FDR – 100 Days Legislation US History AP Unit 7, Lesson 1 Mr. Melvin.

FDR – 100 Days LegislationFDR – 100 Days Legislation

US History APUS History AP

Unit 7, Lesson 1Unit 7, Lesson 1

Mr. MelvinMr. Melvin

Lame Duck Session

Winter -1932-33: Despair gripped US more tightly.

During lame duck period, Hoover without influence and FDR without power– Hoover insisted on passing policies that FDR

condemned

Lame Duck Session

February 1933 – Hoover asked FDR to make series of conservative declarations– If FDR agreed, would pretty much ruin his

Democratic platform– FDR Rejected

Lame Duck Session

Disaster continued to affect banks– More and more people played it safe by

converting savings to cash (withdrawing funds)

Created runs on banks

Led to Michigan governor making a bank holiday in mid-February (temporarily order closing of banks)

– Hoover: “We are at the end of our rope.”

Franklin Delano Roosevelt

FDR - child of Progressive Era

Believed government was instrument of general welfare– Use active government to fix problems and bring

about economic recovery

Identified himself with both action and planning

Assembled group of advisors during campaign – Professors from Columbia University – “brain trust”

Brain Trust

Adolf Berle and Gardiner Means (1932)– Trend toward economic concentration

irreversible– Had transformed old free market into

administered marketDecisions made by those who ran big corporations, rather than supply and demand

Rendered classic laissez-faire theories obsolete

Brain Trust

Rexford Tugwell– Called for public and government planning

If concentration inevitable, shouldn’t be left in private hands (led to cause of Depression)

Better for government to be in control for all of society

Brain Trust

Raymond Moley– Head of brain trust

– Believed US should revert to wartime government agencies to try and stop depression

Treat depression like a war

Brain Trust

– Bernard Baruch, Hugh Johnson, and George Peek:

Began sponsoring schemes for industrial and agricultural planning

– Louis Brandeis & Felix FrankfurterDidn’t like the idea of national planning

Create policies that foster more competition

Brain Trust

William Jennings Bryan– Inflationist– Devalue Currency to help farmers, etc

Lewis Douglas (Republican)– Gold Standard – Balanced Budget

Brain Trust

– As all groups exerted influence, political clashes grew

– FDR loved disagreement and arguingFelt that critical questions would be debated to its fullest

Cabinet Members

Even chose Cabinet with Different Political Views– State – Cordell Hull (conservative democrat)– Henry Wallace – Agriculture (Progressive

Republicans)– Harold Ickes – Interior (Prog. Rep.)– Frances Perkins – Labor – 1st woman cabinet

member

Roosevelt’s InaugurationRoosevelt’s Inauguration

Sworn in on March 4, 1933Sworn in on March 4, 1933

““We have nothing to fear but fear itself!”We have nothing to fear but fear itself!”

Asked for broad powers to wage war Asked for broad powers to wage war against Depressionagainst Depression– Compared it to warCompared it to war

The 100 DaysThe 100 Days

FDR declared a bank holiday as soon as FDR declared a bank holiday as soon as in officein office

Closed banks for a dayClosed banks for a day

Hope that this will restore confidence and Hope that this will restore confidence and stop people from pulling money outstop people from pulling money out

100 Days100 Days

Called special session of Congress on Called special session of Congress on March 8March 8

Passed Emergency Banking Bill (1)Passed Emergency Banking Bill (1)– Allowed banks to convert their assets to cashAllowed banks to convert their assets to cash– Gives more cash – now can reopen or stay Gives more cash – now can reopen or stay

afloatafloat

Passed Bill that reduced gov’t Passed Bill that reduced gov’t expenditures and Veterans’ Pensions (2)expenditures and Veterans’ Pensions (2)

100 Days100 Days

Last emergency bill (3)Last emergency bill (3)– Legalized the sale and consumption of beer Legalized the sale and consumption of beer

and wine (again)and wine (again)– No effect economicallyNo effect economically– Just confidenceJust confidence– People have it rough, let them have a drink if People have it rough, let them have a drink if

they want!they want!

