P7 | APUSH | Wiley | Sources on FDR & New Deal, D___Name:

It is difficult to imagine the pervasive impact of the Great Depression. Various economic indicators and statistics might help to put the depression in perspective: the U.S. Gross Domestic Product—the value of all the goods and services produced by the nation in one year—dropped from $104 billion to $56 billion in four years (1929 to 1932); the nation’s income declined by over 50%; some 20% of all banks closed, wiping out 10 million savings accounts; as banks failed, the money supply contracted by 30%; by 1933, the number of unemployed had reached 13 million people, or 25% of the workforce, farmers not included; and poverty, homelessness, mortgage foreclosures, and evictions, proliferated and became commonplace.

The depression ended Republican domination of government and people pushed for more dramatic changes in policies and an expansion of the federal government, beyond even what Progressives had imaged in the first two decades of the 20th century. Democratic President Franklin D. Roosevelt (1933-1945), elected in 1932, would usher in a “New Deal” for the American people. These sources will help us to examine that New Deal to understand FDR’s approach and the debates about the effectiveness of his approach.

Excerpts from Franklin D. Roosevelt’s Inaugural Address, March 1933

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 preeminently the time to speak the truth, the whole truth, frankly and boldly. . . 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 such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things . . . our ability to pay [taxes and for goods/services] has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange [money, bonds] 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 . . . . Only a foolish optimist can deny the dark realities of the moment.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty. . . .

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. . . . Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources. . . The task can be helped by definite efforts to raise the values of agricultural products . . . . It can be helped by preventing realistically the tragedy of the growing loss through foreclosure [bank seizure] of our small homes and our farms. . . It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a public character. . . We must act and act quickly.

Finally, in our progress toward a resumption of work we require . . . safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency. . .

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If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we can not merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems. Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.

It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption. But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis - broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe. . .

We face the arduous days that lie before us in the warm courage of the national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life. We do not distrust the future of essential democracy [note: FDR likely made this statement in response to Russia’s claims that the Great Depression proved democracy/capitalism was a flawed system doomed to fail]. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.

In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come.

1. What were FDR’s objectives in his First Inaugural Address? Make a list below:

2. What plan for the future does FDR lay out? Make a list of specifics below:

3. Given the specter of suffering (see economic indicators in context section), did the extract provided here adequately deal with the national crisis?

4. How would you characterize FDR’s speech—liberal, conservative, patriotic, capitalist, socialist, etc.? Explain.

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FDR’s Fireside Chats

Many historians, critics as well as supporters, credit the success of much of the early New Deal as much to the delivery of the messages as to their content. What was it about FDR's voice, the structure of his Fireside Chats, and the relative novelty of radio in 1933 that made his use of this medium so effective and important historically? What can we learn from this example of presidential leadership?

Roosevelt made a total of thirty-one Fireside Chats, from the initial days of his first administration to the dark days of World War II. He used these opportunities to explain his hopes and ideas for the country, while inviting the citizenry to "tell me your troubles." The combination of the novelty and intimacy of radio with the believability of his message created a powerful force that enabled him to pass a sweeping set of legislation in the first 100 days of his presidency and then go on to many other accomplishments in the following twelve years. The first broadcast set the pattern for the content and tone of the rest: FDR patiently and calmly explained the complexities of the nation's banking crisis in a way that was understandable and accessible to the masses.

“I never saw him—but I knew him. Can you have forgotten how, with his voice, he came into our house, the President of these United States, calling us friends?" —Carl Carmer, 1945

Fireside Chat on the Bank Crisis, March 1933 :

I want to talk for a few minutes with the people of the United States about banking -- with the comparatively few who understand the mechanics of banking but more particularly with the overwhelming majority who use banks for the making of deposits and the drawing of checks. I want to tell you what has been done in the last few days, why it was done, and what the next steps are going to be. I recognize that the many proclamations from State Capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week.

First of all let me state the simple fact that when you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money in many different forms . . . [and gives out] loans. In other words, the bank puts your money to work to keep the wheels of industry and of agriculture turning around. A comparatively small part of the money you put into the bank is kept in currency -- an amount which in normal times is wholly sufficient to cover the cash needs of the average citizen. In other words the total amount of all the currency in the country is only a small fraction of the total deposits in all of the banks.

What, then, happened during the last few days of February and the first few days of March? Because of undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold. -- A rush so great that the soundest banks could not get enough currency to meet the demand. . .

