Chapter 33 - The Great Depression and the New Deal. I. FDR: A Politician in a Wheelchair

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1 Chapter 33 - The Great Depressin and the New Deal I. FDR: A Plitician in a Wheelchair 1. In 1932, vters still had nt seen any ecnmic imprvement, and they wanted a new president. 2. President Herbert Hver was nminated again withut much vigr and true enthusiasm, and he campaigned saying that his plicies prevented the Great Depressin frm being wrse than it was. 3. The Demcrats nminated Franklin Delan Rsevelt, a tall, handsme man wh was the fifth cusin f famus Thedre Rsevelt and had fllwed in his ftsteps. FDR was suave and cnciliatry while TR was pugnacius and cnfrntatinal. FDR had been stricken with pli in 1921, and during this time, his wife, Eleanr, became his plitical partner. Franklin als lst a friend in 1932 when he and Al Smith bth sught the Demcratic nminatin. 4. Eleanr was t becme the mst active First Lady ever. II. Presidential Hpefuls f In the campaign, Rsevelt seized the pprtunity t prve that he was nt an invalid, and his campaign als featured an attack n Hver s spending (irnically, he wuld spend even mre during his term). 2. The Demcrats fund expressin in the airy tune Happy Days Are Here Again, and clearly, the Demcrats had the advantage in this race. III. Hver's Humiliatin in Hver had been swept int the presidential ffice in 1928, but in 1932, he was swept ut with equal frce, as he was defeated 472 t Ntewrthy was the transitin f the Black vte frm the Republican t the Demcratic Party. 3. During the lame-duck perid, Hver tried t initiate sme f Rsevelt s plans, but was met by stubbrnness and resistance. 4. Hverites wuld later accuse FDR f letting the depressin wrsen s that he culd emerge as an even mre shining savir. IV. FDR and the Three R s: Relief, Recvery, and Refrm 1. On Inauguratin Day, FDR asserted, The nly thing we have t fear is fear itself. 2. He called fr a natinwide bank hliday t eliminate paranid bank withdrawals, and then he cmmenced with his Three R s. 3. The Demcratic-cntrlled Cngress was willing t d as FDR said, and the first Hundred Days f FDR s administratin were filled with mre legislative activity than ever befre. Many f the New Deal Refrms had been adpted by Eurpean natins a decade befre. V. Rsevelt Manages the Mney

2 1. The Emergency Banking Relief Act f 1933 was passed first. FDR declared a ne week bank hliday just s everyne wuld calm dwn and stp running n the banks. 2. Then, Rsevelt settled dwn fr the first f his thirty famus Fireside Chats with America. 3. The Hundred Days Cngress passed the Glass-Steagall Banking Refrm Act, that prvided the Federal Depsit Insurance Crpratin (FDIC) which insured individual depsits up t $5000, thereby eliminating the epidemic f bank failure and restring faith t banks. 4. FDR then tk the natin ff f the gld standard and achieved cntrlled inflatin by rdering Cngress t buy gld at increasingly higher prices. In February 1934, he annunced that the U.S. wuld pay freign gld at a rate f ne unce f gld per every $35 due. VI. Rsevelt Manages the Mney 1. The Emergency Banking Relief Act gave FDR the authrity t manage banks. 2. FDR then went n the radi and reassured peple it was safer t put mney in the bank than hidden in their huses. The Glass-Steagall Banking Refrm Act was passed. This prvided fr the FDIC (Federal Depsit Insurance Crp.) t insure the mney in the bank. 3. FDR wanted t stp peple frm harding gld. He urged peple t turn in gld fr paper mney and tk the U.S. ff the gld standard. He wanted inflatin, t make debt payment easier, and urged the Treasury t buy gld with paper mney. VII. A Day fr Every Demaggue 1. Rsevelt had n qualms abut using federal mney t assist the unemplyed, s he created the Civilian Cnservatin Crps (CCC), which prvided emplyment in fresh-air gvernment camps fr abut 3 millin unifrmed yung men. They refrested areas, fught fires, drained swamps, cntrlled flds, etc. Hwever, critics accused FDR f militarizing the yuths and acting as dictatr. 2. The Federal Emergency Relief Act lked fr immediate relief rather than lng-term alleviatin, and its Federal Emergency Relief Administratin (FERA) was headed by the zealus Harry L. Hpkins. 3. The Agricultural Adjustment Act (AAA) made available many millins f dllars t help farmers meet their mrtgages. 4. The Hme Owners Lan Crpratin (HOLC) refinanced mrtgages n nn-farm hmes and blted dwn the lyalties f middle class, Demcratic hmewners. 5. The Civil Wrks Administratin (CWA) was established late in 1933, and it was designed t prvide purely temprary jbs during the winter emergency. Many f its tasks were rather frivlus (called bndggling ) and were designed fr the sle purpse f making jbs. 6. The New Deal had its cmmentatrs.

