HIGH
EXPECTATIONS
1929-1932
Chapter 26—Part I
What is a
“Depression”?
“The Great Depression which followed the
[stock market] crash of 1929 was the most
devastating economic blow ever suffered by
the nation. It lasted for more than ten years,
dominating every aspect of American life
during the 1930s. . . . It left enduring
psychological scars—never again would the
Americans who lived through it be quite so
optimistic about their economic future. . . . The
Depression led to a profound shift in American
political loyalties.”
The Roots of the Great
Depression—The
Scorecard
Hoover—Republican presidential
candidate in 1928
Hoover “did not view business and
government as antagonists. Instead, he
saw them as partners, working together
to achieve efficiency and affluence for
all Americans. His optimistic view of the
future led him to declare in his speech
accepting the Republican presidential
nomination in 1928 that ‘we in America
today are nearer to the final triumph
over poverty than ever before in the
history of any land.”
Al Smith—Democratic
Presidential
Candidate in 1928
“Smith succeeded for the first time
in winning a majority of votes for
the Democrats in the nation’s
twelve largest cities. A new
Democratic electorate was
emerging, consisting of Catholics
and Jews, Irish and Italians, Poles
and Greeks. Now the task was to
unite the traditional Democrats of
the South and West with the urban
voters of the Northeast and
Midwest. . . .
“[Smith] symbolized the emergence of
the city as the center of twentiethcentury American life. An older nation
founded on rural values had given way to
a new urban society in which the
production and use of consumer goods
led to a very different lifestyle. Just as
nineteenth-century American culture
had revolved around the farm and the
railroad, modern America focused on the
automobile and the city. . . . Only after
World War II would the American
people finally enjoy an abundance and
prosperity rooted in the urban
transformation that began in the 1920s.”
On a Roll. . .
Lexicon of the
1920s
•
•
•
•
Speculate—purchase of land or stock by an
investor at a low price, hoping that the price
would rise giving the opportunity to make a
quick profit
On Margin—investor paid only part of purchase
price of stock in cash
Broker borrowed the remainder of the money
from banks or corporations
Margin Call-broker asks investors buying on
margin to put up more money to cover their
loans on stocks that were now worth less
Financial Indicators in
Farming and Industry
Pointing to an Economic
Slowdown in the 1920s
•
•
•
•
•
•
Wages of industrial workers failed to keep up with rising
costs of goods
Workers could not purchase the goods that they made
Factories had to lay off workers
As workers lost their jobs, demand for goods fell further
(a vicious cycle)
For farmers, increased supplies of crops kept crop prices
down—a part of an agricultural decline that dated from
1919
Meanwhile, the expenses of farmers’ increased (vicious
cycle again)
Hoover and Smith:
Differences in Beliefs
and Backgrounds
•
•
•
•
•
•
•
•
•
Professional engineer
Very popular
Experienced Secretary of Commerce
Self-made millionaire
Efficiency expert
Humanitarian
Quaker
Believed in rugged individualism
and efficiency
Supported laissez-faire
Al Smith
•
•
•
•
•
•
•
•
•
•
Four-term governor of New York
Familiar with machine big-city politics
Son of Irish immigrant parents born on
lower side of east Manhattan
Roman Catholic
Lacked good education
Poor grammar with heavy New York
accent
Wanted government to play an active
role
Wanted public ownership of some
public utilities/power companies
Wanted government to aid farmers
Eastern provincial outlook
Smith’s Political
Career:
•
•
•
Subpoena server
State legislator
Governor of New
York State
Both Smith and Hoover “were self-made men who
embodied the American belief in freedom of opportunity
and upward mobility. Neither advocated any significant
degree of economic change nor any redistribution of
national wealth or power.”
Types of Investment
Attracting Investors in the
1920s
• Land
• Stocks
How Public
Attitudes, Business,
and Government
Contributed to
Conditions Leading
to the Stock Market
Crash of 1929
The Stock Market Collapse
and the Great Depression
25A
• “Black Thursday”—a wave of selling on the
New York Stock Exchange. “The great
crash in October [29,] 1929 put a sudden
and tragic end to the speculative mania.”**
• By 1932, stock prices had fallen to 80%
below their 1929 highs. Unemployment
stood at 12 million workers or 25% of the
American work force. Gross National
Product (GNP) fell to 67% of its 1929 level.
