The Great Depression and the New Deal

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The Great Depression and the New Deal

• 1933-1939
• The country needs anddemands bold, persistent
  experimentation. It is common sense to take a
  method and try it. If it fails, admit it frankly
  and try another. But above all, try something.
• Franklin Roosevelt, 1932

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The Election of 1932

• 11 million Americans unemployed (1932)
• Republicans re-nominated Herbert Hoover at
  convention in Chicago
• Republican Platform- praised Republican
  anti-depression policies, sort of promised to
  end prohibition
• Democrats met in Chicago (June 1932) nominated
  Franklin D. Roosevelt
• Democrat Platform- end prohibition, linked
  depression to Hoover Republicans, balance
  budget, social programs economic reforms

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Franklin Roosevelt (FDR)

• Born to a wealthy family- NY
• 5TH cousin to Theodore Roosevelt
• graduated Harvard
• Served NY legislature
• Governor of NY
• Nominated VP (1920 with James Cox) LOST!
• Assistant Sec. of Navy- just like TR!
• 1921- Struck with Polio- wore metal braces on
  legs
• FDRS WIFE- Eleanor Roosevelt (FDRs distant
  cousin!)
• Roosevelt commanded public media- deep concern
  for the forgotten man seen as a traitor to his
  class
• Accepted his party nomination in person (a 1st
  set a precedent).--- Promised a new deal for
  America

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The Election Campaign 1932

• Democrats (FDR)- attacked Republicans
• FDR presented himself as vibrant (Roosevelt is
  Robust)
• Preached the New Deal for forgotten man
  (remained vague on details)
• Speeches written by members of the Brain Trust
  (young college professors who later developed
  new deal programs
• Promised bold experimentation
• Theme Song- Happy Days Are Here Again

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Hoovers Campaign

• Remained in the Whitehouse at first- working
  through lunch etc.
• Supporters- the Worst is Past It Might Have
  Been Worse
• Hoover took to the stumpfaith in American
  enterprise, individual initiative, urged support
  for Hawley-Smoot Tariff

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FDR Wins
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How did FDR win?

• Dissatisfaction with Hoover- Change!!!
• The New Deal Coalition- black Americans (esp. in
  Northern cities) abandoned the Republican Party
  voted for FDR
• Black voters joined white working class, farmers
  others to elect FDR
• Inauguration day- March 4,1933- speech attacked
  moneyed interests- vowed war on depression,
  the only thing we have to fear is fear itself
• Hoover believed that the uncertainty fear
  surrounding FDRS victory made the depression
  worse!

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FDR THE 3 Rs

• New Deal Programs had 3 goals
• Short-Term (1st 2 years)
• Relief- FDR favored direct relief to individuals
• Recovery- use deficit-spending on public works
  to revive economy (short range)-1st 2 years
• Long Term
• Reform- (Long Term) reform current past
  abuses that had brought on the Depression.
• Restructure capitalism not replace it
• The Bank Holiday- FDR closed the banks on his
  first full day in office (March 6-10)
• Government examiners would inspect banks- banks
  reopen if financially sound
• when banks reopened- deposits outnumbered
  withdrawals (Emergency Banking Relief Act 1933)

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The New Deal- The 1st Hundred Days

• FDR called a joint session of Congress (majority
  Democrat)
• 1st Hundred Days- members passed a large number
  of bills programs (many old progressive ideas)
• Old Progressive ideas unemployment insurance,
  old age insurance (SS), min. wage, restriction of
  child labor, conserve develop natural resources
• Congress gave some of its legislative power to
  the President- later the SC will rule against New
  Deal programs based on this
• AP Test writers- want you to know which
  programs were not part of New Deal also.

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Banking Monetary Recovery Relief

• Emergency Banking Relief Act (1933)- gave
  president power to regulate bank transactions
  foreign exchange reopen solvent banks.
• Glass-Steagall Banking Reform Act- FDIC
  introduced (originally insured deposits up to
  5000)- virtually ends chronic bank failures.
• 1933- FDR took US off gold standard managed
  currency inflation relieve debtors
  stimulate new production. (US purchases gold for
  35 oz. 1934--- up from 21 in 1933)
• Feb. 1934- FDR returned US to gold standard for
  international trade only gold coins collectors
  items

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Job Creation

• FDR uses fireside chats to encourage inform
  the citizens.
• FDR urged pump priming government
  assistance to encourage industrial recovery.
• Civilian Conservation Corp (CCC)- young men hired
  by US to help with reforestation, firefighting,
  flood control, swamp drainage sent money home.
• Helped conserve natural resources human
  resources
• 2. Federal Emergency Relief Act (FERA)- 3
  Billion to states for public works put adults to
  work!