By the afternoon of March 3 scarcely a bank in the country was open to do business. Proclamations temporarily closing them in whole or in part had been issued by the Governors in almost all the states. It was then that I issued the proclamation providing for the nation-wide bank holiday, and this was the first step in the Government's reconstruction of our financial and economic fabric. The second step was the legislation promptly and patriotically passed by the Congress confirming my proclamation and broadening my powers so that it became possible in view of the requirement of time to extend the holiday and lift the ban of that holiday gradually. This law also gave authority to develop a program of rehabilitation of our banking facilities. I want to tell our citizens in every part of the Nation that the national Congress -- Republicans and Democrats alike -- showed by this action a devotion to public welfare and a realization of the emergency and the necessity for speed that it is difficult to match in our history. . .

This bank holiday while resulting in many cases in great inconvenience is affording us the opportunity to supply the currency necessary to meet the situation. . . [T]he banks that reopen will be able to meet every legitimate call. . . A question you will ask is this - why are all the

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banks not to be reopened at the same time? The answer is simple. Your Government does not intend that the history of the past few years shall be repeated. We do not want and will not have another epidemic of bank failures. . . It is necessary that the reopening of banks be extended over a period in order to permit the banks to make applications for necessary loans, to obtain currency needed to meet their requirements and to enable the Government to make common sense checkups. Let me make it clear to you that if your bank does not open the first day you are by no means justified in believing that it will not open. A bank that opens on one of the subsequent days is in exactly the same status as the bank that opens tomorrow. . .

We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but seemed to assume that the acts of a comparative few had tainted them all. It was the Government's job to straighten out this situation and do it as quickly as possible -- and the job is being performed. . .

[T]here is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail.

5. What was FDR aiming to accomplish in his first fireside chat?

6. Describe what FDR and Congress planned to do about the banking crisis:

7. Evaluate FDR’s plan to manage the banking crisis:

FDR’s New Deal Legislation

The new president—a distant cousin of President Theodore Roosevelt who was married to TR’s niece, Eleanor—expanded the size of the federal government, altered its scope of operations, and greatly enlarged presidential powers. He would dominate the nation and the government for an unprecedented stretch of time; 12 years and two months. FDR became one of the most influential world leaders of the 20th century and is commonly ranked as one of the best presidents.

With the nation desperate and close to the brink of panic, Congress looked to the new president for leadership, which Roosevelt was eager to provide. Immediately after being sworn into office in 1933, Roosevelt called Congress into a hundred-day-long special session. During this period, Congress passed into law every request of the President, enacting more legislation than any single

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Congress in history. Most of the new laws and agencies were commonly referred to by their initials (WPA, AAA, CCC, etc.), or more generally as “alphabet soup.” Even after the Hundred Days expired, Roosevelt continued devising new remedies for the nation’s ills, which Congress enacted.

Category: FINANCIAL REFORMProgram/Agency/Reform, Date Purpose Impact

Emergency Banking Act, ‘33 Enlarge federal authority over private banks

Provide loans to private banks Allow president to declare bank

holiday

Banks closed to prevent further withdrawals and bank failures

Authorized Treasury to inspect country’s banks Helped restore faith in banking system

Glass-Steagall Act, ’33 Federal Deposit Insurance Corporation (FDIC)

FDIC to provide federal insurance for bank accounts

Reassured millions that their money was safe and that capitalism would prevail

Federal Securities Act, ‘33Securities and Exchange Commission, ’33 (SEC)

Regulate stock market Made companies liable for any misrepresentations

Prevented insider trading

Category: EMPLOYMENTProgram/Agency/Reform, Date Purpose Impact

Civilian Conservation Corps, ‘33 Unemployment relief Conservation of natural resources

Most popular of all programs Road construction, reforestation, flood control,

park improvementsEmergency Relief Appropriations Act, ‘35Works Progress Administration (WPA)Public Works Administration (PWA)

Public works programs for jobless Increase employment and

consumer spending

Road construction, new schools, bridges, courthouses, public buildings, etc. (PWA)

Community service projects Artists, musicians, actors, writers employed in the

Federal Art Project (covering writing, theater, music, visual arts) – sparked controversy (WPA)

Category: SOCIAL WELFAREProgram/Agency/Reform, Date Purpose Impact

Federal Emergency Relief Administration ’33 (FERA)

Direct federal money for relief, funneled through state/local gov.

