TOPIC 7.10 THE NEW DEAL

The Election of 1932 & Franklin D. Roosevelt’s New Deal

I. The Election of 1932

• Context: The U.S. was experiencing the Great Depression (1929–1939), the worst economic crisis in history.

• Candidates:

  • Herbert Hoover (Republican): Incumbent president, unpopular due to his ineffective response to the depression. Warned that electing a Democrat would worsen the crisis.

  • Franklin D. Roosevelt (Democrat):

    • Governor of New York, promised a "New Deal" for the American people.

    • Advocated for the repeal of Prohibition, aid for the unemployed, and cuts in government spending.

    • Running mate: John Nance Garner (Texas, Speaker of the House).

• Results:

  • Roosevelt won by a landslide (nearly 60% of the popular vote).

  • Democrats gained majorities in both houses of Congress.

  • Many former Socialist supporters of Norman Thomas voted for Roosevelt, desperate for change.

II. Hoover as a "Lame-Duck" President & the 20th Amendment

• Hoover remained president from November 1932 to March 1933, but was powerless as the depression worsened.

• Roosevelt refused to collaborate with Hoover’s policies.

• 20th Amendment (1933):

  • Moved the presidential inauguration from March 4 to January 20, reducing the lame-duck period.

III. Franklin D. Roosevelt as President

• Background:

  • Distant cousin of Theodore Roosevelt.

  • Served as a New York state legislator, Assistant Secretary of the Navy, and Governor of New York.

  • Paralyzed by polio (1921) but remained politically active.

• Key Traits:

  • Charismatic, an excellent public speaker, and able to inspire confidence.

• Eleanor Roosevelt:

  • Most active First Lady in history.

  • Advocate for civil rights, women’s rights, and social reform.

IV. The New Deal Philosophy

• No clear plan, but committed to action and experimentation to combat the Great Depression.

• The Three R’s:

  1. Relief – Direct aid to the unemployed.

  2. Recovery – Programs to stimulate economic growth.

  3. Reform – Long-term changes to prevent future depressions.

• Advisers:

  • Brain Trust: Group of university professors who helped shape New Deal policies.

  • Louis Howe: Chief political adviser.

  • Frances Perkins: First female Cabinet member (Secretary of Labor).

V. The First Hundred Days (March–June 1933)

• Emergency Legislation: Congress passed every request from FDR, enacting more laws than ever before.

• Key Programs & Laws (often referred to by initials):

  • Bank Holiday (March 6, 1933): Closed all banks to stop mass withdrawals and restore confidence.

  • Emergency Banking Relief Act (March 9, 1933): Allowed banks to reopen if financially stable.

  • Repeal of Prohibition (1933):

    • Beer-Wine Revenue Act: Legalized alcohol to raise tax revenue.

    • 21st Amendment: Officially ended Prohibition.

  • Fireside Chats (March 12, 1933): FDR’s radio broadcasts reassured the public, helping restore trust in banks.

VI. Major New Deal Programs

A. Relief for the Unemployed

1. Federal Emergency Relief Administration (FERA)

   • Gave direct grants to state/local governments for soup kitchens and unemployment aid.

   • Director: Harry Hopkins (one of FDR’s closest advisers).

2. Public Works Administration (PWA)

   • Funded construction projects (roads, bridges, dams) to create jobs.

   • Director: Harold Ickes.

3. Civilian Conservation Corps (CCC)

   • Employed young men to work on federal land conservation projects (forests, parks).

   • Families received small monthly payments.

4. Tennessee Valley Authority (TVA)

   • Government-controlled program in the Tennessee Valley.

   • Built dams, power plants, and flood control systems.

   • Provided cheap electricity to a previously underserved region.

B. Financial Recovery & Banking Reforms

1. Emergency Banking Relief Act

   • Allowed the government to inspect bank finances before reopening after the bank holiday.

2. Glass-Steagall Act

   • Separated commercial and investment banking to prevent risky speculation.

   • Created the Federal Deposit Insurance Corporation (FDIC), which guaranteed bank deposits.

3. Farm Credit Administration

   • Provided low-interest loans to farmers to prevent foreclosures.

C. Industrial & Agricultural Recovery

1. National Recovery Administration (NRA)

   • Attempted to stabilize industry by setting fair wages, prices, and hours.

   • Gave workers the right to unionize.

   • Declared unconstitutional in Schechter v. U.S. (1935).

2. Agricultural Adjustment Administration (AAA)

   • Paid farmers to reduce crop production to increase prices.

   • Also declared unconstitutional (1935).

VII. Significance of the New Deal

• Expanded federal government power over the economy.

• Changed the role of the presidency: FDR increased executive power and used fireside chats to communicate directly with Americans.

• Democratic dominance:

  • Democrats controlled Congress and the presidency for most of the 1930s and 1940s.

• Helped stabilize the economy, but the depression persisted until World War II (1939–1945).

Key Supreme Court Cases

• Schechter Poultry Corp. v. United States (1935): Declared the NRA unconstitutional (violated separation of powers).