How Could this
Happen?**
• Public ignored warning signs of coming
depression
• Some people gambled on the stock market
• Many banks made risky loans to speculators
in the stock market
• The government took no steps to regulate
stock market prices
Impact of the
Depression 25A
• Durable Goods—products designed to last several
years before being replaced
• Business Inventory—quantity of unsold goods on
hand
How Economic Relations
Between Supply and Demand
Became Unbalanced in the
1920s
• Supply greatly exceeded demand in the late 1920s
• Workers didn’t make enough money to purchase the
products made by industry
Role of a Weak Banking
System in Leading to
Economic Collapse
• Banks that had loaned large sums to
speculators tried to collect
• Speculators were unable to repay the
banks
• Many banks collapsed, went bankrupt
Causes for the Great
Depression of the 1930s**
Faced with their own economic problems, European
banks withdrew money from U. S. banks; a key Vienna
bank failed, and the German economy collapsed
• Excessive speculation in the stock market
• U.S. factories produced more goods that American
buyers could consume
• Americans could not afford products coming off
the assembly lines—a maldistribution of wealth
• Agricultural decline over the previous decade
• Corporate mismanagement
• Instability of the economic conditions of Europe
Impact of Massive
Unemployment and
Grinding Poverty on
American Society 25C
• It reduced the standard
of living
• It sapped people’s sense
of personal worth
• It made homelessness
and hunger major
social problems
Ironically, the Great Depression had less
impact on the poor than the middle class.
Poor folk already knew how to exist in the
midst of poverty. But depressed economic
condition with no letup in sight was a
powerful psychological blow to a middle
class with high expectations, to white
collar professionals too proud to ask for
charity. Even the well-to-do had to forfeit
many of their traditional luxuries. During
the decade, youths dropped out of college
and vagrancy increased.
Searching for a
Solution
“As the Depression deepened, Hoover reluctantly began to
move beyond voluntarism to undertake more sweeping
governmental measures.”
•
•
Federal Farm Board loaned money to
• Aid cooperatives
• Buy surplus crops on open market
Reconstruction Finance Committee (RFC)
– Congressional creation of early-1932
– Given power to loan money to banks, railroads,
and insurance companies (and later granted
power to lend money to local communities for
public works projects) to save them from
bankruptcy
– Congress gave the RFC the right to lend money
to communities for public works programs
The Bonus Army
25C-2
•
•
Some 22,000 ragged, former American
soldiers who marched on Washington, D.
C. in hopes of persuading the government
to grant them their veterans bonus
immediately rather than waiting until
1945
They took up residence in ramshackle huts
in Anacosta Flats along the Potomac River
Bonus Army
continued. . .
• Hoover authorized General
Douglas McArthur to clear out
the bonus army**
• The brutality of this operation did
Hoover irreparable harm in terms
of public relations**
Actions President Hoover Thought
He Should Take at Beginning of
Depression**
•
•
•
•
•
•
•
Voluntarism—essentially inaction—Hoover believed the
government should not get involved in helping the economy
Received wisdom of the day suggested that handouts from
the federal government (or elsewhere) would undermine the
proud spirit and penchant for hard work that had made
America great in the first place.
Rather, private businesses and charities should step in to
feed and clothe those in need
Bold forecasts of “better days” ahead, of recovery “just
around the corner”
The Republican promise that things would work out in the
long run prompted the Democrats’ rejoinder, “People don’t
eat in the long run.”
Hoover invited business leaders to the White House for an
economic conference
He agreed to federal public works projects that used only
cash
Failure of Republican leadership or provision of relief to
suffering Americans left the door open for a resurrection
of the Democratic Party. Government inaction bred
widespread cynicism and mistrust. Under the dynamic,
confident, positive leadership of Franklin D. Roosevelt,
the Democrats would get a fresh opportunity to sit in the
seats of power and influence.
"As the end of his term approached, President Hoover
seemed to grow daily more petulant and pessimistic. . . . His
attitude as the election neared alienated many voters and
turned defeat into rout."
Herbert Hoover and
Public Opinion After
the Stock Market
Crash of 1929
"The whole world was gripped by depression, but
as it deepened, Americans began to blame Hoover
for some of the disaster. The president became
isolated and bitter. . . . Unable to admit mistakes
and to take a new tack, he could not communicate
personal empathy for the poor and the
unemployed. . . . He believed that the greatest
problem besetting Americans was a lack of
confidence. He could not communicate with these
people or inspire their confidence."
Hoover’s Policy
Distinguished by the
Four D’s
•
•
•
•
Destruction
Delay
Deceit
Despair
Many Americans were demoralized, and
rejected "a discredited leader, a man
who had been exposed now as cold,
uncaring, doctrinaire, and incapable of
acting against the causes of popular
distress.“ The public grew increasingly
"When Hoover refused
resentful of the president's doctrinaire
to take measures strong
adherence to principle while breadlines
enough to relieve
lengthened and millions of willing
people's hardships,
workers searched fruitlessly for jobs."
voters turned him out of
office in the election of
1932."
