MR. LIPMAN’S APUS
CHAPTER 33
POWERPOINT
FDR and the Great Depression
1930’s
Keys to the Chapter
 FDR AND
ELEANOR ROOSEVELT
 ELECTION OF 1932 - CHANGING
POLITICAL PARTY BASE
 THE FIRST HUNDRED DAYS
 THE THREE R’S AND THE SAFETY NET
 FINANCIAL INDUSTRY REFORM
 THE GROWTH OF LABOR UNIONS
 THE DUST BOWL MIGRATION
 COURT PACKING PLAN FAILURE
 FDR:
Wealth / Polio / “Traitor to his class”
 Eleanor becomes his legs and conscience
 Promises “a new deal for forgotten man”
 FDR wins big but vote more anti Hoover
than pro FDR
 Blacks switch to the Democratic Party in a
big way
FDR with Eleanor Roosevelt
America’s
working man
who FDR
says he was
elected to
represent
Election of 1932

November 1932 – March 1933 – Hoover’s lame
duck period
 He could not take long-range action w/o FDR
 Roosevelt refused to be tied down by Hoover
on war-debt or anti-inflationary policy
 Republicans argued that FDR deliberately
allowed Depression to worsen to give himself
more glory
March 4th Inauguration: “The only thing we have to fear
is fear itself”. America will change forever.
Three R’s: Relief, Recovery, and Reform
 New




Deal’s goals
Short-range – relief and immediate recovery
Long-range – reform of abuses that had produced
the boom and bust cycle
Hundred Days focused on short-term
problems; long-term reforms came later
Passed reforms that industrialized Europe
already had
• Unemployment insurance, old-age insurance,
minimum-wage regulations, conservation and
development of natural resources, restrictions on
child labor
THE FIRST 100 DAYS & TERMINOLOGY
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Bank Holiday
Fireside “Chats”
Beer and Wine legalized and later in 1933
Prohibition is repealed
“Prime the Pump” to lower 25% unemployment
(CCC – civilian conservation corp.)
Farming Relief (AAA)- Subsidies not to grow {but
in 1936 Supreme Ct. will rule it unconstitutional}
FERA ($3 billion to state’s to pay relief $}

CWA pays for temporary “make work”
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TVA is created {short term means work but long
term means change the power monopoly in
America – many argue it is socialism}
FSA (Federal Securities Act)
HOLC (homeowners loan corp. will buy up
mortgages- allow people to stay in homes)
Glass-Steagall Banking Act (FDIC)
Pvt. Gold Surrender (reform currency and build
up Government reserves)
NRA – Additional power to labor- reduce hours
worked and create minimum wage (but Supreme
Court will later rule it unconstitutional)
 PWA (thousands
of road jobs across USA)
and will later be followed by the WPA
 SEC created to govern securities industry
 FHA created to provide needed housing
 NLRA created to protect workers and will
establish the NLRB aiding unions
 SSA created in 1935 (social security was
strongly opposed then by Republicans) it
reflects America’s change from LaissezFaire to Safety Net.
The TVA Area
Failures
Before and
After the
GlassSteagall
Banking
Reform Act
of 1933

Why US went off the gold standard


Want inflation to relieve debts and stimulate
production
Government bought up gold at increasing prices to
encourage people to bring in their gold from home
• Price per ounce went up from $21 (1933) to $35 (early 1934)


Attacked by “sound money” conservatives
1934 – 1971 – limited gold standard
• For international trade, US would pay debts in gold if
requested at 1 ounce for every $35 owed
• Domestic circulation of gold (as money) prohibited to force
everyone to use paper money.

1971 – Nixon took US completely off gold standard
& since we have been on the “Fiat” system.

1935 - Schechter Poultry v. United States

The “sick chicken case”

Court ruled that NRA unconstitutional
• Congress could not delegate its legislative power
to executive branch
• Congress itself could not regulate a local business
– Commerce clause only applied to interstate
business not intrastate business
FDR WILL BEGIN TO THINK OF A WAY TO GET
AROUND THE SUPREME COURT
LABOR GROWS STRONGER UNDER FDR

UMW (United Mine Workers) union grows under
John L. Lewis

UAW (United Auto Workers) union grows and
has sit-down strike at GM at Flint, Mich. Wins
official recognition as bargaining unit.

