THE NEW DEALChapter 19

Objective 9.5 Assess the impact of New Deal reforms in enlarging the role of the federal government

Franklin D. Roosevelt1933-1945

“The only thing we have to fear is fear itself”

The Election of 1932

Worst year of the Depression to that point.

Democrats & Franklin Roosevelt carried all but 6 Republican states (60% vote).

FDR promised a “new deal” for the American people= *New Deal became the name of his policies to end the Depression.

** The 3 R’s of the New Deal: Relief, recovery, & reform.

*FDR’s advisor’s- “the brain trust”

FDR THE MAN

Only child of a wealthy NY family– cousin to Theodore Roosevelt

Educated at Harvard & Columbia Law School 1920- VP candidate on Democrat ticket & lost 1921- diagnosed with Polio; eventually had to

wear leg braces & used a wheel chair. 1928- Elected Governor of NY Eleanor Roosevelt- his wife= most active first

lady in US History (had a weekly Newspaper column, traveled the country, took up causes of the underprivileged.

Roosevelt’s Administration Eleanor Roosevelt

Helped bring changes in the White House & the Democrat party – change in demographics

The Black Cabinet Included several

African Americans he appointed

Frances Perkins – 1st Woman Cabinet member - Secretary of Labor

In the 1920s, which economic factor was the key cause of the Great Depression?

1. Lack of investment in the stock market

2. Attempts by the US to promote free trade

3. Failure to develop new consumer goods industries

4. Overproduction of farm products and manufactured goods

1st 100 Days

*Bank Holiday Closed banks until Congress could pass

legislation that would aid banks Emergency Banking Relief Act

Required federal officials to survey banks & approve their financial soundness

*Fireside Chats Weekly radio address Let Americans know what the government was

doing to help the economy Meant to instill confidence in Americans again

1st 100 Days – Stock Market & Banks

Securities Act Required companies to provide complete & truthful

information to investors *Securities & Exchange Commission (SEC)

Created to regulate the stock market & prevent fraud *Glass Steagall Act

Separated commercial banks & investment banks Commercial banks couldn’t invest deposited money in

stock market *Federal Deposit Insurance Corporation (FDIC)

Provides government insurance for bank deposits up to $100,000

Results: Greatly increased American confidence in banks

After a terrible drought struck, the Great Plains became known as what?

1. Oz2. The

Breadbasket3. The Dust Bowl4. The Oakies

1st 100 Days - Farms

Agricultural Adjustment Administration Government would pay farmers a subsidy

to not raise certain livestock Effect – farm surplus fell greatly, prices rose

& farmers income rose by 50% Large farms benefit but sharecroppers

became homeless because owners took their land out of production first

1st 100 Days - Manufacturing

National Industry Recovery Act (NIRA) Suspended antitrust laws Allowed business, labor & government to set up

rules for each industry National Recovery Administration (NRA)

Blue eagle Industrial recovery Consumers urged to buy products with the eagle This pressured companies to go along with their

policies Effect – Lost support as manufacturing

businesses failed – Supreme Court declared it unconstitutional in 1935

1st 100 Days – Relief Programs Homeowners Corporation

Bought mortgages of homeowners behind in their mortgages & restructured them at lower interest rates

Farm Credit Administration (FCA) Helped farmers refinance their loans

Civilian Conservation Corp (CCC) Offered young men jobs in forestry keeping

up national parks & reservoirs

1st 100 Days – Relief Programs

Federal Emergency Relief Administration (FERA) Sent money to state & local governments for relief

projects Public Works Administration

Began a series of construction projects – highways, dams, sewage, water & schools

Civil Works Administration Hired government workers to build airports, roads,

schools, playgrounds, parks & athletic fields

Effect of 1st 100 days: Change in the spirit of the American

people

More programs & reforms to speed up recoverySec. 2

The Second New Deal

Criticisms of the New Deal

Republicans Too many

regulations on businesses

Expansion of federal government at expense of states’ rights

Deficit Spending – no balanced budget

Democrats Roosevelt hadn’t

gone far enough Wanted shift of

wealth from rich to poor

Other Criticisms

American Liberty League Business leaders organized to oppose New Deal

Huey Long Governor of Louisiana Created programs to help the poor but became

corrupt Threatened to run against Roosevelt

Father Coughlin Catholic priest in Detroit Popular radio show Thought the New Deal was too moderate

Which of the following is not a New Deal reform that exists today?

