The New The New DealDeal

“Active” Response to the Depression

FDR as PresidentFDR as President• Background

• Polio

• New Attitude

• Psychological Therapy–“Fireside Chats”

Analysis• “Under Consumption”

• Possible Solutions????

FDR’s 1st FDR’s 1st actionsactions

• Bank holiday: March 6, 1933

• Emergency Banking Act (only sound and healthy banks would re-open)

FDR:FDR: • RRelief elief

• RRecoveryecovery

• RReformeform –RRelied on the advice of very intelligent elied on the advice of very intelligent

group of advisors (“Brain Trust”)group of advisors (“Brain Trust”)

Relief Relief ProgramsPrograms

((designed to relieve suffering of designed to relieve suffering of the needythe needy))

Federal Emergency Relief Federal Emergency Relief AdministrationAdministration

• ((FERA)FERA)

• Harry HopkinsHarry Hopkins

• Congress gives $500 million to Congress gives $500 million to states, cities, and towns states, cities, and towns

• used money to used money to repair roads / repair roads / improve parksimprove parks, etc., etc.

Civil Works Civil Works AdministrationAdministration

• (CWA) (CWA) build roads, parks, build roads, parks, airports, and other facilitiesairports, and other facilities

• gave jobs to 4 million gave jobs to 4 million previously unemployed previously unemployed AmericansAmericans

• tremendous morale boostertremendous morale booster

Civilian Civilian Conservation CorpsConservation Corps• CCCCCC: provided help for males : provided help for males

(18-25 yrs.); most worked on (18-25 yrs.); most worked on projects to projects to conserve the nation’s conserve the nation’s natural resourcesnatural resources

2.5 million 2.5 million men men

$1 a day$1 a day

Sent $25 / mo. Sent $25 / mo. To FamilyTo Family

Recovery Recovery ProgramsPrograms

(designed to lay foundation for (designed to lay foundation for economic growth)economic growth)

Public Works Administration

• Harold IckesHarold Ickes

• funded large scale funded large scale engineering projectsengineering projects: : bridges, dams, etc.bridges, dams, etc.

• spent $6 billion in 6 yearsspent $6 billion in 6 years

• Hoover DamHoover Dam

Tennessee Valley Tennessee Valley AuthorityAuthority

• created jobs and helped farmers in created jobs and helped farmers in country’s least modernized regioncountry’s least modernized region

• TVA provided TVA provided cheap electrial power, cheap electrial power, flood controlflood control, and recreational , and recreational opportunitiesopportunities

• criticism: government owned criticism: government owned industryindustry

Agricultural Adjustment Agricultural Adjustment AdministrationAdministration

• Henry WallaceHenry Wallace, Secretary of , Secretary of AgricultureAgriculture

• Paid farmers Paid farmers NOTNOT to raise certain crops to raise certain crops and animalsand animals

• Lower production = more $Lower production = more $• CONTROVERSIALCONTROVERSIAL• VoluntaryVoluntary

National Industrial National Industrial Recovery ActRecovery Act

• NIRA creates NIRA creates NRANRA

• sought to bolster industrial sought to bolster industrial pricesprices

• trade trade industry codesindustry codes

• management-labor relations (Sect management-labor relations (Sect 7A)7A)

Reform ProgramsDesigned to help

prevent future economic crises

**created the created the FDICFDIC (Federal (Federal Deposit Insurance Company)Deposit Insurance Company)

Glass-Steagall Glass-Steagall Banking Act Banking Act

(1933)(1933)

Securities Act Securities Act (1933)(1933)

• honest disclosure of honest disclosure of stocks, bondsstocks, bonds

• eventually led to the eventually led to the SECSEC (Securities (Securities Exchange Exchange Commission)Commission)

Gold Reserve Gold Reserve Act (1933)Act (1933)• took America off the took America off the Gold Gold

StandardStandard ($1 paper = $1 ($1 paper = $1 gold)gold)

• created inflation because created inflation because the U.S. could print more the U.S. could print more moneymoney

Evaluation of the Evaluation of the first first 100100 days days

• big big change in change in attitudeattitude of the of the American publicAmerican public

• If it failed, then you If it failed, then you try something elsetry something else

New Deal New Deal ((1934-1934- ) )

Works Progress Works Progress AdministrationAdministration

• Harry HopkinsHarry Hopkins

• put people to work in their put people to work in their communities; all types of projectscommunities; all types of projects

• Fed. gov’t: paid 45%Fed. gov’t: paid 45%

• most expensive New Deal programmost expensive New Deal program: : $11 billion$11 billion

National Youth National Youth AdministrationAdministration

• NYA - NYA - Part of the WPAPart of the WPA• found jobs for found jobs for kidskids so they so they

could stay at schoolcould stay at school• mowing grass, painting mowing grass, painting

schools, etc.schools, etc.

Federal Housing Federal Housing Admin.Admin.

• FHA FHA

• easier to get easier to get housing loans; housing loans; lower down paymentslower down payments, etc., etc.

• attempt to boost construction of attempt to boost construction of new homes “new homes “ripple effectripple effect””

Social Security Social Security Act (1935)Act (1935)

• designed to provide “designed to provide “old-ageold-age” retirement ” retirement pensionspensions

• collect share of the “tax” upon retirementcollect share of the “tax” upon retirement• Included Included Unemployment Insurance, Old Unemployment Insurance, Old

Age Medical & Health Insurance and Age Medical & Health Insurance and Grants in Aid to the DisabledGrants in Aid to the Disabled

National Labor National Labor Relations ActRelations Act

• aka aka Wagner ActWagner Act (1935) (1935)

• NIRA had been a failure, but Wagner Act NIRA had been a failure, but Wagner Act was tougherwas tougher

• act stipulated specific activities that act stipulated specific activities that management could management could notnot get involved in. get involved in.

• Huge boost for Huge boost for labor unionslabor unions

Critics of Critics of the New the New

DealDeal

Conservative Conservative CriticsCritics

Radical criticsRadical critics• Father Charles CoughlinFather Charles Coughlin

• Dr. Francis TownsendDr. Francis Townsend

• Senator Huey Long (Louisiana) Senator Huey Long (Louisiana) Share the Wealth ProgramShare the Wealth Program

• National Union PartyNational Union Party

Election of 1936Election of 1936• (D) FDR(D) FDR

• (R) Alfred Landon (Kansas)(R) Alfred Landon (Kansas)

• (NUP) “Liberty Bill” Lemke(NUP) “Liberty Bill” Lemke

The Supreme The Supreme Court BattleCourt Battle

• BackgroundBackground

• ““Court Packing Court Packing Scheme”Scheme”

End of the End of the New DealNew Deal

Lasting OutcomesLasting Outcomes