The New DealThe New Deal

Franklin D. RooseveltFranklin D. Roosevelt

Elected governor of NY in 1928 and 1930Elected governor of NY in 1928 and 1930 Depression programs for the unemployed, Depression programs for the unemployed,

public works, aid to farmers, and conservation public works, aid to farmers, and conservation attracted national attentionattracted national attention

Dubbed "traitor to his class" by the richDubbed "traitor to his class" by the rich Spoke of concern for plight of the "forgotten Spoke of concern for plight of the "forgotten

man“man“ The premier orator of his generationThe premier orator of his generation Really a conservative in many ways: fiscally Really a conservative in many ways: fiscally

frugal, not anti-big business frugal, not anti-big business

Eleanor RooseveltEleanor Roosevelt

Pushed FDR to maintain political careerPushed FDR to maintain political careerMajor leader of female wing of the Democratic Major leader of female wing of the Democratic party in 1920s and early 30sparty in 1920s and early 30sBecame the "conscience of the New Deal“Became the "conscience of the New Deal“ Championed causes for women, children, the poor, Championed causes for women, children, the poor,

and African Americansand African Americans

Most active first lady in American History Most active first lady in American History

Election of 1932Election of 1932

Roosevelt -- Democratic candidateRoosevelt -- Democratic candidate "I pledge you, I pledge myself to a new deal "I pledge you, I pledge myself to a new deal

for the American people.”for the American people.”

Somewhat contradictory during campaignSomewhat contradictory during campaign Promised balanced budget & 25% cuts in Promised balanced budget & 25% cuts in

gov’t spendinggov’t spending Promised gov’t aid for the unemployedPromised gov’t aid for the unemployed Advocated repeal of Prohibition Advocated repeal of Prohibition

Hoover -- Republican candidateHoover -- Republican candidate Platform: Higher tariffs and maintenance of Platform: Higher tariffs and maintenance of

the gold standardthe gold standardReaffirmed faith in American free enterprise and Reaffirmed faith in American free enterprise and individual initiative- “rugged individualism”individual initiative- “rugged individualism”

Roosevelt defeated Hoover 472 to 59Roosevelt defeated Hoover 472 to 59 Blacks shifted to DemocratsBlacks shifted to Democrats

Became vital element in the Democratic party Became vital element in the Democratic party

"Lame duck" period"Lame duck" period American economy came to a virtual haltAmerican economy came to a virtual halt Twenty-First AmendmentTwenty-First Amendment passed by Congress in passed by Congress in

February, 1933February, 1933Repeal of prohibitionRepeal of prohibition

Twentieth Amendment Twentieth Amendment (adopted in 1933)(adopted in 1933)Presidential, VP, and congressional terms begin in JanuaryPresidential, VP, and congressional terms begin in January

Effects of the Great Depression by 1932Effects of the Great Depression by 1932 25%-33% unemployment25%-33% unemployment About 25% of banks failedAbout 25% of banks failed 25% of farmers lost their farms25% of farmers lost their farms Large numbers of businesses failedLarge numbers of businesses failed Loss of self-worth among millions of Loss of self-worth among millions of

Americans Americans

The New DealThe New Deal

Inaugural Address: "the only thing we have to Inaugural Address: "the only thing we have to fear is fear itself”fear is fear itself”FDR’s administrationFDR’s administration "Brain Trust": FDR selected experts for his "inner "Brain Trust": FDR selected experts for his "inner

circle”circle” Notable cabinet members and advisors of FDR’s Notable cabinet members and advisors of FDR’s

"inner circle“"inner circle“Cordell Hull -- Secretary of StateCordell Hull -- Secretary of StateFrances Perkins: first woman cabinet member; Sec. of LaborFrances Perkins: first woman cabinet member; Sec. of LaborHarold L. Ickes -- Secretary of the InteriorHarold L. Ickes -- Secretary of the InteriorHarry HopkinsHarry HopkinsEleanor Roosevelt Eleanor Roosevelt