Half given to states; other half distributed on basis of $1 federal for every $3 of state/local funding for relief

Funds used to create new unskilled jobs in local and state government

Terminated in ’35; work taken over by WPA

Social Security Act, ‘35 Provide old-age pensions Provide unemployment insurance

Pensions quite small Failed to cover many in need Established principle of federal authority for

America’s vulnerable citizens

Category: FARMING / AGRICULTUREProgram/Agency/Reform, Date Purpose Impact

Agricultural Adjustment Administration, ’33 (AAA)

Provide federal farm aid and subsidies

Set prices for crops Raise crop prices by cutting

production

Immediate relief to large growers Raised farm income and pushed prices up Failure to share subsidy payments with tenants or

sharecroppers Payments used for new technology displaced

workers Sparked controversy when farmers were

subsidized by the government to cut production (looked bad when many people were starving)

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Declared unconstitutional in ’37; Court ruled that agriculture was a state matter

Tennessee Valley Authority, ’33 (TVA)

Economic development and cheap electricity for Tennessee Valley

Construction of dams to prevent flooding

Brought modern conveniences to an underdeveloped region

Attracted industry to the area when living standards increased

Sparked controversy: “dangerous step towards socialism”

Resettlement Administration, ’35 (RA)Farm Security Administration, ’37 (FSA)

Relocate poor rural families Loan money to poor families Provide relief for Dust Bowl victims

Lack of funds and poor administration: only about 1% of projected 500,000 families were actually moved

Established network of camps for displaced farm workers

Made a pictorial record by hiring photographers to document life in rural America

Category: INDUSTRY / LABORProgram/Agency/Reform, Date Purpose Impact

National Industrial Recovery Act, ’33 National Recovery Administration (NRA)

Create centralized industrial codes to revive the economy

Codes of fair practice intended to help workers

Set prices Codes seemed to favor big business NRA pronounced unconstitutional in ’35; Court

ruled that the enforcement of industry codes went beyond interstate commerce; many labor provisions included in Wagner Act

National Labor Relations Act, ‘35Wagner Act

Federal guarantee of right to organize trade unions and engage in collective bargaining

Prohibit unfair labor practices

Explosion in union growth, especially in previously unorganized industries (auto, steel, textiles)

Labor Relations Board acts as mediator in labor disputes

Fair Labor Standards Act, ‘38 Establish first minimum wage (25 cents/hr)

Maximum work week of 44-hours for all engaged in interstate commerce

Ban on child labor

For first time in U.S. history, federal government set standards for minimum wages and maximum hours

Children under 12 could no longer be employed in non-agricultural jobs; children between 12-16 could be employed in certain occupations for limited hours; children 16-18 could be employed in non-hazardous occupations

8. Revisit your Progressive Era notes/sources. Which programs/agencies would Progressives circa 1912 support?

9. Labeling: A) Place a check mark by the programs/agencies you would have agreed with, given the context of the Great Depression. B) Put an X by the programs/agencies you would have disagreed with at the time. C) Put a T for programs/agencies that seem temporary and P for permanent (intended to last beyond the current crisis) by each program/agency.

How Successful was the New Deal?, CNN, by John Blake, 2008

President Franklin Roosevelt's New Deal traditionally has been credited with helping lift the nation out of the Great Depression. When Roosevelt took office in 1933, he pushed through the passage of a sprawling set of laws and public works programs geared to revive the economy. But there are some historians who say the New Deal not only failed to help lift the nation out of the Great Depression, it made it worse. We talked to two New Deal historians who represent opposing sides of this debate. Adam Cohen is the author of "Nothing to Fear: FDR's Inner Circle and the Hundred Days That Created Modern America." Jim Powell is the author "FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression."

Did the New Deal help lift the U.S. out of the Great Depression?

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Powell : It certainly did not. The New Deal prolonged the Great Depression not because of one mistake, but because of a combination of policies that make it more expensive to hire people. Some of the time during the 1930s, the economy expanded, but chronic high unemployment persisted throughout the period. It averaged 17 percent. The best the New Deal could do was 14 percent (over double what we have now), and at times, New Deal unemployment was over 20 percent. The chronic high unemployment is what concerns everybody. FDR might have lifted people's spirits, but he never could figure out how to promote the recovery of private-sector employment.

Cohen: Yes, and in two different ways. One, it had a definite impact on the U.S. economy. From 1933 on, you saw a steady increase in the GDP [gross national product], which showed that it was helping with economic activity. You also saw unemployment going down. It is true that the Great Depression didn't end until World War II, with the [fiscal] stimulation it provided. That really suggests we just needed more spending. The New Deal was working, but we needed more of the New Deal. We needed more New Deal spending. When FDR started pulling the spending back (’37-’38), that’s when things slipped. People who say the New Deal didn't help also ignore the fact that the New Deal put millions of people to work. Ronald Reagan’s father had a New Deal job. People could see actual progress on the ground. They could see the economy getting better and they regained trust in capitalism. If people believe things are getting better, they start spending.

What was radical about the New Deal when it was introduced?