Fireside ChatsFireside Chats

FDR gave radio FDR gave radio addresses throughout addresses throughout termsterms

Kept people “in loop” Kept people “in loop” towards country’s towards country’s progressprogress

Made President a Made President a household figurehousehold figure

1933 - 19441933 - 1944

Agricultural PlanAgricultural Plan

March 16, 1933 – FDR sent message to March 16, 1933 – FDR sent message to Congress regarding agricultural planningCongress regarding agricultural planning

Farmers REALLY needed helpFarmers REALLY needed help– 1929-1932 – net income of farmers dropped 1929-1932 – net income of farmers dropped

from $162 to $48from $162 to $48Purchasing power dropping since 1929Purchasing power dropping since 1929

Still had fixed expenditures (mortgages) to pay for Still had fixed expenditures (mortgages) to pay for – Saw only way to make more $ was to produce and sell Saw only way to make more $ was to produce and sell

moremore

Lowered pricesLowered prices


Administration proposed agricultural Administration proposed agricultural adjustmentadjustment

Increase farm income by controlling Increase farm income by controlling productionproduction

Offered benefit payments to farmers that Offered benefit payments to farmers that agreed to regulate crops to the national agreed to regulate crops to the national planplan

Agricultural Plan

Financed through processing taxes Financed through processing taxes collected at mills or packing housescollected at mills or packing houses

Program couldn’t go into affect until Program couldn’t go into affect until farmers agreed to it via referendumfarmers agreed to it via referendum

Goal was to increase purchasing power Goal was to increase purchasing power (parity)(parity)


May 12, 1933 – May 12, 1933 – Agricultural Adjustment Agricultural Adjustment ActAct passed passed

Established Established Agricultural Adjustment Agricultural Adjustment AdministrationAdministration (AAA) (AAA)– Began to destroy cotton crops in return for Began to destroy cotton crops in return for

benefit paymentsbenefit payments– Also slaughtered hogs to keep prices down as Also slaughtered hogs to keep prices down as

wellwell

Agricultural Plan

Seemed ironic– Destoying food and crops in a time of need

Industry been doing it for years– Cutting production

Agricultural BillAgricultural Bill

Bill also gave federal government:Bill also gave federal government:

Authority to maintain prices through loans Authority to maintain prices through loans on non-perishable crops (1)on non-perishable crops (1)– Would then keep the crops in government Would then keep the crops in government

storagestorage

Authority to withdraw land from cultivation Authority to withdraw land from cultivation through leasing (2)through leasing (2)

Agricultural Bill

Regulate release of products into system Regulate release of products into system through marketing agreements (3)through marketing agreements (3)– Government could prevent overuse of market Government could prevent overuse of market

but also save up for bad harvest yearsbut also save up for bad harvest years

President can issue greenbacks, coin President can issue greenbacks, coin silver and alter gold content of dollar (4)silver and alter gold content of dollar (4)

Farm Credit Administration provided Farm Credit Administration provided mortgage relief to farmers (5)mortgage relief to farmers (5)

Results?Results?

Program workedProgram worked– As production declined, As production declined,

prices increasedprices increased– 1932-1936 – farm income 1932-1936 – farm income

increased by 50%increased by 50%– Benefits really went to Benefits really went to

large commercial farmerslarge commercial farmersTenant farmers and Tenant farmers and sharecroppers suffered sharecroppers suffered greatlygreatly

Fixing IndustryFixing Industry

By 1933, industry employing 5 million fewer By 1933, industry employing 5 million fewer workers than 1929 and producing less goods.workers than 1929 and producing less goods.

Businesses lowered wages and laid people off in Businesses lowered wages and laid people off in order to keep profitingorder to keep profiting– More people laid off led to less purchasing powerMore people laid off led to less purchasing power

Only way to stop decline - joint planning by Only way to stop decline - joint planning by government and businessgovernment and business

Backed by FDR and US Chamber of CommerceBacked by FDR and US Chamber of Commerce


Spring 1933 – FDR worked out 2 part industrial Spring 1933 – FDR worked out 2 part industrial recovery billrecovery bill