First First "Hundred Days""Hundred Days" (March 9-June16, (March 9-June16, 1933)1933) FDR did not have a developed plan when he FDR did not have a developed plan when he

took officetook office Intended to experiment and find out what Intended to experiment and find out what

workedworked Used the Used the fireside chatsfireside chats

(radio) to communicate with (radio) to communicate with American people American people

Plan: Plan: Relief, Recovery, and ReformRelief, Recovery, and Reform Short-range goals: relief & immediate Short-range goals: relief & immediate

recovery, especially first two yearsrecovery, especially first two years Long-range goals were permanent recovery Long-range goals were permanent recovery

and reformand reform of current abuses, especially of current abuses, especially those that had produced the Great those that had produced the Great DepressionDepression

CCC, WPA, CCC, WPA, PWA, FERA, PWA, FERA,

NYANYA

NNRRAA

AAAAAA

SSA, FDIC, Wagner Act, SSA, FDIC, Wagner Act, TVA, FHA, SEC, REA, Fair TVA, FHA, SEC, REA, Fair

Labor Standards Act, Labor Standards Act, Indian Reorganization ActIndian Reorganization Act

RReliefelief

(short term)

RRecoveryecovery

(medium term)

RReformeform

(Long term)

EEBBRRAA

Think of Reliefas a “food bowl” that provides

temporary relief to people

out of work.

The “Three R’s” of the New DealThe “Three R’s” of the New Deal

FDR’s “twin pillars of

Recovery”: NRA & AAA

Reform is the foundation that plays a permanent

role in the U.S. economy

Unprecedented passage of legislation in U.S. Unprecedented passage of legislation in U.S. historyhistory Congress gave president extraordinary blank-check Congress gave president extraordinary blank-check

powerspowers 1st 100 Days legislation left lasting mark1st 100 Days legislation left lasting mark 1933-1935 programs now called First New Deal1933-1935 programs now called First New Deal

EBRA, Glass-Steagall Act, Truth-in-Securities Act, SEC, EBRA, Glass-Steagall Act, Truth-in-Securities Act, SEC, HOLC, FHA, FERA, CCC, PWA, AAA, NIRA (NRA), TVAHOLC, FHA, FERA, CCC, PWA, AAA, NIRA (NRA), TVA

1935-1938 programs referred to as Second New Deal1935-1938 programs referred to as Second New Deal

The Banking CrisisThe Banking Crisis

1933 bank failures total 10,9511933 bank failures total 10,951

FDR declared nationalFDR declared national "banking holiday" "banking holiday" between March 6-10between March 6-10 Only banks who were solvent could reopen (the Only banks who were solvent could reopen (the

majority did)majority did) Aimed to restore faith in the nation's banking industryAimed to restore faith in the nation's banking industry Government endorsement of banks would encourage Government endorsement of banks would encourage

people's trust people's trust

Took nation off the gold standard (March Took nation off the gold standard (March 6, 1933)6, 1933) Private holdings of gold were to be Private holdings of gold were to be

surrendered to the Treasury in exchange for surrendered to the Treasury in exchange for paper currencypaper currency

Emergency Banking Relief Act of 1933Emergency Banking Relief Act of 1933 Gave president (Treasury) power to open Gave president (Treasury) power to open

sound banks after ten days and to merge or sound banks after ten days and to merge or liquidate unsound onesliquidate unsound ones

Provided additional funds for banks from the Provided additional funds for banks from the Federal ReserveFederal Reserve

Forbade the hoarding of gold Forbade the hoarding of gold

March 12, first of his 30 March 12, first of his 30 "Fireside Chats","Fireside Chats", 35 million Americans listened35 million Americans listened Assured Americans that it was now safer to Assured Americans that it was now safer to

keep money in the reopened banks than keep money in the reopened banks than "under the mattress”"under the mattress”

