Transcript The New Deal 1932

The New Deal
1932-1941
FDR (Franklin D. Roosevelt ) Offers
Relief and Recovery
FDR: Politician in a Wheelchair
• 1921 Polio paralyzed FDR
• Married to Eleanor Roosevelt
– TR’s niece
– FDR’s distant cousin
– “The conscience of the New
Deal”
• Gov of NY when Depression
started
– Believed in Govt. spending to
help people
– Opposite of what Hoover
thought
Presidential Hopefuls of 1932
• Dems nominated FDR
– “I pledge you, I pledge myself to a new deal for the American people.”
– Promised repeal of Prohibition, balanced budget, and social and economic
reforms
• Reps nominated Hoover
– “Prosperity is just around the corner”
• FDR won with 472 to 59 votes
• Democrats win a 2/3 majority in the Senate
• Democrats win ¾ majority in the House of Reps
• African Americans hurt by depression, started shifting to the Democrats
• They won by a lot
President Hoover, Mr. Chief Justice, my friends: This is a day of national
consecration, and I am certain that my fellow Americans expect that on my
induction into the Presidency I will address them with a candor and a
decision which the present situation of our nation impels.
This is pre-eminently the time to speak the truth, the whole truth, frankly and
boldly. Nor need we shrink from honestly facing conditions in our country
today. This great nation will endure as it has endured, will revive and will
prosper.
So first of all let me assert my firm belief that the only thing we have to fear. . .is
fear itself. . . nameless, unreasoning, unjustified terror which paralyzes
needed efforts to convert retreat into advance.
In every dark hour of our national life a leadership of frankness and vigor has
met with that understanding and support of the people themselves which is
essential to victory. I am convinced that you will again give that support to
leadership in these critical days. In such a spirit on my part and on yours we
face our common difficulties. They concern, thank God, only material things.
Values have shrunken to fantastic levels: taxes have risen, our ability to pay
has fallen, government of all kinds is faced by serious curtailment of income,
the means of exchange are frozen in the currents of trade, the withered
leaves of industrial enterprise lie on every side, farmers find no markets for
their produce, the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of
existence, and an equally great number toil with little return. Only a foolish
optimist can deny the dark realities of the moment.
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What is he referring to?
FDR and the Three R’s: Relief, Recovery,
Reform
• Took office 4 months after election
– Worked with his “brain trust” (a group of advisors)
to solve problems
• Developed the New Deal
– 3 main goals:
• Relief for the needy
• economic Recovery
• financial Reform
100 Days
• The First hundred days of FDR’s term
– Congress passed 15 major pieces of
legislation
• Greatly expanded Federal Govt’s role in
economy
• First step was to help banks
• March 6-10, “banking holiday”
– Congress passed Emergency
Banking Relief Act
– Banks closed and investigated
– Only financially sound banks could
re-open
– Restored some confidence in
banking
How does this compare to today’s Congress? Why is it different or the same?
Have you heard about the Fiscal Cliff?
Fireside Chats
• Explained New Deal acts in simple language
– People felt like FDR was talking directly to them
– The Second Fire Side Chat Audio
– Listen to the speech,
would it have made you
feel better?
On a Sunday night a week after my Inauguration I used the radio to tell you about the banking crisis
and the measures we were taking to meet it. I think that in that way I made clear to the country
various facts that might otherwise have been misunderstood and in general provided a means of
understanding which did much to restore confidence.
Tonight, eight weeks later, I come for the second time to give you my report -- in the same spirit and
by the same means to tell you about what we have been doing and what we are planning to do.
Two months ago we were facing serious problems. The country was dying by inches. It was dying
because trade and commerce had declined to dangerously low levels; prices for basic commodities
were such as to destroy the value of the assets of national institutions such as banks, savings banks,
insurance companies, and others. These institutions, because of their great needs, were foreclosing
mortgages, calling loans, refusing credit. Thus there was actually in process of destruction the
property of millions of people who had borrowed money on that property in terms of dollars which
had had an entirely different value from the level of March, 1933. That situation in that crisis did not
call for any complicated consideration of economic panaceas or fancy plans. We were faced by a
condition and not a theory.