• United States v. Butler (1936): Struck down the AAA, ruling that the government could not force farmers to reduce production.

Key Takeaways for APUSH

• The Election of 1932 marked a major political shift in response to the Great Depression.

• FDR’s New Deal transformed the role of the federal government.

• The First Hundred Days saw unprecedented legislative activity.

• New Deal programs focused on the Three R’s: Relief, Recovery, and Reform.

• Some programs (NRA, AAA) were declared unconstitutional by the Supreme Court.

• The New Deal didn’t end the Depression, but restored public confidence in the government.

Other Programs of the First New Deal

1. Civil Works Administration (CWA)

   • Created to provide jobs through temporary federal construction projects.

   • Aimed to employ laborers for public works such as building infrastructure.

2. Securities and Exchange Commission (SEC)

   • Established to regulate the stock market and prevent speculative practices that led to the 1929 crash.

   • Required corporations to provide financial audits and disclosures to protect investors from fraud.

3. Federal Housing Administration (FHA)

   • Insured bank loans for building, repairing, and purchasing homes.

   • Helped many families buy homes, but the FHA practiced "redlining," denying loans to African American neighborhoods, leading to discriminatory housing practices.

4. United States Off the Gold Standard

   • Aimed to halt deflation by taking the U.S. off the gold standard.

   • Set the value of the dollar at $35 per ounce of gold but made paper money non-redeemable in gold.

The Second New Deal (1935)

• Focused on relief and reform after Roosevelt's first term, which concentrated on recovery.

• Gave Roosevelt a popular mandate following the 1934 Democratic victory.

1. Works Progress Administration (WPA)

   • Spent billions to provide jobs for millions of Americans between 1935-1940.

   • Employed people in construction of public infrastructure and in arts (writers, artists, actors, etc.).

   • National Youth Administration (NYA) offered part-time jobs for students to help with education.

2. Resettlement Administration (RA)

   • Provided loans to small farmers, sharecroppers, and tenants.

   • Helped establish federal camps to house migrant workers in decent conditions.

Reforms under the Second New Deal

1. National Labor Relations (Wagner) Act (1935)

   • Replaced the National Industrial Recovery Act, which was ruled unconstitutional.

   • Guaranteed workers' rights to join unions and engage in collective bargaining.

   • Outlawed unfair labor practices, with enforcement by the National Labor Relations Board (NLRB).

2. Rural Electrification Administration (REA)

   • Provided loans to cooperatives to bring electricity to rural areas.

3. Federal Taxes

   • The 1935 Revenue Act increased taxes on the wealthy and on capital gains (profits from selling stocks or property).

   • Taxed large gifts from parents to children.

4. Social Security Act (1935)

   • Established a federal insurance program funded by employee and employer contributions.

   • Provided monthly payments to retired people over 65, as well as unemployment compensation, benefits for the disabled, and support for dependent children and mothers.

Evaluating Roosevelt's First Term

• Roosevelt transformed the federal government’s role, creating a limited welfare state that regulated the economy and provided social security for vulnerable populations.

• His policies laid the foundation for modern American liberalism.

The Election of 1936

• Despite an unstable economy, Roosevelt ran for re-election with strong support from workers and small farmers.

• Opponent: Alf Landon, the progressive governor of Kansas, who criticized Roosevelt's spending but generally accepted the New Deal.

1. Political Realignment and the New Deal Coalition

   • Roosevelt won a landslide victory, winning every state except Maine and Vermont.

   • The Democratic coalition included:

     • The Solid South

     • White ethnic groups in cities

     • Midwestern farmers

     • Labor unions

     • Liberals

     • African Americans (who shifted from the Republican Party to support Roosevelt)

Opponents of the New Deal

1. Critics from the Left

   • Socialists, some unions, and liberal Democrats criticized the New Deal for favoring business over the unemployed and working poor.

   • Some radicals believed the New Deal was merely saving capitalism from revolution.

2. Critics from the Right

   • Many conservatives opposed the New Deal for increasing federal government power.

   • Complaints centered around:

     • Relief programs like the WPA

     • Pro-union laws such as the Wagner Act

     • Deficit financing (government borrowing to fund programs)

3. American Liberty League

   • A conservative organization formed by anti-New Deal Democrats (Alfred E. Smith, John W. Davis) and Republicans.

   • Aimed to stop the New Deal from undermining the U.S. economy and political system.

Demagogues and Criticism of the New Deal

• Father Charles E. Coughlin

  • Catholic priest with a large following via radio in the 1930s.

  • Founded the National Union for Social Justice.

  • Proposed ideas like issuing inflated currency and nationalizing banks.

  • Became increasingly anti-Semitic and fascist in his broadcasts.

  • His broadcasts were stopped by the Catholic Church.

• Dr. Francis E. Townsend

  • Retired physician from Long Beach, California.

  • Proposed the Townsend Plan to help the elderly.

  • Suggested a 2% federal sales tax to fund $200 monthly payments to those over 60.

  • Believed that elderly spending would stimulate the economy.

  • His plan led to the creation of the Social Security system by Roosevelt.