Franklin Delano Roosevelt—
Democratic governor of New
York State 26A
FDR, The Man
26A-1&2
• From a wealthy New York family, well traveled, schooled,
and a socialite. He had a charming and optimistic
personality
• Pampered Upbringing**
• His mother came from an upper class family and her
father had owned copper lands, coal mines, acreage on
New York Harbor, and a fleet of clipper ships
• His father dabbled in Democratic politics, owned a stable
of trotting-horses, and lived in leisure on a Hyde Park
estate; he was unusually indulgent with Franklin
• Educated at exclusive private Groton School and Harvard
University
• “He became a prodigious doer and joiner, with
memberships in more than a half-dozen campus clubs. . . .
[He wrote] exhortations about 'school spirit' and football
morale.“ At Harvard, he moved "'from one
extracurricular triumph to another.'"
FDR, The Man
continued
• As a child, owned his own pony, a 21 foot sailboat, and
went to Europe eight times before entering adolescence
• Studied briefly at Columbia Law School
• Local volunteer at Hyde Park fire department
• Director of First National Bank of Poughkeepsie
• Delegate to 1910 New York Democratic convention
• Democratic Mayor of Poughkeepsie, 1910—this earned
him a party nomination for state senator
• Elected Democratic state Senator, 1910
• Assistant Secretary of Navy during World War I
FDR—A Natural Born
Politician
26A-1&2
FDR’s Ambition**
"Ambition as much as desire to render public service motivated his career
in politics; even after an attack of polio in 1921 left him badly crippled in
both legs, he refused to abandon his hopes for high office." FDR’s polio
attack came at his summer home on Campobello Island. Hofstadter
observes, "To be sick and helpless is a humiliating experience. Prolonged
illness also carries the hazard of narcissistic self-absorption. It would
have been easy for Roosevelt to give up his political aspirations and retire
to the comfortable privacy of Hyde Park. That he refused to relinquish
his normal life was testimony to his courage and determination, and also
to the strength of his ambition. From his bed he resumed as many of his
affairs as possible. . . . In the long run this siege of infantile paralysis
added much to Roosevelt's political appeal. As a member of the
overprivileged class with a classic Groton-Harvard career he had been too
much the child of fortune. Now a heroic struggle against the cruelest kind
of adversity made a more poignant success story than the usual rags-toriches theme; it was also far better adapted to democratic leadership in a
period when people were tired of self-made men and their management of
affairs.
There has been much speculation about the effect of
Roosevelt's illness upon his sympathies." Frances Perkins, who
knew him both before and after notes that FDR, "a pleasant
but somewhat supercilious young man. . . underwent a
'spiritual transformation,' in which he was purged of 'the
slightly arrogant attitude' he had occasionally shown before.
She now found him warm-hearted,' and felt that 'he
understood the problems of people in trouble." The notion that
FDR "read widely and studied deeply during his illness and
developed a firm social outlook that aligned him forever with
the underprivileged. . . is not sustained by Roosevelt's history
during the prosperity of the 1920s. His human capacity,
enlarged though it probably was, was not crystallized in either
a new philosophy or a heightened interest in reforms."
FDR the
Politician**
Many considered FDR "rather
a lightweight intellectually. . . .
Roosevelt soaked up
information and ideas from a
thousand sources. . . . To those
seeking specific answers to the
questions of the day, he was
seldom satisfying. On such
vital matters as farm policy,
the tariff, and government
spending, he equivocated,
contradicted himself, or
remained silent."
After his loss on the Cox-Roosevelt
Democratic ticket in 1920 (right), he
returned to private life until becoming a
two-term governor of New York State
"His mind. . . . was generous and sensible, but also superficial
and complacent."
"Roosevelt proved to be an adept politician. He was not well
read, especially on economic matters, but he had the ability to
learn from his advisers and yet not be dominated by them. He
took ideas, plans, and suggestions from conflicting sources and
combined them."
When running for the Senate in 1910, Roosevelt "conducted a
vigorous, unconventional campaign by automobile, ran well
ahead of his ticket, and [in spite of the fact that the district
had elected only 1 Democrat since 1856] was elected on the
crest of a Democratic wave. In the legislature Roosevelt
promptly became a leader among Democratic insurgent. . . .
He appeared a typical progressive in his voting record, stood
for the civil service, conservation, direct primaries, popular
election of Senators, women's suffrage, and social
legislation."
FDR’s Rapport With
the Masses 26A-1&2**
"No personality has ever expressed the American popular
temper so articulately or with such exclusiveness. . . . In the
age of the New Deal, it was monopolized by one man, whose
passing left American liberalism demoralized and all but
helpless. . . . At the heart of the New Deal there was not a
philosophy but a temperament. The essence of this
temperament was Roosevelt's confidence that even when he
was operating in unfamiliar territory he could do no wrong,
commit no serious mistakes. From the standpoint of an
economic technician this assurance seemed almost mad at
times. . . . And yet there was a kind of intuitive wisdom under
the harum-scarum surface of his methods. . . .
