Chapter 26FDR & the New Deal

AP US 2Mrs. Carchidi

The Great Depression» Causes of the Depression

˃ Lack of Diversification-Economy relied on only a few industries. Auto, Steel, oil˃ Overproduction – Americans could not purchase all goods produced by

industry.˃ Misdistribution of Wealth˃ Poor Credit Structure – Banks did not have enough reserves.˃ Declining Exports˃ Unstable International Debt Structure – US refused to refinance European war

debt.

» The Great Crash˃ Stock Market Boom-Doubled in value 28-29˃ Buying on Margin fueled this.

+ Leading to investors’ obsession with speculation˃ “Black Tuesday”

Crowds on Wall Street as news of the Crash spread around the city.

» Progress of the Depression˃ Banking Collapse-9000 banks close. Money supply contracts.˃ Severe Contraction- 25% unemployment by 1932˃ City and State relief systems collapse.˃ Hit the middle class especially hard

» Unemployment and Relief˃ Belief in Personal Responsibility

+ Hoover believed efforts to relieve human suffering should come from private charities

˃ “Dust Bowl”- High temps, Low rainfall, overproduction, farm foreclosures.˃ “Okies”

1930 food line

»Hoover and Voluntarism˃ Resisted Democratic efforts to give direct aid to the unemployed˃ Perceived as indifferent to human suffering˃ Agricultural Marketing Act – failed because it relied on voluntarism – Tried to

increase farm prices.˃ More spending on Public works

+ Hoover Dam project+ Federal Farm board

˃ Hoover’s Declining Popularity+ White house business conferences+ HOOVER’S response was RESTRAINED & CAUTIOUS+ Americans blamed Hoover directly for depression

˃ Reconstruction Finance Corporation – gave loans to businesses but not to people – Hoover wanted to prevent bankruptcies

˃ Smoot-Hawley Tariff Act – raised protective tariffs – cutting off even more European trade.

HOOVERVILLES

Hundreds of tiny shacks and tents populated the Hoovervilles, which were comprised of people who had lost most of their possessions. Named after United States President Herbert Hoover, people who dwelled in the Hoovervilles would sleep anywhere.

HOOVERVILLES

1930-31 – Hoover’s Situation deteriorated.

•Republicans lost 1930 elections•Americans held him responsible•European banks collapsed- 1931 largest bank in Austria collapsed. Started a “Gold Drain” in the US. US raised interest rates. (Good Idea?)

Bank Failures in the U.S.A

Popular Protest Farmer’s Holiday Association – Farmers destroyed crops to

increase prices. Demise of the Bonus Army – Wanted early payment of WWI

bonuses. Bonus Army made up of all WWI veterans! Hoover sent out the army under General Douglas MacArthur

to break up the bonus Army Camp. (Good Idea?) Hoover's response haunted the ‘32 election

The Emergence of Roosevelt• Franklin Roosevelt

– Born to wealth and privilege– 1921: Crippled by polio– 1928: Elected governor of New York– Talented and persuasive politician

• 1932: Defeated Hoover with farmer- worker-immigrant-Catholic coalition

Election of 1932•Roosevelt promised to balance the budget•Pushed progressive reform•FDR had a jaunty, optimistic approach to life•Stressed the importance of addressing economic concerns.

Hoover & FDR on their way to the Capitol for the Inauguration

“the ONLY thing we have to Fear is Fear itself.”

The Hundred Days» FDR inaugural inspired with the term “nothing to fear but

fear itself”» The Hundred Days was the period IMMEDIATELY after FDR’s

first inauguration. » FDR calls special session of congress to introduce New Deal» The New Deal – RELIEF, RECOVERY & REFORM

˃ Banking system saved from collapse by closing them (Bank Holiday)+ Support strong banks & eliminate weaker ones.

˃ Fifteen major laws provided relief˃ Tennessee Valley Authority was the most ambitious one˃ Agricultural Adjustment Act for farmers passed. ˃ New Deal aimed to reform and restore, not nationalize, the

economy

The Tennessee Valley Authority

RUN ON THE BANK

WITH BANKS CLOSED PEOPLE BARTERED FOR WHAT THEY NEEDED.

» (FDIC) Federal Deposit Insurance Corporation» (CCC) Civilian Conservation Corps (18 to 25 year old men to build

bridges, fire trails, plant trees, clear land, etc.)

» (FERA) Federal Emergency Relief Administration» (CWA) Civil Works Administration (short lived employed 4 million

workers to build roads, schools, playgrounds, etc.)

» (AAA) Agricultural Adjustment Administration» (TVA) Tennessee Valley Authority» (NRA) National Recovery Adm.» (PWA) Public Works Administration

Members of the CCC (Civilian Conservation Corps) doing road construction in Ohio

See US 2 HONORS Notes on Calendar for more in-depth information.

Civil Works Administration workers repaving road in front of the Philadelphia Zoo's administration building, Philadelphia, PA, June, 1934.