Confidence in nation's banking restoredConfidence in nation's banking restored

Home Owner's Loan Corporation Home Owner's Loan Corporation (HOLC)(HOLC) – June 1933 – June 1933 Refinanced mortgages on about 1 million non-Refinanced mortgages on about 1 million non-

farm homesfarm homes Banks were saved as many foreclosures were Banks were saved as many foreclosures were

preventedprevented

Glass-Steagall Banking Reform Act Glass-Steagall Banking Reform Act (Banking Act of 1933), June(Banking Act of 1933), June Created the Created the Federal Deposit Insurance Federal Deposit Insurance

Corporation (FDIC)Corporation (FDIC)Individual deposits of up to $5,000 were federally Individual deposits of up to $5,000 were federally insuredinsured

Regulation of Banks and Big Regulation of Banks and Big BusinessBusiness

"Truth in Securities Act" (Federal Securities Act) "Truth in Securities Act" (Federal Securities Act) -- May, 1933-- May, 1933 Required promoters to transmit to the investor sworn Required promoters to transmit to the investor sworn

information regarding the soundness of their stocks information regarding the soundness of their stocks and bondsand bonds

Securities and Exchange Commission (SEC)Securities and Exchange Commission (SEC) – June, 1934– June, 1934 Designed to protect the public against fraud, Designed to protect the public against fraud,

deception, and inside manipulation of the stock deception, and inside manipulation of the stock market; more efficientmarket; more efficient

Banking Act of 1935 created a strong Banking Act of 1935 created a strong central Board of Governors of the Federal central Board of Governors of the Federal Reserve System with broad powers over Reserve System with broad powers over the operations of the regional banks the operations of the regional banks

Relief and Unemployment Relief and Unemployment programs of the Hundred Daysprograms of the Hundred Days

Civilian Conservation Corps (CCC) Civilian Conservation Corps (CCC) -- -- March 31, 1933March 31, 1933 Employed of 2.75 million young men (18-24) Employed of 2.75 million young men (18-24)

in outdoor gov’t camps to keep them out of in outdoor gov’t camps to keep them out of trouble trouble

Reforestation, firefighting, flood control, swamp Reforestation, firefighting, flood control, swamp drainage, and further developing national parksdrainage, and further developing national parks

Under direction of the War Department Under direction of the War Department

Most of monthly payment made to the family Most of monthly payment made to the family of each memberof each member

Some criticized it as being too Some criticized it as being too

militaristic in nature militaristic in nature

Federal Emergency Relief Federal Emergency Relief Administration (FERA)Administration (FERA) Created by Federal Emergency Relief Act Created by Federal Emergency Relief Act

(May 12, 1933)(May 12, 1933) Headed by Headed by Harry HopkinsHarry Hopkins Gave $3 billion to states for direct Gave $3 billion to states for direct dole dole

paymentspayments or preferably for wages on work or preferably for wages on work projectsprojects

"on the dole""on the dole"

Civil Works AdministrationCivil Works Administration (CWA) (CWA) (branch of the FERA), Nov. 1933(branch of the FERA), Nov. 1933 4 million unemployed received jobs in mostly 4 million unemployed received jobs in mostly

make-work tasks raking leaves, sweeping make-work tasks raking leaves, sweeping streets and digging ditchesstreets and digging ditches

Widely criticized and terminated in April 1934 Widely criticized and terminated in April 1934

Public Works Administration (PWA) -- Public Works Administration (PWA) -- Created in 1933Created in 1933 Headed by Headed by Harold L. IckesHarold L. Ickes Granted over $4 billion to state and local Granted over $4 billion to state and local

governments to provide jobs on public governments to provide jobs on public projectsprojects

Problem: Money not spent quickly enough; Problem: Money not spent quickly enough; millions remained out of work millions remained out of work