“[Although] reared on a social and economic philosophy
rather similar to Hoover's, he succeeded at once in
communicating the fact that his temperament was
antithetical. When Hoover bubbled that it was necessary
only to restore confidence, the nation laughed bitterly. When
Roosevelt said: 'The only thing we have to fear is fear itself,'
essentially the same threadbare half-true idea, the nation
thrilled. Hoover had lacked motion; Roosevelt lacked
direction. But his capacity for growth, or at least for change,
was enormous. Flexibility was both his strength and his
weakness. Where Hoover had been remote and abstract, a
doctrinaire who thought in fixed principles and moved
cautiously in the rarefied atmosphere of the managerial
classes, Roosevelt was warm, personal, concrete, and
impulsive. . . .
He had little regard for abstract principle but a sharp
intuitive knowledge of popular feeling. Because he was
content in large measure to follow public opinion, he was
able to give it that necessary additional impulse of
leadership which can translate desires into policies.
Hoover had never been able to convey to the masses a
clear picture of what he was trying to do; Roosevelt was
often able to suggest a clear and forceful line of policy
when none in fact existed. . . . Roosevelt's admirers, their
minds fixed on the image of a wise, benevolent, provident
father, have portrayed him as an ardent social reformer
and sometimes as a master planner. . . . He displayed a
broad, easygoing tolerance, a genuine liking for all sorts of
people; he loved to exercise his charm in political and
social situations."
FDR "was a marvelous campaigner.
He traveled back and forth across the
country, radiating confidence and good
humor. . . . Like every great political
leader, he took as much from the
people as he gave them, understanding
the causes of their confusion and
sensing their needs." One member of
the Hoover Administration noted that
"'the people seem to be lifting eager
faces to Franklin Roosevelt, having the
impression that he is talking intimately
to them. . . . I am glad of his
enthusiasm and buoyance but it cannot
escape the sense that he really does not
understand the full meaning of his own
recitations.'"
"One element
was rapport
with the
masses, created
through a
mixture of
antiestablishm
ent appeals to
the 'forgotten
man' with a
charismatic
radiation of
warmth,
confidence,
compassion,
and even vigor
despite his
crippled legs."
FDR’s
Advantages**
•
•
His antiestablishment appeals to the
"forgotten man"
He radiated a charismatic warmth,
compassion, an optimism, a confidence,
and vigor
"His sunny, magnetic personality contrasted favorably
with that of the glum and colorless Hoover." He knew how
to use flattery to win supporters. He easily transmitted his
effervescent confidence to others.
FDR’s Advantages
continued
• He invocated a political demonology
• The accommodation/balancing of
conflicting prescriptions and pressure
groups
"Roosevelt displayed a buoyancy and a willingness
to experiment that helped restore public
confidence in the government and the economy."
He was a master at using the media of the period
to his advantage.
FDR’s Advantages
continued
•
•
He proposed greater relief & work
expenditures
He used of the prestigious Roosevelt name
Theodore Roosevelt was a distant cousin. Like TR, he had
a quick and agile mind.
Hoover
• Often illinformed
• Generally shy
and ill at east
FDR
"Operating in terra incognita did not
seem to trouble him [FDR] in the
least."
• Master of all
facets of various
questions
• Relaxed,
informal, and
cordial
A whole generation
of “children grew
up thinking that
economic
deprivation was the
norm rather than
the exception in
America. . . .
Herbert Hoover
was the
Depression’s most
prominent victim.”
FDR AND THE
NEW DEAL
1932-1935
Chapter 26—Part II
Dorothea Lange's
"Migrant Mother"
The Dust Bowl. . .
and Migration West
How did the election of
1932 drastically
change the direction of
the United States of
America?
THE
EARLY
NEW
DEAL
26
FDR:
Savior or
Satan?
The election of 1932 brought Franklin D. Roosevelt to
office and in so doing, drastically reshaped American
attitudes about the role and rights of government in
relationship to the people.
