THE NEW DEAL - Chapter 15

AMERICA GETS BACK TO WORK

Franklin D. Roosevelt’s Appeal✱ perceived as a man of action

✱ “can-do” attitude

✱ projected an air of friendliness and confidence

✱ knew how to handle the press

✱ willing to experiment

✱ two-term governor of New York

✱ distant cousin of former president Theodore Roosevelt

✱ Results: a landslide for Democrats (both presidency and Congress)

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Situation When FDR Entered Office✱ In March 1933, the country

was virtually leaderless, banking system had collapsed

✱ 20th Amendment (Feb. 1933) moved presidential elections from March to January did not apply (to avoid “lame duck” issues)

Inaugural address, “The only thing we have to fear is fear itself….”

3 Goals of the New Deal✱ Relief: for the needy,

provided jobs for the unemployed, protected farmers from foreclosure

✱ Recovery: economic, get the economy back into high gear

✱ Reform: financial, to regulate banks, abolish child labor, conserve farm lands

✱ 1st New Deal (1933 – 1935) ✱ Focused primarily on Relief and

Recovery

✱ 2nd New Deal (1935 – 1938)✱ Focused primarily on Reform✱ Changing the role of government

Two New Deals

First Hundred Days

✱ March 9 – June 16, 1933

✱ Congress passed more than 15 major pieces of New Deal legislation

✱ Significantly expanded the federal government’s role in the nation’s economy

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• MONEY SHOULD BE INVESTED IN THE PEOPLE, THE WORKING CLASS.

• SPENDING WOULD THEN INCREASE WITH NEW MONEY IN CIRCULATION.

• AS SPENDING INCREASED IT WAS EXPECTED THAT BUSINESS WOULD EXPAND TO MEET THE NEW DEMAND AND HIRE NEW WORKERS.

• THIS WOULD BRING ON MORE SPENDING AND MORE GROWTH.

FDR’S PHILOSOPHY: “PUMP PRIMING”

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OPPOSITE PHILOSOPHY: SUPPLY SIDE OR "TRICKLE DOWN" ECONOMICS

✱ IN THIS PHILOSOPHY MONEY WAS TO BE INVESTED AT THE TOP, IN BUSINESS.

✱ THEN BUSINESSES WOULD EXPAND, HIRE NEW WORKERS AND THIS IN TURN WOULD SPUR ON SPENDING AND FURTHER ECONOMIC GROWTH.

Fireside chats – radio talks about issues of public concern; explained New Deal; Americans felt like FDR was speaking directly to them

Prohibition Repealed - 1933

In order to raise government revenues by taxing alcohol; 21st Amendment passed

First: Help Banks

Recover

● First order of business was to get the banking system in order

● On March 5, one day after taking office, FDR declared a bank holiday

● He persuaded Congress to pass the Emergency Relief Act, which authorized the Treasury Department to inspect the nation’s banks

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FDR CLOSED THE BANKS FOR SEVERAL DAYS, A “BANK HOLIDAY” TO AVOID PANIC. THEY OPENED A FEW DAYS LATER AND THE SITUATION HAD CALMED.

A BANK PANIC WAS WHEN PEOPLE CANNOT GET THEIR MONEY BECAUSE THE BANK WAS CLOSED

Gaining Confidence in Banks

●Next, FDR passed the Glass-Steagall Act which established the Federal Deposit Insurance Corporation

●The FDIC insured account holders up to $5,000 and set strict standards for banks to follow (today = $250,000)

✱ PWA: Public Works Administration✱ Provided $4 billion to state govt’s to build schools, roads, improving

highways, etc.

✱ CCC: Civilian Conservation Corps✱ Put young men (18 – 24) to work✱ Workers sent a portion of income back to families

✱ Environmental work: planting trees, building parks, etc.