• Huey Long

  • Senator from Louisiana, known as the "Kingfish."

  • Created the "Share Our Wealth" program.

  • Proposed a minimum annual income of $5,000 per family funded by taxing the wealthy.

  • Challenged Roosevelt for the Democratic Party’s leadership in 1935.

  • Assassinated in 1935, ending his presidential ambitions.

The Supreme Court and Roosevelt’s Challenges

• Conservative Supreme Court Decisions

  • In 1935, the Supreme Court struck down the National Recovery Administration (NRA) and the Agricultural Adjustment Act (AAA) as unconstitutional.

  • These decisions frustrated Roosevelt’s efforts to end the Depression.

• Court Reorganization Plan (1937)

  • Roosevelt proposed the judicial-reorganization bill to overcome the Court’s opposition.

  • Plan would allow the president to appoint one additional justice for every justice over 70½ years old.

  • Critics called it a "Court-packing" bill, accusing Roosevelt of trying to undermine checks and balances.

  • The bill was defeated in Congress, including opposition from many Democrats.

• Aftermath

  • Despite the defeat of the Court-packing plan, the Court began to support Roosevelt’s New Deal policies.

  • In 1937, the Court upheld major New Deal laws like the Wagner Act and the Social Security Act.

  • Several justices retired during Roosevelt’s second term, enabling him to appoint more liberal justices.

Labor Unions and Workers' Rights

• The National Industrial Recovery Act (1933) and the Wagner Act (1935)

  • These acts legalized labor unions, leading to a massive increase in union membership from 3 million to over 10 million by 1941.

• Formation of the CIO (Congress of Industrial Organizations)

  • AFL was dominated by skilled workers and White males.

  • In 1935, industrial unions formed the CIO, led by John L. Lewis.

  • CIO sought to organize unskilled workers in industries like automobiles, steel, and textiles.

  • The CIO became the AFL’s rival, focusing on unskilled workers.

• Automobile Strikes

  • The General Motors Flint, Michigan, sit-down strike of 1937: Workers refused to leave the assembly line and won recognition from GM for the United Auto Workers (UAW).

  • Ford plant workers were beaten and driven away by company thugs, demonstrating resistance to unionization.

• Steel Strikes

  • In 1937, the Memorial Day massacre occurred when police shot and killed four steel workers during a demonstration at Republic Steel in Chicago.

  • U.S. Steel eventually recognized the CIO, though smaller steel companies resisted.

The Fair Labor Standards Act (1938)

• Last major reform of Roosevelt’s second term.

• Established:

  • Minimum wage (40 cents per hour).

  • 40-hour workweek with overtime pay.

  • Restrictions on child labor.

• Impact on Child Labor

  • In 1941, the Supreme Court upheld child labor restrictions in United States v. Darby Lumber Co., reversing an earlier ruling that had declared child labor laws unconstitutional.

The Recession of 1937-1938

• Economic Setback

  • The economy had shown improvement from 1933 to 1937, but a recession hit in 1937 due to reduced government spending.

  • The Social Security tax decreased consumer spending, and Roosevelt curtailed public works and relief programs to balance the budget.

• Keynesian Economics

  • Economist John Maynard Keynes taught Roosevelt that deficit spending was needed during tough times to stimulate growth.

  • Roosevelt’s advisers adopted Keynesian principles, leading to a positive economic recovery starting in 1938.

• Political Impact

  • The recession weakened the New Deal, and the 1938 elections saw a reduction in the Democratic majority in Congress.

  • A coalition of Republicans and conservative Democrats blocked further New Deal reforms.

Life During the Depression

• Dust Bowl

  • A severe drought in the 1930s created the Dust Bowl in the Great Plains.

  • Poor farming practices led to topsoil erosion, forcing many families, particularly "Okies" from Oklahoma, to migrate to California for work.

  • The Soil Conservation Service was created in 1935 to teach farmers better farming techniques.

• Women

  • With many men unemployed, women entered the workforce in greater numbers, though they faced criticism for taking jobs from men.

  • Despite efforts by Eleanor Roosevelt to champion women's equality, many New Deal programs paid women lower wages than men.

• African Americans

  • African Americans faced racial discrimination, with higher unemployment rates and exclusion from some relief programs.

  • FDR was reluctant to push for civil rights to avoid losing Southern Democratic votes.

  • Notable actions:

    • Marian Anderson’s concert at the Lincoln Memorial arranged by Eleanor Roosevelt and Harold Ickes.

    • Mary McLeod Bethune was appointed to a federal position to increase African American involvement in New Deal programs.

• Mexican Americans

  • Mexican Americans faced high unemployment and were replaced by White migrant workers.

  • The government’s repatriation efforts deported over 400,000 people, including U.S. citizens of Mexican descent.

• American Indians

  • John Collier, appointed Commissioner of the Bureau of Indian Affairs, promoted Native American rights and involvement in New Deal programs.

  • The Indian Reorganization Act (1934) repealed the Dawes Act and returned land to Native American tribes.

  • Critics later viewed the act as paternalistic.