The New Deal How the Great Depression Produced a Political Realignment, Turning the Democratic Party into the Dominant Party for the Next 20 years, and Redefining the Role of the Federal Government
Is your Cell Phone Turned On? First Lady Eleanor Roosevelt Says Please, Turn it off!
Themes and Topics Role of Government Franklin Roosevelt's Leadership Response to the Great Depression: First and Second New Deals (and why their wasn t a Third New Deal Cultural Change New Deal Coalition as a more representative form of democratic political culture New Deal Coalition as a new American Identity Private Enterprise Trade Associations as a solution to the Capitalist Trade Cycle High Wage Unionism and Welfare State as solutions to the Capitalist Trade Cycle Multiculturalism Realignment of ethnics, and minorities into the Democratic Party during the New Deal Persistence of institutional racism in the 1930s New Deal for Indians
Central Analytical Questions How did Franklin Roosevelt differ from Herbert Hoover on Presidential Leadership? What was the First New Deal and how did it differ from the Second New Deal Why did the Third New Deal never materialize? How successful was the New Deal in overcoming the Depression? What were the permanent changes to the role of the Federal Government as a result of the New Deal?
Election of 1932 A Watershed Election Roosevelt/Democrats sweep into power reversing 12 years of GOP rule Roosevelt s campaign promises Hoover s bitterness at the loss Hated Roosevelt He lived to be ninety!
Franklin Delano Roosevelt Inaugural Address How he prepared himself The Crowd FDR s message Grave Accusatory and populist Bold Stern and Didactic Called for a new morality Called for Action Issued a Warning Doesn t outline a plan or program http://www.history.com/videos/ina ugural-address-franklin-d- The only thing we have to fear is fear itself, nameless, unreasoning fear.
Roosevelt s Cabinets FDR s Cabinet, note the woman, Francis Perkins FDR s cabinet included Francis Perkins, Sec. Of Labor, Harold Ickes, Sec. Of Interior, Henry Wallace, Sec. Of Agriculture, and Sec. Of Treasury, Hans Morgenthau In addition, FDR relied on his Brain Trust, Columbia University Professors Raymond Moley, Rexford G. Tugwell, and Adolph A. Berle, strong critics of laissez faire
First Hundred Days FDR established a new standard by which to define bold, productive leadership Congress passes 15 major pieces of legislation within the first 100 days of FDR s reign What is the scope of the First New Deal? Reform Recovery Relief Regional Development
First Hundred Days and Beyond First New Deal (1933-1934) Reform Target the Financial System Declares a Bank Holiday Securities Act of 1933 Securities Act of 1934 Glass-Steagall Banking Act of 1933 Banking Act of 1935 Long Term Consequences: Stability in the banking and monetary field that lasted into the 1970s Inflation undermined this structure, which was replaced by de-regulation during the Carter-Reagan years Financial upheaval followed In 1990s, massive consolidation in Banking
First Hundred Days and Beyond First New Deal (1933-1934) Recovery Elite Corporatism (not populism) defined initial program of industrial recovery because Big Business rejected liquidation How did Corporate America define the problem and solution? Problem: overproduction and declining prices Solution: give business the authority to cartelize industry through existing trade associations Problem: solution violates anti-trust laws New Deal repeals anti-trust laws with National Industrial Recovery Act of 1933, creating the National Recovery Administration (NRA) Law includes new rights for labor (unions, 8 hour day) Shows FDR sought class cooperation in first New Deal Give farmers power to restrict production of seven major staple crops (Wheat, Corn, Cotton, Tobacco, Cattle, Chickens, and Pigs) through Agricultural Adjustments Act of 1933, creating Agricultural Adjustments Administration (AAA)
National Recovery Administration To generate enthusiasm for the New Deal, the Administration created a new symbol of national unity, the blue eagle and held parades to promote the movement Businesses placed this symbol on their storefronts to show we do our part as evidence of their compliance
