The Great Depression

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The Great Depression Part 2The New Deal

• Chapter 18

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Did you know?

• Between Franklin Roosevelts election in November
  1932 and his inauguration in March 1933, the 20th
  Amendment was added to the Constitution. This
  amendment changed the inauguration date form
  March 4 to January 20.

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18.1 Franklin D. Roosevelt

• I. Roosevelts Rise to Power (552-554)
• A. The Republicans nominated Hoover to run for a
  2nd term as president. Democrats nominated NY
  Governor Franklin D. Roosevelt
• B. FDRs policies to end the depression New
  Deal
• C. FDRs background -

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• II. FDR is Inaugurated (554-555)
• A. FDR won narrowly, but his inauguration would
  not occur until March 1933. Meanwhile,
  unemployment continued to rise, bank runs
  increased, and people began converting their
  money into gold
• B. Many occurred because of fear the FDR would
  end the gold standard and reduce value of the
  dollar.
• C. 4000 banks collapsed. Many governors closed
  banks to keep them from collapsing bank holidays

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18.2

• I. The Hundred Days
• A. March 9 June 16, 1933 Congress passed 15
  major acts to help end the crisis. 1st New Deal
• B. FDRs advisors came from academics, business,
  agriculture, government, law, social work Brain
  Trust

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• C. 3 groups
• 1. New Nationalism of T. Roosevelt- believed
  government and business should work together
• 2. Distrusted big business and wanted government
  planners to run key parts of the economy.
• 3. New Freedom of W. Wilson- felt it was the
  governments responsibility to restore
  competition to the economy.

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• II. Fixing the Banks and the Stock Market
• A. FDRs first job restore confidence in the
  banking system. Called a national bank holiday.
• B. Emergency Banking Relief Act required
  inspection of banks
• C. To restore confidence, FDR used Fireside
  Chats radio addresses to the public to explain
  programs
• D. It worked! Bank deposits increased.

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• E. New regulations
• 1. Securities Act banks must provide complete
  and truthful information
• 2. Glass-Steagall Act Separated commercial
  from financial banking
• 3. Securities and Exchange Commission (SEC)
  regulated the stock market to prevent fraud
• 4. Federal Deposit Insurance Corp.- insured bank
  deposits

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• III. Managing the Economy
• A. Agricultural Adjustment Act/Administration
  (AAA) paid farmers not to raise certain crops
  Why? Supply and demand
• B. National Industrial Recovery Act (NIRA)
  suspended antitrust laws and allowed business,
  labor, government to cooperate in setting up
  voluntary rules (codes of fair competition).
  National Recovery Administration urged consumers
  to buy only from companies who signed agreements
  with the NRA. Declared unconstitutional in 1935.

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• IV. Providing Debt Relief
• A. Home Owners Loan Corporation (HOLC) bought
  the mortgages of homeowner behind on payments and
  gave longer payments and lower interest rates.
  Refinanced 1 of 5 mortgages. Only helped the
  employed.
• B. Farm Credit Administration (FCA) established
  to help farmers refinance their mortgages.
  Helped in short, but may have slowed overall
  economy by giving money to inefficient farmers
  instead of business.

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• V. Spending and Relief Programs
• A. Civilian Conservation Corp (CCC) employed
  18 25 yr. old men to work for the national
  forestry service
• B. Federal Emergency Relief Administration
  (FERA) created to channel money to help state and
  local agencies fund relief projects
• C. Public Works Admin created jobs
  (construction projects)
• D. Civil Works Admin Harry Hopkins hired
  workers directly on govt payroll Shut down
  too expensive?

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• F. New Deal change in spirit of the American
  people, became optimistic and their faith in
  America was restored.

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18.3

• I. Challenges to the New Deal
• A. Support of FDR and his New Deal began to fade
  in 1935 Questioned by right left wing
  politicians
• B. Deficit Spending to pay for programs
  abandoned balanced budget
• C. American Liberty League businessmen opposed
  to New Deal

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• D. Huey Kingfish Long Share our Wealth
  societies. Take money from the rich and
  redistribute.
• E. Charles Coughlin Catholic priest who
  drummed up Longs support through radio
• F. Dr. Francis Townsend proposed federal
  government pay seniors a pension Old Age
  insurance, paid for by younger workers

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• II. Launching the New Deal
• A. 1935 2nd New Deal to counter criticism
• B. Works Progress Administration (WPA) Created
  jobs for artists, writers, musicians, etc.
• C. Schecter v. US NIRA declared
  unconstitutional, Congress gave up powers to
  President
• D. Would lead to Court Packing Plan
• E. National Labor Relations Board (Wagner Act)
  secured Unions

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• IV. Social Security Act
• A. Provided security for the elderly, unemployed
  workers and needy. Provided monthly retirement
  benefit and unemployment insurance. Younger
  workers pay premiums.
• B. Helped many people, but initially left out
  many of the neediest, such as farmers and
  domestic workers.

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18.4

• I. Second Term
• A. Shift in Democratic Party from mainly white
  Southerners to include immigrants, African
  Americans, minorities
• B. Frances Perkins 1st woman appointed to a
  cabinet post.

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• II. Court Packing Plan
• A. Response to AAA ruling
• B. Attempt to shift Supreme Court ruling, tried
  to increase of justices.
• C. Politically a mistake Split Demo. Party.
  Too much presidential power.
• D. 1937 recession debate over how to handle it.
• Henry Morgenthau balance budget and cut
  spending
• John Maynard Keynes Spend heavily to jump-start
  the economy

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• E. FDR asked Congress to increase spending

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• II. Last New Deal Reforms
• A. Limited successes in 2nd Term
• B. National Housing Act Subsidized loans for
  builders willing to build low-cost housing
• C. Farm Security Admin made loans to purchase
  farms
• D. Fair Labor Standards Act protected workers,
  abolished child labor, and created 40-hour work
  week.
• E. By 1939 Congress turned against the New Deal

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• III. Legacy of the New Deal
• A. New Deal had limited success, but gave
  Americans a stronger sense of security and
  stability
• B. New Deal balanced competing interests
  established the broker state.
• C. New attitude toward the government the
  government established a safety net (welfare,
  unemployment)