Credit: Courtesy of Temple University, Urban Archives, Philadelphia, Pa

When Mayor J. Hampton Moore refused federal assistance, WPA state administrator Edward Jones moved 12,000 Philadelphia WPA employees to the suburbs. After S. Davis Wilson became mayor in 1937, federal relief poured into the city; the WPA alone employed more than 47,000 people. Moore's opposition, however, had cost the city millions of dollars in relief and lost it construction projects that benefited other municipalities throughout the state.

Roosevelt and Recovery» National Recovery Administration (formed under National

Industrial Recovery Act – NIRCA) BLUE EAGLE is the symbol˃ Industries formulated codes to eliminate cutthroat competition, ensure labor peace˃ Codes favored big business, unenforceable

+ The NIRA included Section 7a which guaranteed workers the right to bargain collectively.˃ SCHECHTER V. UNTIED STATES, 1935 – Supreme Court ruled that the NIRA (NRA)was

unconstitutional. According to the ruling:+ The constitution did NOT give the Federal Gov’t. the authority to regulate every aspect of

business.+ Congress had given too much of its authority to the President+ The President did NOT have the authority to approve or disapprove of industry codes.+ Fair Practice codes were NOT legally BINDING.

» Agricultural Adjustment Act of 1933˃ Harry A. Wallace – Secretary of agriculture in charge of farm relief. ˃ Farmers paid to take land out of cultivation (Cut Production)˃ Prices increased, mainly because of government payments, but Dust Bowl helped by cutting

supply˃ Sharecroppers, tenant farmers dispossessed

+ UNITED STATES V. BUTLER, 1936 – Supreme Court found the AAA unconstitutional– Ruling stated that congress did not have the right to regulate agriculture ONLY the states

had that right.

Hugh S. Johnson on the cover of TIME

» 1933: Harry Hopkins placed in charge of RFC to direct aid to unemployed

» 1933: Civilian Conservation Corps provided employment to young men

» 1935: Works Progress Administration placed unemployed on federal payroll

» Programs never sufficiently funded» FDR’s conduct between 1933 & 1935 could best be described

as that of the MODERATE REFORMER

• Critics of AAA ‘33• Farm products destroyed while workers in the cities were starving• Hastened the decline of the family farm & the rise of large-scale agribusiness.• Large farmers benefitted most• Millions of tenant & sharecroppers were forced off the land.

• FARM SECURITY ADMINISTRATION (FSA), 1937 – was created by Congress to make low-interest long term loans to tenant farmers & sharecroppers so they could buy their own farms.

FSA also established camps were migrant farm workers could find shelter & medical care.

» 1933–1934: Focus on immediate problems » 1935: Shift to permanent economic reform, “broker state”

President Roosevelt’s severest critics were demanding more radical reforms: Father Charles Coughlin advocated nationalizing banks

and his radio program (sermons) contained blatant anti-Semitic references

Francis Townsend called for $200 per month pensions to all those over 60 if they spent it within the month

Huey Long and the Share the Wealth Clubs called for redistribution of wealth by seizing private fortunesPosed a threat to FDR’s 1936 re-election campaign

The Second New Deal» The Second New Deal, passed in 1935, focused more on

pro-labor movements and not being in favor of businesses. ˃ The National Labor Relations Act (Wagner Act) helped protect collective

bargaining. The right to organize unions˃ The right to bargain collectively for better wages & working conditions˃ Condemned as unfair to labor discrimination against a worker because he/she was

a union member.+ The Wagner Act helped labor organize rapidly & promoted industrial recovery

by giving workers higher wages so they could buy more products. This act was strongly supported by FRANCES PERKINS, the Secretary of Labor & the first woman on a President’s cabinet.

+ This caused growth in labor unions - in the American Federation of Labor. ˃ The Works Progress Administration (WPA) created many blue-collar jobs for men

in the United States. ˃ The National Youth Administration (NYA), under the direction of future United

States President Lyndon B. Johnson, provided the same benefits for children and young adults.

Frances Perkins

» Congress passed the Social Security Act in 1935. ˃ This created a pension that would be given to someone when they retired. ˃ It also created a plan where those who were temporarily out of employment would

still be able to get a paycheck. ˃ Money was also made available to those who had physical problems. This plan had a significant lasting effect on the American culture. Those who were

suffering in society would be granted aid and helped. This act also made people think differently about retirement.

It was fundamentally a CONSERVATIVE measure

THE SOCIAL SECURITY ACT

President Roosevelt signs the Social Security Act into effect on August 14, 1935

Critics of Social Security:• Farmers & domestic servants were

not covered• It offered nothing to those already

out of work• The pension payments were paltry &

would not begin until 1942• The SS trust fund removed money

from circulation

» Fair Labor Standards Act˃ Threatened the low wages that had attracted northern industry to the south˃ It established minimum wages for millions of workers˃ It drew conservative opposition b/c it meant greater government involvement in

private enterprise˃ It established maximum hours of work per week

» Industrial union Movement of the 1930s˃ Was lead by John L. Lewis President of the United Mine Workers (UMW)˃ 1942 – Lewis organized the Congress of Industrial Organizations (CIO) – all unskilled

labor could join+ CIO worked harmoniously with the AFL in the 1930s (they join AFL-CIO in the

1950s)+ SIT-DOWN STRIKE – was first used against General Motors (GM) in 1936

– It was 6 weeks before GM agreed to recognize the UAW (United Auto Workers) as the bargaining unit for its workers.

