Ch. 33 Notes:
The Great Depression and the New
Deal
1. In the presidential election
of 1932, Franklin D.
Roosevelt will defeat
Herbert Hoover in a
landslide.
2. FDR promised a “New
Deal” for the American
people which would
include a balanced budget
and sweeping social and
economic reforms
3. This election is also the
first one in which large
numbers of African
Americans voted
Democrat – largely
because they suffered the
worst during the Great
Depression.
FDR
The “New Deal”
1. Roosevelt didn’t exactly know what the New Deal would
entail.
2. He was assisted by his “Brain Trust” – a collection of
social, economic and political thinkers who advised him in
developing his New Deal agencies.
3. He was also greatly aided (and influenced) by his wife,
Eleanor – she often time served as his “legs”, inspecting
things around the country and reporting back to her
husband.
4. He also appointed Francis Perkins to the position of
Secretary of Labor – the first woman to serve on the
Cabinet (she was a big supporter of workers’ rights and
unions).
Eleanor Roosevelt and Francis Perkins
The Three “R”’s
1. The three main goals of the New Deal were known as
the Three R’s:
1.
relief – immediate action to half the economy’s
deterioration and aid those in need (Federal Emergency
Relief Act and Works Progress Administration).
2. recovery – temporary programs designed to restart the
flow of consumer demand - “priming the pump”
(Civilian Conservation Corp and Public Works
Administration).
3. reform – permanent programs designed to avoid
another depression and insure U.S. citizens against
economic disasters (Securities and Exchange
Commission and Social Security Act).
The Bank Holiday
1. FDR’s first order of business was to address the problem of
bank failures.
2. On March 6, 1933, he closed all of the banks in the U.S. (four
days).
3. On March 9, 1933, Congress passed the Emergency Banking
Relief Act, which allowed only the most financially sound
banks to reopen.
4. On March 12, 1933, FDR made his first radio address to the
nation (known as fireside chats) to explain what was
happening with the banks – this stopped the run on banks.
5. Congress also passed the Glass-Steagall Banking Reform
Act, which created the Federal Deposit Insurance
Corporation – insured bank deposits up to $5000 then,
today it’s $250,000.
The 100 Days
1. The initial meeting of Congress is known as the
100 Days (March 9th – June 16th).
2. During the 100 Days, Congress (which was
controlled by the Democrats) passed more than
fifteen major pieces of legislation that
significantly expanded the government’s role in
the nation’s economy and welfare.
3. These programs gave he president broad
authority over the nation’s economy – so broad
that some of the programs will later be declared
unconstitutional by the U.S. Supreme Court.
The 100 Days
The Alphabet Agencies
1. The Securities and Exchange Commission
required stock information to be accurate and
truthful.
2. The Federal Securities Act prevented insider
trading and other fraudulent practices.
3. The Agricultural Adjustment Act raised crop
prices by lowering production.
4. The Civilian Conservation Corp put young men
to work (ages 18 – 25) building roads and parks
and planting trees – especially in the Dust Bowl
region.
The Alphabet Agencies
1. The Federal Emergency Relief Act provided around $3
billion to give out as direct payments or for wages on work
projects.
2. The Home Owners’ Loan Corp was created to assist with
low interest rage home loans.
3. The Public Works Administration (part of the National
Industrial Recovery Act) provided money to states to
construct schools and community buildings.
4. The Civil Works Administration built roads and schools
and provided money for the salaries of teachers in rural
areas.
5. The Federal Housing Administration provided home loans
for mortgages and repairs.
1. One of the most
controversial New Deal
programs was the
Tennessee Valley
Authority.
2. The TVA was designed to
bring relief to the
Tennessee Valley region by
building dams – this would
create jobs and provide
cheap hydroelectric power
to the region.
3. Critics claimed the
government shouldn’t be
competing with private
utility industries – too
much like socialism.
TVA
The Dust Bowl
1. To make matters worse
during the Great
Depression, late in
1933 a prolonged
drought hit the
midwest.
2. The drought, along
with the cultivation of
marginal farmlands,
the dry-farming
techniques that were
in use and soil erosion,
led to tons of topsoil
being blown across the
Great Plains.
The Dust Bowl
The Migration of
the “Okies”
1. Many midwestern farmers
went west to California,
looking for work.
2. However, when they
arrived in California, there
wasn’t enough work to go
around and the farmers
still struggled for food and
shelter.
3. FDR eventually created the
Resettlement
Administration to help
Dust Bowl victims move to
better land – they also set
up relief camps in
California to help provide
for the migrants.
John Steinbeck and The Grapes of
Wrath
1. Author John Steinbeck
wrote The Grapes of
Wrath to describe the
plight of the migrant
workers as they
headed to California.
2. It was widely read and
also harshly criticized.
3. It was even banned in
many communities,
especially in California.
