chapter 19 section 1. distant relative of tr started in the ny state senate started in the ny state...
TRANSCRIPT
The First New DealCHAPTER 19
SECTION 1
Roosevelt’s Rise to Power
Distant relative of TR• Started in the NY state senate• Served Asst. Sec of Navy under Wilson• Ran for VP in 1920, lost badly!• Took a year off; contracted polio• Elected governor of NY in 1928, and again in
1930• Ran for president in 1932 against Hoover• Roosevelt’s confidence was a sharp contrast
to Hoover’s apparent failure• Because of his upbeat confidence (and with a
little help from the Depression) he won in a landslide – promised America a “new deal”
The Hundred Days Roosevelt won in Nov. 1928, but didn’t
take office until Mar. 1929• During the winter unemployment and bank
runs increased Abandoning the gold standard made many
Americans and foreign investors pull money from U.S. banks
By March 1933 4000 banks collapsed; $9 million lost 38 states declared bank holidays By Roosevelt’s inauguration most banks were closed Unemployment 25% and rising; economy paralyzed
“let me assert my firm belief that the only thing we have to fear is fear itself”
The Hundred Days FDR’s advisers fell into 3 camps
• One favored the “New Nationalism” of TR Work with business to regulate wages, prices, production
• Second group blamed business for the depression Wanted government planners to run parts of economy
• Third group favored Wilson’s “New Freedom” Wanted to break up large companies to enhance competition and regulate to ensure competition remained fair
Banks and Debt Relief FDR’s first priority was to get an
emergency banking bill through Congress• Declared a national “bank holiday”• Called Congress into special session on Mar 9th
• Passed the Emergency Banking Relief Act in one day! New law allowed Treasury Dept. to certify that banks
were fiscally solvent prior to reopening In his first “fireside chat” FDR let citizens know their
money would be safe in American banks When banks opened the next day deposits far
outweighed withdrawals – the banking crisis was over!
Banks and Debt Relief FDIC and SEC
• His advisers wanted further regulations on banks and on the stock market
• Securities Act of 1933 Ended manipulation of stock prices Companies had to provide complete and truthful information to investors
Created Securities & Exchange Commission• Glass-Steagall Act
Banks could not risk depositors money in stock market
Also created FDIC to insure money deposited in banks
Banks and Debt Relief Mortgage and Debt Relief
• Many believed that paying off debt kept people from spending money
• Others thought that fear of losing their homes kept people from spending money
• Home Owners Loan Corporation Restructured mortgages with longer terms and lower rates
Covered a million mortgages in3 years Didn’t help everyone – farmers and the unemployed who couldn’t make payments
Banks and Debt Relief Mortgage and Debt Relief
• The Farm Credit Administration (FCA) Helped farmers refinance their mortgages Pushed interest rates lower; saved many farms
FCA may have slowed the economy (money loaned to poor farmers wasn’t available for more efficient businesses)
But it did help impoverished people keep their land
Farms and Industry Agricultural Adjustment Act
• To correct overproduction, government would pay farmers not to raise certain livestock or certain crops Also asked not to produce dairy products 6 million piglets, 200,000 sows and 10 million acres
of cotton were destroyed Program was administered by the Agricultural
Adjustment Administration (AAA) Program worked – surplus dropped, prices rose Higher farm prices not good news for everyone! Small farmers often hurt by larger farms Thousands of tenant farmers lost land when
landlords took fields out of production
Farms and Industry The NRA
• National Industrial Recovery Act of 1933 Suspended anti-trust laws; Allowed business, labor and government cooperation to set up new rules (codes) for each industry
Prices, minimum wages, limiting shifts to spread production over several firms, reduced workers hours
Allowed workers to unionize National Recovery Administration (NRA) ran it all
Farms and Industry The NRA
• NRA revived some industries, but gains were short lived Small companies complained that codes favored big companies
Employers still opposed unionization They did not like paying minimum wages Codes were difficult to administer and were optional
By the time the NRA was declared unconstitutional in 1935, it had lost much of its political support
Relief Programs The Civilian Conservation Corps (CCC)
• Gave 18-25 year old men the chance to work for the forestry service planting trees Planted 200 million trees in the Dust Bowl to prevent a recurrence
Earned $30 per month, $25 was sent home Average CCC worker only worked a year Went home better nourished and with greater self-respect
By the time it closed down in 1942, over 3 million had been given work, including 80,000 Native Americans and 250,000 veterans
Relief Programs Federal Emergency Relief
Administration (FERA)• Established a few weeks after the CCC• Channeled money to state and local agencies to fund relief projects
The Public Works Administration (PWA)• Built highways, dams, sewer systems, schools and other government facilities
• PWA didn’t hire directly, but awarded contracts to construction companies who hired workers
• Insisted on non-discrimination breaking down racial barriers in the construction industry
Relief Programs The CWA
• By the fall of 1933 FERA and CWA hadn’t reduced unemployment significantly To avoid the severe distress of another winter with very high unemployment FDR authorized the Civil Works Administration (CWA)
CWA hired directly That winter it employed 4 million people including 300,000 women
The CWA built 1000 airports, 500,000 miles of roads, 40,000 school buildings
Relief Programs The CWA
The CWA employed great numbers, but spent a lot of money
FDR not want Americans to become dependent on government jobs, shut the program down the next spring
Success of the First New Deal• Amazing amount of legislation passed• Did not restore prosperity, but showed FDR’s
willingness to try any good idea to help• Banks reopened, people kept their homes and
farms, and many were working• Most importantly FDR had restored American’s
faith in their country