"It has often been said that he betrayed his class;
but if by his class one means the whole policymaking, power-wielding stratum, it would be just as
true to say that his class betrayed him. . . . [When
he came to office,] the economic machinery of the
nation had broken down and its political structure
was beginning to disintegrate. People who had
anything to lose were frightened; they were willing
to accept any way out that would leave them still in
possession. During the emergency Roosevelt had
practically dictatorial powers. He had righted the
keel of economic life and had turned politics safely
back to its normal course. Although he had adopted
many novel, perhaps risky expedients, he had
avoided vital disturbances to the interests. . . .**
Nothing that Roosevelt had done warranted the
vituperation he soon got in the conservative press or the
obscenities that the hate-Roosevelt maniacs were bruiting
about in their clubs and dining-rooms. . . . . The New Deal
was designed for a capitalistic economy.. . . For success in
attaining his stated goals of prosperity and distributive
justice he was fundamentally dependent upon restoring
the health of capitalism."
Franklin D. Roosevelt in
classic pose—his smile and
body language exuded an
irrepressible confidence
and optimism
"His political achievement also reveals the true nature of
Roosevelt's success. He was a brilliant politician who
recognized the essence of leadership in a democracy—
appealing directly to the people and infusing them with a
sense of purpose. Thus despite his limitations as a reformer,
Roosevelt proved to be the man the American people needed
in the 1930s—the leader who gave them the psychological lift
that helped them endure and survive the Great Depression."
"No single ideological position united all the programs, for
Roosevelt was a pragmatist who was willing to try a variety of
programs. More than Hoover, however, he believed in
economic planning and in government spending to help the
poor. . . . The truth was that Roosevelt did not have a master
plan to save the country."
The Early New Deal—The
Scorecard 26A-2
• Brain Trust**—name for
FDR’s economic, social,
planning, and legal advisers
• Harold Ickes—Secretary of the
Interior (**progressive
Republican and evidence of
FDR’s non-partisan
appointments); leader of
reform politics from Chicago
• Henry A. Wallace—Secretary
of Agriculture (progressive
Republican and evidence of
FDR’s non-partisan
appointments)
Wallace
Ickes
Brain Trusts
continued
• Francis Perkins—
Secretary of Labor—
1st woman cabinet
member**
• Harry Hopkins—
overseer of FERA
(1933), WPA (1935),
Secretary of
Commerce (1938),
and U.S. Lend Lease
(1941)
Perkins
How FDR’s upbringing,
illness, and political experience
influenced his attitude in
fighting the Great Depression
• Raised to believe those
with wealth should help
others
• Illness taught him
compassion
• Political experience
taught him that
government should help
people
Main principles
underlying the
New Deal**
• Provide immediate
relief to unemployed
• Bring about economic
recovery
• Reform conditions
causing the Depression
The Election of
1932
When he accepted the
Democratic presidential
nomination in 1932, he
spoke to party delegates in
Chicago declaring, “I pledge
you—I pledge myself to a
new deal for the American
people.” From this point of
origin, the Roosevelt
administration came to be
known as:
THE NEW DEAL
"View[ing] each other across the transfer of power in 1933,
the Hooverites and the New Dealers tended to see much
greater differences than recent historical scholarship has
been able to discern. The Hooverites. . . were not the
laissez-faire fundamentalists excoriated in New Deal
rhetoric. Nor were the New Dealers the collectivizing anticapitalists depicted in Hooverian oratory. Both are best
seen as seekers of a managed capitalist order committed to
the realization of traditional liberal ideals. Both had also
drawn much of their inspiration from the organizational
experience of the war period. And the early New Dealers, at
least, were remarkably similar to the Hooverites in their
willingness to work through established organizational
elites and concerts of organized interests. . . . Much of the
early New Deal might more aptly labeled 'Hooverism in
high gear.'"
The “New”
Democratic Party
“Farmers and workers, Protestants and
Catholics, immigrants and native born
rallied behind the new leader who
promised to restore prosperity. Roosevelt
not only met the challenge of the
Depression but also solidified the shift to
the Democratic Party and created an
enduring coalition that would dominate
American politics for a half century.”
Inaugural
Address
"It was unquestionably Franklin D.
Roosevelt who provided the spark
that reenergized the American
people. His inaugural address
reassured the country and at the
same time stirred it to action. 'The
only thing we have to fear is fear
itself'" was the main thread in his
brief address. "The inaugural
captured the heart of the country."
To the left, U.S. Supreme Court
Justice Charles Evans Hughes swears
in Franklin D. Roosevelt as president.
FDR the
Pragmatist
26A
FDR was willing to
change his opinions
as long as they got
the job done. For
him, the end justified
the means.
"Far from being a radical. . . during the 1920s he
had not seriously challenged the basic tenets of
Coolidge prosperity. He never had much
difficulty adjusting his views to prevailing
attitudes. . . . Indeed, his life before the
depression gave little indication that he
understood the aspirations of ordinary people or
had any deep commitment to social reform. . . .
Many critics judged him too irresolute, too
amiable, too eager to please all factions to be a
forceful leader. . . . Walter Lippmann [left]. . .
called him 'a pleasant man, who, without any
important qualifications for the job, would very
much like to be President.' . . . [His
pronouncements contained] dozens of conflicting
generalities]."
