Readiness standards comprise
65% of the U. S. History Test
Economics 19 A
Readiness Standard (19)
The Student understands changes over
time in the role of government
The Student is expected to:
(A) Evaluate the impact of New Deal
legislation on the historical roles of
state & federal government
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
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
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.”
Deficit
Spending
Entitlements
Deficit Spending—The spending of public
funds obtained by borrowing rather than by
taxation; the practice of spending funds in
excess of income, esp. by a government, usu.
requiring that such funds be raised by
borrowing, as from the sale of long-term bonds
Was the “New Deal” the birthplace of
both?
Entitlements—A government program that
guarantees and provides benefits to a particular
group; the right to guaranteed benefits under a
government program
FDR AND THE
NEW DEAL
1932-1935
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
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
• 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
Hopkins
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
FDR’s 1932
Landslide Victory
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
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
“At the very beginning of
his candidacy Roosevelt,
without heed for tradition
or formality, flew to the
1932 nominating
convention and addressed
it in person instead of
waiting for weeks in the
customary pose of
ceremonious ignorance. A
trivial act in itself, the
device gave the public an
impression of vigor and
originality that was never
permitted to die.”
“Roosevelt was perhaps the most
controversial president the United
States ever had. For thousands of
Americans, he was a folk hero: a
courageous statesman who,
crippled by polio, saved a crippled
nation from almost certain collapse
and whose New Deal salvaged the
best features of democratic
capitalism while establishing
unprecedented welfare programs
for the nation. For others, he was a
tyrant, a demagogue who used the
Depression to consolidate his
political power, whereupon he
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?
“Roosevelt has no real
policy.” Edmund Wilson,
FDR critic (1934)
“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
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
“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 declares Bank
Holiday Proclamation
The Hundred
Days
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)—gave money to local
governments to give to the unemployed
Purpose of Civil Works Administration
(CWA)—gave people jobs instead of
relief payments
How the Agricultural Adjustment
Administration (AAA) helped farmers
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)
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)
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
•
•
•
•
Build Dams
Construct hydroelectric dams
Plant trees to stop erosion
Introduce educational and health
facilities
Voices of Protest—The
Scorecard
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
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
• The Wagner Act—1935
• Public Utilities Holding Company Act—
1935, 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
the 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
• Right to
organize
• Right to
bargain
collectively
How Works Progress
Administration tackled
problem of unemployment
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
• 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
• The elderly
• People who had lost their jobs
• The handicapped
• Certain dependent children
Major provisions of the
Social Security Act of
1935
•
•
•
•
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
1932-1935
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.”
FDR & THE
“SECOND” NEW
DEAL
1936-1941
FDR’s
SECOND
TERM
Why did FDR scaled back his
interventionist economic policies
after the election of 1936?
Roosevelt’s second term witnessed
continuing economic difficulties as well as
new challenges to his presidential
leadership
The Election of
1936
New Deal
Lexicon
• Coalition—an alliance of many
different groups for a single
purpose
• Deficit Spending—practice of
spending more government money
than is taken in from taxes; is a
policy designed to stimulate the
economy
Faltering of
Government Economic
Policy—1937
Economic Policy During
FDR’s Second Term
“Roosevelt's greatest failure was not spending enough to
prime the American economy by increasing consumer
purchasing power. By responding to basic human
needs, Roosevelt had made the Depression bearable but
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 Newof
Deal
forced FDR
FDR
lacked a full
understanding
howand
government
shift to the
spending stimulatedtorecovery.
In left.”
June 1937, he cut back
on relief programs and the economy slipped into a
downward spiral, the “Roosevelt recession.”
The “Roosevelt Recession” of
1937
FDR’s prestige thus suffered another blow, it appearing that he had
adopted a Hoover-like attitude. “Actually, Roosevelt was at fault.
In an effort to reduce expanding budget deficits, he had cut back
sharply on WPA and other government programs after the election.
