Franklin D. Roosevelt

1. Franklin D. Roosevelt Path to the White House

2. Governor Franklin D. Roosevelt New York State 1928-1932

3. Became governor of New York in 1928 • Politically ambitious, socially progressive • Proposed state old-age pensions • Did not believe Hoover’s optimistic reports • Had Frances Perkins compile unemployment figures • Created state mechanisms to deal with unemployment crisis • Endorsed unemployment insurance

4. Temporary Emergency Relief Administration • FDR saw aid to the unemployed as a matter of social duty • TERA created in the winter of 1930 • First state to begin unemployment relief • Agency headed by Harry Hopkins who would later head FERA

5. FDR Agenda • Public power, jobs, conservation, social reform • When Republican legislature balked, FDR took his message straight to the people via the radio • November 1930—reelected as governor • Already had sights on the White House

6. Election of 1932 Promise of a “New Deal”

7. Organizing a Campaign • Eleanor Roosevelt and Molly Dewson (Consumers League) organized the women’s vote • Policy developed by the “Brains Trust” • Group of Columbia University academics • Raymond Moley, political science, probably coined the term “New Deal” • Rexford Tugwell, agricultural economics • Adolf Berle, corporate economics

8. Democratic Platform • Balanced budget • Cut government spending through retrenchment • Repeal of Prohibition • Government was losing millions of dollars annually • Cost of enforcement • Lost revenue from liquor taxes

9. Politics of Action • FDR promised action as opposed to Hoover’s seeming inaction • “The country 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.” • Emphasized the importance of • Planning, public power, and public works • Public works only until prosperity returned

10. The 1932 Campaign

13. Franklin Delano Roosevelt and the First New Deal, 1933-35

14. Early 1933 • FDR took office March 1933 • Agriculture and industry in serious trouble • Output had dropped 50% • One-half of the workforce was unemployed • Banking had collapsed • Millions of people were on the verge of starvation • The economy was clearly not self-correcting

15. The FDR Team • Bright and innovative • Marguerite “Missy” LeHand • Secretary, influenced appointments and policy • Frances Perkins • Secretary of Labor, labor reformer • Harold Ickes • Secretary of Interior, conservationist • Eleanor Roosevelt • Pushed the New Deal continuously to the left

16. What was the New Deal? • Not a philosophy as much as a goal • Economic recovery and social security • Two early tasks: • Choose and implement an economic strategy • Boost morale

17. Keynesian Economics • John Maynard Keynes, The General Theory of Employment, Interest, and Money (1936) • Advocated government management of the economy • Leaving the gold standard, deficit spending, and public works • Represented a group of English economic theorists who were wrestling with the world wide collapse of capitalism

18. FDR and Keynes met in 1934. • Both were working on the problem of maldistribution of wealth. • Keynes was working out the problem on a theoretical basis • Later developed a formal mathematical relationship between the level of government spending and the level of economic activity, called “the multiplier” • Tax and spending tool used by governments in capitalist countries to balance unemployment and inflation

19. First New Deal was an attempt to plan the entire economy. • This was antithetical to the American tradition, but that tradition had failed • FDR saw the need to plan as an extension of progressivism, not a turn to socialism • His team agreed, but argued about who should play primary role—business or government • Nature of the New Deal—conservative, progressive or radical—has been an issue of continuing historical debate and interpretation

20. First Hundred Days • Deal with sectors in crisis • Banking, agriculture, industry • Restore public confidence • Increase government revenue • Repeal Prohibition • 21st Amendment, 1933 • Gave farmers a market for corn and wheat • Provided the government with tax revenue

21. Banking Crisis • Strengthen the Monetary System • Progressives wanted to set up a truly national banking system • Heads of financial institutions opposed this. • Emergency Banking Relief Act • 4 day banking “holiday” • Permitted sound banks to reopen • Began with one per state, backed by the Federal Reserve • Provided managers for unsound banks

22. Public Confidence • Securities and Exchange Commission (SEC) created to oversee the stock market • FDIC to provide insurance for deposits • Radio broadcast “fireside chats” • First one explained the banking crisis • FDR had an aristocratic, confident voice • Spoke slowly • Explained things in simple terms • First week in office FDR received 500,000 letters

24. First Hundred Days • Economy Act • Civilian Conservation Corps • Abandoned the gold standard • Federal Emergency Relief Act • Agricultural Adjustment Act • Emergency Farm Mortgage Act • Tennessee Valley Authority • Federal Securities Act • National Industrial Recovery Act

