The Great Depression and the New Deal

• Hoover's Policies During the Great Depression

  • Presidential Optimism

  • Hoover gave speeches in which he said this is a temporary problem and encouraged people to be positive thinkers

• Outcome:

• Not really solving on anything and could be thought of as a liar if things don't work out

• Angered People because he was a millionaire!

• Hoovervilles: Cardboard box homes

• hoover blanket: Newspaper blankets

• hoover flag: Pant Pocket turned out

• Hoover was a target of American Public's wrath because he's out of touch with America's reality

  • The people feel ignored by D.C. gov

• Hawley-Smoot Tariff

  • Extremely High Tariff; he had been warned by economists

  • Hoover wanted to raise tariff higher to protect US goods

  • Also raises prices of domestic goods

  • Raises the cost of goods

  • Tariff was one of the causes of the depression

  • Causes underconsumption; self-inflicted wound

• Taxes

  • Belief was if he cut taxes then people have more money to spend and the more money spent meant that the business had more profits, which resulted in an increase wages/hire more people

• Outcomes:

  • People have no money to begin with to be taxed, so less taxes do not matter

  • LESS GOVERNMENT SPENDING!!!

  • People may hoard money, not spend it because they don't know how long economic crisis will last

  • If you cut taxes then there would be less gov. Revenue and less gov. Spending money to put into programs that would help people

• Plead with Big Business

  • Hoover begged employers to rehire, open up factories

• Outcome:

  • Businesses can't sell and can't pay employees and they Can't rehire because there is no work to be done

• State and Local Gov. Should get involved, should find solutions, help people

• Outcome:

  • Federal Government maintains it is not part of its responsibility

  • NO MONEY to use b/c Hoover cut taxes

• Charity

  • Ask Americans to be charitable

  • Give money to charity, loan to neighbors, invite troubled neighbors to dinner

• Outcome

  • This is only a temporary solution

  • Gap between. Wealthy and poor is so big, wealthy could not give enough to help

• REconstruction Finance Corporation (RFC)

  • Trickle down economics

  • Program est. in 1932

  • Fed gov. gave Loans to banks and business to help them re-adjust

• Outcome:

  • Good idea, but waits too long and doesn't go for enough in Federal Aid

  • Criticism: Did not do enough in RFC

• New Deal doesn't get America out of depression

  • FDR was Fiscally Conservative (fear of blowing up the debt)

  • He Watched his spending

  • The Spending for WW2 gets us out of Depression

• Putting too much money in the government Is better than too little money

• Gross Domestic Product (GDP)

  • Total value in dollars of all final goods and services produced w/in the nation each year

  • If the GDP Is larger than last year the economy is expanding (getting bigger)

  • If the GDP is smaller, the economy is shrinking (getting smaller)

• Business Cycle

  • Allows people to understand the direction the economy (GDP) is going (Growing or shrinking) and plan accordingly

• The economy allows the Business Cycle regularly

• Cannot predict how each phase is

• Phase: Expansion, Peak, Contraction, Trough

• Expansion:

  • Wages increase

  • Low unemployment

  • Production is high

  • Consumer confidence is high

  • Businesses tart

  • Easy to get a bank loan

  • Businesses make profits and stock prices increase

  • Most Americans aren't optimistic (reality)

• Buy stocks when market is low

• Peak:Never really know until contraction

  • Economy stops growing (reached the top)

  • GDP reaches max

  • Businesses can't produce anymore or hire more people

  • Cycle begins to contract

• Contraction: During a period of contraction (Recession)

  • Businesses cut back production and layoff people

  • Unemployment increases

  • Number of jobs decline

  • People are pessimistic (negative) and stop spending money

  • Banks stop lending money

• Trough: economy reaches trough

  • Economy bottoms out (reaches lowest point)

  • High unemployment and low spending

  • Stock prices drop

  • INVEST during troughs!