This led to a reduction of consumer spending. . . . FDR's
premature attempt to balance the budget meant two more years of
hard times and marred his reputation as the energetic foe of the
Depression. The political result of the attempted purge and the
recession was a strong Republican upsurge in the 1938 elections. . . .
Thus not only was the New Deal over by the end of 1938, but a new
bipartisan conservative coalition that would prevail for a quarter
century had formed in Congress. The New Deal lasted a brief five
years, and most of its measures came in two legislative bursts in the
spring of 1933 and the summer of 1935. Yet its impact on American
life was enduring.”
The New Democratic Coalition
of 1936
The “election marked the stunning success of a new political
coalition that would dominate American politics for the next three
decades. FDR, building on the inroads into the Republican majority
that Al Smith had begun in 1928, carried urban areas by impressive
margins, winning 3.6 million more votes than his opponents in the
nation’s twelve largest cities. He held on to the traditional
Democratic votes in the South and West and added to them by
appealing strongly to the diverse religious and ethnic groups in the
northern cities—Catholics and Jews, Italians and Poles, Irish and
Slavs. The strong support of labor, together with three-quarters of
the black vote, indicated that the nation’s new alignment followed
economic as well as cultural lines. The poor and the oppressed, who
in the Depression years included many middle-class Americans,
became attached to the Democratic party, leaving the GOP in a
minority position, limited to the well-to-do and rural and small-town
Americans of native stock.”
Who Were the
“New Democrats”?
• Southern Democrats—traditionally
Democratic since the Civil War
• Large Eastern and Midwestern Democratic
machines
• Organized labor—swayed by Wagner Act
• African-Americans
• Intellectuals—note FDR’s use of the “brain
trusts”
“The New Deal
Reached its High
Point in 1936.”
Course of the
American economy
in fall and winter of
1937-1938
A recession developed due to:
• Cuts in government spending
• Cuts in private spending
New Reforms—The
Scorecard over FDR’s
First Two Terms in Office
• Congress of Industrial Organizations—a rival union to the
American Federation of Labor; CIO proposed to organize
workers in whole industries, not excluding those who were
“unskilled”
• Farm Security Administration—helped tenant farmers
and sharecroppers buy farms and equipment
• Second Agricultural Adjustment Act--limited production;
insured wheat farmers against drought losses; set up
program for “ever-normal granary”
• Executive Office of the President—established
administrative assistants, press secretaries, budget officers,
legal advisers, and other assistants to the president
• Industrial union—Union that represented every worker in
an industry, not only the “skilled” workers (e.g., pipe
fitters, machinists, printers, etc.)
John L. Lewis,
legendary labor
leader of the
1930s
The dynamic and ruthless Lewis from 1919
was president of United Mine Workers. He
led the fight to create industrial unions by
forming the Committee on Industrial
Organization or CIO (later renamed
Congress of Industrial Organizations).
Lewis used the Wagner Act to gain rights of
collective bargaining in the automobile and
steel industries. The United Automobile
Workers (UAW) proved very effective
through use of sitdown strikes (see 7.
below). “For the first time, unskilled as well
as skilled were unionized.” At right, FDR’s
vulnerability to Lewis is caricatured in a
contemporary cartoon. During the steel
strike, FDR had aloofly remarked “A
plague on both your houses.”
Rise of labor
unions during the
New Deal
• They organized unions
• They used sitdown strikes
• Greater organization/power attracted
larger memberships
Reforms passed
during FDR’s 2nd
term
“The legislative record during Roosevelt’s second
term was meager.”