25. Agricultural Crisis • Net farm income had fallen ⅔ between 1928-1932 due to chronic overproduction • Goal was to raise and stabilize farm prices • Rexford Tugwell (asst. secretary of agriculture) developed a domestic allotment plan • Pay farmers not to produce and the prices would rise

26. Agricultural Adjustment Act • May 1933 • Adopted Tugwell’s allotment plan • Subsidy financed by a process tax levied on canneries and mills which processed agricultural products • Immediate crisis of overproduction solved by the slaughter of livestock and the plowing under of crops • “…solved the paradox of poverty in the midst of plenty by doing away with the plenty.” Richard Hofstadter

27. Was the AAA successful? • Emergency Farm Mortgage Act • Refinanced farm mortgage • AAA helped push up farm prices • Aided by natural disasters, like the Dust Bowl • Wheat crop—864 million bushels 1928-32 567 million bushels 1933-35 Only 20 million came from AAA subsidies Not until 1941 did farm income exceed 1929.

28. Agricultural Adjustment Administration worked through local production control committees. • Favored the rich and white • Tenant farmers and renters lost their land as it was taken out of production, resulting in a rapid degree of rural depopulation • Increased the cost of food to the consumer

29. Industrial Crisis • Total value of finished goods fell from $38 billion in 1929 to $17.5 billion in 1932 • Almost 40% of wage and salary earners were out of work by 1933 • Goal was to start creating jobs and paying wages

30. Some Congressional leaders (led by Robert Wagner) wanted to mandate a 30-hour week to share work. • Frances Perkins agreed, but only if hourly wages were raised to maintain total income • Some in Congress wanted to set a minimum wage • AFL feared a minimum wage would quickly become a maximum wage

31. National Industrial Recovery Act • June 1933, a plan worked out by Raymond Moley who was now Assistant Secretary of State • Amalgamation of two plans • Public works • Industrial self-government • Government sanction of unions

32. NIRA • Contained three Titles • Title III provided a system of capital stock and excess profits taxes to finance Titles I and II • NIRA Title I • Program of industrial self-government • Allowed industry to write its own codes of fair competition • Section 7 mandated agreement on maximum hours and minimum pay • Section 7(a) provided workers with the right to organize and bargain collectively • Section 9 gave the president to remake and impose codes

33. Major step away from unregulated competition of free market capitalism • Business favored price and production controls to restore profits • Workers saw the promise of higher wages, shorter workdays, full employment, and the growth of unions

34. Government sponsored parades to build public support and put pressure on employers. • Employers could ratify the codes or not. • Displayed a blue eagle logo with the slogan “We do our part”

36. NRA Parade in New York City

37. Weaknesses in NIRA • NIRA Title I codes were not very effective • Section 7(a) was not really enforced, thus wages did not rise • Dominated by big business to their advantage • Did nothing to create jobs for the millions of unemployed

38. Pecan Workers in San Antonio Pecan Crackers

39. Pecan Shelling

40. Mr. and Mrs. Medina

44. NIRA Title II • Initial appropriation of $3.3 billion for public works • First ND measure to directly create jobs • More than the entire cost of running the government from 1922-30 • National Recovery Administration set up to enforce regulations

45. A New Approach to Relief • Hoover felt that public employment should not compete with private enterprise. • FDR was convinced by Harry Hopkins to incorporate public works into relief

46. The Alphabet Agencies • FERA Federal Emergency Relief Association • Headed by Harry Hopkins • Provided some direct relief (about $6 per week) • PWA Public Works Administration • Headed by Harold Ickes • Funded public works projects for cities and states • Most of the initial money went for planning • Architects, engineers, contractors, etc.

47. As the winter of 1933-34 approached, it became clear that relief was not reaching people fast enough • CWA Civilian Works Administration • Headed by Harry Hopkins • Charged with creating 4 million jobs by Jan 1935 • Created 4.3 million jobs by January 1934 • Eventually employed about 20 million people and completed 400,000 projects • CWA and PWA merged in 1935 to form the WPA Works Progress Administration

48. Between 1933-39, public works projects constructed schools, hospitals, roads, bridges, military airports, warships and combat planes. • 651,087 miles of highways, roads, streets • 121,031 bridges • 125,000 public buildings • 8,192 parks • 853 airports and landing fields

50. WPA Flood Control Project