  • Compounding interest

• Recession/Depression

• Prolonged contraction is a recession (contraction for over 6 months)

• Recession for more than one year is a depression

Franklin D. Roosevelt:

• only man elected more than two times *elected 4 times

• Two term governor of NY

• Cousin of Teddy Roosevelt

• Served in WW2

• Struggled with infantile paralysis: patience, tolerance, compassion, and strength of will

• *needed steel britches

• Comes from rich family

• Friendly, approachable, confident

• Used the press to advantage (Radio)

• Open to new ideas

• He got polio later —Did everything he could in public without crutch (weak)

• Roosevelt's political appeal

• Premier American orator of his generation

• As popular depression gov. Of NY

• SPonsored heavy state spending to relieve human suffering

• Believed money, rather than humanity, expendable

• Revealed deep concern for plight of forgotten man

• Assailed by rich as traitor to his class

• Unemployed, farmers, immigrants, African-American, women

Roosevelt vs. Hoover

• Great Depression was the issue

Mrs. Roosevelt was the heart and soul of New Deal

FDR: Politician in a Wheelchair

• DNC in Chicago speedily nominated

• Liberal- Conservative

• Liberal: wanted balance budget

• Promised a balanced budget (goes from Great Depression right into WW2), which Doesn't happen

• Sweeping social reforms

• FDR flew to Chicago and accepted nomination in person

• Pledges the New Deal (nobody knew what it was including him )

• Vague throughout the campaign

Eleanor Roosevelt

• Most active and consequential first lady in American history

• Personal and political asset to FDR

• Influenced policies of national government

• Joined Women's Trade Union League and League of Women voters

• Brought unprecedented number of women activists to the White House

• Helped make her most active First Lady in history

• INfluenced policies of national government

• Battled for the impoverished and oppressed

• Condemned by conservatives and loved by liberals, she was one of the most controversial—and consequential—public figures of 1900s

• Received 4x as much correspondence than president did

Presidential Election of 1932

• President Herbert Hoover

• Trickle Down

• Supply Side Economics:  theory that postulates economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade

• Franklin Roosevelt

• Pump Priming-  steps taken to stimulate spending in an economy during or after a recession. Generally, it involves pumping small amounts of government funds into a depressed economy to encourage growth.

• New Deal

FDR preached New Deal for forgotten man—vague and contradictory

SPeeches were ghost written by Brain Trust

• Helped with problems with minorities

• College professors, economists

• Advised FDR during campaign and presidency

• Key Architects of new deal

• Small group of reform-minded intellectuals

• Authored much New Deal legislation

• FDR rashly promised balanced budget and berated heavy Hooverian Deficits

Hoover's Humiliation in 1932

• Hoover was swept into office on the tide of prosperity and he was swept out by receding depression; Americans blame Republicans for depression, so it’s time for party switch

Features of election:

• DISTINCT SHIFT of Blacks to Roosevelt camp

• MAJOR Political realignment: AFrican americans had been loyal to Republicans since days of Lincoln but in 1932 they start to vote democrat (African Americans were hit by unemployment hit harder compared to white people)

• Victims of depression

• SHifted to democratic party, especially in urban centers of North

• Hard times ruined Republicans:

• Vote as much anti-Hoover as it was pro-Roosevelt voters

• Roosevelt's Overwhelming Victory

• Democrats also won huge victories in the House and Senate

• Helps him pass sweeping legislative reform

• Greatest Democratic victory in 80 years

• Presidential election showed that Americans were clearly ready for a change

Lame Duck Period Post election

• Lame Duck because what's the point of the president he has no power

• Hoover continued to be president for 4 long months, until 3/4/1933

• Helpless to embark upon any long-range policies without cooperation of Roosevelt

• Hoover arranged two meetings with Roosevelt to get FDR to agree to anti-inflationary policy that would have prevented most New Deal experim etns

• Republicans argued that FDR deliberately allowed Depression to worsen to give himself more glory

• March 4th Inauguration: America will change forever

• Last person inaugurated from March

• "The only thing we have to fear is fear itself"

FDR assumes the Presidency

• November 1932-March 1933: Country was virtually leaderless and the banking system collapsed

• Inauguration Day, March 4, 1933:

• Declared government must wage war on Great Depression

• Moved Decisively

• Boldly declared nationwide banking holiday, March 6-10

• Summoned Congress into special session to cope with national emergy

• 20th AMendment: moved presidential inauguration from March to January (effort to fix "lame duck" period)

3 RElief of the New Deal

• Relief: Immediate help for the needy, jobs for the unemployed, protection for farmers from foreclosure

• Recovery: get the economy moving again

• Reform: regulate banks, abolish child labor, conserve farm lands

• New Deal: Deficit spending, forgotten/common man, and 3 R's

Immediate help for needy:

• Jobs for unemployed, federal works program (hoover did that too), direct relief

• dole payments to american people was the Difference between FDR and Hoover

• Recovery: Pump priming means give money directly to people

• Reform: trying to pass measures to make sure a depression never happens again

First Hundred Days

• March 9-June 16, 1933

• Congress passed 15+ major pieces of New Deal legislation (both singular & plural)

• Get people to work through deficit spending

• Congress was compliant, so FDR able to pass more because they were all democrats

• Significantly expanded federal government's role in the nation's economy

Top Priority:

• Help the Banks

• The number one problem facing FDR's presidency was unemployment, however the first problem he addressed was the banking crisis because this is something they can do quickly

• First order of business was to get the banking system in order

• March 5, 1933: 1st day after taking office, FDR declared a bank holiday

• He persuaded Congress to pass the Emergency Banking RElief Act, which authorized the Treasury Dept. to inspect the nation's banks

• People were taking money out of banks and keeping it in their houses because they didn't think they were going to keep it safe. but money was needed to invest which circulates back into the economy

• Americans Regain confidence in banks

• Next, FDR passed the GLass-Steagall Act which est. the Federal Deposit Insurance Corporation

• The FDIC insured account holders up to $5000 and set strict standards for banks to follow (Today $250,000)

• REstore people's faith in the banking system

• After Glass Steagall was passed, bank failures decreased and the FDIC DID restore people's faith in the banking system

Keys to the first 100 days

• Bank Holiday

• Fireside "Chats" — FDR Would sit by White House Fireside, turn on radio, and directly communicate w/American people

  • He would speak in a language people understood and wasn't patronizing

• Beer and Wine legalized and later in 1933 Prohibition is repealed

• Prime the Pump to lower 25% unemployment (CCC- Civilian Conservation Corp.)

• Farming Relief (AAA)- Subsidies not to grow (but in 1936 Supreme Court will rule it unconstitutional)

• FERA ($3 billion to state's to pay relief $)

• CW pays for temporary "make work        1"

FDR and the 3 R's: Relief, REcovery, and Reform

• New dealers embraced progressive ideas:

• Unemployment insurance, old-age insurance

• Minimum-wage regulations

• Conservation and development of natural resources

• Restrictions on child labor

• Invented some new schemes: Tennessee Valley Authority

• America No longer looked backward in realm of social welfare as it once had

Roosevelt Manages the Money *VERY william Jennings Bryan esque

• Declining gold reserves: FDR takes us off of Gold standard because they want to print more money to cause inflation (inflation for some people which meant wages go up and it was easier to pay off debt)

• A " Managed currency"

• Manage inflation and deflation based on the needs of the economy

• Principal instrument for achieving inflation was gold buying

• Invest in gold

• Policy did increase amount of dollars in circulation

• Inflationary result provoked wrath of sound money critics on baloney dollar

Agencies:

• FDIC: Federal Deposit Insurance Corporation

• What they did: individual accounts insured for up to $5000

• Purpose: Restore trust in banking system

• Of the three r's which one was it: Reform (though it puts money back into the banking system, it's not necessarily going to help with economic recovery; it's reform because it's trying to prevent what happened from ever happening again)

Sources of the New Deal Ideas

• Brains Trust: Specialist and experts, mostly college professors

• New Economists: government spending, deficit spending and public works, government should prime economic pump *understand that gov. Will not be able to spend america out of the recession