•
•
Fair Labor Standards Act
Farm Security Administration Rural
Electrification Administration
–
–
Lent money to for building power lines in
rural areas
Brought electric power to 90% of U.S. farms
that did not have electricity in the 1930s
• Soil Conservation and Domestic Allotment Act—
encouraged planting of soil-enriching land cover
• Agricultural Adjustment Act
• National Housing Act—gave loans to public
agencies to build low-income housing; created the
U. S. Housing Authority
• Food, Drug, and Cosmetic Act—required
manufacturers to list ingredients and test new
drugs before legal sale
• Hatch Act—barred use of official favors to
influence elections; forbade most federal
employees from taking active part in political
campaigns
• Executive Order 8248—see Executive Office of the
President above
American life during
the New Deal—The
Scorecard
Frank Capra (left) was the
movie director of popular films
Mr. Smith Goes to Washington,
Mr. Deeds Goes to Town, and
Meet John Doe. His heroes
battled corrupt politicians or
businessmen, faced humiliation
and frustration, but eventually
triumphed.
Women—Appointed to
Important
Government Posts
The impact of the First Lady, Eleanor Roosevelt, was
central to these developments. She had a keen sense of
social justice and deplored the existence of poverty and
inequality. She became a kind of self-appointed conscience
for her husband’s administration. “She exposed the areas
where the New Deal had not been realized. Her accessibility
to the public and her willingness to serve its interests gave
encouragement to those who had lost all hope. Her courage
and vitality in the pursuit of human rights and equality
made her the embodiment of reform and social justice in
the New Deal.”
•
•
•
•
Ways the New Deal
Changed American
Government and
Society
Increased the size and scope of the federal
government
People’s views about the responsibility of
government changed as the government
assumed the job of helping the needy
Almost every American was touched by
some benefit of government
Security for the elderly and unemployed
became available
Assessing the New
Deal
• Undeserved Credit for Ending the Depression
– Garraty argues that World War II swept away the
Depression—not FDR's policies and legislation. His
New Deal did not return the U. S. to full employment.
• Experimentation the Only Thing to Do
– In such an unprecedented and uncertain setting,
experimentation was the only thing FDR could logically
have done
• FDR's Vacillation
– He bounced between efforts to stimulate the economy
through deficit spending and attempts to balance the
budget.
“He could never
make up his mind
whether to try to
rally liberals to his
cause without
regard for party or
to run the
government as a
partisan leader.”
Cavalier Attitude
About Constitutional
Limitations to
Executive Power
He set in motion trends
increasing both the prestige
and authority of the
presidency. . . to the point
of threatening the balance
between the executive,
legislative, and judicial
branches of government.
Vast Expansion of
Federal
Bureaucracy
This was the product of FDR’s fondness for
establishing new agencies. The proliferation
of new agencies led to the expansion of
federal power. In fact, as Hawley and Nash
show, these were but continuations of
previous trends pre-dating the era of FDR.
The
New
Deal
A
Ground
Breaking
Era
. . . but looming on the
horizon were FDR
opponents outside the
United States
Appendix
New Deal
Legislation
Sources:
Robert A. Divine et al, America, Past
and Present, (New York: HarperCollins, 1994), pp 456-7.
Gary B. Nash Ed. et al, The American People—
Creating a Nation and a Society, (New York:
Harper Collins, 1994), pp 842.
Year Created
Legislation
Provisions
1932
Reconstruction Finance Corporation
(RFC)
Passed during the Hoover administration, it granted emergency loans to
banks, life insurance companies and railroads.
1933
Agricultural Adjustments
Administration (AAA)
Attempted to regulate the production of certain products through farm
subsidies. Funding was provided by a processing tax, which the Supreme
court ruled unconstitutional in 1936. It helped coordinate agricultural
production during World War II, after which it was disbanded.
Banking Act of 1933 (Glass-Steagall
Act)
Prohibited banks from selling stock or financing corporations; also created
the FDIC.
Civilian Conservation Corps (CCC)
Employed young men (and a few women) ages 18 to 25 on regional
environmental projects, such as reforestation, road construction and flood
control projects, mainly west of the Mississippi; they received $30 a month of
which $25 was sent home; disbanded during World War II.