First Hundred Days and Beyond First New Deal (1933-1934) Recovery NRA in action Trade Associations drew up codes Some businessmen complained because the codes included the right of workers AAA in action Farm incomes rose between 1933 and 1935 Congress also created the Commodity Credit Corporation, which made loans to farmers to take their crops off the market, in effect, it was a Sub-treasury Plan Congress also created a quota laws for cotton and tobacco and taxed farmers who sold more than their share of the quota Supreme Court and the NRA Black Monday, May 27, 1935, Court declared NRA unconstitutional in Schechter Poultry Corporation v. U.S. Court argues constitution did not give Congress the power to regulate intra-state commerce Congress had delegated too much power to the executive when it granted code-making authority, and had exceeded its power under the Commerce Clause Court declared AAA unconstitutional in U.S. v. Butler (1936) A processing tax was illegal because the law violated commerce clause
First Hundred Days and Beyond First New Deal (1933-1934) Relief This was the First New Deal s greatest achievement because it brought federal aid to the relief of millions of distressed Americans Civilian Conservation Corps (CCC) brought jobs (work relief) to 18-25 year olds Employed 3 million workers in the winter of 1933-34 Cost $900 million Federal Emergency Relief Administration (FERA) Loans/Grants to states for students, transients Cost: $500 million Civil Works Projects Administration (CWPA, Later WPA) Replaced FERA Initially, under CWPA, make work jobs, highway repair; Cost: $900 M Later, with Second New Deal, Massive Public Works Projects; Cost $48 B National Youth Administration for high school/college youth
First Hundred Days and Beyond First New Deal (1933-1934) Relief This was the First New Deal s greatest achievement because it brought federal aid to the relief of millions of distressed Americans Jobs programs helped the dependant unemployed populations of the cities The New Deal also targeted protecting owners from losing their homes and farms It reorganized the Farm Credit Administration and refinanced farm mortgages for $100 million It did the same for homeowner mortgages
First Hundred Days and Beyond First New Deal (1933-1934) Regional Development: The Tennessee Valley Authority (May 1933) Object: bring electrification to rural America through Hydro-electric power, eventually 90% of farms are served Marks the first time in US history the Federal Government has directly engaged in regional development investment
Dust Bowl Conditions Migration offered the only solution to the problem of soil erosion: Mid-westerners headed west; while southerners headed north
Politics of the New Deal Governor Al Smith, Republicans, and the Liberty League Define the New Deal as Communism, Socialism, or Regimentation of Free Enterprise Want to reverse course Sen. Huey Long, Father Charles Coughlin, and Dr. Edward Townsend of the Union Party Define the New Deal as profascism Push for populist change FDR and Al Smith in a Friendly Moment
1934 Mid-Term Elections: Senate Showed how enormously popular FDR and the Democrats had become Added 9 seats, for a 69+2 majority
1934 Mid-Term Elections: House The Democratic Party takes commanding control of the House of Representatives, with nearly 75% of all seats
Critical Thinking Question Roosevelt Moved Left: 1935-1936, creating a Second New Deal What emboldened him to further experiment?
Popular Resistance to Hardship Despite the New Deals multipronged approach to the Depression, hardship persisted and provoked popular resistance Unemployment demonstrations swept the country Food and services protests led to riots and inspired self-help activities In the workplace, class conflicts increased dramatically as workers organized Congress on Industrial Organization moved to organize mass production industries Longshoreman s Strike in S.F. 1937 Strikers
New Deal for Labor Following Schechter v. U.S., Congress passed the Wagner Act in July 1935 It created the National Labor Relations Board, a federal agency set up to protect the right of workers to bargain collectively The long term consequences of this act increased the number of American workers in unions from 3 million to 14 million by 1945
Unions Empowered Numbers in millions
FDR s left critics had called for reforms addressing the needs of the elderly and the dependent In August 1935, Congress passed the Social Security Act, creating the Social Security Board, later Administration (SSA) Social Security
Other Features of the 2nd New Deal Revenue Act of 1935 Called the soak the rich act because it increased the tax rate on incomes above $5 million to 75% Politically effective, it didn t increase revenue Anti-trust actions Wheeler-Rayburn Public Utility Holding Company Act of 1935 targeted pyramiding of holding companies
Politics of the 1936 Election Alfred Landon This election featured some of the sharpest class rhetoric in U.S. history Republicans accused FDR of being a communist and a dictator FDR s reply, Government by organized money is just as bad as government by mob rule. [The economic elite] are unanimous in their hatred of me, and I welcome their hatred.