Ironically, in the 1920s, FDR's philosophy was
not all that different from Hoovers. He
warned against government regulation that he
deemed unwieldy and expensive; also against
the union of business and government
• Biting criticism of
Hooverian
extravagance and
deficits
• Denunciation of
Republican tariff
• Calls for greater
economic nationalism
“Roosevelt was perhaps the most
"At the very beginning of
controversial president the United
his candidacy Roosevelt,
States ever had. For thousands of
without heed for tradition
Americans, he was a folk hero: a
or formality, flew to the
courageous statesman who,
1932 nominating
crippled by polio, saved a crippled
convention and addressed
nation from almost certain collapse
it in person instead of
and whose New Deal salvaged the
waiting for weeks in the
best features of democratic
customary pose of
capitalism while establishing
ceremonious ignorance." A
unprecedented welfare programs
trivial act in itself, the
for the nation. For others, he was a
device gave the public an
tyrant, a demagogue who used the
impression of vigor and
Depression to consolidate his
originality that was never
political power, whereupon he
permitted to die."
dragged the country zealously down the
road to socialism.
In spite of his popular appeal, Roosevelt became the
hated enemy of much of the nation's business and
political community. Conservatives denounced him as
a Communist. Liberals said he was too conservative.
Communists castigated him as a tool of Wall Street.
And socialist dismissed him as a reactionary. "He
caught hell from all sides,' recorded one observed,
because nobody knew how to classify his political
philosophy. Where, after all, did he fit ideologically?
Was he for capitalism or against it? Was the New
Deal itself revolutionary or reaction? Was it 'creeping
socialism' or a bulwark against socialism? Did it lift
the country out of the Depression, or did the economy
right itself in spite of the New Deal?"
An Absence of
Policy? 26A
"Roosevelt has no real
policy." Edmund Wilson,
FDR critic (1934)
26D
"Roosevelt had the power
and the will to act but no
comprehensive plan of
action. . . . [Rather, he]
proceeded in a dozen
directions at once,
sometimes wisely,
sometimes not, often at
cross-purposes."
"Roosevelt's premises, far
from being intrinsically
progressive, were capable of
being a adapted to very
conservative purposes. . . .
The polar opposition
between such a policy and
the promise of making
prosperity uniform and
distributing purchasing
power anticipated a basic
ambiguity in the New Deal."
“Fireside Chat”--FDR nationwide
broadcasts or informal talks in
conversational tones to the American
people
FDR calmed American uncertainties via the "fireside
chat," an informal report direct to the man on the
street, an innovative & popular new use of the media
(radio)
"His warmth and steadiness reassured millions of
listeners. . . . The Roosevelt 'magic,' unfeigned and
inexhaustible, amazed his associates."
Initiated March 5, 1933
26A
The Blue Eagle
The emblem of the
National Recovery
Administration
The WPA slogan “We Do
Our Part” became a
rallying cry for Americans
The New Deal
26A-2
"Roosevelt's basic position was unmistakable. There
must be a 're-appraisal of values,' a 'New Deal.'
Instead of adhering to conventional limits on the
extent of federal power, the government should do
whatever was necessary to protect the unfortunate
and advance the public good. Lacking concrete
answers, Roosevelt advocated a point of view rather
than a plan: 'The country needs bold, persistent
experimentation. It is common sense to take a
method and try it. If it fails, admit it frankly and try
another. But above all, try something.'"
"Roosevelt's 1932 campaign utterances indicate that the
New Deal had not yet taken form in his mind." Indeed,
one of his main premises was that Hoover had been
spending too much money; he urges cessation of
borrowing to meet continuing deficits.
OR
"Psychologically the nation turned the corner in the spring
of 1933. Under FDR, the government seemed to be
responding to the economic crisis, enabling people for the
first time since 1929 to look to the future with hope."
How FDR Tried to
Solve the Bank
Crisis**
•
•
•
Declared a bank holiday
Proposed Emergency
Banking Relief Act (put
banks under federal
supervision) Permitted
sound banks to borrow
federal funds
Closed unsound banks
FDR signs Bank
Holiday draft
Proclamation
The Hundred
Days
26B
This was the appellation given to FDR’s presidential
initiatives to aid industrial and agricultural recovery upon
FDR’s taking office. His fifteen major requests to Congress
for action yielded fifteen major pieces of legislation. Over the
long haul, many New Deal creations were temporary in
nature—“designed to meet specific economic problems of the
Depression.” Moreover, none were uniformly successful.