Part 1 - Designed to promote proper trade Part 1 - Designed to promote proper trade organization through usage of fair competition organization through usage of fair competition codes that were exempted from anti-trust suitscodes that were exempted from anti-trust suits– Section 7a – federal guarantees for trade unions to Section 7a – federal guarantees for trade unions to

organize and collectively bargainorganize and collectively bargain

Part 2 – Established the Public Works Part 2 – Established the Public Works Administration (3.3 billion budget)Administration (3.3 billion budget)


FDR signs National Industrial Recovery FDR signs National Industrial Recovery Act on June 16, 1933Act on June 16, 1933


2 agencies were set up under National 2 agencies were set up under National Industrial Recovery ActIndustrial Recovery Act

(1) PWA – Harold Ickes(1) PWA – Harold Ickes– Not very successfulNot very successful

Ickes too strict on who to give money for public Ickes too strict on who to give money for public works toworks to

Fixing Industry

(2) National Recovery Administration (2) National Recovery Administration (NRA) – Hugh Johnson(NRA) – Hugh Johnson– Developed blanket codes for industriesDeveloped blanket codes for industries

Negotiating codes for individual businesses too Negotiating codes for individual businesses too slow-movingslow-moving

– Employers observed NRA standards on Employers observed NRA standards on minimum wages and maximum hoursminimum wages and maximum hours

Would be given a “blue eagle” sign if businesses Would be given a “blue eagle” sign if businesses compliedcomplied


Because of codes, managers were Because of codes, managers were protected from competition – able to stop protected from competition – able to stop cutting prices and wages.cutting prices and wages.

Protected marginal businesses from failure Protected marginal businesses from failure and larger ones that would have only and larger ones that would have only made profits by laying people offmade profits by laying people off– Codes decreased probability of investing in Codes decreased probability of investing in

new facilitiesnew facilities


NRA attempted to pursue long term recovery NRA attempted to pursue long term recovery and reformand reform– Bring about permanent reemployment by raising Bring about permanent reemployment by raising

wages and shortening work hourswages and shortening work hours– Sought abolition of child labor, improvement of Sought abolition of child labor, improvement of

working conditions, and encouragement of labor working conditions, and encouragement of labor unionsunions

Eventually began to overextend itselfEventually began to overextend itself– Began seeking codes for local and service trades Began seeking codes for local and service trades

(sweatshop)(sweatshop)

Bogged it down in petty enforcement fights Bogged it down in petty enforcement fights


NRA people wanted to use codes as a method of raising NRA people wanted to use codes as a method of raising pricesprices– Businesses believed this would be a good trade for their Businesses believed this would be a good trade for their

concessions on wages and hoursconcessions on wages and hours– Others argued that price fixing would defeat policy of expanding Others argued that price fixing would defeat policy of expanding

purchasing power purchasing power

Section 7a gave rise to more unions, which aggravated Section 7a gave rise to more unions, which aggravated businessesbusinessesHugh Johnson’s personality made many people angryHugh Johnson’s personality made many people angry– FDR forced him out in fall of 1934FDR forced him out in fall of 1934

By 1935, most of FDR administration were fine with the NRA being By 1935, most of FDR administration were fine with the NRA being struck down by the courtsstruck down by the courts

Other 100 Days ActionsOther 100 Days Actions

FDR didn’t want currency inflation, but FDR didn’t want currency inflation, but wanted price increasewanted price increase– April 18, 1933 – FDR April 18, 1933 – FDR abandoned gold abandoned gold

standardstandard by executive order by executive orderFew weeks later, Congress approved by passing Few weeks later, Congress approved by passing its own similar billits own similar bill


– Gold Act of 1934Gold Act of 1934 – gave treasury large – gave treasury large authority to manage value of dollar abroad authority to manage value of dollar abroad and credit conditions at homeand credit conditions at home

All of this shifted financial power of nation to DC, All of this shifted financial power of nation to DC, and away from NYCand away from NYC

– DC made it much easier for businesses to borrow (low DC made it much easier for businesses to borrow (low interest rates)interest rates)

– However, this still didn’t produce recoveryHowever, this still didn’t produce recovery– But, did establish public authority over a financial system But, did establish public authority over a financial system

previously dominated by private interestspreviously dominated by private interests


1935 Federal Reserve Act1935 Federal Reserve Act - concentrated - concentrated authority of federal reserve to Board of authority of federal reserve to Board of Governors, a public agency in DC (away Governors, a public agency in DC (away from private bankers) from private bankers)

