Topic 10: Franklin Roosevelt and The New Deal

10. Franklin Roosevelt + the New Deal

Redefining Federal Authority during Great Depression

• 1932-1945

• Great Depression: due to 6 factors

  • Kindling Factors: Consumer Debt, Overproduction, Federal Reserve Policies

  • Igniting Factors: Stock Market, Bank Failure

  • Worsening Factors: Hoovers decisions

• Hoover, FDR

• New Deal: 6 (7) policies to react to crisis: protect most vulnerable Americans, tap into natural resources, regulating industry = benefit everyone

Herbert Hoover

• Republican

• Hoovervilles

• views America as family not buisness

• Laissez-faire

The Great Depression Kindling Factors

1929-late 1930s: began in US but expanded due to connection between countries

• Consumer Debt: Americans are in debt to buy luxury items, credit card, wages don’t keep up w/ prices

• Overproduction: huge demand for 1-time items, supply exceeds demand = prices, profits, stock values drop + business decline

• Federal Reserve Policies: insulin + glucagon = raise interest when inflation, lower when deflation → federal reserve overcorrects = crash

The Great Depression Igniting Factors

1929-late 1930s

• Stock Market: shares of companies were widley overvalued + when ppl realized this and withdrew their investments in 1929, the market crashed

• Bank Failure: banks that had risky investments in stock market + loans to customers so when stock collapses banks loose money = make ppls loans due + close houses = ppl withdraw $ they dont have

The Great Depression Worsening Factor

1929-late 1930s

• 1. Hoover feeds the flames: believes in Laissez-faire gov so does nothing

• 2. when he receives criticism he gives speeches telling businesses to stop firing ppl but still stays out of economy

• 3. when he does intervene he imposes tariffs on imports to cut spending internationally= less US expors, cuts gov spending = no gov industry, inc income tax to bring = but ppl cant pay taxes

Election of 1932

Herbert Hoover vs Franklin Roosevelt

• R wins by landslide bc Hoover is not resolving anything and there is a nationwide rejection of Laissez-faire

Franklin Roosevelt

• Democrat

• Governor of NY

• Paralyzed @ 39 bc polio but appeared “ambulatory” to public

• 1932-1945: won 4x = 22nd amendment

  • dies 4th term = VP Harry Truman + own term

• Great Depression + World War II

  • Keynesian approach to economic policy: crisis like business not family (rather than cutting spending he borrows from other countries)

• New deal: massive and instrumental social welfare project = laws, policies, and programs to end depression + prevent another

• Worked w/ “The Brain Trust”

Redefining Freedom + Fed Gov

• freedom is no longer viewed as natural and limited by gov (federalist, Jeffersonian, capitalism) but rather there are barriers to accessing personal freedom that the gov can HELP remove

  • Lincoln thought these barriers were slavery

  • Radical Republicans thought barriers were unequal civil rights

  • progressives thought barriers were capitalism

  • Roosevelt thought barrier was poverty (need economic stability)

Negative Rights: conservatives (republicans) believe gov restrains our inborn freedom = neg rights → const: things gov can’t do: freedom of religion, speech

Positive Rights: liberal (democrat) believe gov faciliates our freedom = pos rights → gov is obligated to provide u w/ services like right to education, decent housing

The New Deal

Programs to: built economy bottom up, safety nets for must vulnerable Americans, protect environment, make investments, regulate of industry = to benefit everyone

• benefited South more bc more poor + wanted to leave party

• Goal to provide Relief, Recovery, Reform during Great Depression

  • relief for the unemployed and poor (stop bleeding)

  • Recovery of the economy to normal levels (stabilize patient)

  • Reform of the financial system to prevent a repeat depression (then make sure injury doesn’t happen again)

• Archived through laws passed by Congress + executive orders: ones to know

New Deal Programs

• Agricultural Adjustment Act (1933)

  • Agricultural Adjustment Administration (AAA)

• Glass-Steagall Banking Act (1933)

  • Federal Deposit Insurance Incorporation (FDIC) (1933)

• Social Security Act (1935)

  • Social Security Administration (SSA)

• Civilian Conservation Corps (CCC) (1933)

• Tennessee Valley Authority (TVA) (1933)

• Works Progress Administration (WPA) (1935)

Agricultural Adjustment Act

• 1933: Introduced measures to reduce crop supply, stabilize prices, and subsidize farm incomes. (controversial)

  • created Agricultural Adjustment Administration (AAA)

Glass-Steagall Banking Act

• 1933: Created Federal Deposit Insurance Corporation to insure personal bank accounts (up to $250,000) Separated commercial from investment banking – The ‘Firewall.’

  • created Federal Deposit Insurance Corporation (FDIC) to insure bank deposits

Social Security Act

• 1935: Takes taxes of young+employed and uses that money to pay for ppl who are too old to work/ can’t work bc disabled or single mothers

  • created Social Security Administration (SSA) to administer it

Civilian Conservation Corps

• (CCC) 1933: created under Emergency Conservation Act: put unemployed, unskilled young men to work on improving rural and parks

  • carved out Stowe ski trails

Tennessee Valley Authority

• (TVA) 1933: Created under the Tennessee Valley Authority Act.
  Put skilled workers to work planning + building river basins/dams/ hydroelectricity

  • bring electricity to most rural areas in American South

Works Progress Administration

• (WPA) 1935 Created by Executive Order to fund state and local public works projects.
  Hired the unemployed directly and became the largest of all public works programs

  • Range of public works tasks -> unskilled (Trees) -> skilled (new buildings, construction, electricity) 

  • Build schools, municipal buildings, infrastructure (damns, roads) 

  • Artists -> murals

Consolidating National Power

FDR knows that he needs to consolidate to get stuff done within democracy QUICKLY (similar to Andrew Jackson/ gov overruled by court)

• FDR + Brain Tree which was team of ppl who were experts who came up w/ laws and Congress signed (normally congress writes bill)

• Congress: has support bc Democratic Majority in House + Senate (though doesn’t act on civil rights)

• Supreme Court: more difficult bc mostly conservative + finds parts of New Deal unconst = Judicial Procedures Reform Bill

Judicial Procedures Reform Bill

1937: Meant to allow prez to appoint max of additional 6 Justices for every member over 70.5 years (const doesn’t limit supreme court)

• Dies in Senate Judiciary Committee: Justice Owen Roberts says this would politicize court + get rid of checks and balances

• BUT: bc of FDR’s pressures Owen Roberts begins to vote for ND legislation to keep justices @ 9 + Willis Van Devanter resings

  • by his 3rd term court is on his side

Fireside Chats

Established trust + legitimacy w/ American ppl and allowed prez to paint whatever picture he wanted w/o media filter

• 30 radio adresses between 1933-1944

• Abt banking crisis, recession, new deal initiatives, WWII

Criticism of Roosevelt

Conservatives think New Deal goes to far (big fed gov

Populists think New Deal doesn’t go far enough

Transformations under Roosevelt (FDR)

Democratic power is changed + consolidated

• Prez closer to the people

• Gov consolidated power -> laissez faire is over

• Gov responsible for ensure overall economic stability AND individuals

• Democratic control (prez+housesenate+Supreme Court more liberal leaning)