3 One FDR spkespersn was Father Charles Cughlin, a Cathlic priest in Michigan wh at first was with FDR then disliked the New Deal and viced his pinins n radi. Senatr Huey P. Lng f Luisiana was ppular fr his Share the Wealth prgram. Prpsing every man a king, each family was t receive $5000, allegedly frm the rich. The math f the plan was ludicrus. His chief lieutenant was frmer clergyman Gerald L. K. Smith. He was later sht by a deranged medical dctr in Dr. Francis E. Twnsend f Califrnia attracted the trusting supprt f perhaps 5 millin senir citizens with his fantastic plan f each senir receiving $200 mnth, prvided that all f it wuld be spent within the mnth. Als, this was a mathematically silly plan. 7. Cngress als authrized the Wrks Prgress Administratin (WPA) in 1935, which put $11 millin n thusands f public buildings, bridges, and hard-surfaced rads and gave 9 millin peple jbs in its eight years f existence. It als fund part-time jbs fr needy high schl and cllege students and fr actrs, musicians, and writers. VIII. New Visibility fr Wmen Jhn Steinbeck cunted dgs (bndggled) in his Califrnia hme f Salinas cunty. 1. Ballts newly in hand, wmen struck up new rles. 2. First Lady Eleanr Rsevelt was the mst visible, but ther ladies shne as well: Sec. f Labr Frances Perkins was the first female cabinet member and Mary McLed Bethune headed the Office f Minrity Affairs in the NYA, the Black Cabinet, and funded a Flrida cllege. 3. Anthrplgist Ruth Benedict helped develp the culture and persnality mvement and her student Margaret Mead reached even greater heights with Cming f Age in Sama. 4. Pearl S. Buck wrte a beautiful and timeless nvel, The Gd Earth, abut a simple Chinese farmer which earned her the Nbel Prize fr literature in IX. Helping Industry and Labr 1. The Natinal Recvery Administratin (NRA), by far the mst cmplicated f the prgrams, was designed t assist industry, labr, and the unemplyed. There were maximum hurs f labr, minimum wages, and mre rights fr labr unin members, including the right t chse their wn representatives in bargaining. 2. The Philadelphia Eagles were named after this act, which received much supprt and patritism, but eventually, it was sht dwn by the Supreme Curt. Besides t much was expected f labr, industry, and the public. The Public Wrks Administratin (PWA) als intended bth fr industrial recvery and fr unemplyment relief.