“Psychologically, the nation turned the corner in the spring of
1933. Under FDR, the government seemed to be responding
to the economic crisis, enabling people for the first time since
19209 to look to the future with hope.”
The Hundred
Days**
•
•
•
•
•
Purpose of Federal Emergency Relief Act
(FERA) 26B
Gave money to local governments to give to
the unemployed
Purpose of Civil Works Administration (CWA)
26B
Gave people jobs instead of relief payments
How the Agricultural Adjustment
Administration (AAA) helped farmers 26B
Agricultural
Adjustment
Administration (AAA)
The AAA limited production to prevent
surpluses. Consequently, prices rose for
farm products. The government offered
subsidies to farmers who took some land
out of production, and in other
instances, actually paid farmers to plow
under crops and kill livestock, all to
boost farm prices. In 1936, the Supreme
Court found the AAA to be
unconstitutional.
The “Dust Bowl”
Farmer woes were complicated by the
extended drought and dust storms that
pummeled areas of Nebraska, Kansas,
Oklahoma, and the panhandle of Texas.
Scores of rural families were forced to
abandon their homes and seek greener
pastures in other areas of the nation. The
so-called “Dust Bowl” experience was the
backdrop of John Steinbeck’s heralded
novel, Grapes of Wrath.
Main provisions of
National Industrial
Recovery Act (NIRA)
26B
The NRA permitted trade associations to draft codes to
regulate production, prices, and working conditions. It
was “FDR’s attempt to achieve economic advance
through planning and cooperation between government,
business and labor.” Use of the blue eagle was aimed at
tying patriotism to support of NRA programs. Section
7A of the NIRA ostensibly protected labor by
establishing maximum hours and minimum wages. In
fact, it favored big business over small competitors. In
1935, the Supreme Court judged the NRA
unconstitutional.
Main purpose of Public
Works Administration
(PWA) 26B**
Stimulate
employment by
spending money
on public works
projects
A future president—LBJ—with FDR
during the heyday of public projects
Tennessee Valley
Authority (TVA)
•
•
•
•
The most successful and enduring
of all New Deal legislation
26B
Build Dams
Construct hydroelectric dams
Plant trees to stop erosion
Introduce educational and health
facilities
Voices of Protest--The
Scorecard**
26D
The Anti-Roosevelt Triumvirate
Dr. Francis
Townsend
"Collectively they [his critics] represented a threat to
Roosevelt; their success helped to make the president
see that he must move boldly to restore good times or
face serious political trouble in 1936. Political
imperatives had much to do with Roosevelt's decision.
. . . [FDR's advisors Justice Brandeis & Felix
Frankfurter] urged Roosevelt to abandon his probusiness programs, especially the NRA, and stress
restoring competition and taxing corporations more
heavily. The fact that most businessmen were turning
away from him encouraged the president to accept
this advice; so did the Supreme Court's decision in
Schechter v. United States (May 1935), which declared
the National Industrial Recovery Act
unconstitutional."
Huey Long
•
•
•
Governor of
Louisiana
Critic of FDR
Preached a “Share
the Wealth” gospel
encouraging the
redistribution of
wealth in America
Long’s Program
Take money from the rich and distribute it.
Long’s Style
•
•
•
•
•
•
Shrewd
Ruthless
Witty
The absolutism of an
oriental monarch
A demagogue
A racist
•
•
Raffish
Totally unrestrained
"Long did not
question
segregation or
white supremacy.
. . . He used the
word n****r with
total un-selfconsciousness."
Long’s Reform
Program
•
•
Hated bankers and “the
interests
Believed poor people
should have chance to
earn decent living, get
good education. . .
regardless of race or color
In late 1935, An
assassin’s bullet
ended Long’s threat
to FDR in the 1936
election.
Charles Coughlin
–
–
–
–
–
–
Detroit priest who labeled
the Depression as an
international conspiracy
of bankers
Coughlin’s weekly radio
program had an audience
of over 30 million
He had strident AntiSemitic racist views
He proposed various
crank monetary schemes
Monetary inflation
Nationalization of the
banking system
Francis E.
Townsend
–
–
–
Retired California
doctor who wanted
government to help
older citizens through
pensions
He proposed a
monthly pension to
everyone over age 60
of $200 a month
Recipients had to
spend the amount
within 30 days
American Liberty
League
Founded in 1934 by bitter opponents of FDR;
encouraged private enterprise and use of property
Scherter v. U.S
Supreme Court decision declaring the National Industrial
Recovery Act unconstitutional since the government did
not have power to regulate interstate commerce (trade
within boundaries of a state)
"The Supreme Court broke the mainspring of the original
New Deal by declaring the NRA unconstitutional. . . . The
Court had torn up his entire program for labor and industry.