• They hoped it will be a catalyst for growth which would kickstart recovery and the US would be on the road to prosperity (don't surround yourself with sycophants—a yes-person (all your ideas are wonderful; surround yourself with divergent opinions)

• Roosevelt Cabinet: included conservatives, liberals, Democrats, Republicans, inflationists, anti-inflationists—often conflicting, compromising, blending ideas

Prohibition Repealed-1933

• 21st amendment: ends Prohibition

• Government can collect taxes on liquor, use it to help national economy

• There are 27 amendments to the constitution

• FDR wanted this

  • Legalize Alcohol business meant he could put a tax sell on liquor (revenue), and the businesses would have legal incomes and that can be taxed as well (good for both economy and people)

New Deal Programs:

• Relief: short-term, get people through until economy recovers

• Bank Holiday: closed all banks; could not re-open until gov. Inspectors declared bank sound

• FERA (Federal Emergency Relief Act), CCC (Civilian conservation corps), WPA (Works progress administration)

• Recovery

• National Recovery Administration: asked businesses to voluntarily follow codes that set standard prices, production limits, minimum wages

• Agricultural Adjustment Acts:

• First AAA: Gov. paid framers to plant fewer crops

• Second AAA: Gov. bought farm surpluses, stored in warehouses until prices went up

• REform

• 1933: FDIC: insured deposits so people would not lose their money if bank failed

• 1933: Tennessee Valley authority (TVA): Built government-owned dams to control flooding, bring electricity to poverty-stricken Tennessee River Valley (Regional planning: Georgia, North Carolina, Tennessee, parts of Virginia: rural)

• Creeps into socialism

  • The gov. is Creeping up to utility companies

  • They wanted to see if people were overcharging people (which they were) (actual reasons why they were really critical)

• 1934: SEcurities and Exchange Commission: Regulate stock market to prevent fraud and another crash (Joseph Kennedy) and to watch over wall street

• 1935: Social Security Act: Gave workers unemployment insurance, pensions, insurance to families if workers died early

• Civilian Conservation Corp (CCC)
  Most popular New Deal agency

• Outdoor work for about 3 million unemployed men between 18 and 25

• Young men from rural areas were shipped to CCC camp in rural area

  • They did Useful work

    • forest fire firefighting (47 lives lost), flood control, swamp drainage, parks planting trees (200 million trees in Dust Bowl areas)

• Paid $30/month, but $25 went back to family —> work for families not themselves

• CCC Provided food and housing

• Critics of CCC: Minor complaints of "militarizing the nation's youth"

Federal Emergency RElief Administration (FERA)

• Purpose: Relief

• Under Harry L. Hopkins (part of Brain trust)

• Granted $3 billion to states for direct dole payments or preferably for wages on work projects (Spread out to 48 states at this time)

• Could distribute money, clothing, and food to the unemployed

• Continuation of hoover's ideas but also a departure from hoover

• Hoover did not dole out direct relief & FDR gave direct relief

  • THey both did works programs (FDR does it on a grander scale)

First Agricultural Adjustment Act (AAA)

• Purpose: recovery of agriculture

• Farmers had problem of overproduction —> led to debt

• Paid farmers who agreed to reduce production of basic crops such as cotton, wheat, tobacco, hogs, and corn

• Money came from a tax on processors such as flour millers and meta packers who passed the cost on to the consumer

• Paying farmers not to farm during a time of crisis

• Feeding pigs was hard because it cost too much money to feed and it was a liabilit,y, which led to slaughter of livestock

• First AAA in a 5:4 Butler decision was unconstitutional

Concerns About the New Deal

• Policy of deficit spending (spend more money than government receives in revenue)

• FDR felt this was a necessary evil that had to be used to help fix economic crisis

• Supported by British economist John Maynard Keynes

• Opposite of laissez faire

Critics Emerge

• Despite renewed confidence of many Americans, critics from both political spectrums emerged

• Liberals (left) felt FDR's program was NOT doing enough (more deficit spending, more programs)

• Conservatives (right) felt government intervention was TOO Much and interfered with our free market economy

Criticisms by Conservative Opponents

• Approaching socialism (killed individualism)

