Transcript FDR and the Great Depression - Franklin County Public Schools

FDR AND THE GREAT
DEPRESSION
Causes of the Depression
 False sense of prosperity on the part of
Americans
 Approximately 60% of the population lived in
poverty (earning less than $2,000 per year)
 Americans were buying on credit;
 Resulted in a demand for goods which caused
overproduction
 Speculation in the stock market
 People bought stocks on margin: (10% of value)
 Same as borrowing money to pay for stocks
Causes cont.
 Speculation led to falsely high stock prices
 Stock market began to tumble in the months
leading up to the October 1929 crash AND
 Speculative investors couldn’t make their
margin calls
October 29, 1929
 AKA “Black Tuesday”
 Day when the U.S. stock market crashed
 Marked as the start of the Great Depression in
America
 Over a two-day period, the market lost 24% of
its value
 Other important dates were:
 Oct 24, 1929 (Black Thursday)
 Oct 28, 1929 (Black Monday)
Bank Failures
 Run on America’s banks began immediately
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following the stock market crash of 1929
Hundreds of thousands of customers began
to withdraw their deposits
Banks had no money to lend
Loans went bad as businesses and farmers
collapsed
By 1933, 11,000 of the nation’s 25,000 banks
had disappeared
Unemployment
 1929, unemployment was at 3%
 1930, unemployment had jumped to 9%.
 1931, unemployment reached almost 16%.
 1932, unemployment climbed to 24%
 1933, unemployment reached almost 25%.
(11 million people without work)
 1934-1937, rate drops to 14%
Hoovervilles
 Nickname for the shantytowns that spread
across the United States
 Homeless Americans improvised with scraps,
abandoned cars, and packing crates
Dust Bowl 1930-1936
 Farmers over the decades had overplanted
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and poorly managed their crops
Severe droughts plagued the Great Plains
creating the “dust bowl” conditions
Soil turned to dust causing large clouds
Farmers lost their farms and migrated from
rural areas to cities
Further complicating the unemployment
crisis
FDR and the New Deal
 FDR elected in 1932
 Defeats Herbert Hoover
 Only 4 term president
 Dies near the end of his 4th term
 Overcame the challenges of polio
 “Fireside chats” over the radio were
reassuring to the American people
“The only
thing we have
to fear, is fear
itself”
Vice-Presidents of FDR
John Nance
Garner
Henry
Wallace
Harry Truman
Three R’s
 Relief, Recovery, Reform
 Short-range goals were relief and immediate
recovery
 Long-range goals were permanent recovery
and reform of current abuses
 FDR was inaugurated on March 4, 1933
 March 6-10,FDR declared a national banking
holiday as a prelude to opening the banks on
a sounder basis
Cont.
 Hundred Days Congress/Emergency Congress
(March 9-June 16, 1933)
 Pass a series of laws in order to deal with the
national emergency
 Some of the laws expressly delegated
legislative authority to the president
FDR and the Banks
 Emergency Banking Relief Act of 1933:
 Gave FDR power to regulate banking
transactions and foreign exchange and to
reopen solvent banks
 Glass-Steagall Banking Reform Act:
 Created the Federal Deposit Insurance
Corporation (FDIC)
 Insured individual bank deposits up to $5,000,
ending the epidemic of bank failures
FDR Job Programs
 Civilian Conservation Corps (CCC):
 Provided employment for about 3 million
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men in government camps
Work included reforestation, fire fighting,
flood control, and swamp drainage
Works Progress Administration (WPA):
Construction of buildings, roads, etc
Criticized for paying people to do "useless"
jobs such as painting murals
Cont.
 Public Works Administration (PWA):
 Intended for industrial recovery and
unemployment relief
 $4 billion on thousands of projects, including
public buildings and highways
Tennessee Valley Authority (TVA)
 Created by the Hundred Days Congress
 New Dealers accused the electric-power industry
of gouging the public with excessive rates
 2.5 million of America's most poverty-stricken
people inhabited Muscle Shoals, Alabama
 Constructing a dam on the Tennessee River in
Muscle Shoals did two things:
 Put thousands of people to work with a longterm project
 Reformed the power monopoly
Effects of the TVA
 Brought full employment to the area
 Cheap electric power
 Low-cost housing
 Restoration of eroded soil
 Improved navigation and flood control
 Area was being turned into one of the most
flourishing regions in the United States
National Industrial Recovery Act
(NIRA)
 Designed to assist industry, labor, and the
unemployed
 Industries, through "fair competition" codes,
were forced to lower their work hours so that
more people could be hired
 Minimum wages were established
 Workers were formally guaranteed the right
to organize and bargain collectively through
representatives of their choosing
Schechter Poultry Corp. v.