1. Social Security2. Securities &

Exchange Commission

3. Project #14. FDIC

The Townshend Plan

Dr. Francis Townshend Government should pay

citizens over 60 years old a pension of $200/month & in return those citizens should retire

Idea was to get older Americans to give up their jobs so more jobs would be available to younger people

The Supreme Court & the New Deal May 1935 Schecter Poultry Company v.

US- Supreme Court unanimously struck down authority of NRA.

Court ruled that Constitution did not allow Congress to delegate its powers to the president.

FDR was worried that the Supreme Court would eventually strike down all of his New Deal!

FDR decided to push through a series of 2nd New Deal programs.

Programs of 2nd New Deal

*Works Progress Administration Built roads, highways, public buildings & parks Federal Project Number One

Division of WPA offered work to artists, musicians, actors & writers

*Social Security Act Unemployment system, retirement & disability

pensions, child welfare benefits

*The Wagner Act (1935)

AKA National Labor Relations Act Guaranteed workers the right to organize

unions & to bargain collectively (through union reps).

Set up the National Labor Relations Board to supervise union elections, investigate employers.

Set up binding arbitration- union members could take complaints to a neutral third party, third party listened to both sides then made a decision.

Industrial Unions

National Labor Relations Board Certified unions Authorized to investigate employer actions

Committee for Industrial Organization (CIO) Organized industrial unions Focused on steel & auto workers

Sit down strikes Workers sat down on the job

What prevented banks from being closed completely because of bank runs?

1. New Deal2. Bank holiday3. Gold standard4. Fireside chats

The New Deal Coalition

19 Sec. 3--FDR wins a 2nd Term

The Election of 1936

Republican Alfred Landon (Gov. of Kansas)- liked some New Deal programs but, felt businesses were being shackled by government.

Democrat Franklin Roosevelt- voters liked the New Deal- remained popular= WON REELECTION!!

WON 60% OF POPULAR VOTE; CARRIED ALL BUT 2 STATES

** New Deal Coalition- FDR won with help a Blacks who joined working class whites, farmers, ethnic minorities, women, new immigrants, progressives, & intellectuals.

* Blacks shift from voting Republican to Democrat

Jan. 1936- Supreme Court declared the AAA unconstitutional; FDR feared other New Deal programs would be struck down.

Court Packing Plan Supreme Court declared some

of FDR’s legislation unconstitutional

FDR’s Plan- for every justice over age 70- FDR could appoint a new justice (possible to add 6 justices)

Many people (Republican & Democrat) opposed his plan- seen as a power grab.

Court backed off his programs & the plan died

Hurt FDR’s reputation Encouraged Conservative

Democrats to start working with Republicans

Economics Recession of 1937 FDR cut spending programs thatput people to work.

Surge in unemployment Balance budget or create jobs?

John Maynard Keynes Keynesian economics

Government should spend heavily to jump start the economy

Roosevelt brought back programs

Unemployment (% labor force)

Year Lebergott Darby[61]

1933 24.9 20.6

1934 21.7 16.0

1935 20.1 14.2

1936 16.9 9.9

1937 14.3 9.1

1938 19.0 12.5

1939 17.2 11.3

1940 14.6 9.5

1941 9.9 8.0

1942 4.7 4.7

1943 1.9 1.9

1944 1.2 1.2

1945 1.9 1.9

Last New Deal Reforms National Housing Act

Provided money for builders to build low cost housing

Farm Security Administration Gave loans to sharecroppers to purchase farms

Fair Labor Standards Act Provided more protection for workers, abolished child

labor & established a 40 hour work week, & minimum wage 25 cent/hour.

1938- Southern Democrats & Republicans began blocking any new programs= New Deal Ends.

New Deal Legacy

By 1939 – New Deal ends

The Broker State Federal government expected to step in &

settle disputes, look after Americans & protect citizens’ interests

Creation of a safety net for average Americans in times of economic crisis

Increased Federal power