1920-1945 Domestic

The New DealUnit IX-4

First 100 Days

The Banking Crisis = 1st priority

March 5: special session of Congress

March 6: Conference with state governors: said feds would step in if governors allowed people to starve

Used RFC for states, banks, businesses

Banking

March 6: Banking holiday: Feds to examine banks to determine soundness

March 9: Emergency Banking Act: to prevent larger banks from being dragged down by smaller ones. Banks were given federal assistance

Banking

Note: Banks were not nationalized

By March 15 ¾ of Federal Reserve Banks were sound and reopened

March 16th: First fireside chat. FDR encouraged people to stop hoarding their money and to redeposit it

Banking

Glass-Steagall Act June 1933 Banks could no longer finance

corporations or sell securities Also provided for an FDIC (insured

small deposits…up to $2500) Bankers fought the above but:

Promoted stability Protected small depositors Increased public confidence

Finance

SEC created to act as a watchdog on the stock market. Joe Kennedy was first in charge

Federal Securities Act (Truth in Securities Act): Companies that issued securities (stock) had to provide investors with complete and reliable information

Finance

Britain and others went off of the gold standard

The U.S. did not but reduced gold content in the dollar

Forbade the private hoarding of gold Called in all gold coins Treasury bought lots of silver

Finance

The Economy Act: to balance the budget

Cut $400,000 from payments to veterans

Cut $1 billion from federal government employees

Did not help offset the cost of the New Deal

Pump-priming: continued to pour government credit into trade to stimulate the economy

The Tariff

1934 Reciprocal Trade Agreements Act: U.S. would reduce tariffs on foreign-made goods when they reduced their tariffs on U.S.-made goods

Amendment 21

Repeal of Prohibition 18th the only amendment to be

repealed by another amendment

Agriculture

The New Deal tried to raise prices by controlled inflation of the economy

The Frazer-Lemke Farm Bankruptcy Act: provided for a 5-year moratorium on farm foreclosures

Agriculture

The AAA (The Agricultural Adjustment Act)

Paid farmers to take land out of

production Larger farmers benefitted more than

small ones Sharecroppers SOL Dust Bowl: top soil blown away

1932-1936 Total farm income rose by 50%

Agriculture

AAA struck down by the Supreme Court

Was replaced by the new AAA: (The Soil Conservation and Domestic Allotment Act)

Farmers had to share with sharecroppers, tenants

Had to pland trees, etc to restore soil & prevent erosion

Industry

Used Hoover’s RFC

Tried to end the depression by reducing competition (no anti-trust enforcement for now. Large companies were encouraged…they employed more people)

The NIRA (National Industry Recovery Act)

NIRA

Representatives of labor and industry to draw up codes of fair competition:

They controlled production and spread employment by: Reducing work week Fair Prices Floor on wages

NIRA

The codes were supervised by the NRA (National Recovery Administration)

Allowed the President to draft codes

Struck down by the Court in the Sick Chicken Case (Schechter Brothers v United States)

NIRA and the Court

Problems with NIRA: Codes for all industries? Flyswatters? Violated Anti-trust laws Gave the President legislative powers Prices rose faster than wages Violations of Section 7a: Right to

collective bargaining Too many violations to prosecute..

NIRA

Included PWA (Public Works Administration): provided work on sewers, dams, canals, etc.

NIRA was replaced with The Wagner Act

With NLRB to oversee problems

The Wagner Act WAS able to give union protection. Gave rise to the CIO and UAW

Trade Unions

By 1932 1/3 of all U.S. laborers were unemployed

1932 Hoover: Norris-LaGuardia Act 1934 Strikes everywhere AFL not adept at organizing

assembly workers AFL split at national convention over

organizing workers on an industry-wide basis

Unions

1935 AFL issued a charter to the CIO

John Lewis first CIO leader Organized the steel industry first 400 organizers signed up steel

workers all over the U.S. Threatened to strike but didn’t have

to 1937 gained 40-hour work week

with pay increase from Taylor (President of the Board of Steel Corp)

The UAW Auto workers were unique High wages but seasonal Unskilled and difficult to organize

1936 CIO gave charter to UAW Homer Martin 1st head of the UAW Sit-down strikes were very effective By 1941 Auto companies recognized UAW By 1939 over 9 million members of UAW

