Franklin D. Roosevelt and the New Deal

1. Franklin D. Rooseveltand the New Deal Redefined Democracy: Political Rights  EconomicSecurity  Social Justice

2. Agricultural overproduction Industrial overproduction Unequal distribution of wealth Over-extension of credit International economic situation Causes of the Great Depression

3. How Herbert Hoover Dealt with the Crisis • He played the game of confidence economics and just kept saying: “Prosperity is right around the corner.”

4. Voluntary Measures • Hoover eventually established two privately-funded organizations: • The National Credit Association provided $1/2 billion to businesses for emergency loans, but it was too under-funded to do much good. • The Organization for Unemployment Relief was a clearing house for relief agencies. However, state and local governments were already in too much debt to benefit from it.

5. Limited Government Intervention • In the end, Hoover resorted to government intervention: • The Reconstruction Finance Corp gave $1-1/2 billion in federal loans to banks, insurance companies, and industry to prevent bankruptcies, but it was too little, too late. • The Home Loan Bank Act provided federal loans to homeowners to prevent foreclosures, but got bogged down in red tape.

6. Reasons for Ineffectiveness • Hooverthought business should be self-regulating. • He had a mania for a balanced budget. • He lacked political finesse.

7. Franklin D. Roosevelt’s Appeal • In 1932 presidential election, FDR was perceived as a man of action. • Hoover was viewed as a “do-nothing president.” • Norman Thomas, the Socialist candidate, was viewed as a radical. • Results: a landslide for Democrats and a mandate to use government as an agency for human welfare.

9. Situation When FDR Entered Office • In March 1933, the country was virtually leaderless and the banking system had collapsed.

10. FDR Restored Confidence • In his inaugural address, he said “The only thing we have to fear is fear itself….” • He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

11. FDR’s Personal Qualities • He was a practical politician who practiced the art of the possible. • He was a charismatic person who exhibited a warmth and understanding of people. • He knewhow to handle press by focusing attention on Washington. • He provided dynamic leadership in a time of crisis. • He was willing to experiment

12. Purposes of the New Deal • Relief: immediate help to poor and unemployed Recovery: Bring businesses back from foreclosure • Reform: Long range changes – no more depressions

13. Sources of New Deal Ideas • Brains Trust: specialists and experts, mostly college professors, idea men • New Economists: Keynesian economic theory - government spending, deficit spending and public works, government should prime economic pump • Roosevelt Cabinet: - often conflicting, compromising, blending ideas

14. First New Deal (1933-1934) • Emphasis: relief,reform • Political Position: conservative • Primary aim: economic recovery • Philosophy: economic nationalism and economic scarcity (i.e., raise prices by creating the illusion of scarcity) • Objectives: higher prices for agriculture and business • Beneficiaries: big business and agricultural business

15. Emergency Banking Relief Act • Closed all banks for 4 days • Opened up only sound banks, merged or eliminated weak ones • Gold hoarding prohibited • Glass-Steagall Banking Reform Act (FDIC)

16. Federal Emergency Relief Admin (FERA) • Purpose: relief • Gave money to states and municipalities so they could distribute money, clothing, and food to the unemployed

17. Civilian Conservation Corp (CCC) • Purpose: relief • Gave outdoor work to unemployed men between the ages of 18 and 25 • They received $30 per month, but $25 went back to the family

18. First Agricultural Adjustment Act (AAA) • Purpose: the relief for farmers (subsidies) • Paid farmers who agreed to reduce production of basic crops such as cotton, wheat, tobacco, hogs, and corn • Money came from a tax on processors such as flour millers and meat packers who passed the cost on to the consumer

19. National Industrial Recovery Act (NIRA) • Complex • Designed to prevent extreme competition, labor-management disputes, over-production • Section 7a • National Recovery Administration – management part of this administration

20. National Recovery Administration (NRA) • Purpose: recovery of industry • Created a partnership of business, labor, and government • Blue eagle • Codes – lots and lots • Declared unconstitutional

21. Public Works Administration(PWA) • Headed up by Harold Ickes • $4 billions to states • To build public works (schools, hospitals, bridges, dams) • NY Triborough Bridge

22. Tennessee Valley Authority (TVA) • Reform the monopoly of the utility companies • Gov’t will build own hydroelectric plants on Tennessee River • Muscle Shoals • Socialistic?

