Franklin D. Roosevelt and the New Deal

1. 26 Franklin D. Roosevelt and the New Deal

2. The Great Depression • 1920s Optimism about good economy • 1929 – “Black Thursday” Stock market collapsed, factories closed, unemployment went up, optimism shattered • Result in 25% unemployment • Wealth of 1920s not distributed boardly enough • Profits used for dividends, and stock speculation

3. The Great Crash • Souring stock prices attract investment • Corporate investor’s obsess with speculation on stock market • Money not used for wage increases • Productivity increased 43%, wages only by 11% • Demand for consumer goods declines • Businesses laid off workers • 1929: Stock market crashed

4. Unemployment, 1929–1942

5. Effects of the Depression • Hardship affected all classes – unemployment and poverty undermined self-worth and caused despair • The middle class lost belief in ever-increasing prosperity – hit them hard • Thousands of young homeless, jobless • 25% unemployed

6. Fighting the Depression • Republican party struggles to overcome depression • Depression gives Democrats opportunity to regain power

7. Hoover and Voluntarism • Hoover initially sought solution through voluntary action, private charity • Aided farmers with Farm Board to buy surpluses and bankers with loans through Reconstruction Finance Corporation • Hoover Dam • White House business conference • Hoover too cautious and too late with programs

8. Hoover and Voluntarism • Bonus Army and General MacArthur • Resisted Democratic efforts to give direct aid to the unemployed • Perceived as indifferent to human suffering • Hoover blamed for the Depression

9. Bank Failures, 1929–1933

10. The Emergence of Roosevelt • Franklin Roosevelt • Born to wealth and privilege • 1921: Crippled by polio – prepared him to be sensitive to downtrodden • 1928: Elected governor of New York • Talented and persuasive politician • 1932: Defeated Hoover with farmer- worker-immigrant-Catholic coalition • Roosevelt healed division in Democratic party • People remembered Bonus Army

12. The Hundred Days • FDR inaugural inspired with the term “nothing to fear but fear itself” • Called special session of Congress • Banking system saved from collapse – closed all banks - strong banks saved, weak eliminated – gave money to strong banks and FDIC • Fifteen major laws provided relief • Tennessee Valley Authority was the most ambitious one – jobs, electricity and modernization to rural South • New Deal aimed to reform and restore, not nationalize, the economy

13. The Tennessee Valley Authority

14. Roosevelt and Recovery • National Recovery Administration • National economic planning • Industries formulated guidelines and codes to eliminate cutthroat competition, ensure labor peace • Codes favored big business, • NRA ruled unconstitutional because it favored large corporations – not small ones

15. Roosevelt and Recovery • Agricultural Adjustment Act of 1933 • Farmers paid to take land out of cultivation – farmers must cut production • Prices increased, mainly because of government payments, but Dust Bowl helped by cutting supply • Sharecroppers, tenant farmers dispossessed • Found unconstitutional in 1936 – mainly helped large farms not small ones

16. Roosevelt and Relief • 1933: Harry Hopkins placed in charge of Relief programs to give aid to unemployed – seen as “color blind” • 1933: Civilian Conservation Corps (CCC) provided employment to young people • 1935: Works Progress Administration (WPA) placed unemployed on federal payroll • Programs never sufficiently funded

17. Roosevelt and Reform • 1933–1934: Focus on immediate problems • 1935: Shift to permanent economic reform,

18. Challenges to FDR • Critics of FDR demanded radical reforms for small guy • Father Charles Coughlin advocated nationalizing banks, anti-Semitism • Francis Townsend called for $200 per month pensions to all those over 60 if they spent it within the month • Huey Long and the Share the Wealth Clubs called for redistribution of wealth by seizing private fortunes – popular with those not benefiting from New Deal

19. Social Security • 1935: Social Security Act passed – most significant reform of New Deal • Criticisms: • Too few people would collect pensions • Unemployment package inadequate • Too conservative • Passed because of duty to help unemployed, aged, and handicapped

20. Labor Legislation • 1935: Wagner Act • Allowed unions to organize and collectively bargain – New Deal good for Unions • Outlawed unfair labor practices • 1938: Fair Labor Standard Act • Maximum hour – Minimum wage • Rural Electrification Administration brought electricity to 90% of farmers who did not have it in 1930

21. Impact of the New Deal • Had a broad influence on the quality of life in the U.S. in the 1930s • Helped labor unions most • Helped women, minorities least • Harry Hopkins helped minorities

22. Rise of Organized Labor • 1932: National Recovery Act spurred union organizers • Congress of Industrial Organization (CIO) formed by John L. Lewis • CIO unionized steel, auto industries • 1940: CIO membership hit 5 million, 28% of labor force unionized • Promoted all workers – not just skilled

23. The New Deal Record on Help to Minorities • Crop reduction program allowed whites to fire or evict blacks, Hispanics • Public works programs helped by providing employment • New Deal figures convinced minorities that the government was on their side • 1934: Indian Reorganization Act gave American Indians greater control

24. Women at Work • Position of women deteriorated in the ‘30s • Jobs lost at a faster rate than men • Hardly any New Deal programs help • Progress in government • Frances Perkins, Secretary of Labor, the first woman cabinet member • Women appointed to several other posts • Eleanor Roosevelt a model for activism

25. End of the New Deal • 1936: New Deal peaked with Roosevelt’s reelection and brought about powerful political coalition • Blacks shifted from Republican to Democrat (FDR) because FDR hired Blacks in cabinet and Harry Hopkins • Congress resisted programs after 1936 • New Deal lasted 5 years

26. The Election of 1936 • FDR’s campaign • Attacked the rich • Promised further reforms • High point of New Deal – downhill after that • Democrats won majorities in both houses of Congress • FDR coalition: South, cities, labor, ethnic groups, African Americans, poor

27. The Supreme Court Fight • Supreme Court blocked several of FDR’s first-term programs • 1937: FDR sought right to “pack” Court and remove threat to New Deal • Congressional protest forced retreat – even Democrats against “packing” the Court • FDR’s opponents emboldened

30. The New Deal in Decline • 1936: Cutbacks for relief agencies • 1937: Severe slump hit economy • Roosevelt blamed • Programs require massive spending that could not be sustained • Some feel FDR was too conservative and should have spent more • 1938: Republican party revived

31. The New Deal and American Life • Overall New Deal – Slow and halting • New Deal’s limitations: • Depression not ended • Economic system not fundamentally altered • Little done for those without political clout • Achievements: • Wagner Act helped labor • Political realignment of the 1930s • Most important was Social Security Act