Labor seemed on the verge of withdrawing political support"
playing into the hands of FDR's adversary, Huey Long
Why FDR and his
advisers did not
ignore these critics
In the abnormal times,
Americans would not
ignore such appeals
Unconstitutional
New Deal laws
• National Industrial Recovery Act—federal
government cannot regulate commerce within
a state
• Agricultural Adjustment Act—government cannot
tax one part of the population to help another
FDR’s
Adversaries:
The “Nine Old
Men”
Assessing FDR’s
First New Deal
26B
Hofstadter writes of sharp swerves in FDR's
policy, dating the First New Deal from 1933-1934,
"conceived mainly for recovery. Reform elements
and humane measures of immediate relief were
subsidiary to the organized and subsidized
scarcity advocated by [various agencies]. . . These
great agencies, the core of the first New Deal,
representing its basic plans for industry and
agriculture, embodied the retrogressive idea of
recovery through scarcity."
"Herbert Hoover. . . called
the New Deal 'the most
stupendous invasion of the
whole spirit of Liberty that
the nation has witnessed.'. .
. [He & many others]
believed that it was
undermining the
foundations of American
freedom."
British
economist John
Maynard Keynes
Continued. . .
FDR never accepted
Keynes' theories, was
unable to grasp his
"rigmarole of figures"
with which Keynes
deluged him. Keynes
argued that governments
should unbalance their
budgets by reducing
interest rates & taxes &
increasing expenditures
to stimulate consumption
& investment.**
Continued
“Roosevelt had little
regard for the wisdom of
economists as a
professional cast.”
However, the
imperatives of the
depression forced FDR
to adopt deficit spending
policies, i.e., a partial
Keynesian approach.**
A “Second” New Deal-The Scorecard**
26C
• The Wagner Act
• Public Utilities Holding Company Act—
empowered government to prohibit holding
companies from owning more than one
utility company in any one part of the U. S.
• Utility Company—distributors of gas and
electricity
• Unemployment Compensation—temporary
income for people who had lost their jobs
The Wagner Act**
“The Wagner [National Labor Relations] Act, the most far
reaching of all New Deal measures, led to the revitalization of t
he American labor movement and a permanent change in
labor-management relations.”
• Outlawed company unions
• Outlawed other unfair labor
practices
• Ensured collective
bargaining for unions
• Created National Labor
Relations Board to preside
over labor-management
relations
The Wagner Act was “the
most far reaching of all New
Deal measures.” It “led to the
revitalization of the American
movement and a permanent
change in labor-management
relations. . . . With this
unprecedented government
sanction, labor unions could
now proceed to recruit the
large number of unorganized
workers throughout the
country.”
Rights the Wagner
Act guaranteed for
workers
RQ25
• Right to
organize
• Right to
bargain
collectively
How Works Progress
Administration tackled
problem of unemployment
26B
The WPA put people to work on a wide variety of projects
in the fields in which the people had been trained. In fact,
the WPA “failed to prime the American economy by
increasing consumer purchasing power. . . . The American
people still did not have money. . . . [Nonetheless,] Roosevelt
had made the Depression bearable. The New Deal’s failure.
. . to go beyond relief to achieve prosperity led to a growing
frustration and the appearance of more radical alternatives
that challenged the conservative nature of the New Deal and
forced FDR to shift to the left.”
Effects of the Public
Utilities Holding
Company Act
26C
• Ended most of the large utility empires
• Put the rest under direct supervision of
government agencies
•
•
•
•
Groups affected by the
Social Security Act of
1935
26C
The elderly
People who had lost their jobs
The handicapped
Certain dependent children
Major provisions of the
Social Security Act of
1935**
26C
•
•
•
•
Old-age pensions financed by tax on both
employers and workers (in equal amounts)
States given federal matching funds for pensions
to aid the destitute and elderly
System of unemployment compensation set up
on a federal-state basis
Direct federal grants given to states on matching
basis for welfare to blind, handicapped, needy
elderly and dependent children.
Created a national system of
pensions for retired people as
well as aiding the disabled and
unemployed.
Roosevelt established “the
principle of government
responsibility for the aged, the
handicapped,, and the
unemployed. Whatever the
defects of the legislation, Social
Security stood as a landmark of
the New Deal, creating a system to
provide for the welfare of
individuals in a complex
industrial society.”
Conclusion
FDR’s record on reform proved to be a
“modest success but no sweeping victory. A
cautious and pragmatic leader, FDR
moved far enough to the left to overcome
the challenges of Coughlin, Townsend, and
Long without venturing too far from the
mainstream. His reforms improved the
quality of life in America significantly, but
he made no effort to correct all the nation’s
social and economic wrongs.”
. . . but looming on the
horizon were FDR
opponents outside the
United States