The Election of 1932:

• The Republicans nominated Herbert Hoover to run for a second term as President.

• The Democrats nominated New York Governor Franklin Delano Roosevelt. Roosevelt will be the first to deliver an acceptance speech to a nominating campaign.

• Roosevelt’s campaign plan had programs designed to end the depression called the New Deal. FDR will win the election in a landslide victory.

• FDR came from a wealthy New York family and was educated at Harvard and Columbia Law School.

• He was a distant cousin of President Teddy Roosevelt.

• FDR married TR’s niece, Eleanor.

Roosevelt’s political career

• Began in 1910, FDR was elected to a seat in the New York State Senate.

• He supported progressive reform and opposed party bosses.

• Appointed Secretary of the Navy under Woodrow Wilson.

• 1920 FDR caught polio which is a paralyzing disease with no cure.

• He will rely on his wife to keep his name prominent in politics.

• FDR narrowly won the race for Governor of New York.

• Roosevelt would use government power to help people deal with the economic challenges of the time.

• His struggle with polio made people feel he could somehow understand their hardships.

• This popularity in New York will lead him to become President.

Roosevelt is inaugurated

• FDR won the election of 1932 in November but his inauguration would not occur until March 1933.

• During this time, unemployment continued to rise, bank runs increased, and people began converting their money into gold.

• Some bank runs occurred out of the fear that Roosevelt would end the gold standard.

• This would reduce the value of the dollar.

• People began taking gold and currency out of the banks, resulting in over 4,000 banks collapsing by March 1933.

• Many governors declared bank holidays.

• Closed the remaining banks before bank runs could put them out of business.

The Hundred Days begins:

• Between March 9 and June 16, 1933 is referred to as the Hundred Days.

• Congress passed 15 major acts to help the economic crisis.

• These programs made up the First New Deal.

• To generate the new ideas and New Deal programs, FDR put together a group of advisers in the fields of academia, business, agriculture, government, law, and social work.

Fixing the Banks and Stock Market

• FDR knew that the first thing he needed to do in office was to restore confidence in the banking system.

• He called a national bank holiday and called Congress into a special session.

• Congress passed the Emergency Banking Relief Act Required examiners to survey the nation’s banks and issue Treasury Department licenses to financially sound banks.

• The 1st Fireside Chat FDR spoke on the radio directly to the people; he assured Americans that the banks were now secure.

• The following day deposits in every city outweighed withdrawals, ending the banking crisis.

• New regulations for banks and the stock market were implemented with the Securities Act of 1933 and the Glass- Steagall Banking Act.

• Securities Act of 1933-

  • Companies that sold stocks and bonds had to provide complete and truthful information to investors.

  • The Securities and Exchange Commission (SEC) Created to regulate the stock market and prevent fraud.

• The Glass- Steagall Act-

  • Separated commercial banking from investment banking.

  • It no longer allowed depositors’ money to be risked by speculation on the stock market.

  • It also created the Federal Deposit Insurance Corporation (FDIC)

  • Provided government insurance for bank deposits up to a certain amount.

Managing Farms and Industry-

• Roosevelt asked Congress to pass the Agriculture Adjustment Act

• The plan paid farmers not to raise certain crops to lower crops production.

• While the plan reduced production, increased prices, and helped some farmers, thousands of tenant farmers were unemployed and homeless.

• Large commercial farmers who raised one crop profited more than small farmers who raised several products.

• The National industrial Recovery Act (NIRA) suspended antitrust laws and allowed business, labor, and government to cooperate in setting up voluntary rules.

• Known as codes of fair competition, for each industry.

• National Recovery Administration (NRA) urged consumers to buy only from companies who signed agreements with the NRA.

• Actually caused industrial production to fall.

  It was declared unconstitutional by the Supreme Court in 1935.

Providing Debt Relief-

• Several policies were introduced by Roosevelt to help Americans deal with their debt.

• The Home Owner’s Loan Corporation (HOLC) bought the mortgages of homeowners behind on payments and restructured them with longer terms of repayment and lower interest rates.

• The HOLC only gave loans to those employed.

• It foreclosed on property if payment could not be made.

• Results in 100,000 foreclosures.

• The HOLC refinanced 1 out of every 5 mortgages in the United States.

• The Farm Credit Administration (FCA) was established to help farmers refinance their mortgages.

• The FCA loans helped many farmers in the short term, the loans may have slowed overall economic recovery by giving money to poor inefficient farmers instead of businesses.

Spending and Relief Programs-

• Roosevelt supported a series of government agencies to begin work programs for the unemployed.

• The Civilian Conservation Corps (CCC) gave unemployed men ages 18 to 25 the opportunity to work with the national forestry service planting trees, fighting forest fires, and building reservoirs.

• By the time it closed in 1942, the CCC had employed 3 million men.

• The Federal Emergency Relief Administration (FERA) was created to channel money to help state and local agencies fund relief projects (direct relief).

• In 1933 Congress authorized the Public Works Administration (PWA) to begin a series of construction projects, creating additional jobs. Ex. Schools, hospitals, dams, highways (Hoover Dam)

  • Contracts would be given to private sector

• Harry Hopkins, the head of the FERA, set up the Civil Works Administration (CWA), which hired workers directly and put them on the government’s payroll. (temporary winter construction jobs)

• It was shut down when FDR became fearful of the amount of money spent on the program.