There were just two alternatives: The first was to allow the foreclosures to continue, credit to be
withheld and money to go into hiding, and thus forcing liquidation and bankruptcy of banks, railroads
and insurance companies and a recapitalizing of all business and all property on a lower level. This
alternative meant a continuation of what is loosely called "deflation", the net result of which would
have been extraordinary hardship on all property owners and, incidentally, extraordinary hardships
on all persons working for wages through an increase in unemployment and a further reduction of
the wage scale.
The First New Deal Programs
• Glass-Steagall Banking Act of 1933
– Created the FDIC (Federal Deposit Insurance Corporation) which
insured money up to $5,000 (how much is insured now?)
– People returned money to banks
• Congress passed the Federal Securities Act
– Companies had to release all information on stock offerings
– Created the Securities and Exchange Commission
• No insider information
• Some alcohol became legal, with a tax of course
– Raised govt revenue
– By end of 1933 21st Amendment passed, no more prohibition
• National Recovery Administration (NRA)
– Designed to help industry, labor, and unemployed
• Industry:
– Codes of “fair competition” created
» Hours reduced
» Ceiling placed on max hours for a work week (before minimum
wage kicked in)
» Floor placed on wages
• Labor:
– Workers guaranteed the rights to self-organize and bargain collectively
– “yellow-dog” contracts were outlawed
– Restrictions placed on child labor
• Very popular at first but slowly lost appeal when
people/businesses realized what they were giving up
• Agricultural Adjustment Act (AAA)
– Paid farmers to leave fields bare. Lowered supply, raised
prices
– Bought surplus food and destroyed it
• Made starving Americans very mad
• Civilian Conservation Corps (CCC)
– Put men 18-25 to work building roads, planting tress…
– 200 million tress planted in Great Plains, WHY?
• Federal Emergency Relief Administration (FERA)
– Immediate relief
– Gave billions to states to hand out to unemployed
– Direct relief to unemployed
•Tennessee Valley Authority (TVA)
•Provided jobs to a very poor region
•Built 20 new dams and fixed 5 old dams
•Provided cheap electricity where none was before
New Deal Under Fire
• Free Market vs. Socialism
– Liberals “Not far enough”
– Conservatives, “Too far”
WPA Activity
The Second New Deal
1936 Election
• FDR: “Are you better off than you were four
years ago?”
• Wins 523 electoral votes to 8
– House majority of 331 to 89
– Senate majority 76 to 16
• Vote of confidence for FDR and his New Deal
Government Spending
• Federal deficit in 1932 = $461
million
• Federal deficit in 1936 = $4.4
billion
– Federal deficit in 2009 = ~1 trillion
• Known as Keynesian economics
– John Maynard Keynes encourage
“deficit spending”
• British economists
– Govt spending is good for economy,
even if you don’t have the money
Helping People
• Works Progress Administration (WPA)
–
–
–
–
–
–
Created as many jobs as quickly as possible
8 million people employed from 1935-1943
Built 850 airports
Built or repaired 651,000 miles of road
110,000 schools, libraries, and hospitals
Produced 300 million garments for needy Sub
divisions of WPA paid artists to paint, write,
play music
• National Labor Relations Act (Wagner Act)
– Fed now supported the right to organize
– Listed unfair labor practices
• Threatening workers
• Interfering with union organization
• Fair Labor Standards Act
– Minimum wage
• 25 cents an hour, 40 cents an hour by 1945
– Maximum work week
• 44 at first, 40 two years later
– Child labor forbidden
• 1935 Committee for Industrial
Organization (CIO) created
– Started using the sit-down strike
• General Motors strike, 44 days
• Social Security Act (1935)
– Provided federal and state unemployment
insurance
– Retired workers would receive payments from
government
• Financed by taxes
– Provisions also made for handicapped and
disabled
FDR: Court Packing
• FDR inaugurated January 20, 1937
– 20th Amendment shortened “lame
duck” period
• During 1st admin. FDR lost 7 of 9
Supreme Court cases about New
Deal legislation
– Justices were very conservative
– Six of the nine were over 70 yrs old
• FDR asked Congress for legislation
that would allow him to appoint a
justice for every member that was
over 70
– Would then have 15 justices
• Not well received
– FDR viewed as a dictator trying to ruin the checks
and balances of the US Govt
• Although court packing failed, Supreme Court
began supporting New Deal
• Eventually FDR appointed a total of 9 justices
• Whole ordeal hurt FDR’s reputation
Twilight of the New Deal
• New Deal did not fix the economy
– 1936 unemployment 15%
• 1937 economy went downhill again
– Social Security tax hurt
– Govt began to cut spending
• 1937 FDR announced massive deficit spending
– “Keynesianism” (British economist)
• By 1938 New Deal was losing momentum fast
– Good thing for FDR that someone was stirring up trouble in
Europe!