Works Progress Administration (WPA), Works Progress Administration (WPA), May, 1935 (2nd New Deal)May, 1935 (2nd New Deal) Employed nearly 9 million people on public Employed nearly 9 million people on public

projects (list on previous slide)projects (list on previous slide) Total cost: $11.4 billion; eventually Total cost: $11.4 billion; eventually

employed 40% of nation’s employed 40% of nation’s

workersworkers

Federal Arts Project: Federal Arts Project: WPA agencies also WPA agencies also found part-time occupations for actors, found part-time occupations for actors, musicians, and writersmusicians, and writers Dorothea LangeDorothea Lange hired to photograph ordinary hired to photograph ordinary

Americans during depression Americans during depression

National Youth Administration (NYA)National Youth Administration (NYA) -- -- June, 1935June, 1935 Part-time jobs for high school and college Part-time jobs for high school and college

students to help them to stay in schoolstudents to help them to stay in school

Agricultural Programs of the Agricultural Programs of the Hundred DaysHundred Days

Agricultural Adjustment Administration Agricultural Adjustment Administration (AAA)(AAA),, May 12, 1933May 12, 1933 Attempted to eliminate price-depressing Attempted to eliminate price-depressing

surpluses by paying growers to reduce their surpluses by paying growers to reduce their crop acreage – crop acreage – subsidiessubsidies

Criticized for destruction of food at a time Criticized for destruction of food at a time when thousands were hungrywhen thousands were hungry

Farm income increased but tenants and Farm income increased but tenants and sharecroppers hurt when owners took land sharecroppers hurt when owners took land out of cultivation, thus removing tenants but out of cultivation, thus removing tenants but retaining subsidies retaining subsidies

Eventually killed in the Supreme Court case Eventually killed in the Supreme Court case Butler vs. U.SButler vs. U.S..

Federal Farm Loan ActFederal Farm Loan Act Allocated millions of dollars to help farmers Allocated millions of dollars to help farmers

meet their mortgagesmeet their mortgages

Addressing the Addressing the Dust BowlDust Bowl refugees refugees Late 1933, drought struck states in Great Late 1933, drought struck states in Great

PlainsPlainsMillions of tons of top soil were blown as far as Millions of tons of top soil were blown as far as BostonBoston

In five years, 350,000 Oklahomans and Arkansans In five years, 350,000 Oklahomans and Arkansans -- "Okies" and "Arkies" migrated to southern -- "Okies" and "Arkies" migrated to southern California California

“Oakies”

Frasier-Lemke Farm Bankruptcy Act of 1934Frasier-Lemke Farm Bankruptcy Act of 1934Defer foreclosure while they obtained new Defer foreclosure while they obtained new financingfinancing

Resettlement Administration (RA) May 1935Resettlement Administration (RA) May 1935Relocated destitute families to new rural Relocated destitute families to new rural homestead communities or suburbshomestead communities or suburbs

Grapes of WrathGrapes of Wrath by John Steinbeck by John Steinbeck educated many on the crisis educated many on the crisis

Industry and LaborIndustry and Labor

National Industrial Recovery National Industrial Recovery Administration (NIRA) – Administration (NIRA) – June 16, 1933)June 16, 1933) Designed to prevent extreme competition, Designed to prevent extreme competition,

labor-management disputes, & over- labor-management disputes, & over- productionproduction

Board composed of labor leaders and Board composed of labor leaders and industrial leaders to work out codes of "fair industrial leaders to work out codes of "fair competition”competition”

Maximum work hours: spread employment out Maximum work hours: spread employment out among more peopleamong more people

Minimum wages were establishedMinimum wages were established

Minimum prices set (to avoid cutthroat competition)Minimum prices set (to avoid cutthroat competition)

Production limits & quotas instituted (to keep Production limits & quotas instituted (to keep prices higher) prices higher)

Antitrust laws temporarily suspended for Antitrust laws temporarily suspended for two yearstwo years

Section 7aSection 7a Workers formally guaranteed the right to Workers formally guaranteed the right to

organize and bargain collectively through organize and bargain collectively through representatives of their own choosingrepresentatives of their own choosing