• It added to national debt ($35 billion)

• It wasted money on relief and encouraged idleness

• It violated the constitution and states rights

• It increased the power of the Presidency (FDR was reaching toward dictatorship, Congress a rubber stamp, independence of judiciary threatened, separation of powers shattered)

American Liberty League (collegeboard): Rich people and FDR didn't care about them

• Less gov. Interference

• Said New Deal violated rights of individuals and property

• Added to national debt

• Wasted money on relief

• Encouraged idleness

• Gave president to much power

• Had money, but too few in numbers, but FDR didn't care

Criticism by Radical Opponents

• Radical Opponents said the New Deal did not go far enough. They were demagogues (rabble-rousers) and had popular followings, so FDR was concerned

Father CHarles. E. Coughlin

• Began broadcasting in 1930

• His slogan was "Social Justice"

• His anti-New Deal messages went to 40 million radio fans

• He advocated nationalization of banking and currency and national resources and demanded a "Living wage"

• So anti-semitic, fascistic, and demagogic that he was silenced in 1942 by ecclesiastical (priestly) superiors

• Started praising Adolf Hitler (before holocaust) and said depression was the fault of Jews

Senator Huey Long (Louisiana)

• Planned to run for president

• Advocated Share Our WEalth plan

• Guaranteed annual income of at least $5000 for every American

• Financed by confiscating wealth of people who made over $5 million per year

• Slogan: Every Man A King

• Very popular: guaranteeing families an annual income, which is what more than most americans were making

• Going to be a modern day robin hood

  • In 1935, he claimed 7.5 million members of Share-Our-Wealth clubs

• Killed by Dr.  Carl WEiss at rally

• Believed that every family should had house, car, and radio

Dr. Francis E. Townsend

• Elderly physician from CA

• Plan for federal government to pay $200 per month to unemployed people 60+

• The program would be financed by 2% national sales  tax and each pensioner would be required to spend the money in 30 days and this would stimulate the economy

• Serves the basis for social security act

• Older generation would retire because they know they'll be able to live modest comfortable life, which meant more job opportunities for younger generation entering workforce

A Day for Every Demagogue

• Demagogues (Coughlin and Long) raised questions about link between fascism and economic crisis

• Japan, Germany Adolf Hitler

• WOrks Progress Administration

• Not every WPA project strengthened infrasture

• Most Loved WPA Programs

• Federal Art Project: hired artists to create posters and murals

• Critics claimed WPA meant "we provide alms"

• Over eight years, nearly 9 million people given jobs, not handouts:

• Nourished precious talent, preserved self-respected, fostered creation of more than a million pieces of art, many of them publicly displayed

National Recovery Act (NRA) was Going to be unconstituatioal

• Most complex of agencies

• Purpose: Combine immediate relief with long-range recovery and reform in industry

• Created a partnership of business, labor, and government to attack the depression through price controls, high wages, minimum wage levels, maximum hours of labor

• Labor granted additional benefits

• Workers formally guaranteed right to organize and bargain collectively through representatives of their own choosing

• ANtiunion contracts expressly forbidden (Yellow Dog)

• Certain restrictions placed on Child labor

• NRA "Fair competition" codes

• Called for self-denial by management and labor

• Patriotism aroused by mass meetings and parades

• Blue eagle designed as symbol of NRA

• For brief time, an upswing in business activity Sick Chicken Case

• - Supreme Court killed NRA

• In Schechter, Court ruled Congress could not delegate legislative powers to the executive powers —> NRA was unconstitutional!!!!