Unions strongly support FDR and help him win
elections in 1936 and 1940
The Growth of
Labor Union
Membership,
1933–1946
----------------1980s -2005 has
seen large union
membership
decline
The Dust Bowl

Late 1933 – drought struck Great Plains



Rainless weeks &winds removed tons of topsoil
Reached from Colorado to Missouri
Causes of the dust storms
Natural causes
 Farming marginal land during WWI
 Dry-farming techniques (leaving land fallow in
summer)
 Mechanization tore up more land than previously
(using horses)
OKIES MIGRATE TO CALIFORNIA (“Grapes of Wrath”)

Route 66-The Dust Bowl Express
Okies on the Road
to California
----------They brought it all
with them
because there
was nothing to
return to
Farm
bankruptcy
act gave
extension of
time to pay
for farmers
in trouble
1934

PEOPLE TO KNOW FROM THE DECADE

Secretary of Labor Frances Perkins
•

First woman cabinet member
Mary McLeod Bethune
•
Highest-ranking black in FDR’s administration
(minority affairs)
1. Father Coughlin (anti-semetic)
2. Huey Long (Kingfish from N.Orleans)
3. Dr. Charles Townsend (stimulate economy by giving
everyone $200 @ month they must spend)
4. Margret Meade (new ideas on sexuality and gender roles)
5. Pearl Buck- author the good earth
 Policies

toward Indians
Indian Reorganization Act of 1934
• Reversed assimilation policies of Dawes Act
(1887) & encouraged tribes to preserve culture
and set up self-government
Election of 1936 - FDR big over Landon and
Congress stays solidly Democratic.
FDR coalition includes Unions, Blacks, Immigrants
and anyone getting government assistance (As AL
Smith said “You don’t shoot Santa Claus”)
FDR sees landslide as a mandate to continue the
policies of the New Deal
The Supreme Court Problem
Ultra conservative

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6 of 9 justices were over 70
Ruled against New Deal 7 of 9 times it came
before them, usually 5 to 4 majorities
Roosevelt appointed no justices in first term
Following inauguration in 1937 he decides to
“pack the court” (now because of 20th
amendment moved to Jan. from March)
Congress and
the American
People turn
against FDR and
accuse him of
threatening the
Constitution itself.
 “A switch


in time saves nine”
Justice Owen J. Roberts, previously
conservative, began to vote with the liberals
March 1937 – court upheld state minimum
wage law for women
• Reversal of a similar case from1936
– Congress voted full pay for retired
justices over 70
 1937


One of the oldest conservatives retired
Replaced by more liberal Hugo Black
 New
Deal laws upheld by new majority

1933 – 1937 – Depression continued during
Roosevelt’s first term


Unemployment still at 15% (but down from high of
25%)
1937 – the “Roosevelt recession” (word created
to avoid using the word depression)

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Economy took sharp downturn
Social Security ate into payroll checks
Administration had cut back on spending to keep
budget balanced (as close as possible)
Hatch Act of 1939
• Barred fed workers from campaigning or soliciting for votes
• Banned government funds for political purposes
• Stopped collection of contributions from people on relief
 John




Maynard Keynes
British economist advocated government
running deficits during bad economic times to
heat up the economy
Borrowed $ paid back when times were better
Opposed by Friedrich Hayek who argues that
it makes government too powerful and temp.
programs will become permanent
Starting in 1937 FDR announces he will follow
Keynesian policy and budget deficits grow

Criticisms of the New Deal
 Waste, incompetence, and graft (bribery)
 Fear it was remaking US into communist or
socialist state
 Increased size and power of bureaucracy
 Doubling of deficit ($19 billion to $40
billion); although WWII would increase it to
$258 billion
 Business believed it could get US out of
Depression w/o government interference
 Despite years and billions, US was still in
Depression
 Argument

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in favor of the New Deal
Relief – not the economy – was primarily what
Gov’t was attacking
Graft was minimal compared to amount spent
Government’s obligation to help the masses
Capitalism saved from collapse (purged
worse abuses to save it from itself)
Fairer distribution of income achieved
Stopped more radical solutions to
Depressions
Kept armed revolt and upheaval occurring in
Europe out of US
Final Word on FDR
He drove “the car” down middle road

Called greatest American conservative
• Chose middle road between radical conservatives
who wanted little or no government action and
radical left-wingers who wanted to end capitalism

Both Hamiltonian and Jeffersonian
• Supported big-government action
• Remembered the “forgotten man”
THE AMERICAN SAFETY NET IS CREATED AND
IT WILL ONLY GROW LARGER