United States/1935
 AKA “Sick chicken case”
 Supreme Ct. ruled that NIRA was
unconstitutional
 Court found that the president lacked the
power to write the code
 All legislative power belonged in the
legislative branch
 Congress did not have authority to grant the
president that exclusive legislative power
Agricultural Adjustment
Act(AAA)
 Purpose was to balance supply and demand for
farm products
 Prices would support decent purchasing power
for farmers
 The concept was known as parity
 AAA controlled the supply of seven "basic crops"
– corn, wheat, cotton, rice, peanuts, tobacco and
milk
 Farmers received payments for taking some of
their land out of farming by not planting a crop
AAA Cont.
 Supreme Ct. ruled the Act unconstitutional
 Violated regulatory taxation provisions
 Soil Conservation and Domestic Allotment
Act of 1936 gave payments to farmers for
planting soil conserving crops
 Second Agricultural Adjustment Act of 1938
gave payments to farmers if they obeyed
acreage restrictions for specific crops
Federal Securities Act
 AKA “Truth in Securities Act”
 Protected the public against fraud
 Requiring promoters to give the investor
sworn information regarding the soundness
of their stocks and bonds
 Securities and Exchange Commission (SEC)
 Acts as the watchdog of the stock exchange
for illegal activity
Labor Issues
 National Labor Relations Act of 1935 (Wagner
Act)
 Enacted in response to Sup. Ct. ruling the
NIRA unconstitutional
 Created the National Labor Relations Board
 Reasserted the rights of labor to engage in
self-organization and to bargain collectively
through representatives of its own choice
Labor cont.
 Congress passes Fair Labor Standards Act
(Wages and Hours Bill) 1938
 Industries involved in interstate commerce:
 Required to set up minimum-wage (about .25
cents) and maximum-hour levels
 Labor by children under the age of 16 was
forbidden
John L. Lewis
Founder of the United
Mine Workers
And
Congress of Industrial
Organization
(CIO)
Claimed about 4 million
members by 1940
Social Security Act of 1935
 Provided for federal-state unemployment
insurance
 Provided security for old age of retired
workers to receive regular payments
 Government was recognizing its
responsibility for the welfare of its citizens
Ida Mae Fuller
Recipient of the
first social
security check
check number
00-000-001
$22.54
Dated January
31, 1940.
Federal Housing Administration
(FHA)
 United States Housing Authority (USHA)
 Speed recovery and better homes
 Designed to lend money to states or
communities for low-cost construction
21st Amendment 1933
 Repealed prohibition
 Created employment and raised revenue
Indian Reorganization Act 1934
 AKA Wheeler-Howard Act
 Brought on by findings of the Meriam Report
that uncovered the destructive impact of the
Dawes Act :
 Resulted in extreme poverty and a substantial
loss of tribal land due to sale to white settlers
 Aimed at decreasing federal control of
American Indian affairs and increasing Indian
self-government and responsibility
Opposition to the New Deal
 Republicans condemned the New Deal for its
radicalism, experimentation, confusion, and
"frightful waste.“
 Undermining the old virtue of initiative
 Charged the president of spending too much
money on his programs extending national
debt
 By 1939, the national debt was at $43 billion
(currently $15.23 trillion)
Opposition cont.
 Radical opponents to FDRs New Deal began
to be vocal:
 Father Charles Coughlin's anti-New Deal
radio broadcasts became so anti-Semitic
that he was forced off the air
 Senator Huey P. Long publicized his "Share
Our Wealth" program where every family in
the U S would receive $5,000 (assassinated in
1935)
Father Charles Coughlin
Early supporter of FDR
Eventually becomes
highly critical of the New
Deal
"The great betrayer and
liar, Franklin D.
Roosevelt……Franklin
Double-Crossing
Roosevelt."
Huey P. Long
AKA “Kingfish”
Governor of Louisiana
U.S. Senator
Keynesianism
 Developed by British economist John
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Maynard Keynes
Economic program designed to stimulate the
economy by planned deficit spending
Known as “pump priming”
Use of federal funds to stimulate the
economy
Became the policy of FDR
John
Maynard
Keynes
New Deal Response to Critics
 New Deal supporters argued that relief, not
economy, had been the primary objective of
the war on the depression
 Roosevelt believed that the government was
morally bound to prevent mass hunger and
starvation by "managing" the economy
FDR and the Supreme Court
 Overall, when FDR took office, the Sup. Ct.
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was ultraconservative
Resulted in some New Deal programs to be
ruled unconstitutional
FDR viewed as a threat to New Deal reform
FDR asks congress to allow him to appoint
one new justice for every member over 70
Would have raised the number of justices to
15
Supreme Ct. cont
 Idea was largely unpopular
 Deaths and resignations of justices allowed
FDR to appoint 9 justices to the Court
 Resulted in New Deal programs to be upheld
as constitutional
William O Douglas
Appointed by FDR
Served from 1939 to 1975
Longest serving justice in
Sup. Ct. history