The Hundred Days and The Hundred Days and Bank ReliefBank Relief

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The Hundred DaysThe Hundred Days

Before FDR inaugurated unemployment Before FDR inaugurated unemployment continued to rise, and bank runs continuedcontinued to rise, and bank runs continued People exchanged dollars for goldPeople exchanged dollars for gold Bank holidaysBank holidays were declared in 38 states were declared in 38 states

Gold standardGold standard Some afraid that FDR would abandon and would Some afraid that FDR would abandon and would

reduce value of dollarreduce value of dollar FDR FDR diddid take the country off the gold standard shortly take the country off the gold standard shortly

after becoming presafter becoming pres Then, FDR raised (and fixed) the price of goldThen, FDR raised (and fixed) the price of gold

The Gold StandardThe Gold Standard

FDR allowed the gov’t FDR allowed the gov’t to basically print 3 to basically print 3 billion dollars out of billion dollars out of nothing to finance his nothing to finance his programsprograms

Now, paper money is Now, paper money is devalued 41%devalued 41%

(Nixon eventually got (Nixon eventually got us totally off the gold us totally off the gold standard in 1971)standard in 1971)

Executive Order 6102Executive Order 6102 ““Forbidding the Hoarding of Gold Coin, Gold Bullion, Forbidding the Hoarding of Gold Coin, Gold Bullion,

and Gold Certificates within the continental United and Gold Certificates within the continental United States". States".

The order criminalized the possession of monetary gold The order criminalized the possession of monetary gold by any individual, partnership, association or corporation. by any individual, partnership, association or corporation.

  all persons to deliver on or before May 1, 1933, all but a all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in certificates owned by them to the Federal Reserve, in exchange for $20.67 (equivalent to $371.10 today) exchange for $20.67 (equivalent to $371.10 today) per ounce per ounce

Specifically exempted "customary use in industry, Specifically exempted "customary use in industry, profession or art"—a provision that covered artists, profession or art"—a provision that covered artists, jewelers, dentists, and sign makers among others jewelers, dentists, and sign makers among others

Gold coins also upped in limit, due to collectorsGold coins also upped in limit, due to collectors

Inauguration Inauguration

March 4, 1933March 4, 1933 ““Let me assert my firm belief that the only Let me assert my firm belief that the only

thing we have to fear is fear itself…This thing we have to fear is fear itself…This nation asks for action, and action now!”nation asks for action, and action now!”

The New Deal BeginsThe New Deal Begins

Brain Trust Brain Trust FDR advisors FDR advisors Often disagreedOften disagreed

No clear agenda (No actual “New Deal”)No clear agenda (No actual “New Deal”) ““The country needs bold persistent The country needs bold persistent

experimentation…Above all try something.”experimentation…Above all try something.” And he did. LOTS of bills sent through legislationAnd he did. LOTS of bills sent through legislation

Hundred DaysHundred Days March 9-June 16 March 9-June 16 15 major acts passed15 major acts passed

EconomicsEconomics

KeynesKeynes Government spending Government spending

would spur demand would spur demand and thus pull a nation and thus pull a nation out of depression out of depression

Keynesian Keynesian economics was economics was Roosevelt’s Roosevelt’s philosophyphilosophy

TraditionalistsTraditionalists (Ex Hayek)(Ex Hayek) Cut government Cut government

spending to spending to encourage private encourage private investmentinvestment

http://www.youtube.cohttp://www.youtube.com/watch?v=d0nERTFm/watch?v=d0nERTFo-Sko-Sk

New Nationalism or New FreedomNew Nationalism or New Freedom

Gov’t work w/ Gov’t work w/ business business

Regulate wages, Regulate wages, prices, productionprices, production

OROR Distrust big business Distrust big business

completelycompletely Gov’t run parts of Gov’t run parts of

economyeconomy

““Trust busting”Trust busting” Regulation to keep Regulation to keep

competition faircompetition fair

Banks and Debt ReliefBanks and Debt Relief

Temporarily closed all banks March 9Temporarily closed all banks March 9Emergency Banking Relief ActEmergency Banking Relief Act

Unanimous Unanimous 38 min of debate38 min of debateRequired Fed examiners to survey banks and Required Fed examiners to survey banks and

issue licenses to those that were financially issue licenses to those that were financially soundsound

Fireside ChatsFireside Chats

March 12March 12Sixty million listenersSixty million listenersMoney will be secure in banksMoney will be secure in banksWhen banks opened, deposits > When banks opened, deposits >

withdrawals withdrawals

SEC and FDICSEC and FDIC

Securities Act Securities Act companies that sold companies that sold stock/bonds had to provide infostock/bonds had to provide info

SEC (Securities and Exchange Commission)SEC (Securities and Exchange Commission) Regulate stock market and prevent fraudRegulate stock market and prevent fraud

Glass-Steagall Act Glass-Steagall Act commercial banking commercial banking separate from investment bankingseparate from investment banking Commercial banks no longer allowed to risk Commercial banks no longer allowed to risk

despositors’ money by using it to speculate on the despositors’ money by using it to speculate on the stock marketstock market

Created Federal Deposit Insurance Corporation Created Federal Deposit Insurance Corporation (FDIC) to insure bank deposits(FDIC) to insure bank deposits

Mortgage and DebtMortgage and Debt

Low prices or Low prices or debtdebt cause of GD cause of GDMost income went to paying back debtMost income went to paying back debt

Cut back on spendingCut back on spendingHome Owners’ Loan CorporationHome Owners’ Loan Corporation

Bought mortgages of many homeowners who Bought mortgages of many homeowners who were behind in their payments were behind in their payments restructured, restructured, with lower interest rateswith lower interest rates

10% of homeowners10% of homeownersNot farmers, still employedNot farmers, still employed

The Farm Credit AdministrationThe Farm Credit Administration

(FCA) (FCA) lent 4x as much $ to farmers as lent 4x as much $ to farmers as the entire banking system had the year the entire banking system had the year beforebefore

Lowered interest ratesLowered interest ratesLong-term value?Long-term value?

Money to poor farmers meant that money was Money to poor farmers meant that money was not able to be lent to more efficient businessnot able to be lent to more efficient business

Slowed overall economic recoverySlowed overall economic recovery