New Deal & FDR – Comprehensive Exam Notes

Franklin Delano Roosevelt (FDR) – Personal & Early Career

• Born in $1882$, Hyde Park, New York; fifth cousin of Theodore "Teddy" Roosevelt ↔ builds name recognition & progressive pedigree.

• Education: Harvard College ➔ Columbia Law School (did not finish J.D. but passed N.Y. bar).

• Marriage: $1905$ to Eleanor Roosevelt (niece of Teddy).
  • Eleanor later serves as eyes-and-ears of administration, lobbying for social justice & urging FDR to remain in politics.

• Political Ladder:
  • New York State Senator in $1910$ (progressive, pro-labor reputation).
  • Assistant Secretary of the Navy under Wilson, $1913–1920$ (administrative experience, wartime logistics).
  • Contracts polio $1921$ ⇒ permanent paralysis below waist, yet becomes symbol of perseverance; uses braces, wheelchairs, stagecraft to conceal disability in public.
  • Governor of New York $1929–1932$ during Wall St. Crash/Great Depression.
  – Creates first state relief agency ➔ proof-of-concept for later federal programs.

1932 Presidential Campaign & Philosophy of the New Deal

• Slogan: "I pledge you, I pledge myself, to a New Deal for the American people."

• Emphasizes direct federal action—break from laissez-faire Hoover policies.

• Three R’s framework:
  • Relief – immediate aid for unemployed & poor.
  • Recovery – jump-start economic demand / production.
  • Reform – structural changes to prevent future crises.

• Political Coalition (crucial for Democratic victory):
  • Southern & Western farmers
  • Northern industrial workers & labor unions
  • Urban progressives / reformers
  • Liberal intellectuals
  • Increasing share of Northern African-American voters (shifting from GOP).

• Ideological Roots: Progressivism ($1900–1920$) ➔ belief that government can rationally regulate markets & protect public welfare.

Presidential Communication: "Fireside Chats"

• Informal radio addresses (first on banking, $March\,12,\,1933$).

• Goals:
  • Explain legislation in plain language.
  • Reassure public (“the only thing we have to fear…”).
  • Invite citizen participation; ≈ $100{,}000$+ letters mailed to White House.

• Creates precedent for mass-media leadership & emotional bond with electorate.

The First Hundred Days (March–June $1933$) – Massive Legislative Blitz

• Congress passes $15$+ major bills ⇒ largest peacetime expansion of federal authority.

• Necessitates new boards, administrators, experts = growth of executive branch (“alphabet agencies”).

1. Banking & Monetary Stabilization

• Emergency Banking Act ➔ Bank Holiday:
  • All banks closed $March\,6–9,\,1933$; Treasury examiners certify solvency before reopening.
  • Infusion of federal funds for at-risk but viable institutions.

• Glass–Steagall Act (Banking Act of $1933$):
  • Separates commercial & investment banking; bans banks from gambling with depositors’ savings in stock market.
  • Creates FDIC – government insurance up to $\$5{,}000$ (later raised) per depositor, restoring public confidence.

• Abandonment of Gold Standard ($1933$):
  • Dollar no longer convertible to gold at fixed rate.
  • Allows Federal Reserve / Treasury more flexibility to expand $M_1$ money supply ⇒ mild inflation = stimulus.

2. Industrial Coordination & Labor Rights

• National Industrial Recovery Act (NIRA):
  • Establishes National Recovery Administration (NRA).
  • Drafts ≈ $750$ "codes of fair competition" – set minimum wages, maximum hours, production quotas, and guarantee right to unionize (§$7(a)$).
  • Blue-eagle logo: “We Do Our Part.”
  • Problem: paperwork & compliance costs cripple small businesses; mixed economic results; later ruled unconstitutional (Schechter Poultry v. U.S., $1935$).

3. Direct Relief & Job-Creation (Alphabet Soup)

• FERA – Federal Emergency Relief Administration:
  • Grants $\approx\$500\,million$ to states/cities for food, clothes, housing.

• CCC – Civilian Conservation Corps (1933-1942):
  • Targets single men $18–25$; uniformed, quasi-military camps.
  • Work: reforestation, trail-building, firebreaks, soil erosion projects in national parks & rural areas.
  • Compensation: $\$30$/month; $\$25$ sent home ⇒ injects money into families while preventing urban idleness.
  • Total employment > $3\,000\,000$.

• PWA – Public Works Administration:
  • Budget $\approx\$3.3\,billion$ (largest to date).
  • Funds PRIVATE contractors to build roads, bridges, schools, courthouses, hospitals, airports.
  • Anti-discrimination clause → African Americans gain skilled jobs; sets future civil-rights precedent.

• CWA – Civil Works Administration (Winter $1933–34$):
  • Govt itself hires > $4\,000\,000$ for short-term construction (schools, airports, playgrounds).
  • Criticized for "make-work" & budget blow-out; FDR ends it after thaw to avoid dependency narrative.

• TVA – Tennessee Valley Authority:
  • Regional planning in $7$-state watershed (TN River).
  • Builds series of dams →
  – Flood control saves farms & towns.
  – Hydro-electric power electrifies isolated rural South (kWh rates drop >$50\%$).
  – Demonstration model of public-corporation vs. private utilities (controversial).

4. Agricultural Stabilization

• AAA – Agricultural Adjustment Act:
  • Pays farmers subsidies to leave acreage fallow / destroy surplus (e.g., plow under cotton, slaughter piglets).
  • Economic logic: supply ↓ ⇒ commodity prices ↑ ⇒ farm income ↑.
  • Winners: landowners of large farms.
  • Losers: tenant farmers & sharecroppers (often Black) evicted as acreage reduced; moral outrage amid hunger.
  • Supreme Court voids first AAA $1936$; re-written with soil-conservation rationale.

Broad Implications & Legacy

• Expansion of Federal Responsibility: sets expectation that Washington must protect citizens from market failures.

• Keynesian Experimentation: deficit-financed spending ≈ embryonic adoption of demand-side economics (John Maynard Keynes).

• Labor Empowerment: NIRA’s §$7(a)$ foreshadows Wagner Act $1935$.

• Civil Rights Footnote: PWA & CCC nondiscrimination rules mark incremental but meaningful federal stance; however, many programs administered locally → segregation persists.

• Political Realignment: New Deal coalition dominates U.S. politics $1932–1968$; African Americans, immigrants, labor become core Democrats.

• Critiques:
  • Conservative: govt overreach, regulation throttles business, deficit danger.
  • Left-wing: not far enough; blacks, women, poor still marginalized; unemployment remains > $15\%$ until WWII.
  • Supreme Court challenges (NIRA, AAA) lead to FDR’s later "court-packing" plan.

Study Tips & Connections

• Relate 3 R’s to specific programs:
  • Relief → FERA, CCC, CWA
  • Recovery → NRA, AAA, TVA
  • Reform → Glass-Steagall, FDIC, end of gold standard

• Compare Hoover’s Reconstruction Finance Corporation $1932$ (loans to banks) with FDR’s direct-aid philosophy.

• Understand regional impact: TVA modernizes South; AAA reshapes tenant agriculture.

• Memorize key figures:
  • $3.3$ billion PWA
  • $3$ million CCC workers
  • $4$ million CWA jobs

• Ethical lens: Is it acceptable to destroy food (AAA) while citizens starve? debate utilitarian vs. deontological views.

• Possible exam prompts:
  • "Assess effectiveness of First Hundred Days in restoring confidence."
  • "Explain how New Deal altered relationship between federal government and American citizens."