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CIVILIAN CONSERVATION CORPS

• Created in April 1933.
• Within 4 months, 1300 CCC camps were in
  operation.
• 300,000 men in 1933 between ages 18 and 25
• Signed up for 6 months and made 30.00 a month.
• 1933 and 1941 over 3,000,000 men served in the
  CCC .
• Goal Keep teenage young men off the street and
  away from the job market.
• Develop job skills and improve environment

CCC
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Planted trees, built public parks, drained swamps
to fight malaria, restocked rivers with fish,
worked on flood control projects and a range of
other work that helped to conserve the
environment.
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Housing Relief

• Agricultural Adjustment Act (AAA)- MILLIONS to
  farmers to meet mortgages.
• Home Owners Loan Corporation (HOLC)- Refinance
  mortgages on non-farm home loans (helped about 1
  million).
• Job Creation-
• 1933 (late)- Civil Works Administration (CWA)-
  under auspices of FERA both HEADED BY HARRY
  HOPKINS provided jobs during winter of 1933 to
  10s of thousands (leaf raking)- highly
  criticized!

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TVA
TENNESSEE VALLEY AUTHORITY

• 1933- 1st Hundred Days (13 Billion Dollars)
• Develop a poor section of the Southeast U.S.
• Stimulate the economy and produce cheap
  electricity.
• Control floods, planting new forests.
• set up to test fairness of utility rates.

• 94 percent of property owners and 98 percent of
  tenants did not have electricity.
• 30 percent of property owners and 41 percent of
  tenants had no toilet facilities whatsoever

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TVA
TENNESSEE VALLEY AUTHORITY

• 65 percent of property owners and 78 percent of
  tenants had to travel at least 300 yards to get
  their household water.
• 8 percent of property owners and 3 percent of
  tenants owned radios (usually battery operated).
  
• 39 percent of property owners and 23 percent of
  tenants had phonographs (including record players
  that were operated with a hand crank).

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TVA
TENNESSEE VALLEY AUTHORITY

• 50 percent of property owners and 25 percent of
  tenants read newspapers.
• 26 percent of property owners and 16 percent of
  tenants owned automobiles.
• 7 percent of property owners and 4 percent of
  tenants owned trucks.

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TVA MAP
TENNESSEE VALLEY AUTHORITY
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TVA CRITICISM
CRITICISM OF THE TVA
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Critics of the New Deal

• Critics on the right left found the New Deal
  lacking
• Unemployment was still high after the programs
  passed in the 1st 100 days
• Father Charles Coughlin- Catholic priest (Mich.)
  with a radio show (40 million fans) wanted
  social justice.
• Senator Huey P. Long (Louisiana)- Share Our
  Wealth Program Make Every Man a King every
  family would get 5000 (by taking money from
  rich)
• Threatened to challenge FDR for presidential
  nomination in 1936 but was killed by an
  assassin.

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Critics of the New Deal

• Dr. Francis Townsend- retired doctor supported
  by senior citizens.
• Called for old age help- 200 month to citizens
  60 years old or older to be spent within a month
  later FDR Congress will create Social Security
  based on the idea.
• 1935-Works Progress Administration (WPA)-
  employment for useful projects (brought on by
  criticism) headed by Harry Hopkins.
• 11 Billion on 1000s of public buildings,
  bridges, roads (9 million people employed over 8
  years).
• Federal Number 1- part of WPA employed actors,
  writers, musicians highly criticized program.
• Sent writers to collect oral histories slave
  narratives!! Etc.

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wpa
WPA

• Works Progress Administration (WPA), the New
  Deals main relief agency.
• People employed by the WPA at its peak was more
  than 3 million
• 2,500 hospitals
• 5,900 schools
• 13,000 playgrounds
• 125,000 public buildings

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WPA
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Women the New Deal

• Secretary of Labor- Francis Perkins 1st woman
  cabinet member in the US.
• Mary McLeod Bethune- director of Office of
  Minority Affairs- highest ranking
  African-American woman.
• Margaret Meade- (1901-1978) anthropologist
  helped popularize cultural anthropology.

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SOCIAL SECURITY ACT

• One of the most important features of the New
  Deal.
• 1935- Established a retirement for persons over
  65 funded by a tax on wages paid equally by
  employee and employer.
• Old age insurance
• Protect Americans who were unable to support
  themselves.
• Unemployment compensation
• Compensation to disabled workers and assistance
  to widows and children

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Industry Labor

• National Recovery Administration (NRA)- part of
  the NIRA combined immediate relief with long
  range recovery industries work out fair
  competition set wages hours worked.
• Unions granted right to organize, collective
  bargaining through union reps!
• Yellow dog contracts forbidden
• Restrictions on child labor
• blue eagle" program-
• 1935- NRA declared unconstitutional by SC
  Schechter sick chicken case.

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NATIONAL INDUSTRIAL RECOVERY ACT

• Also called the National Recovery Act.
• Helped businesses organize codes setting prices
  and minimum wage.
• Put people back to work at decent jobs, wages and
  working conditions.
• Businesses were not forced to join this.