Election of 1936
Senate Elections 1936 Republicans were reduced to 16 Senate seats, the lowest number by an opposition party since Reconstruction
FDR s Court Packing Plan Buoyed by the election, FDR moved to punish the Court which had invalidated so much of the First New Deal and still threatened the Second New Deal He proposed to increase the number of justices from 9 to 15 He argued the ages of the Justices justified the additional help, one new justice for every justice over 70 There ages were: 61 64 70 74 X 3 75 76 80
FDR s Court Packing Plan Despite considerable efforts at lobbying, by summer 1937, FDR recognized he did not have the support of the Democratic majority No vote was ever taken on FDR s proposal This setback demonstrated to FDR s opponents he could be beaten In the short term, the court got the message and began approving key elements of the 2nd New Deal, including Social Security, the NLRA, and the minimum wage law In the longer term, FDR won because those nine old men began to retire Eventually, FDR appointed all nine members of the court
Roosevelt Recession 1937 FDR s second misstep of 1937 grew out of his failure to understand the nature of his own recovery policies The Second New Deal embraced an consumption theory of recovery But in 1937, he cut spending, seeking to balance the budget The country plunged back into recession
Roosevelt Recession of 1937 John Maynard Keynes Internally, his team debated what to do Morgenthau argued for a cut in spending and balanced budgets Hopkins and Ickes wanted to increase government spending to revive business (the Keynesian Solution) Thurman Arnold favored trust busting to restore competition April 1938, Congress voted $33 billion for public works and set up the TNEC
Toward a 3rd New Deal In 1937-1938 FDR succeeded in getting several additional reforms passed The National Housing Act The Farm Tenant Act Set up the Farm Security Administration to make loans to purchase farms and for farmers sinking into tenancy The Second Agricultural Adjustments Act Fair Labor Standards Act Created a Federal Minimum Wage for businesses engaged in interstate commerce Established a Federal 40 hour work week Abolished Child Labor
1938 House Elections Democrats suffered major Reversals in the 1938 Congressional races Notes especially the loss Of support in the mid-west
1938 Senate Elections Republicans gained six seats in the Senate But the Democrats Still held a 2 to 1 margin
What Limited the 3rd New Deal? The Election of 1938 Failed to purge the Democratic Party of its conservative wing A conservative block emerged in Congress uniting southern Democrats and Republicans Thus by 1939, the New Deal s creative energies were spent By 1939, FDR sought only to preserve existing reforms Return to Political Stalemate
New Deal and African Americans A major shift from GOP to Democratic Party in 1936 Real tangible benefits derived from class legislation aiding workers and poor Little tangible actions achieved because of political reasons
New Deal for Indians Collier and Friends New Deal for Indians resulted from the Indian Reorganization Act of 1934 John Collier, Dept of the Interior, Bureau of Indian Affairs, supported cultural pluralism Closed Federal Indian Boarding Schools Ended Dawes System Restored 4 million acres of land
Critical Thinking Exercise How do we assess the significance of the New Deal Three historiographic perspectives Radical Conservative Liberal Which view gets it right?
Disability and Achievement This is one of only two photos among 40K in FDR s Presidential Library which show FDR is in a wheelchair To most Americans, the fact polio had left FDR paralyzed hardly mattered, he was their handicapped savior
Conclusions The New Deal redefined the role of government in American social and economic life During this period, the Federal government became the honest broker between labor and capital, urban and rural, native born and immigrant Americans Although African Americans embraced the Democratic Party, they received class-based, not race based benefits