23. Federal Securities Act • Securities and Exchange Commission • Joseph Kennedy • Protect against fraud in stock market

24. Gold Reserve Act • All gold transferred to gov’t • Fix the price of the dollar based on gold • 24 was his favorite number

25. Federal Housing Administration(FHA) • Supply loans for building or improving homes

26. Civil Works Administration (CWA) • 4 million people given a job • Make shift jobs – raking, sweeping streets • $750 million pumped in

27. The New Deal on Trial • By 1935, political disunity was evident. There were critics on the right and the left. NEW DEAL

28. Criticisms of Conservative Opponents • Conservative opponents said the New Deal went too far: • It was socialism (killed individualism) • It added to the national debt ($35 billion) • It wasted money on relief and encouraged idleness • It violated the Constitution & states rights • It increased the power of the Presidency (FDR was reaching toward dictatorship, Congress arubber stamp, independenceof judiciary threatened, separation of powers shattered)

29. Anti-New Deal Organization • Conservative opponents to the New Deal had an organization called the American Liberty League. They had money but were small in numbers, so FDR was not worried.

30. Criticisms of Radical Opponents • Radical opponents said the New Deal did not go far enough. They were demagogues (rabble-rousers) and had popular followings, so FDR was concerned.

31. Dr. Francis E. Townsend • Dr. Francis E. Townsend was an elderly physician from CA. He had a plan for the federal government to pay $200 per month to unemployed people over 60. The program would be financed by a 2% national sales tax and each pensioner would be required to spend the money in 30 days. This would stimulate the economy.

32. Father Charles E. Coughlin • Father Charles Coughlin was a rabble-rousing radio priest from Detroit. His broadcasts were called the “Golden Hour of the Little Flower.” He claimed there was an international bankers conspiracy and Jews were responsible. He advocated nationalization of banking and currency and national resources and demanded a “living wage.”

33. Senator Huey Long (LA) • Senator Huey Long said New Deal relief measures were mere crumbs and advocated a share the wealth plan (i.e., a guaranteed annual income of at least $5,000 for every American, financed by confiscating wealth of people who made over $5 million per year).

34. Primary Document • Assignment: • Read Primary document “Reaction to the New Deal” • Using your own paper, answer the questions that followed the document (1-4) • Yes, you need write a speech for the President. BE PREPARED TO READ your speech for the class! Yikes!

35. SUPREME COURT REACTED • By the mid-1930s, the Supreme Court struck down the NIRA as unconstitutional (citing too much government control over industry) Schechter v. US • The Court also struck down the AAA on the grounds that agricultural was a local matter -- not a federal matter (Butler vs. US) The Supreme Court – 1935 Nine Old Men

36. FDR REGAINED CONTROL OVER SUPREME COURT • From the mid to late 1930s, FDR was able to appoint 7 new judges to the Supreme Court, thus assuring that his programs would carry on unabated. • By 1937 no new programs were being introduced • Most programs were ended or repealed with the onset of WWII

37. Second New Deal (1934-1941) • Emphasis: reform • Political Position: liberal • Primary aim: permanent reform • Philosophy: international economic cooperation and economic abundance • Objectives: increased purchasing power and social security for public • Beneficiaries: small farmers and labor

38. THE SECOND NEW DEAL • Although the economy had improved during FDR’s first term (1932-1936), the gains were not as great as expected • Unemployment remained high and production still lagged

39. Revenue Act • Wealth Tax Act • Tax on income over $50,000, (75% tax on income over $1 million • Tax on estates over $40,000 • Corporate tax

40. Works Progress Administration • 9 million employed in over 250,000 public jobs • Cost more than $11 billion • Over 40% of population involved

41. Works Progress Administration (WPA) Employed 8.5 million workers in construction and other jobs, but more importantly provided work in arts, theater, and literary projects. Helping urban workers was critical to the success of the Second Hundred Days

42. WPA BUILT AMERICA The Davis Street School Extension in Atlanta under construction as part of the Works Progress Administration Program, November 2, 1936

43. WPA Initiatives

44. WPA Arts Project

45. WPA Community Murals Construction of the Damby William Gropper

46. ARTISTS HERALDED • Painters like Edward Hopper, Thomas Hart Benton, and Iowa’s Grant Wood were all made famous by their work in the WPA program • Photographer Dorothea Lange gained fame from her photos during this era (featured throughout this presentation) Wood’s American Gothic is perhaps the most famous piece of the era (1930)

47. NATIONAL YOUTH ADMINISTRATION • The National Youth Administration (NYA) was created to provide education, jobs and recreation for young people • Getting young people off the streets and into schools and jobs was a high priority for the NYA

48. National Labor Relations Act (Wagner Act) • Purpose: reform • Put restraints on employers and set up a National Labor Relations Board to protect the rights of organized labor to bargain collectively with employers. • Called the “Magna Carta” for labor • Congress of Industrial Organization

49. Second Agricultural Adjustment Act • Purpose: recovery for agriculture • Paid farmers for conservation practices, but only if they restricted production of staple crops.

50. Fair Labor Standard Act • Minimum wage (.40 an hour) $6.13 today • 40 hour week • No children under 16