Civil Works Administration (CWA)
An emergency work relief program which, during the extremely cold winter
of 1933-34, placed over 4 million people to work, after which it was
disbanded.
Federal Deposit Insurance
Corporation (FDIC)
Provided a federal guarantee of savings bank deposits up to $2,500 initially,
and continued to grow; continues today with a limit of $100,000.
Year Created
Legislation
Provisions
1933 ctd.
Federal Emergency Relief
Administration (FERA)
Supplied a combination of cash relief and work relief to needy families;
superseded in 1935 by work relief of WPA and unemployment insurance of
Social Security.
National Industrial Recovery Act
(NIRA)
Attempted to revive business through national economic planning which
controlled production, pricing and labor relations among leading business
interests; ruled unconstitutional in 1935.
Public Works Administration (PWA)
Provided funding for over 34,000 construction projects such as roads, public
housing, power, and conservation of natural resources; it made the federal
government the nation's leading producer of power, and advanced
conservation of the country's natural resources; discontinued in 1939 due to a
lack of reduction of unemployment and lack of private investment.
Tennessee Valley Authority (TVA)
A regional planning project to construct dams and power projects, and to
develop the economy of the nine states of the Tennessee valley area.
Continues today to meet the valley's energy and flood control needs.
Federal Communications
Commission (FCC)
A regulatory agency established to oversee the wired and wireless
broadcasts; showed the growing importance of radio in America during the
depression; continues today to control both television and radio.
National Housing Act - Federal
Housing Administration (FHA)
Allowed banks to make loans, for construction and repair of homes, which
would be guaranteed by the Government. The reduction of down payments,
from 30 to 10%, and the extension of repayment terms, from 20 to 30 years,
continues today.
1934
Year
Created
Legislation
Provisions
1933 ctd.
Securities and Exchange
Commission (SEC)
Continues today to regulate the trading practices in stocks and bonds.
1935
Social Security Act
A program which continues today guaranteeing retirement payments after
age 65, providing unemployment insurance and care for dependant mothers
and children, and the handicapped as well as public health; the program is
paid for jointly by taxes on employers and employees.
Rural Electrification
Administration (REA)
Provided electrification to rural areas which private power companies
refused to serve thereby closing the cultural gap by providing modern
amenities to rural communities.
National Labor Relations Act
(Wagner-Connery Act)
Enhanced the power of labor by reinforcing the right of workers to join
labor unions and to bargain collectively; established the National Labor
Relations Board to oversee elections and prevent unfair labor practices. It
continues to arbitrate labor-management disputes today.
Emergency Relief Appropriation
Act - created Works Progress
Administration (WPA)
Provided massive relief by employing over 8 million people in public works
programs ranging from construction to acting; disbanded by President
Roosevelt during World War II.
National Youth Administration
(NYA)
Established by the WPA, it supported the education and training of young
people in order to reduce the competition for employment; it provided
grants for students for work done in schools as well as providing training
towards skilled labor for out-of-school youths; disbanded during World War
II.
Year
Created
Legislation
1935 ctd.
Public Utility Holding Company
Act
Created holding companies to control gas and electrical provisions within
restricted areas; forced companies to provide efficient, useful service to local
areas within 5 years or be dissolved.
1937
Farm Security Administration
(FSA)
Provided loans to small farmers for purchase and upgrading of small-sized
farms; it budget was greatly reduced by Congress during World War II when
many farmers went into the armed forces or migrated to urban areas.
National Housing Act (WagnerSteagall Act)
Allowed for low-rent public housing projects.
Agricultural Adjustments Act
(AAA)
Similar to the 1933 act in that it continued to provide price supports and
payments to farmers in order to limit production, however the processing tax
which had funded it was replaced by direct federal payment.
Fair Labor Standards Act
Set a standard minimum wage of 40 cents and hour and created the standard
work week of 40 hours for business engaged in interstate commerce.
1938
Provisions
Fini