✱ TVA: Tennessee Valley Authority ✱ Goal: reform utility power in Tennessee✱ Building of dams helped provide jobs and hydroelectric power

✱ WPA: Works Progress Administration✱ Employed 9 million workers✱ Built roads, bridges, building, etc.✱ Employed 40% of nation’s employees

Programs That Put People to Work (Relief)

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TVA: TENNESSEE VALLEY AUTHORITY

TVA TODAY

More Relief ● FHA – Federal Housing Administration provided home loans, home mortgages and repairs

Repaired business in Childersburg, Alabama

More Relief

●FERA – Federal Emergency Relief Agency provided $500 million in direct relief to the neediest Americans

Citizens wait outside a FERA in Calipatria, CA for relief

checks

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CIVIL WORKS ADMINISTRATION (CWA)•THE CWA WAS SET UP TO PUT 4,000,000 MEN AND WOMEN TO WORK AS SOON AS POSSIBLE. •400 MILLION DOLLARS OF PUBLIC WORKS FUNDS WERE PROVIDED.

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CWA JOBS VARIED, FROM DIGGING NEW SEWER SYSTEMS TO LEADING EXERCISE SESSIONS FOR SCHOOL CHILDREN

✱ AAA: Agricultural Adjustment Act✱ Sought to remedy overproduction of crops✱ Paid farmers NOT to grow crops✱ Supreme Court overturned it in Butler v. US

✱ NIRA: National Industrial Recovery Act ✱ Allowed president to set codes for industries (prices,

working hours, etc.)✱ Section 7a allowed unions to collectively bargain✱ Declared unconstitutional in Schechter Poultry v. US

✱ National Youth Administration ✱ Provided job training for unemployed young people and

part-time jobs for needy students. Grants given to high school and college students in exchange for work.

Recovery Programs

✱ Social Security:

✱ Provided unemployment insurance

✱ Pensions for retired workers

✱ Wagner Act: Or (NLRA) National Labor Relations Act

✱ HUGE boost for unions

✱ Allowed unions to collectively bargain

✱ Inspired CIO led by John L. Lewis – sit down strike

✱ FDIC:

✱ Guaranteed bank deposits up to $5,000

✱ Restored faith in banks

✱ SEC:

✱ Sought to protect stock market from fraud

Reform Programs

SOCIAL SECURITY ACT

● One of the most important achievements of the New Deal era was the creation of the Social Security System

● The Social Security Act, passed in 1935, had 3 parts:

1. Old-Age Pension2. Unemployment compensation3. Aid to families with dependent

children & disabled (welfare)

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FRANCIS PERKINS WAS AN IMPORTANT PLAYER IN THE CREATION OF THE SOCIAL SECURITY ACT

IN 1933, FDR APPOINTED MS. PERKINS AS HIS SECRETARY OF LABOR. MAKING HER THE FIRST WOMAN TO HOLD A CABINET POSITION IN THE UNITED STATES. AS SECRETARY OF LABOR SHE PLAYED A KEY ROLE WRITING NEW DEAL LEGISLATION, INCLUDING MINIMUM WAGE LAWS.

CONGRESS PROTECTS

WORKERS●In 1938, Congress passed the Fair Labor Standards Act which set maximum hours at 44 per week and minimum wage at 25 cents per hour

Concerns with the New Deal

✱ policy of deficit spending (spending more money than the government receives in revenue)

✱ FDR felt it was a necessary evil - only to be used at a time of great economic crisis

✱ supported by British economist John Maynard Keynes

✱ FDR sought to influence the Supreme Court

✱ His plan?✱ For every judge over 70 that does not retire,

he could appoint a new one✱ This would allow him to appoint up to six new

judges

✱ This NEVER happened due to public (and government) outcry✱ Fear of FDR being a “dictator”

Court Packing Plan

CRITICS EMERGE

● Despite the renewed confidence of many Americans, critics from both political spectrums emerged

● Liberals (left) felt FDR’s program was NOT doing enough

● Conservatives (right) felt that government intervention was TOO much and interfered with our free market economy

Criticisms of Conservative Opponents

✱ American Liberty League✱ felt New Deal violated respect for and rights of

individuals and property✱ added to the national debt

($35 billion)✱ wasted money on relief

and encouraged idleness✱ violated the Constitution &

States’ rights✱ increased power of

the Presidency

Senator Huey Long (Louisiana)

✱ an early supporter of the New Deal

✱ turned against FDR

✱ planned to run for president

✱ advocated a Share-Our-Wealth plan ✱ guaranteed annual income of at least

$5,000 for every American✱ to be financed by confiscating wealth

of people who made over $5 million per year

✱ Slogan: “Every Man a King!”