• The most important aspects of FDR’s New Deal was the change in the spirit of the American people.

• People became more hopeful and optimistic, and their faith in America was restored.

Challenges to the New Deal-

• Support of FDR and his New Deal began to fade in 1935.

• The effectiveness of the New Deal was questioned by right and left wing politicians.

• Roosevelt used deficit spending to pay for his programs.

• FDR abandoned a balance budget and borrowed money to pay for his programs.

• The American Liberty League

  • Created as business leaders and anti- New Deal politicians from both parties organized to oppose the New Deal.

• Huey Long-

  • Left wing Democratic Senator who proposed taking property from the rich and dividing it up amongst the poor.

  • It was believed that if he ran as a third party candidate, he would take 10 % of Roosevelt’s vote, possibly enough for a Republican victory.

• Father Charles Coughlin-

  • A Catholic priest in Detroit.

  • Sponsored Huey Long through his popular radio broadcast.

• Dr. Francis Townsend-

  • A former public health official.

  • He proposed that the federal government pay citizens over the age of 60 a pension of $200 a month.

  • This would increase spending and create additional jobs for younger people.

Launching the Second New Deal-

• In 1935 FDR’s second New Deal began with a series of programs and reforms to speed up recovery and provide economic security to every American. Roosevelt hoped the plan would increase his chances of being re-elected in 1936.

• The Works Progress Administration (WPA) was a federal agency headed by Harry Hopkins.

• It spent $11 billion over several years, creating jobs for workers.

• Its most controversial aspect was offering work to artists, musicians, theater people, and writers.

• paid people to sew clothes, paint murals, can vegetables, cook school lunches, and build everything from hospitals and schools to sidewalks and swimming pools.

The Rise of Industrial Unions-

• New labor legislation was created because FDR believed in high union wages to allow more spending power to boost the economy.

• July 1935, the National Labor Relations Act (Wagner Act) was passed.

  • This guaranteed workers the right to organize unions without employer interference.

• The law set up the National Labor Relations Board (NLRB)

  • which organized factory elections by secret ballot to determine if workers wanted to form a union.

• Binding arbitration was also set up, in which a neutral party would listen to both sides and decide the issue.

• This gave dissatisfied union members a process to voice their complaints.

The United Auto Workers (UAW)-

• After two men were demoted at the General Motors auto-body plant in Cleveland, Ohio, workers protested with a sit-down strike refusing to work.

• Workers at a plant in Flint, Michigan did the same.

• Violence broke out and finally the company gave in.

• The UAW was formed and quickly became one of the most powerful unions in the U.S.

The Social Security Act-

• The Social Security Act-

  • Became law in 1935.

  • Providing security for the elderly, unemployed workers, and other needy people.

  • The bill would provide a monthly retirement benefit and unemployment insurance.

  • Workers earned the right to receive the benefits by paying premiums.

• Social Security helped many people, but initially it left out many of the neediest members of society.

  • Ex. Farmers and domestic workers.

Roosevelt’s Second Term-

• Millions of voters owed their jobs, homes, and bank accounts to the New Deal.

• By the election of 1936, Democratic Party members shifted from mainly white Southerners to include farmers, laborers, African Americans, new immigrants, ethnic minorities, women, progressives, and intellectuals.

• Frances Perkins-

  • First woman appointed to a cabinet post.

• FDR wins the 1936 election in one of the biggest landslides in American history.

• The Supreme Court did not support FDR’s New Deal programs.

• January 1936, the Court declared the Agricultural Adjustment Act unconstitutional.

• After the election, FDR attempted to change the political balance of the Supreme Court with the court- packing plan.

• FDR sent Congress a bill to increase the number of justices on the Supreme Court.

• It was a political mistake and split the Democratic Party and Americans felt that it would give the president too much power.

• In 1937 a rise in unemployment will hurt FDR’s popularity.

• When FDR cut spending the economy plummeted and 2 million people were out of work.

• This recession led to a debate on how to handle the situation.

• Treasury Secretary Henry Morgenthau wanted to balance the budget and cut spending.

• The opponents favored “Keynesianism” ideas, which states that government needed to spend heavily during a recession to jump- start the economy.

• In 1938 FDR asked Congress for $3.75 billion for the PWA, WPA, and other programs.

The Last New Deal Reforms-

• FDR’s successes were limited in his second term in office.

• In 1937 National Housing Act (NHA) Created the US Housing Authority to subsidize loans for builders willing to buy blocks of slums and build low- cost housing.

• The Farm Security Administration-

  • Gave loans to tenant farmers to purchase farms.

  • Congress kept appropriations low, believing that the plan made agricultural problems worse.

• The Fair Labor Standards Act of 1938

  • Gave protection to workers, abolished child labor, and created a 40- hour workweek for workers.

  • New Deal legislation began to get blocked as

• Congress began to turn against the New Deal.

  • The New Deal era ended in 1939.

The legacy of the New Deal-

• The New Deal had limited success, but it gave Americans a stronger sense of security and stability.

• The New Deal operated to balance competing economic interests.

• The New Deal’s mediating role established the broker state which helped work out conflicts among different interests.

• The New Deal brought a new public attitude regarding the government.

• The program gave Americans a safety net that provided safeguards and relief programs to protect them from economic disaster.