Powell: It involved the biggest peacetime expansion of government power in American history. So the New Deal was different, but I'm not sure one would call that radical. Was it radical to triple the tax burden, which is what FDR did between 1933 and 1940? Was it radical to destroy food and make three-quarters of the American population pay higher prices for food -- in the country's worst depression? That's what the New Deal did under the Agricultural Adjustment Act. Was it radical to make it more expensive for employers to hire people, triggering unemployment, as a number of New Deal policies did? Regardless of whether one would call such policies radical, I think it's fair to say that they harmed the people they were supposed to help.

Cohen: When FDR took over, the federal government was limited in scope [due to the conservatism of the 1920s presidents]. FDR reimagined what the federal government could be. It could be an employer of people. It could be a provider of relief payments. It could regulate the stock market. Those were things that no one thought the government should do, but terrible times allowed that.

10. Complete the chart below:

Praise for the New Deal/FDR Critique of the New Deal/FDR

11. What specific materials would need to be analyzed before reaching a conclusion regarding the success or failure of the New Deal?

FDR’s New Deal—Historiography:

Roosevelt's New Deal was unique. In later decades, there would be nothing quite like it in terms of either the challenges faced or the legislative record achieved. Recognizing its scope, historians have debated whether the New Deal represented a revolutionary break with the past or an evolutionary outgrowth of earlier movements.

The first historical interpretations tended to praise the New Deal as a continuation or revival of the Progressive reform movement. In the late 1950s, Arthur M. Schlesinger Jr. saw the New Deal in terms of his theory of a recurring political cycle from a period of liberal reforms to a period of conservative reaction and back again to reform.

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Some liberal historians such as Carl Degler went further and characterized the New Deal as an American Revolution that went far beyond earlier reforms. They argued that such measures as the NRA, the WPA, and the Social Security Act redefined the role of government in American society. In his Age of Reform (1955), Richard Hofstadter agreed that the New Deal had ventured beyond traditional reform movements. It was unique, he said, because it concentrated not on regulating corporate abuses as in the past but on providing social-democratic guarantees for different groups in such forms as Social Security, housing credits, and minimum wage laws.

Revisionists of the 1960s and 1970s viewed the New Deal differently. William E. Leuchtenburg in Franklin D. Roosevelt and the New Deal (1963) depicted a "halfway revolution" that helped some (farmers and labor unions), ignored others (African Americans), and implemented changes without being either completely radical or conservative. Leuchtenburg believed Roosevelt did the best he could given both his own personal ideas and the political realities of the time. A highly critical interpretation came from New Left scholars (radical thinkers of the 1970s), who argued that the New Deal was a missed opportunity that did not do enough to meet society's needs. They saw New Deal measures as conservative in purpose, aimed at preserving capitalism from a worker revolution. New Left historians have been criticized for judging the New Deal in terms of the 1970s rather than the 1930s.

In recent years, some historians have questioned whether it is useful to characterize the New Deal as either conservative on the one hand or revolutionary on the other. They see the New Deal as nothing more or less than a pragmatic political response to various groups. In their view, Roosevelt and his political advisers had no central plan but simply responded to the different needs of special interests (farmers, business, labor, and elderly).

In defense of Roosevelt, they ask: If the nation in general and the South in particular was essentially conservative, then how far could the New Deal go in improving race relations? If the government bureaucracy was relatively small in the 1930s, how could it be expected to implement massive new programs?

12. Which interpretation above did you find most persuasive or intriguing? Why?

13. What is the message of the cartoon? What is the cartoonist suggesting? Do you think it’s an accurate portrayal of FDR and the New Deal? Why or why not?

14. How would you characterize FDR’s approach to battling the New Deal? Was it socialism? Why or why not? Read his response to the claim that his approach was socialism, or some other –ism with a negative connotation before coming up with your own response.

“A few timid people, who fear progress, will try to give you new and strange names for what we are doing. Sometimes they will call it "Fascism," sometimes "Communism," . . . sometimes "Socialism." But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical. . . .

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Feather in [very old] woman’s hat reads “Miss Democracy;” horse has “Constitution” written on its body, Uncle Sam is driving the carriage; FDR holds a blueprint of

a sharp looking car that says “Federal Control.”

All that we do seeks to fulfill the historic traditions of the American people. Other Nations may sacrifice democracy for the transitory stimulation of old and discredited autocracies. We are restoring confidence and well-being under the rule of the people themselves. We remain, as John Marshall said a century ago, "emphatically and truly, a government of the people." Our Government "in form and in substance . . . emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefits." –Fireside Chat, July, 1934

Letters to FDR:

Briefly summarize the key insights gained from each letter in the margins:

A. March 13, 1933

B. May 8, 1933

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C. May 16, 1933

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D. May 8, 1933

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