JOHN L. LEWIS

Sit-Down Strike

Ten demonstrators were killed by police bullets during the "Little Steel Strike" of 1937

»African Americans and the Depression˃ Cause of civil rights was advanced when African Americans were able to join unions.

+ African American Suffering– Whites took jobs (Last hired, first fired)– Sharecropping system broke down– Did not receive relief benefits– Continued racial prejudice.

» Harry Hopkins was the individual most responsible for promoting African-Americans right to work during the New Deal˃ He had more than 1 million blacks working in the WPA

» African Americans and the Depression˃ Cause of civil rights was advanced when African Americans were able to join unions.˃ African American Suffering˃ Whites took jobs˃ Sharecropping system broke down˃ Did not receive relief benefits˃ Continued racial prejudice.

» Scottsboro Case˃ Eight Black youths sentenced to death˃ Communist party came to their aid˃ All were eventually set free˃ Supreme court overturned convictions˃ NAACP’s Changing Role

The Scottsboro Boys were nine black teenagers accused of rape in Alabama in 1931. The landmark set of legal cases from this incident dealt with racism and the right to a fair trial. The case included a frame-up, an all-white jury, rushed trials, an attempted lynching, and an angry mob; it is frequently given as an example of an overall miscarriage of justice.

˃ Mexican Americans in Depression America+ Discrimination Against Hispanics+ Because they were not legal they had little access to relief efforts.+ 1937 = WPA denied employment to aliens, a decision that greatly

affected Mexican Americans.

˃Asian Americans in Hard Times+ Japanese Americans Citizens League – encouraged the Nisei

(Japanese born in America to Japanese parents) to become more assimilated to American culture.

» Native Americans (American Indians)˃ Indian Reorganization Act, 1934

+ Emphasize tribal unity & autonomy + John Collier, Commissioner of Indian Affairs

– Supported educational programs on the reservations– Encouraged tribes to produce native handiworks– Employed native Americans in the Indian bureau

John Collier

Harold Ickes

» Women and the Workplace in the Great Depression+ Popular Disapproval of Women’s Employment- should not work if husband did not

have a job.+ Increased Female Employment 30% more working but they were mostly single or the

sole supporter for their family– NRA codes allowed women to be paid less than men for the same job

+ Black women suffered due to the loss of service jobs+ Unemployment lower for certain woman –

– sales clerks and stenographers. + Demise of the National Woman’s Party –Feminist movement declined.+ Women were discouraged from applying to medical and Law schools+ Female Faculty members in colleges & universities continued to decline

˃ Eleanor Roosevelt, the first lady, pushed for increasing the rights of women, blacks, and other minorities.

First Lady, Eleanor Roosevelt got permission for Philadelphia's Marian Anderson to sing at the Lincoln Memorial after she was denied the right to sing at Constitution Hall by the Daughters of the American Revolution. April 9, 1939

https://www.youtube.com/watch?v=mAONYTMf2pk

» FDR’s New Deal coalition included support from:˃ African-Americans˃ Democrats in the South & West˃ Organized labor˃ Urban masses

» The Election of 1936˃ This coalition (above) brought Roosevelt to the 1936 victory.˃ FDR’s campaign

+ Attacked the rich + Promised further reforms

˃ Defeated Republican Alfred Landon, Governor of Kanas˃ Democrats won lopsided majorities in both houses of Congress

» The Supreme Court Fight˃ FDR decided that no program of reform could long survive the conservative justices who had already

struck down the NRA & the AAA of 1933. So Roosevelt proposed what his critics called “The Court Packing Scheme”

+ According to the “scheme” for each justice on the Supreme Court over the age of 70, the President would be able to appoint another justice.

+ The Court Packing proposal: – was legal, – was effectively blocked by Democratic opposition, – badly strained FDRs relations w/ congress, – outraged both conservatives & liberals

» By 1945, through death & retirement, 8 of the 9 justices on the Supreme Court had been appointed by FDR.

» The New Deal in Decline˃ In his 2nd term FDR was stung by each of the following:

+ The failure of National Health Insurance & anti-Lynching legislation+ The Roosevelt Recession, 1937-1938+ Republican resurgence in the Congressional elections of 1938+ The emergence of a conservative congressional coalition which blocked further new Deal

legislation after 1938

World War II begins in Europe September 1, 1939 with the German Invasion of Poland.

» For TEST:

» Read the Chapter for additional information» Know the chart on page 670

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