✱ Very popular – 1935 claimed 7.5 million members of Share-Our-Wealth clubs

✱ Killed by Dr. Carl Weiss at a rally (Long died at hospital; Weiss killed at scene)

Father Charles E. Coughlin✱ radio priest from Detroit

✱ combined economic, political and religious ideas

✱ favored a guaranteed annual income

✱ wanted nationalization of banks

✱ claimed there was an international bankers conspiracy and Jews were responsible

✱ Anti-Semitic views led to downfall

Dr. Francis E. Townsend

✱ an elderly physician from CA

✱ felt FDR’s plan didn’t do enough for poor and elderly

✱ created a pension plan for the federal government to pay $200 per month to unemployed people over 60

✱ plan financed by a 2% national sales tax and each pensioner would be required to spend the money in 30 days; stimulating the economy

FDR EASILY WINS 2ND

TERM●The Republicans nominated Alfred Landon, Governor of Kansas, while the Democrats (of course) nominated Franklin Delano Roosevelt

●Again the Dems and FDR won an overwhelming victory in the presidential election and in both houses

New Deal Affects Many Groups

●First Lady Eleanor Roosevelt helped women gain higher political positions during the New Deal●Eleanor was influential in her role as advisor to the president●Frances Perkins became America’s first female cabinet member (Labor)

Eleanor & Franklin

AFRICAN AMERICANS GAIN POLITICAL

Status FDR appointed over 100 African Americans to positions within the government

●Mary McLeod Bethune headed the division of Negro Affairs of the NYA

●Despite these gains, FDR was never fully committed to Civil Rights Bethune

NATIVE AMERICANS MAKE GAINS

● Native Americans made advances during the 1920s & 1930s

● Full citizenship granted in 1924

● The Reorganization Act of 1934 gave Natives more ownership of reservations

● Policy was moving away from assimilation towards autonomy

SECTION 4: CULTURE IN THE 1930s

MOVIES:● By the late 1930s, 65%

of Americans were attending the movies at least once per week at one of the nation’s 15,000 movie theaters

● Comedies, lavish musicals, love stories and gangster films dominated the movie industry

Movies provided an escape from the hardships of the Great Depression

FAMOUS FILMS OF THE 30s

● One of the most famous films of the era was Gone with the Wind (1939)

● Other notable movies of the era included The Wizard of Oz (1939) and Snow White and the Seven Dwarfs (1937)

FAMOUS RADIO MOMENTS

● Orson Welles created a radio special called War of the Worlds

● It was an epic drama about aliens landing in America

● Unfortunately, many thought it was a news broadcast and panicked

LIVE NEWS COVERAGE

●Radio captured news as well as providing entertainment●One of the first worldwide broadcasts was the horrific crash of the Hindenburg, a German (blimp), in New Jersey on May 6, 1937●Such immediate news coverage became a staple in society

The Hindenburg caught fire and was utterly destroyed within a minute Of the 97 people on

board, 13 passengers and 22 crew-members were killed

ART DURING THE GREAT DEPRESSION

● The Federal Art Project (branch of the WPA) paid artists a living wage to produce art

● Projects included murals, posters and books

● Much of the art, music and literature was sober and serious

WPA Art – “Democracy . . .a Challenge” – artist, date unknown

Grant Wood

American Gothic- One of the most

famous pieces of art in 1930s

JOHN STEINBECK

●American writer John Steinbeck received assistance from the Federal Writers’ Project

●He published his most famous book, Grapes of Wrath (1939), as part of the program

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LEGACY OF THE NEW DEAL: HOW DID IT CHANGE AMERICA?

•Increase IN THE POWER OF THE FEDERAL GOVERNMENT

•INCREASE OF THE ROLE THE FEDERAL GOVERNMENT

•GROWTH OF EXECUTIVE POWER

•USE OF DEFICIT SPENDING

•CREATION OF A WELFARE SYSTEM

•RIGHT OF WORKING PEOPLE TO ORGANIZE UNIONS

•RENEWED INTEREST IN PRESERVING & PROTECTING THE ENVIRONMENT

LEGACIES OF THE NEW DEAL

●FDIC – banking insurance critical to sound economy●Deficit spending has became a normal feature of government●Social Security is a key legacy of the New Deal in that the Feds have assumed a greater responsibility for the social welfare of citizens since 1935

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