Franklin D Roosevelt&

the New Deal

The New Deal: Big Picture• FDR promised America a ‘New Deal’

– It was not clear what new measures might be

– It was clear that FDR intended to use the full power of the gov’t to get US out of depression

• FDR’s priorities:– Get Americans back to work

– Protect their savings and property

– Provide relief for sick, old & unemployed

– Get American industry & agriculture back on their feet

Tackling the Banks First• FDR gets to work

– FDR & advisors (later known as the ‘Brains Trust’) produced enormous range of sweeping measures, starting w/ the ‘Bank Holiday’

• March 5: FDR’s ‘Bank Holiday’– Day after inauguration

– Ordered all banks closed for inspection of books by federal officials

– Sound banks (about 5000) allowed to reopen

– They were supported by gov’t money

– Rules & regulations set up to prevent reckless speculation like that leading to Wall Street Crash

– These two measures were the Emergency Banking Act and the Securities Exchange Commission

The ‘Hundred Days’ Begins• ‘Bank Holiday’ start of ‘Hundred Days’

– FDR sent 15 proposals to Congress

– Congress passed all 15

– ‘During the whole Hundred Days Congress, people didn’t know what was going on, but they knew something was happening, something good for them.’

• FDR advisor

– Every Sunday FDR used radio to broadcast his ‘fire-side chats’ explaining his programs

– March 12, 1933: first chat focused on banking

– Over 60 million Americans tuned in

– First time an American president used mass media in this way

Fact File: The ‘Hundred Days’– 4 March: Roosevelt inaugurated

– 5 March: closed banks

– 9 March: Selected banks reopened

– 12 March: Roosevelt’s first radio ‘fire-side chat’. Encouraged Americans to put their money back into the banks. Many did so.

– 31 March: The Civilian Conservation Corps (CCC) set up

– 12 May: The Agricultural Adjustment Act (AAA) passed

– 18 May: The Tennessee Valley Authority (TVA) created

– 18 June The National Industrial Recovery (NIR) Act passed

Some New Deals• Federal Emergency Relief Administration

– Tried to meet immediate needs of the poor– $500 million for soup kitchens, blankets,

nursery schools, employment schemes

• Civilian Conservation Corps (CCC)– Sought to employ young men– Men signed up for six month tours of duty– Environmental projects in national parks– Most $$$ went to men’s families– Employed 2.5 million men

• Agricultural Adjustment Admin. (AAA)– Set quotas for cereals to slowly increase prices– Also helped farmers modernize, conserve soil– Extreme cases received mortgage help– Overall, very good for farmers, though

modernization had unforeseen consequence of putting more farm laborers out of work!

Some New Deals• National Industrial Recovery Act (NIRA)

set up two organizations:– Public Works Administration (PWA)

• Used gov’t $$$ to build schools, roads, dams, bridges, airports

• Vital to future growth

• Employed millions of jobs in the short term

– National Recovery Administration (NRA)• Improved industrial working conditions

• Outlawed child labor

• Defined fair wages & sensible production levels

• Sought to get $$$ in hands of workers w/o overproducing goods & causing a slump

• Voluntary, w/ incentive (display NRA symbol)

• Over 2 million employers joined

The Tennessee Valley• Tennessee Valley touched seven states

• Great physical problems– Wet season: Tennessee River flooded

– Dry season: river reduced to trickle

– Farmland in valley was dust bowl

– Soil erosion turning valley to desert

• Great social problems– T V folks lived in poverty

– Most had no electricity

– No one state could fix problems & coordinating seven states was difficult

FDR Signs TVA Into Law• FDR set up Tennessee Valley Authority

– Independent of states

– First goal to build dams to harness river

– Dams irrigated lands & produced electricity

– Created thousands of new jobs

• TVA still operates, producing electricity at rates below the national average

Fact File: Achievements of the Hundred Days

• Above all, it restored confidence and stopped investors pulling money out of the banks

• Banking measures saved 20% of home owners and farmers from repossession

• Farmers were 50% better off under AAA by 1936

• TVA brought electrical power to underdeveloped areas

• Public Works Administration created 600,000 jobs and built landmarks like San Francisco’s Golden Gate Bridge

A New Spirit• The Hundred Days had an immediate effect

– Restored confidence in gov’t

– Reporters traveled the country, reported new spirit seen around the country

– Historians agree that FDR’s bold & decisive action did have a marked effect on the American people

Frances PerkinsSecretary of Labor

Focus Task: What was the New Deal of 1933?

• Look over your notes and complete your own copy of this table.

Evidence it was/was not effective

Action taken/powers of agency

Issue/problem it aimed to tackle

New Deal measure/agency

• Which measure was most effective? Explain.

• Which measure was least effective? Explain.

Fin

PSDs on the Hundred Days• This is the time to speak the truth frankly and boldly … So let me assert my

firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyses efforts to convert retreat into advance … This nation calls for action and action now … Our greatest primary task is to put people to work … We must act and act quickly

– Roosevelt’s inauguration speech, 1933

• What do you think Roosevelt means by ‘the only thing we have to fear is fear itself’?

• The bank rescue of 1933 was probably the turning point of the Depression. When people were able to survive the shock of having all the banks closed, and then see the banks open up again, with their money protected, there began to be confidence. Good times were coming. It marked the revival of hope.

– Raymond Moley, one of Roosevelt’s advisors during the Hundred Days Congress session

PSDs on the Hundred Days• Wandering around the country with one of New York’s baseball teams, I find

that [what was] the national road to ruin is now a thriving thoroughfare. It has been redecorated. People have come out of the shell holes. They are working and playing and seem content to let a tribe of professional warriors do their worrying for them

– Rudd Rennie, a journalist, describes what he saw around the country in the early days of the New Deal. From Changing the Tune from Gloom to Cheer, 1934.

• The CCC, the PWA, and similar government bodies (the alphabet agencies as Americans called them) made work for millions of people. The money they earned began to bring back life to the nation's trade and businesses. More customers appeared in the shops … As people started to buy again, shopkeepers, farmers and manufacturers began to benefit from the money the government was spending on work for the unemployed. This process was described by Roosevelt as ‘priming the pump’. By this he meant that the money the Federal Government was spending was like a fuel, flowing into the nation’s economic machinery and starting it moving again.

– D B O’Callaghan, Roosevelt and the USA, published in 1966

PSDs on the Hundred Days• As Roosevelt described it, the ‘New Deal’ meant that the forgotten man, the

little man, the man nobody knew much about, was going to be dealt better cards to play with … He understood that the suffering of the Depression had fallen with terrific impact upon the people least able to bear it. He knew that the rich had been bit hard too, but at least they had something left./ But the little merchant, the small householder and the home owner, the farmer, the man who worked for himself – these people were desperate. And Roosevelt saw them as principle citizens of the United States, numerically and in their importance to the maintenance of the ideals of American democracy.

– Frances Perkins, The Roosevelt I Knew, 1947. Perkins was Labor Secretary under Roosevelt from 1933. She was the first female Cabinet member in the nation’s history