Effects of the New Deal
Women
• Some named to important
official positions
– Frances Perkins: Secretary of
Labor
• First woman appointed to
President’s cabinet
• Still faced discrimination in
workplace
– 1936 82% of Americans
believed a woman should not
work if her husband had a job
African Americans
• Gained more of a voice in politics
– “Black Cabinet”
• Group of African-Americans who advised
Roosevelt
• Robert C. Weaver would go on to
become the first Black member of a
President cabinet
• FDR fails at civil rights
– Didn’t support a federal antilynching
law
– WPA, CCC, TVA all paid lower wages
• African Americans still supported
Roosevelt
– Shift to primarily Democratic Party
Native-Americans
• Indian New Deal
– Indian Reorganization Act of 1934
• Gave Indian tribes back control of Indian land
• Reversed the Dawes Act of 1887
Wide Support for New Deal
• New Deal Coalition: made up of Southern
whites, urban groups, African Americans,
unions
– All agreed to support Democratic Party
New Deal Review
• Government’s role in economy greatly
expanded
– Put federal money directly into the economy
– Created federal jobs
– Regulated supply and demand
– Increased governments participation in labor
disputes
• Government started helping workers
– Wagner Act, Fair Labor Standards Act
• Standard wages and hours
• Banned child labor
• Workers right to organize
• National Labor Relations Board still mediates
labor disputes today
• Agriculture
–Set quotas on crops to control
surpluses
–Price supports for farmers
• Banking
–Securities and Exchange Commission
still monitors the stock market
–FDIC still insures your money
($250,000)
Continuing Benefits
• Social Security
– Old age insurance program
– Unemployment compensation
– Aid to families with dependent children or
disabled relatives
• Environment
– CCC
– TVA, electricity to rural areas
Welfare
• Very controversial today in America
– Is it the government’s responsibility to take care of
the poor, elderly, sick, disabled, unemployed, and
children?
– Started during the New Deal, still continuing
today….
Culture of the 1930s
Chapter 9 Section 4
Motion Pictures
• Movies and radio
flourished during the
1930’s, why?
– 65% of population
went to the movies
once a week
– 15,000 theaters
nation wide
• Comedies, love stories, and gangster films
were very popular
– Greta Garbo, Clark Gable, James Cagney
• Gone with the Wind (1939), The Wizard of Oz
(1939), Snow White (1937)
• Gangster Films
– Main characters coming from nothing to succeed
– Little Caesar (1930), The Public Enemy (1931)
• Comedies
– Marx Brothers
• Duck Soup (1933)
Gone with the Wind (1939)
The Wizard of Oz (1939)
Snow White (1937)
Radio
• 90% of households owned a
radio by late 1930’s
• Aired news, dramas,
comedies, children’s shows,
soap operas
• Who used the radio to his
political advantage?
• Orson Welles
– War of the Worlds, October
30, 1938
Literature
• Federal Writers’ Project
(FWP) came out of the
WPA and helped
authors keep writing
– John Steinbeck received
aid which helped him
finish The Grapes of
Wrath