Franklin D. Roosevelt and the New Deal

FRANKLIN D. ROOSEVELT AND THE NEW DEAL

CAUSES OF THE GREAT DEPRESSION

Agricultural overproduction – Midwest

Industrial overproduction – East

Unequal distribution of wealth

Over-extension of credit

HOW HOOVER DEALT WITH IT.

Hoover played the game of confidence.

“Prosperity is right around the corner.”

No government assistance.

REASONS FOR INEFFECTIVENESS

Hoover though business should self-regulate.

Wanted a balanced budget Was not well liked by his political foes.

Seen as a “Do-Nothing President”

ELECTION OF FRANKLIN D. ROOSEVELT

POSITION WHEN FDR CAME INTO OFFICE. Banking System had collapsed The country believed it was leaderless

I never saw him—but I knew him. Can you have forgotten how, with his voice, he came into our house, the President of these United States, calling us friends..."—Carl Carmer, April 14, 1945 

RELIEF

RECOVERY

REFORM

FIRST NEW DEAL

Emphasis: reform Political Position:

conservative Primary aim: economic

recovery Philosophy: economic

nationalism and economic scarcity (i.e., raise prices by creating the illusion of scarcity)

Objectives: higher prices for agriculture and business

Beneficiaries: big business and agricultural business

EMERGENCY BANKING RELIEF ACT

Purpose: Restore confidence in the banking system

Passed unanimously in Congress Federal examiners to survey the

nation’s banks and issue licenses to those that were financially sound.

Belief that their money would now be secure if they put it back into the banks

NRA: NATIONAL RECOVERY ACT

Purpose: Recovery of Industry Created a partnership of business,

labor, and government to attack the depression.

Use of: price controls, high wages, codes of fair competition.

FIRST AGRICULTURAL ADJUSTMENT ACT Purpose: the recovery

of agriculture Paid farmers who

agreed to reduce production of basic crops: cotton, wheat

Money came from: tax on processors who passed the cost on to consumers.

CIVILIAN CONSERVATION CORP. (CCC) Purpose: Relief Gave outdoor work to unemployed men

between the ages of 17 and 29. $30 per month

SECOND NEW DEAL

Emphasis: reform Political Position: liberal Primary aim: permanent

reform Philosophy: international

economic cooperation and economic abundance

Objectives: increased purchasing power and social security for public

Beneficiaries: small farmers and labor

SOCIAL SECURITY ADMINISTRATION

Became law in 1935 Major goal: to provide some security for

the elderly and for unemployed workers Core: monthly retirement benefit when

workers stopped at age 65. Unemployment insurance

SECOND AGRICULTURAL ADJUSTMENT ACT Purpose: recovery for agriculture Paid farmers for conservation. Restricted the production of staple

crops.

BANK “HOLIDAY”

Fear the Roosevelt would abandon the gold standard

People were doing “bank runs” – withdrawal all of their money

By March of 1933 over 4,000 banks had closed. Governors declared a bank holiday to close the remaining banks before they lost money. ****CALLED CONGRESS INTO A SPECIAL

SESSION, CLOSED ALL BANKS****

UNEMPLOYMENT

Refusal to simply give money to the unemployed.

Recipients were more likely to maintain work skills and self-respect if they earned their money

Creation of Governmental agencies that would organizes work programs for the unemployed.

PUBLIC WORKS ADMINISTRATION

Created as part of the National Recovery Administration, the Public Works Administration provided jobs working in public works all across the nation.

WORKS PROGRESS ADMINISTRATION

The Works Progress Administration provided millions of jobs working on public works projects across the nation. In 1939 the name was changed to Works Projects Administration.

RECOVERY OF THE UNITED STATES ECONOMY

MORTGAGE RELIEF

Home Owner’s Loan Corporation Bought mortgages from homeowners

who were behind on payments Restructured them with longer terms of

repayment and lower interest rates. 10% of homeowners received HOLC Only helped those still employed, it

foreclosed on those who were unemployed

HOME OWNERS LOAN CORPORATION

The Home Owners Loan Corporation purchased and insured 20% of urban homes in the country.

FEDERAL HOUSING ADMINISTRATION

The FHA opened home ownership to a new group of people by lowering required down payments and increasing repayment periods.

SEARCH FOR EFFECTIVE REFORM

BANKING: GLASS-STEAGALL ACT (FDIC) The Glass-Steagall Act separated

commercial banking from investment banking.

To protect depositors: Federal Deposit Insurance Corporation (FDIC)

Greatly increased public confidence in the banking system.

STOCK MARKET: SEC

Securities Act of 1933 Required companies that bought and

sold stocks and bonds to provide complete and truthful information to investors.

Creation of the Securities and Exchange Commission (SEC) to regulate the stock market and prevent fraud.

WAGNER ACT (NLRB)

Guaranteed workers the right to organize unions without interference from employers, and the ability to bargain collectively

National Labor Relations Board (NLRB) – organized factory elections by secret ballot to determine if the workers wanted a union.

LABOR’S RESPONSE: FORMATION OF CIO After the Wagner Act A burst of labor activity Committee for Industrial

Organization – helped workers in industries without unions, to form unions.

Organize unions with all workers skilled and unskilled.

LABOR STANDARDS ACT

1938 After NIRA was dismantled by the

Supreme Court The Fair Labor and Standards Act of

1938 provided more protection for workers, abolished child labor, and established a 40-hour workweek.

CONTROVERSIAL ASPECTS OF THE NEW DEAL

CONSTITUTIONAL ISSUES

Schechter Poultry Corp v. United States, 1935

SCHECHTER POULTRY CORP V. UNITED STATES (1935)

Activity

ROOSEVELT’S COURT-PACKING PROPOSAL

1940: THIRD TERM CONTROVERSY

PASSAGE OF THE 22ND AMENDMENT (1951)

Unclear rules for presidential succession

FDR would serve for almost four full terms

A look back at the constitution