for misrepresentations.

• The Securities and Exchange Commission (SEC) – created to regulate stock market

activity• All of these actions strengthened banks

and businesses and allowed people to invest with confidence.

Tennessee Valley Authority (1933)

• One of the most ambitious programs was the Tennessee Valley Authority (TVA). – removed old dams from the Tennessee

River – built 20 new dams– This created thousands of jobs,

established flood control, and provided electricity to an extremely poor region.

TVA Douglas Dam

Expanding and Regulating Utilities

• In 1935, only 12.6% of American farms had electricity.

• Roosevelt established the Rural Electrification Administration (REA) which helped to bring electricity to isolated areas.

• By 1945, 48% of rural farms and home had electricity and that number rose to 90% by 1949.

Social SecurityIn 1935, the Social Security Act was

established to care for the elderly and those with disabilities. This would provide a safety net for those who could no longer work. This act included:– Old age insurance for retired workers 65 or

older and their spouses– Unemployment compensation for those who

lost their job– Aid to families with dependent children and

the disabledThis Social Security system was not a complete

pension or welfare system, but it did provide substantial aid to millions.

Improving Labor and Other Reforms

• In a 1935 speech, Roosevelt likened his reforms to curing a disease: “When a man is convalescing from an illness, wisdom dictates not only cure of the symptoms but also removal of their cause.”

• Under this theory, during the 2nd New Deal, Roosevelt created reform in the areas of labor relations and care for retired workers – these would remove the problem of unfair treatment of workers.

Improving Labor and Other Reforms

• One of the first reforms of the 2nd New Deal was the Wagner Act – allowed workers to collectively

bargain (form unions)– prohibited anti-union activity by

businesses such as: threatening workers, firing union members, and interfering with union organizing.

Improving Labor and Other Reforms

In 1938 Congress finally passed the Fair Labor Standards Act which set labor laws to protect workers including:– Maximum hours were set at 44 per week and

decreased to 40 hours a week after 2 years.– Minimum wage was set at 25 cents an hour;

this would increase to 40 cents an hour by 1945.

– Rules were set for the employment of those under the age of 16 and banned hazardous work for those under 18.

These labor laws were the culmination of years of progressive activism to protect workers.

AFL CIO

• Once unions were given back some power under the National Labor Relations Board, they grew in size during the Depression

• The AFL and CIO were joined, but split in 1936 – both continued to grow through the 30’s and 40’s

• They won some labor victories, but also continued to face violence

2-2 Clip 10: Labor Issues

1936 Election

• Republicans: Alfred M. Landon (governor of Kansas)

• Democrats: FDR• No real third party competition

• FDR won with 523 to 8 electoral votes, the most in 116 years

• The Second New Deal was under way by the time of the 1936 presidential election. FDR won by an overwhelming victory and the Democrats also won majorities in both houses.

• This election was important because it marked the first time that most African Americans had voted Democratic rather than Republican. It also showed widespread support for Roosevelt’s New Deal policies.

Second New Deal

The Supreme Court

• The Court struck down the National Industrial Recovery Act (NIRA), the group that sponsored the CWA and NRA, as unconstitutional.

• Then the Supreme Court stuck down the first AAA on the grounds that agriculture is a local matter and should be regulated by the states and not the federal government.

The Supreme Court

• Realizing that the Court could quickly dismantle his New Deal program, Roosevelt asked Congress to pass a court-reform bill that would allow FDR to appoint 6 additional Supreme Court justices (one for every justice over the age of 72 who wouldn’t retire)

• This “Court-packing bill” created a huge storm of opposition stating that FDR was violating the separation of powers. This bill did not pass, but since many Supreme Court justices retired at this time or died, FDR was able to appoint 9 new justices anyway.

Problems with FDR and the Court

• FDR’s plan to pack the court was seen as dictatorial and dangerous by many– A poor political decision by Roosevelt

• Even though FDR took a lot of heat for his idea, the court did begin to vote more in favor of the New Deal laws– Upheld the Wagner and Social Security Acts– Upheld state min wage for women

• FDR lost the battle but won the campaign

1937 and the End of the New Deal

• FDR still lost the war on the Depression

• He had ruffled so many people’s feathers with the court packing scheme that few New Deal laws were passed after 1937

1937 and Keynes

• Economic recession “Roosevelt recession”– SS taxes were coming out of paychecks– Government was reducing spending

•Still believed in a balanced budget!– Too much at once

• Caused FDR to turn to Keynesian Economics– British economist John Maynard Keynes– Planned deficit spending to reinvigorate

the economy in a time of need

Hatch Act of 1939

• Cleaned Up Elections:• Barred federal administrative officials

from active political campaigning and soliciting– Except highest policy-making officials

• Forbade use of government funds for political purposes

• Forbade collection of campaign contributions from those receiving relief

Changes in the Federal Government from the New

Deal• Bigger than the states• More bureaucracy• Doubled national debt to $40

billion• Strong executive• Broker State

What did FDR accomplish?

• Did NOT end the Depression – WW2 did that

• Stopped a further downward spiral of the economy

• Saved people from starvation

Why is FDR SO IMPORTANT?

• FDR saved American democracy• Other countries facing these

problems were riddled by revolution, communism, or fascism

• By helping and ticking off everyone at the same time, FDR actually prevented revolution in America

Which of the New Deal reforms do we still have

today?