4 Headed by Secretary f the Interir Harld L. Ickes, it aimed at lng-range recvery by spending ver $4 billin n sme 34,000 prjects that included public buildings, highways, and parkways (i.e. the Grand Culee Dam f the Clumbia River). 3. One f the Hundred Days Cngress s earliest acts was t legalize light wine and beer with an alchlic cntent f 3.2% r less and als levied a $5 tax n every barrel manufactured. Prhibitin was fficially repealed with the 21st Amendment. X. Paying Farmers Nt t Farm 1. T help the farmers, which had been suffering ever since the end f Wrld War I, Cngress established the Agricultural Adjustment Administratin, which paid farmers t reduce their crp acreage and wuld eliminate price-depressing surpluses. Hwever, it gt ff t a rcky start when it killed lts f pigs fr n gd reasn, and paying farmers nt t farm actually increased unemplyment. The Supreme Curt killed it in The New Deal Cngress als passed the Sil Cnservatin and Dmestic Alltment Act f 1936, which paid farmers t plant sil-cnserving plants like sybeans r t let their land lie fallw. 3. The Secnd Agricultural Adjustment Act f 1938 was a mre cmprehensive substitute that cntinued cnservatin payments but was accepted by the Supreme Curt. XI. Dust Bwls and Black Blizzards 1. After the drught f 1933, furius winds whipped up dust int the air, turning parts f Missuri, Texas, Kansas, Arkansas, and Oklahma int the Dust Bwl and frcing many farmers t migrate west t Califrnia and inspired Steinbeck s classic The Grapes f Wrath. The dust was very hazardus t the health and t living, creating further misery. 2. The Frazier-Lemke Farm Bankruptcy Act, passed in 1934, made pssible a suspensin f mrtgage freclsure fr five years, but it was vided in 1935 by the Supreme Curt. 3. In 1935, FDR set up the Resettlement Administratin, charged with the task f remving near-farmless farmers t better land. 4. Cmmissiner f Indian Affairs was headed by Jhn Cllier wh sught t reverse the frced-assimilatin plicies in place since the Dawes Act f He prmted the Indian Rerganizatin Act f 1934 (the Indian New Deal ), which encuraged tribes t preserve their culture and traditins. Nt all Indians liked it thugh, saying if they fllwed this back-t-the-blanket plan, they d just becme museum exhibits. 77 tribes refused t rganize under its prvisins (200 did). XII. Battling Bankers and Big Business

5 1. The Federal Securities Act ( Truth in Securities Act ) required prmters t transmit t the investr swrn infrmatin regarding the sundness f their stcks and bnds. 2. The Securities and Exchange Cmmissin (SEC) was designed as a stck watchdg administrative agency, and stck markets hencefrth were t perate mre as trading marts than as casins. 3. In 1932, Chicagan Samuel Insull s multi-billin dllar financial empire had crashed, and such cases as his resulted in the Public Utility Hlding Cmpany Act f XIII. The TVA Harnesses the Tennessee River 1. The sprawling electric-pwer industry attracted the fire f New Deal refrmers. New Dealers accused it f guging the public with excessive rates. 2. Thus, the Tennessee Valley Authrity (TVA) (1933) sught t discver exactly hw much mney it tk t prduce electricity and then keep rates reasnable. It cnstructed dams n the Tennessee River and helped the 2.5 millin extremely pr citizens f the area imprve their lives and their cnditins. Hydrelectric pwer f Tennessee wuld give rise t that f the West. XIV. Husing Refrm and Scial Security 1. T speed recvery and better hmes, FDR set up the Federal Husing Administratin (FHA) in 1934 t stimulate the building industry thrugh small lans t husehlders. It was ne f the alphabetical agencies t utlast the age f Rsevelt. 2. Cngress blstered the prgram in 1937 by authrizing the U.S. Husing Authrity (USHA), designed t lend mney t states r cmmunities fr lw-cst cnstructin. This was the first time in American histry that slum areas stpped grwing. 3. The Scial Security Act f 1935 was the greatest victry fr New Dealers, since it created pensin and insurance fr the ld-aged, the blind, the physically handicapped, delinquent children, and ther dependents by taxing emplyees and emplyers. Republicans attacked this bitterly, as such gvernment-knws-best prgrams and plicies that were cmmunist leaning and penalized the rich fr their success. They als ppsed the pineer spirit f rugged individualism. XV. A New Deal fr Labr 1. A rash f walkuts ccurred in the summer f 1934, and after the NRA was axed, the Wagner Act (AKA, Natinal Labr Relatins Act) f 1935 tk its place. The Wagner Act guaranteed the right f unins t rganize and t cllectively bargain with management. Under the encuragement f a highly sympathetic Natinal Labr Relatins Bard, unskilled labrers began t rganize themselves int effective unins, ne f which was Jhn L. Lewis, the bss f the United Mine Wrkers wh als succeeded in frming the Cmmittee fr Industrial Organizatin (CIO) within the ranks f the AF f L in 1935.

