The New Deal

Franklin D. Roosevelt, 1933-1945

In his presidential campaign he promised a “New Deal” → series of programs to help out the economy

• many feared he’d take the country to socialism

• served the most terms (4 terms and 12 years)

Elanor Roosevelt

Changed the role of the First Lady, became the first public voice as first lady - before they were domestic showpieces but she began working in many ways for the people and influenced her husbands policies

• Wrote a daily newspaper column ‘My Day’ and a monthly magazine column and weekly radio show

• Advocated for Civil Rights, tried to pass anti-lynching bill

• The emissary to the 2nd Bonus Army in 1933, instead of sending federal troops FDR sent his wife

First Hundred Days

In FDR’s first hundred days he passed over a dozen major bills

• Banking Holiday → closed banks for 4 days to asses their strenght, if they passed the bank could re-open

• Glass-Steagall Act → created the Federal Deposit Insurance Corporation (FDIC), they guaranteed deposits in federally approved banks (if a bank goes under, your money is safe up to $250,000)

• Federal Emergency Relief Act → provided direct payments to extreme cases of need

• Signed the 21st Amendment → repealed prohibition, alcohol could bring new jobs and revenue to America instead of using millions to keep the volstead act

Keynesian Economics

Encouraged the use of gov’t spending even at a deficit

• FRD spent heavily on Public works to stimulate economic growth

Major Acts: Tennessee Valley Authority (TVA)

Federal corporation that worked on infrastructure issues, flooding, forestry, dams, and electrical infrastructure

• Before 1933, only 5% of farmers in the region had electricity until the program where the TVA would provide over 90% with electricity 

Major Acts: National Industrial Recovery Act (NIRA) and National Recovery Administration (NRA)

Sought to regulate private businesses to stabilize the economy

Major Acts: Agricultural Adjustment Act

In control of allocating acres to farmers, paid farmers subsidies not to plant, not to raise livestock, or to destroy livestock

Fireside Chats

8 days after being elected, FRD began a series of fireside chats speaking to the American people about the nations troubles

• The openness fostered a connection between Americans and the pres. began to repair a sense of trust in gov’t, it was a drastic change from traditionally elitist and detached politicians

Social Security

The Social Security Act - a 3 part welfare system for those who cannot help themselves, part of the 2nd New Deal

1. Old-age pension financed equally by a tax on employers and workers

2. Set up unemployment compensation on a federal-state basis

3. Provided direct federal grants to the states, on a monthly bases, for welfare payments to: blind, handicapped, needy elderly, and dependent children

2nd New Deal

Shifted its focus from immediate economic recovery to long-term social and economic security

Public Works

The projects of the New Deal put many young men to work, the Civilian Conservation Corps (CCC) typically employed single men under 25 and provided housing, food, etc

• worked largely on reforestation, dam projects, and in national parks

Wagner Act

Gave the gov’t the ability to supervise the election of union officials and investigate unfair labor practices

• National Labor Relations Board → The enforcement and investigative branch created out of the first act

• Strengthened unions and increased both general strikes and sit-down strikes

The fair Labor Standard

Established a national work standard of 8 hr work day, 40 hr work week, and overtime pay of one and a half pay for the first 4 hrs

Supreme Court packing Scheme

Roosevelt argued there were too many old conservatives on court, so he proposed an amendment to the constitution to limit the court power or to clarify constitutional issues after some programs were declared unconstitutional

• He wanted to be allowed to appoint up to 6 judges with a new judge for every judge over 70

• In the end both the Supreme Court and Roosevelt backed down, looses political support

End of the New Deal

• The court scheme cost FDR some congressional support making it harder to pass further initiatives for the next few years, ending the New Deal

• The loss of acts like the PWA and the AAA, a reduction in WPA spending, and the new social security tax reduced the amount of money being put in circulation

  • led to an economic downturn in 1937 through 1938 called the Roosevelt Recession, unemployment which had come back down to 14% increased again to 19%

Coming of War

• Roosevelt knew war was coming due to global conflicts

• Oct. 1935, Mussolini’s Italian troops invaded Ethiopia

• March 1936, Hitler’s troops marched into the Rhineland

• July 1936, Spain entered a civil war between leftists and fascist - in 1937 fascist see victory

• July 1937, Japan launched an undeclared war against China

• Oct. 1937, Roosevelt called for a “quarantine” of aggressor states (ones who attack first)

The Neutrality Acts (1935, 1937)

Banned arms sales and loans to belligerents, only sold clothes/food/etc.

• in 1937, Congress passed a “cash and carry” provision that allowed supplies sales, but not arms sales, to Britain and France

• Most Americans were strongly isolationist

Cash and Carry

Provision that allowed supplies sales, but not arms sales, to Britain and France in 1937

Appeasement

In 1938, Hitler annexed Austria - Britain, and France chose a policy that let him do as he wanted believing he would stop, allowed Hitler to annex the Sudetenland

European Conflict Intensifies, America Begins to react

• In May 1939 → Germany and Italy formalized an alliance 

• Sept.1 1939 → German troops invaded Poland making Britain and France declare war on Germany

• Nov. 1939 → New Neutrality Act expands definition of “cash and carry” - arms embargo essentially lifted

• 1940 → Roosevelt began to push Congress to increase defense spending, and the trade of 50 US Naval destroyer to Britain (in exchange for basis in British territories in the west)

  • Roosevelt signed the Selective Service Act to prepare the nation for a possible draft

  • Sales of industrial goods, food, and arms to allies combined with massive military spending (at a deficit K) ramped up employment and started to bring America out of the depression