"yellow dog", or antiunion contract was "yellow dog", or antiunion contract was forbiddenforbidden

Restrictions placed on the use of child labor Restrictions placed on the use of child labor

National Recovery Administration (NRA)National Recovery Administration (NRA) Under leadership of Under leadership of Hugh JohnsonHugh Johnson to enforce the to enforce the

law and generate public enthusiasm for the NIRAlaw and generate public enthusiasm for the NIRA The The "blue eagle""blue eagle" was displayed by merchants was displayed by merchants

adhering to NRA codes with the slogan "we do our adhering to NRA codes with the slogan "we do our part”part”

Results:Results:In short run, business did improveIn short run, business did improve

NRA later shot down by Supreme Court in NRA later shot down by Supreme Court in

Schechter vs. U.SSchechter vs. U.S..

Wagner Act (National Labor Relations Wagner Act (National Labor Relations Act of 1935)Act of 1935) -- 2nd New Deal -- 2nd New Deal Perhaps most important piece of labor Perhaps most important piece of labor

legislation in U.S. historylegislation in U.S. historyReplaced Section 7a of NRA that had been killed Replaced Section 7a of NRA that had been killed by Supreme Courtby Supreme Court

Right of labor to organize and to bargain Right of labor to organize and to bargain collectively through representativescollectively through representatives

Encouraged the creation of the Encouraged the creation of the CIO CIO (Congress of Industrial Organizations)(Congress of Industrial Organizations)

Fair Labor Standards Act (Wages and Fair Labor Standards Act (Wages and Hours Bill)Hours Bill), 1938 (2nd New Deal), 1938 (2nd New Deal) Minimum-wage and 40-hour week for Minimum-wage and 40-hour week for

industries in interstate commerceindustries in interstate commerce Prohibited child labor under age 16; Prohibited child labor under age 16;

dangerous labor forbidden under age 18dangerous labor forbidden under age 18

Tennessee Valley Authority (TVA) Tennessee Valley Authority (TVA) -- -- May, 1933May, 1933 Reform power monopoly of utility companies Reform power monopoly of utility companies

by building hydroelectric power plants in by building hydroelectric power plants in Tennessee Valley while employing thousandsTennessee Valley while employing thousands

20 dams built to generate hydroelectric power20 dams built to generate hydroelectric power

Sought to establish fair ratesSought to establish fair rates Huge success: provided full employment in Huge success: provided full employment in

the region, cheap electric power, low-cost the region, cheap electric power, low-cost housing, restoration of eroded soil, housing, restoration of eroded soil, reforestation, improved navigation, and flood reforestation, improved navigation, and flood controlcontrol

Criticized by many as socialisticCriticized by many as socialisticSupreme Court later upheldSupreme Court later upheld

Housing ReformHousing Reform

Federal Housing Administration (FHA) Federal Housing Administration (FHA) –– 1934 1934 Small loans to homeowners to improve their Small loans to homeowners to improve their

homes or build new oneshomes or build new ones

Effects of the First New DealEffects of the First New Deal

Economy improved but did not recover Economy improved but did not recover between 1933 and 1935between 1933 and 1935 Farm income more than doubledFarm income more than doubled

Unemployment dropped from about 25% Unemployment dropped from about 25% of non-farm workers to about 20% of non-farm workers to about 20%

Critics of the New Deal Critics of the New Deal

The American Liberty LeagueThe American Liberty League Group of wealthy Republicans and Group of wealthy Republicans and

conservative Democrats formed in 1934 to conservative Democrats formed in 1934 to fight "socialistic“ New Dealfight "socialistic“ New Deal

Unsuccessful in overthrowing FDR in Unsuccessful in overthrowing FDR in 1936 1936 electionselections