6 The CIO later left the AF f L and wn a victry against General Mtrs. 2. The CIO als wn a victry against the United States Steel Cmpany, but smaller steel cmpanies struck back, resulting in such incidences as the Memrial Day Massacre f 1937 at the plant f the Republic Steel Cmpany f Suth Chicag in which plice fired upn wrkers, leaving scres killed r injured. 3. In 1938, the Fair Labr Standards Act (AKA the Wages and Hurs Bill ) was passed, setting up minimum wage and maximum hurs standards and frbidding children under the age f sixteen frm wrking. 4. Rsevelt enjyed immense supprt frm the labr unins. 5. In 1938, the CIO brke cmpletely with the AF f L and renamed itself the Cngress f Industrial Organizatins (the new CIO). XVI. Landn Challenges the Champ 1. The Republicans nminated Kansas Gvernr Alfred M. Landn t run against FDR. Landn was weak n the radi and weaker in persnal campaigning, and while he criticized FDR s spending, he als favred enugh f FDR s New Deal t be ridiculed by the Demcrats as an unsure idit. 2. In 1934, the American Liberty League had been frmed by cnservative Demcrats and wealthy Republicans t fight scialistic New Deal schemes. 3. Rsevelt wn in a huge landslide, getting 523 electral vtes t Landn s FDR wn primarily because he appealed t the frgtten man, whm he never frgt. XVII. Nine Old Men n the Bench 1. The 20th Amendment had cut the lame-duck perid dwn t six weeks, s FDR began his secnd term n January 20, 1937, instead f n March He cntrlled Cngress, but the Supreme Curt kept blcking his prgrams, s he prpsed a shcking plan that wuld add a member t the Supreme Curt fr every existing member ver the age f 70, fr a maximum pssible ttal f 15 ttal members. Fr nce, Cngress vted against him because it did nt want t lse its pwer. Rsevelt was ripped fr trying t becme a dictatr. XVIII. The Curt Changes Curse 1. FDR s curt-packing scheme failed, but he did get sme f the justices t start t vte his way, including Owen J. Rberts, frmerly regarded as a cnservative. 2. S, FDR did achieve his purpse f getting the Supreme Curt t vte his way. 3. Hwever, his failure f the curt-packing scheme als shwed hw Americans still did nt wish t tamper with the sacred justice system. XIX. Twilight f the New Deal 1. During Rsevelt s first term, the depressin did nt disappear, and unemplyment, dwn frm 25% in 1932, was still at 15%.

7 In 1937, the ecnmy tk anther brief dwnturn when the Rsevelt Recessin, caused by gvernment plicies. Finally, FDR embraced the plicies f British ecnmist Jhn Maynard Keynes. In 1937, FDR annunced a bld prgram t stimulate the ecnmy by planned deficit spending. In 1939, Cngress relented t FDR s pressure and passed the Rerganizatin Act, which gave him limited pwers fr administrative refrms, including the key new Executive Office in the White Huse. The Hatch Act f 1939 barred federal administrative fficials, except the highest plicy-making fficers, frm active plitical campaigning and sliciting. XX. New Deal r Raw Deal? 1. Fes f the New Deal cndemned its waste, citing that nthing had been accmplished. 2. Critics were shcked by the try anything attitude f FDR, wh had increased the federal debt frm $ millin in 1932 t $ millin in It tk Wrld War II, thugh, t really lwer unemplyment. But, the war als created a heavier debt than befre. XXI. FDR s Balance Sheet 1. New Dealers claimed that the New Deal had alleviated the wrst f the Great Depressin. 2. FDR als deflected ppular resent against business and may have saved the American system f free enterprise, yet business tycns hated him. 3. He prvided bld refrm withut revlutin. 4. Later, he wuld guide the natin thrugh a titanic war in which the demcracy f the wrld wuld be at stake.