Securities Act of 1933Securities Act of 1933 – required – required disclosure of relevant information in the disclosure of relevant information in the issuance of new stocks on the marketissuance of new stocks on the market


Glass-Steagall ActGlass-Steagall Act (1933) (1933) – separated commercial – separated commercial and investment banking and investment banking to limit bank speculationto limit bank speculation

Securities and Exchange Securities and Exchange Commission (1934)Commission (1934) – – prevent fraud and punish prevent fraud and punish misrepresentation and misrepresentation and fraud in stock market fraud in stock market tradingtrading


Other actions designed to help banks and Other actions designed to help banks and reduce human cost of depressionreduce human cost of depression

Home Owners’ Loan ActHome Owners’ Loan Act – provided means for – provided means for refinancing mortgages (saved homes)refinancing mortgages (saved homes)

Similar refinancing occurred for farm mortgages Similar refinancing occurred for farm mortgages under under Farm Credit AdministrationFarm Credit Administration– Banks would receive government bonds for Banks would receive government bonds for

unpaid mortgagesunpaid mortgages– Could turn these bonds into cash at any timeCould turn these bonds into cash at any time


Federal Deposit Federal Deposit Insurance CorporationInsurance Corporation – set up system of – set up system of insurance for savings insurance for savings deposits in banksdeposits in banks– Helped restore Helped restore

confidence in banksconfidence in banks

Showed New Deal’s Showed New Deal’s commitment to saving commitment to saving capitalism while capitalism while reforming itreforming it

Relief EffortsRelief Efforts

Federal Emergency Relief ActFederal Emergency Relief Act – – established first system of federal reliefestablished first system of federal relief

Harry Hopkins as directorHarry Hopkins as director

Supplied states with cash for assistanceSupplied states with cash for assistance

Soon after, began experiment of “work Soon after, began experiment of “work relief” rather than cash handoutsrelief” rather than cash handouts

Relief EffortsRelief Efforts

Civilian Conservation Corps (CCC)Civilian Conservation Corps (CCC) – linked relief – linked relief to conservation of natural resourcesto conservation of natural resources

Recruited men ages 18-25 to work countrysideRecruited men ages 18-25 to work countryside– Protecting and developing watersheds, Protecting and developing watersheds,

reservoirs, forests and parksreservoirs, forests and parks

Dust Bowl of early 1930’s made people Dust Bowl of early 1930’s made people realize conservation was necessaryrealize conservation was necessary

– Planted shelter belt of trees from Canada to Planted shelter belt of trees from Canada to TexasTexas

Tennessee Valley AuthorityTennessee Valley Authority

Tennessee Valley Tennessee Valley AuthorityAuthority best example of best example of relief to an entire region relief to an entire region (most successful)(most successful)

Tennessee Valley Tennessee Valley impoverished, no impoverished, no electricity, floods, erosionelectricity, floods, erosion

Still housed one of most Still housed one of most valuable power sites in valuable power sites in Muscle Shoals, ALMuscle Shoals, AL

Tennessee Valley AuthorityTennessee Valley Authority

FDR saw problems in Valley connected to a single oneFDR saw problems in Valley connected to a single one

Could be fixed with development under a single authorityCould be fixed with development under a single authority

April 1933 – called on Congress to create a corporation April 1933 – called on Congress to create a corporation clothed in power of federal government but having clothed in power of federal government but having flexibility of private enterpriseflexibility of private enterprise

May 1933 – Congress passed TVA (director – David May 1933 – Congress passed TVA (director – David Lilenthal)Lilenthal)– Built dams, powerhouses, cleared rivers, replenished Built dams, powerhouses, cleared rivers, replenished

soil, rebuilt forests, and brought electricity to the soil, rebuilt forests, and brought electricity to the ValleyValley

– Also systematically excluded blacks from participationAlso systematically excluded blacks from participation

FDR – 100 Days Legislation US History AP Unit 7, Lesson 1 Mr. Melvin.

Documents

war slide

melvin slide

competition slide

fullest slide

days fdr

woman cabinet member

brain trust rexford

brain trust bernard