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NATIONAL INDUSTRIAL RECOVERY ACT
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Industry Labor

• 2. Public Works Administration (PWA)- ALSO PART
  OF THE NIRA Industrial recovery unemployment
  relief.
• Headed by Harold Ickes
• 4 Billion spent over 4 years 34,000 projects
  (public buildings, highways, parkways)
• Grand Coulee Dam

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Repeal of Prohibition

• Gave federal government extra revenue
• 1st 100 days- legalized wine beer
• 1933- officially repealed by 21st Amendment
  (1933)

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Paying Farmers not to farm

• Farmers suffered from low prices overproduction
• Mortgages foreclosed corn burned as fuel,
  destruction of crops to drive up prices
• Agricultural Adjustment Act (AAA) used artificial
  scarcity est. parity prices (same real value
  as in 1909-1914).
• US govt paid farmers to reduce crop acreage
• To pay for the program- Tax processors of farm
  products consumers pay higher prices for
  consumers (TAXING ONE GROUP GIVING MONEY TO
  ANOTHER)
• Effect- raised farm incomes
• Criticized for waste destruction of needed crops
  animals
• SC declared it unconstitutional 1936- PART ABOUT
  COLLECTING TAX FROM PROCESSORS TO PAY FARMERS.

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Paying Farmers not to Farm

• 2. Soil Conservation Domestic Allotment Act
  (1936)- caused farmers to withdraw acreage from
  production plant soil saving crops like
  soybeans.
• 3. 1938- Second AAA- continued conservation
  payments acreage restrictions on specific crops
  parity payments
• NO TAXATION OF PROCESSORS TO PAY FARMERS
• Farmers got fairer prices bigger share of
  national income

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The Dust Bowl

• Causes over production in the 1920s (over
  plowing, dry farming techniques), drought of
  1933.
• Areas affected- eastern Colorado to western
  Missouri Oklahoma Arkansas most affected!
• In 5 years- 350,000 Okies Arkies moved to
  California
• John Steinbeck- The Grapes of Wrath-

• Frazier-Lemke Farm Bankruptcy Bill- suspension of
  foreclosures on farms for 3 years. (1935)
• 2. Resettlement Administration- remove
  near-farmless farmers to better land.
• CCC planted more than 200 million trees on
  prairies.

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Reforming Bankers Business

1. Federal Securities Act Truth in Securities Act
   (1st 100 days)- required promoters to swear to
   the soundness of stocks bonds.
2. 1934- Securities and Exchange Commission (SEC)-
   A watchdog for the stock market. (still exists).
3. The Public Utility Holding Company Act (1935)-
   death sentence for the utility holding company
   unless deemed useful economically.

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The New Deal Labor

• After the Supreme Court axed the blue eagle-
  Congress wanted to ensure protection of labor.
• The Wagner (National) Labor Relations Act
  (1935)- asserted the right to labor to organize
  bargain collectively (with its own reps).
• Unskilled workers began to organize John L.
  Lewis (United Mine Workers) formed Committee for
  Industrial Organization (CIO) WITHIN THE AFL.
  (AFL wanted to organize according to skill
  trade)
• 1936- AFL suspended CIO UNIONS associated with
  AFL
• Lewis CIO- moved into the auto industry (used
  sit-down strike) General Motors Sit Down
  Strike
• GM- RECOGNIZED CIO AS SOLE BARGAINING AGENT
• 2. Fair Labor Standards Act (1938)- set up min.
  wage (40 cents/hour) max. hours (40 hours per
  week) outlawed child labor (under 16 18 if
  dangerous)
• Excluded blacks, agricultural workers, women,
  Mexican-Americans
• Labor organization boomed supported FDR DEMS
• 1938- CIO broke with AFL COMPLETELY 1940 4
  MILLION STRONG (INCLUDING 200,000 BLACKS)
• CIO- FAVORED ORAGNIZATION OF ALL WORKLERS IN A
  PARTICULAR INDUSTRY.

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Criticisms of the New Deal

• Waste, incompetence, confusion, cross-purposes,
  graft
• Employment of Communists, leftist professors
• FDR accused of being too cozy with Jewish
  interests (RosenField) (The Jew Deal)
• Growth of the national government- Federal
  government became the single largest business
• Growth of the national debt- to 40,440, 000,000
  by 1939.
• Class warfare- Why soak the successful?
• FDRs court packing scheme purging of Congress
  (one man super government)