Relief Measures

FERA (Federal Emergency Relief Administration): Loans and gifts to states for public relief: food, clothing, money + some loss of self-respect

CCC (Civilian Conservation Corps) young single men 18-25 given outdoor work. Paid $30 a month but $22 sent to their families

Relief

PWA (Public Works Administration) under NIRA: dams, sewers, waterworks. Headed by Ickes: Sec of Interior

CWA (Civil Works Administration) built roads, schools, hospitals

WPA (Works Progress Administration) White Collar jobs: teachers, Nurses, Artists

Relief

NYA (National Youth Administration) gave part-time jobs to full-time high school and college students. (Prevented teens from taking full-time jobs from heads of households)

Increased # of high school grads

Relief

Homeowners Loan Corporation: provided for refinancing small mortgages at lower rates

Federal Housing Agency Guaranteed loans to pay for new housing and home repairs

Rural Electrification Administration: provided electricity to rural areas

Social Security Act

Inspired by European Countries Gave $ to care for dependent

children Gave $ for old-age pensions Paid for by payroll deductions (very

difficult) Flaws: (lots of critics from the right)

Benefits insufficient Did not help: farmers, domestic

workers, merchant marine

Social Planning

TVA (Tennessee Valley Authority) One of the most depressed areas of the

U.S. Government went into the business of

providing electricity and fertilizer (similar to the Norris Bill vetoed by Hoover)

Built 25 great dams, really cheap electricity

Provided 40,000 jobs Hugely successful but Socialism Power Companies very angry

Critics from the Right

Called FDR a commie dictator Formed the American Liberty

League Denounced lack of free enterprise Goal: To defend and constitution

and restore respect of private property

Business and banking were doing much better by 1934!

Hoover wrote A Challenge to Liberty (blasted FDR)

Critics from the Left

Upton Sinclair: almost won governor of California. Advocated ending poverty by establishing cooperative colonies of the unemployed

Dr. Townshend also California. Proposed every retiree over 65 be given $200 monthly to spend every month as long as they spent it all. Paid for by sales tax (could not be put into trust funds, etc) To be paid for by sales tax

Critics from the Left continued

Father Coughlin Michigan (12 mile and Woodward) His church was burned down by the KKK in 1926. WWJ radio gave him a ½ hour slot on a Sunday to beg for money. Got a big following and lots of $. Built the Shrine of the Little Flower. Advocated guaranteed income for everyone paid for by taxing the snot out of the wealthy. Had more fan mail than FDR

Critics from the Left continued

Huey Long sometimes Governor, sometimes senator of Louisiana. (aka the Kingfish)

Share the Wealth Plan: confiscate the property of the wealthy and give everyone a home, $2,000 annual income, free college

Social Security Act, Food Stamp Plan, etc soon followed. FDR hoped to get left support. Knew he couldn’t get it from the right.

The Courts

The court had declared much early New Deal legislation unconstitutional

Much deemed unconstitutional based on division of powers (federal v state)

FDR needed Court’s cooperation before passing the Social Security Act

Threatened to “Pack the Court”: proposed that he appoint 1 additional justice for every one over age 70! (6 were)

The Court

The Court backed down without any other action and the new New Deal Legislation was not overturned

BUT conservative (anti-New Deal) democrats still supported states’ rights)

Election of 1936

Democrats: FDR 523 Republicans: Al Landon 8 (accused

FDR of usurping too much power and endangering free enterprise

AFL endorsed FDR: first time it endorsed a presidential candidate…grateful for union help

Black vote: To Dems. They shared in ND help

Election 1936

FDR promised to cut New Deal costs BUT couldn’t He cut work relief, etc. but it caused

a recession So…new pump-priming

By 1938 Republicans making a comeback in congress

Child Labor

Fair Labor Standards Act Abolished Child Labor, ceiling on hours, floor on wages

Compare New Deal to Progressivism: basic differences:

Progressives tried to improve life for the average Joe. To protect citizens from abuse

New Deal tried to keep us ALL alive (business and banking too)

Other Stuff

Although New Deal did not solve the Depression, it kept us alive until war production improved the economy

Technology: 30’s: commercial aviation, Dupont came up with cellophane

Entertainment: News analysis on Radio, Disney Entertainment

War of the Worlds