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.

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