Father Charles CoughlinFather Charles Coughlin

Senator Huey P. ("Kingfish") LongSenator Huey P. ("Kingfish") Long Popular Governor in Louisiana: raised taxes Popular Governor in Louisiana: raised taxes

to fund schools and hospitals to serve the to fund schools and hospitals to serve the poor; roads improved & bridges built in poor; roads improved & bridges built in neglected areasneglected areas

"Share Our Wealth""Share Our Wealth" program promised to program promised to make "Every Man a King" by supplying each make "Every Man a King" by supplying each family with $5,000 at the expense of the family with $5,000 at the expense of the prosperousprosperous

High inheritance taxesHigh inheritance taxes

Second New DealSecond New DealMore reform orientedMore reform oriented FDR introduced new programs in the spring of FDR introduced new programs in the spring of

1935 ("Second Hundred Days")1935 ("Second Hundred Days")

Programs included: WPA, NYA, REA, Programs included: WPA, NYA, REA, Wagner Act (National Labor Relations Wagner Act (National Labor Relations Board), Social Security Act, Banking Act of Board), Social Security Act, Banking Act of 1935, Revenue Act 1935, Revenue Act

Social Security Act of 1935Social Security Act of 1935One of the most far-reaching laws ever to pass One of the most far-reaching laws ever to pass CongressCongress By 1939, over 45 million Americans were eligibleBy 1939, over 45 million Americans were eligible Provided for federal-state unemployment insuranceProvided for federal-state unemployment insurance Provided for pensions for retired workersProvided for pensions for retired workers Financed by a payroll tax on both employers and Financed by a payroll tax on both employers and

employeesemployees Provision also made for the blind, Provision also made for the blind,

physically handicapped, delinquent physically handicapped, delinquent

children, and other dependents children, and other dependents

Revenue ActRevenue Act of 1935 ("soak the rich tax”) of 1935 ("soak the rich tax”) Raised income taxes on higher incomes & Raised income taxes on higher incomes &

inheritanceinheritance

1936 elections1936 electionsNew Democratic party coalition: blacks, New Democratic party coalition: blacks, unions, intellectuals, city machines, Southunions, intellectuals, city machines, South

Result: Roosevelt defeated Alfred Landon Result: Roosevelt defeated Alfred Landon (R) 523 to 2(EV)(R) 523 to 2(EV)

Roosevelt and the Supreme CourtRoosevelt and the Supreme Court

Court Challenges to the New DealCourt Challenges to the New Deal Schechter vs. USSchechter vs. US (1935) ("sick chicken" (1935) ("sick chicken"

case)case)Court ruled the Nat’l Industrial Recovery Court ruled the Nat’l Industrial Recovery Adminstration unconstitutionalAdminstration unconstitutional

Congressional control of interstate commerce Congressional control of interstate commerce could not apply to local Brooklyn poultry business could not apply to local Brooklyn poultry business of the Schechter brothersof the Schechter brothers

Butler vs. USButler vs. US (1935) (1935)Federal gov't could not tax businesses that bought Federal gov't could not tax businesses that bought agricultural products, and then use those taxes to agricultural products, and then use those taxes to benefit farmers who received federal subsidiesbenefit farmers who received federal subsidies

Judiciary Reorganization BillJudiciary Reorganization Bill

19371937Attempt by FDR to remove old Attempt by FDR to remove old conservative justices by imposing a conservative justices by imposing a retirement requirement for justices 70 retirement requirement for justices 70 years or olderyears or olderCritics accused FDR of being a "dictator" Critics accused FDR of being a "dictator" and trying to pack the court -- and trying to pack the court -- "court "court packing”packing”Bill not passedBill not passed

The End of the New DealThe End of the New Deal

By 1938, approaching war in Europe By 1938, approaching war in Europe diverted public attention from the domestic diverted public attention from the domestic economyeconomy

Dems lost 80 seats in 1938 mid-term Dems lost 80 seats in 1938 mid-term electionselections "Conservative coalition"Conservative coalition" in Congress could " in Congress could

now block FDR’s legislation now block FDR’s legislation