The Indian Reorganization Act
1. In 1934 Congress
passed the Indian
Reorganization Act.
2. This law gave Native
Americans more
control over their
reservations – moved
away from assimilation
and allowed the Native
Americans to preserve
their cultures through
tribal government.
Critics of the New Deal
1. There were many critics
of the New Deal –
liberals felt the
programs didn’t do
enough while
conservatives felt the
government had gone
too far and we were
headed down the road
to socialism.
2. Three critics in particular
gained popular support
for their ideas.
Father Charles
Coughlin
1. Catholic priest Father
Charles Coughlin
believed FDR was too
friendly with the
country’s bankers.
2. He called for monetary
reforms, the
nationalization of
major industries and
protection for labor.
3. His anti-Semitic rants
eventually turned off
listeners.
1. Retired physician Dr.
Francis Townsend
wanted more help for
the elderly.
2. He called for everyone
over sixty to receive
$200 a month.
3. His influence eventually
led to the Social
Security Act, which not
only created old-age
pensions but also
contained
unemployment
insurance and help for
the disabled and minors.
Dr. Francis
Townsend
Huey Long
1. The biggest threat to
FDR was Louisiana
Senator Huey Long.
2. Long’s “Share the
Wealth” program
promised to tax the rich
and give to the poor.
3. Long had serious designs
on challenging FDR for
the Democratic
nomination for
president in 1936 but
was assassinated in
Louisiana in 1935.
New Deal Setbacks
1. The National Recovery Administration was established to
combine immediate relief with long-range recovery and
reform.
2. It was designed to assist industry, labor and the unemployed
– industries were to work out “fair competition” codes which
set lower maximum hours and minimum wages so that more
people could work.
3. It also provided benefits for workers and unions.
4. However, because it depended on people being willing to
sacrifice during times of hardship, it began to collapse from
within.
5. Before it could collapse, though, the U.S. Supreme Court
declared it unconstitutional (along with the AAA) - Congress
had delegated too much of its authority to the president.
FDR Attempts to “Pack the Court”
1.
2.
3.
4.
5.
6.
7.
After being easily reelected in 1936, FDR beliefs that the people of
the U.S. support the New Deal and want it to continue.
However, the Supreme Court (which was conservative) had
blocked several of FDR’s plans.
So FDR proposed a law which would add a justice for each on on
the court over 70 who wouldn’t retire (that would have added six
more justices).
The nation and his own party balked at the idea – he was messing
with the traditional system of checks and balances.
Congress refused to support his “court packing” proposal and it
hurt him politically – he didn’t have the total support of Congress
that he did during his first term.
However the court did become more sympathetic to New Deal
legislation after this.
FDR eventually appointed nine justices to the Supreme Court
either due to death or retirement.
“Court Packing”
The “Roosevelt Recession”
1. During FDR’s first time,
the Great Depression
lingered in spite of the
New Deal programs.
2. In 1937, the economy
took a downturn, largely
due to new Social
Security taxes and
cutbacks on spending
(FDR was trying to
balance the budget).
1. Because of the
downturn, FDR once
and for all embraced the
ideas of John Maynard
Keynes, which was a
policy of government
spending (deficit
spending) to prime the
pump and encourage
consumer spending.
2. This deficit spending
caused the national
debt to double from
around $19 billion to
$40 billion by 1939.
Keynesianism
Works Progress Administration
1. The WPA was created to
create as many jobs as
possible as quickly as
possible.
2. The WPA spend over $11
billion to give jobs to
over 8 million people.
3. The WPA built roads,
airports and various
public buildings – it even
paid artists, writers and
photographers to create
art.
The CIO
1. During the Great
Depression, the
Congress of Industrial
Organizations was
created – its members
were non-craftsmen
who felt their needs
weren’t being met by
the AFL.
2. The AFL tried to organize
all workers within an
industry.
1. Unions made numerous
gains during the Great
Depression.
2. During FDR’s second term,
the Wagner Act was passed
to create the National Labor
Relations Board.
3. The NLRB protected workers
by ensuring the right to
unionize and to participate
in collective bargaining.
4. In 1938, Congress passed
the Fair Labor Standard Act
which set maximum hours
at 44 a week and created a
minimum wage of 25 cents
an hour.
The New Deal and
Labor
New Deal Amendments
1. The 20th Amendment changed the date of
the presidents inauguration from March 4th
to January 20th – shortened the “lame duck”
period.
2. The 21st Amendment repealed the 18th
Amendment, ending prohibition in the U.S.
3. The 21st Amendment is the only amendment
passed for the explicit purpose of repealing
another amendment.
Effects of the New Deal
1. In the end, the New Deal was not able to end
the Great Depression – the industrial
production of WWII will do that.
2. However, the New Deal did provide
moderate reform without any type of radical
revolution or reactionary fascism like that
taking place in several European countries
(Germany, Italy, Spain, Soviet Union).