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1936 Election

• Democrats re-nominated FDR on New Deal Programs
• Republicans nominated Alfred M. Landon
  (MODERATE) Platform condemned New Deal deficit
  waste
• Key Republican backers- Hoover the Liberty
  League (wealthy conservatives bound to fight
  against New Deal Socialism)
• Landon carried only Vermont Maine
• Democrats retained majorities in Congress (2/3 in
  House Senate)
• Class warfare needy economic groups vs. greedy
  economic groups
• FDR strong coalition blacks, South, urbanites
  poor (New Immigrants- Catholics Jews)
• FDR appointed Catholics' to one of every four
  federal judgeships

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FDRs Court Packing Scheme

• 7 of 9 cases involving New Deal programs declared
  unconstitutional by 1937.
• Court was ultra-conservative (6 of 9 SC members
  over 70 years old)
• FDR asked Congress for a bill- permit him to add
  a new justice to the SC for every member over 70
  who would not retire (max. membership15).
• Congress (both houses parties) condemned the
  proposal dictator bill attempting to thwart
  checks balances.
• Justice Owen Roberts- (conservative) began
  voting with liberals
• SC upheld other New Deal proposals SS, Wagner
  etc.
• Congress voted full pay to Justices over 70 who
  retired one justice replaced by Hugo Black (New
  Dealer)
• Court Packing- major political mistake by FDR
  ARROUSED CONSERVATIVES OF BOTH PARTIES.

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FDR's COURT PACKING
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The Roosevelt Recession

• 1933-1937 (FDRs 1st Term)- did not end the
  Depression.
• 1936- unemployment 15 (down from 25 in 1933)
• Recovery modest
• 1937- economy took a downward turn.
• Causes
• Social Security taxes- had begun to take money
  from payroll checks less money to spend.
• FDR administration cut back on spending (job
  creation).
• April 1937- FDR adopted theories of John Maynard
  Keynes (Keynesianism) US policy for decades.

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The New Deal Comes to a Close

• 1937 FDR urged Congress (more conservative now)-
  to reorganize national administration
  efficiency failed.
• 1939- The Reorganization Act- gave FDR limited
  powers to reform the national administration
  Executive Office of White House created.
• New Dealers accused of having huge war chest-
  relief checks often came about election time??
• 2. Hatch Act (1939)- act barred federal
  administrative officials from campaigning except
  highest policy makers forbade use of government
  finds for campaigning.
• Forbade collection of campaign funds from people
  getting relief checks.
• By 1938- the NEW DEAL HAD LOST MOMENTUM
• 1938- Republicans (1st time) made gains in
  Congressional elections

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Impact of the New Deal

• A program of Reform-not revolution (restructure
  capitalism-not replace it)
• New Deal had partially reduced unemployment
  reviving the economy
• Democratic Party a major party
• Helped African-Americans others survive
  Depression
• US did not fully emerge from Depression until
  massive military expenditures of WWII.
• Failures of the New Deal
• Did not directly confront racial prejudice
• Did not integrate armed forces
• Did not contain programs to protect civil rights
• Did not establish Bureau of Indian Affairs
• Did not nationalize basic industries
• Did not recognize unionization of migrant workers
  

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Brother, Can You Spare a Dime ?

• When Bing recorded this song in October, 1932,
  one out of every four Americans who wanted work
  could not find work.
• The banking system was near collapse.
• Record sales had plummeted because Americans did
  not have the money for such luxuries.
• No song captures the dark spirit of the Great
  Depression more than "Brother, Can You Spare a
  Dime?"
• Bing recorded the song shortly before President
  Roosevelt's election and it went to No. 1 in the
  charts.

Bing Crosby
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Brother, Can You Spare a Dime ?
They used to tell me I was building a dream, and
so I followed the mob, When there was earth to
plow, or guns to bear, I was always there right
on the job. They used to tell me I was building
a dream, with peace and glory ahead, Why should
I be standing in line, just waiting for
bread? Once I built a railroad, I made it run,
made it race against time. Once I built a
railroad now it's done. Brother, can you spare
a dime? Once I built a tower, to the sun, brick,
mortar and lime Once I built a tower, now
it's done. Brother, can you spare a dime?
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Brother, Can You Spare a Dime ?
Once in khaki suits, gee we looked swell, Full
of that Yankee Doodly Dum, Half a million boots
went marching through Hell, And I was the kid
with the drum! Say, don't you remember, they
called me Al it was Al all the time. Hey don't
you remember, I'm your pal? Buddy, can you spare
a dime? Once I built a railroad, I made it run,
made it race against time. Once I built a
railroad now it's done. Brother, can you spare
a dime? Once I built a tower, to the sun, brick,
mortar, and lime Once I built a tower, now
it's done. Brother, can you spare a dime?
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Brother, Can You Spare a Dime ?
Once in khaki suits, gee we looked swell, Full
of that Yankee Doodly Dum, Half a million boots
went marching through Hell, And I was the kid
with the drum! Say, don't you remember, they
called me Al it was Al all the time. Say,
don't you remember, I'm your pal? Brother, can
you spare a dime?