FDR’sNew deal

1932 Presidential Election

• FDR promised a New Deal for America

• Elected in a landslide• 472 electoral votes• Instead of sending the

military to attack the Bonus Army, FDR sent his wife to talk to them and see how he could help.

FDR

• Franklin Delano Roosevelt came from a rich family.

• His greatest strengths were his warm personality, his ability to work with and inspire people, and his gifts as a speaker.

• He had polio when young and was crippled as a result.

FDR’s Philosophy

• FDR was a pragmatist.• -He tried bold plans, if they

failed, he admitted it and tried something else.

• -He was about solutions not ideology.

• -He promised to take drastic, even warlike action against the economic crisis.

• -He promised to help the forgotten man at the bottom.

• FDR believed that communication was crucial to solve our crisis of confidence.

• -He had an infectious optimism.

• -His fireside chats on the radio effectively communicated his policies in conversational language.

• FDR believed that the government is chiefly responsible for ensuring the smooth running of the American economy.

• His New Deal programs were to serve three Rs: relief for people out of work, recovery for business and the economy as a whole, and reform of American economic institutions.

• FDR believed in pouring money into the economy to get it working again.

• He believed in Keynesian Economics.

• He believed deficit spending was acceptable during difficult times. Sometimes the government needed to spend more than its tax revenue to initiate economic growth.

• The idea was to increase investment and create jobs.

The First 100 Days- 1933

• FDR’s response to the Great Depression is known as the New Deal.

• During his first “Hundred Days” he passed a lot of new legislation during a special session of Congress.

• These new laws are often known as the 1st New Deal.

1st New Deal Legislation

• Federal Emergency Banking Act, 1933 (FERA)-

• -5,000 banks had failed and 5,000 more would fail in 1933

• -To restore confidence and get people to make bank deposits he closed all banks closed two days after inauguration.

• He promised when banks reopened (within a week), they would be safe for deposits while weak banks were allowed to fail.

• Federal Deposit Insurance Corporation, 1933 (FDIC)- Insured bank deposits so that people would not lose their savings if the bank failed.

• Farm Credit Administration, 1933 (FCA)- Provided low-interest loans and mortgages to prevent farm foreclosures.

• Home Owners Loan Corporation, 1933- Provided refinancing of small homes to prevent foreclosures.

• Tennessee Valley Authority, 1933 (TVA)- Allowed the government to build dams and power plants in the Tennessee Valley to control floods, to generate and sell electricity, and to engage in area development.

• National Recovery Administration, 1933 (NRA)- Part of the National Industrial Recovery Act, it asked business to voluntarily follow codes which set standard prices, production limits, allowed collective bargaining, outlawed child labor, and called for minimum wages.

• Federal Emergency Relief Act, 1933 (FERA)- Funded state and local governments to provide emergency relief such as soup kitchens and bread lines and enabled millions of people to be hired on “make-work” projects.

• Agricultural Adjustment Act, 1933 (AAA)- Paid farmers to plant less in hope of raising crop prices.

• Public Works Administration, 1933 (PWA)- Part of the NIRA, it created federal jobs by building public projects such as schools, roads, courts, post offices bridges, dams, and other infrastructure projects.

• Civilian Conservation Corps, 1933 (CCC)- Sometimes called the “tree army,” gave jobs to young men, such as planting trees and cleaning up forests. Members lived in camps and received free food. Most of their pay was sent to their parents.

• Gold Reserve Act , 1933- FDR wanted people to rely on paper (fiat) money instead of gold to expand the money supply and stimulate economic activity. Congress allowed the nations currency to be removed from the gold standard.

• Beer-Wine Revenue Act, 1933- Repealed Prohibition (18th Amendment) with the 21st Amendment. The sale of alcohol was legalized and now provided a new source of taxes.

2nd New Deal Legislation

• Work Progress Administration, 1935 (WPA)- Created jobs by building dams, roads, and bridges. Also created jobs by hiring artists and writers to paint murals, produce plays, and write histories.

• 2nd Agricultural Adjustment Act, 1938-Government paid farmers to conserve soil by not growing crops in some of their fields to avoid another Dust Bowl.

• Securities and Exchange Act, 1934- Created to watch over the stock market, prevent fraud, and guard against another stock market collapse.

• National Labor Relations Act (Wagner Act), 1935- Gave workers the right to form unions, collective bargaining, and to submit grievances to a National Labor Relations Board.

• Fair labor Standards Act, 1938- It established a minimum wage and a maximum work week of 40 hours and time and a half for overtime and imposed child labor restrictions on those under 16.

• Social Security Act, 1935- The most important measure of the New Deal. It provided workers with unemployment insurance, old age pensions, and insurance if they died early. Workers and their employers each paid new contributions to fund these benefits. Disability benefits were added later.

Challenges to the New Deal

• The large majority of Americans supported FDR’s New Deal. However, the programs were extremely controversial and became the target of vitriolic attacks by liberals, conservatives, and demagogues.

Opponents of the New Deal

• Huey Long- US Senator and former Governor of Louisiana who promised to give each American family $5000 a year to be paid for by taxing the wealthy- a program popularly known as “Share Our Wealth.” He planned to challenge FDR for the nomination in 1936, but was assassinated.

• Father Charles Coughlin- A Catholic priest who had

a huge following because of his weekly radio show. His attacks on the New Deal became increasingly Anti-Semitic and Fascist until his superiors in the Catholic Church ordered him to stop his broadcasts.

• Dr. Francis Townsend- before the passage of the Social Security Act, he wanted to give citizens over 65 years old a pension of $200 a month, to be spent within the month and thus would create new jobs and end the depression.

• American Liberty League- Conservative Democrats and Republicans joined together to stop the New Deal from subverting the US economic and political system. They saw it as creeping socialism. They portrayed FDR as a “traitor to his class” and trying to establish a popular dictatorship.

1936 Presidential Election

• FDR won the 1936 election in a landslide.

• He won 523 electoral votes.

• He also won the popular vote with 61%

The Supreme Court

• The Supreme Court had made decisions that some acts of the New Deal were unconstitutional. This frustrated FDR.

• He interpreted his landslide reelection in 1936 as a popular mandate to end the obstacles posed by the Court.

• FDR proposed a plan in 1937 to add Justices to the Supreme Court who would support the New Deal.

• Critics called in “Court-packing.”

• This was seen as an attempt to tamper with the system of checks and balances and the bill went down in defeat.

Social Impact of the New Deal• Labor- With the Wagner Act

and collective bargaining union membership rose from 3 million in 1930 to 10 million in 1941. All workers were guaranteed minimum wage and a maximum 40 hour work week.

• Mexican Americans- Whites were seeking agricultural jobs which forced many Mexican Americans to return to Mexico.

• Women- More women entered the workforce but were not paid as much as men. Eleanor Roosevelt and Francis Perkins were great champions of women’s rights at a time when feminism took a big hit.

• African Americans- Racial discrimination continued. African Americans were often last hired and first fired. New Deal programs brought some relief with jobs. Hard times increased racial tensions.

The Legacy of the New Deal

• The use of deficit spending as a technique for maintaining the economic health of the nation

• Creation of a welfare state and the acceptance that the federal government should take responsibility of the people

• Labor union membership increased and unions were given collective bargaining

• The federal government accepted responsibility for the health of the economy

• Increase in the power of the federal government

• Creation of the Imperial Presidency