• Declared congressional control of interstate commerce could not apply to local business

• Conservative court was declaring acts of the new deal unconstitutional

  • FDR isn't happy about it

  • sometimes legislation is poorly written and it needs to be rewritten and after FDR wins in 1936, he's frustrated with the court

  • he tries to change the makeup of the court (very unpopular thing that he tried)

The Second New Deal

• Women were far more reluctant to go out and seek assistance during these hard times, because the lines (full of men) were intimidating to a woman

• Unfortunate realities was that more women starved to death because they were reluctant to seek assistance

• Men were unemployed and going to soup kitchens and seeking assistance and maintain dignity by wearing suits

New Visibility for Women

• After 19th amendment, women began to carve more space in political & intellectual life

• First Lady Eleanor Roosevelt most visible woman in Roosevelt White House

• SEcretary of Labor Frances Perkins (1880-1965) became first woman cabinet member (activist for workplace reform—-after triangle shirtwaist factory)

• Mary McLeod Bethuen (1875-1955)

• Director of Office of Minority Affairs in National Youth Administration–served as highest-ranking African AMerican in Roosevelt administration

• Black Cabinet—at this point in time, that is going to give Blacks more of a political voice than they have ever had in our nation's history up to that point in time, with that said, one of the major shortcomings when we get to the end of the New Deal, one of the glaring failures of the New Deal was the failure to advance in New Deal, it's still going to be an era of Jim Crow, in some programs, FDR is going to forget Blacks; the reason FDR didn't prioritize it was because he was so concerned with the great depression, and thought if he advocated for civil rights he wouldn't get support in Congress

The TVA harnesses the TEnnessee Valley

• Electric power industry attracted ire of New Deal reformers for charging excessive rates:

• An industry that reached directly into pocketbooks of millions of customers for vitally needed services

• Tennessee River provided New Dealers with opportunity:

• By developing hydroelectric potential of entire area, Washington could combine immediate advantage:

• Employment of thousands of people to work

• And long-term project for reforming power monopoly

• Represented opportunity for New Deal through regional planning, which would reveal if the power industry is charging fair rates or not

• First ex. Of regional planning (Ex. New England) of the gov.

• Most revolutionary of all new deal agencies

• Determined to discover precisely how much it cost to product and distribute electricity

CCC was the most popular

NRA was the most complex (before declared unconstitutional)

TVA: most revolutionary; most rural/poor: Virginia, North Carolina, Georgia, TEnnessee, Alabama

TVA benefits

• Full employment (if you need a job you can get a job)

• Cheap electric power; low-cost housing

• Abundant cheap nitrates

• Restoration of eroded soil

• Reforestation

• Improved navigation

• Flood control

• Conservative reaction against "Socialistic" New Deal confined TVA's brand of federally guided resource management and comprehensive regional development to Tennessee Valley

The Second New Deal

• Although the economy had improved during FDR's 1st term (1932-1936), gains were not as great as expected

• Unemployment remained high and production still lagged

• Emphasis: reform

• POlitical Position: liberal

• Primary aim: permanent reform

• Philosophy: international economic cooperation and economic abundance

• Objective: increased purchasing power and social security for public

• Beneficiaries: small farmers and labor

The Second Hundred Days

• FDR launches the "Second New Deal" also called the "Second Hundred Days"

• 1st priority was the farmers- FDR reinvigorated the AAA

2nd agricultural adjustment act

• purpose : recovery for agriculture

• Paid farmers for conservation practices but only if they restricted production of staple crops (corn, wheat, cotton)

Moderate Legislation

• FDR sponsored moderate legislation to silence radical opposition

• Revenue Act of 1935: response to Huey Long increased taxes on large incomes and corporations

• Banking Act of 1935: Response to Coughlin. Extended federal control over private banking practices

• Social SEcurity Act of 1935: Response to Townsend. Included provisions for unemployables (dependent children, the disabled, blind), unemployment insurance, and old-age pensions, which was FDR's legacy of the New Deal

• Best known aspect of SSA: Pension for 65 and older but provisions for unemployables (dependent children under 18, may lose parent, disabilities, blind)

Social SEcurity Act

• Purpose: reform

• Gave money to states for aid to dependent children,established unemployment  insurance through payroll deduction (taxed on employer and employee), set up old-age pensions for retirees

• When social security was originally implemented, the average age span was 58 years of age, most americans were not going to live

• Don't rely on social security funds!

National Youth Administration

• National Youth Admin. (NY) created to provide education jobs and recreation for young

• Getting young people off the streets, into schools, & jobs was a high priority

Improving Labor RElations

• In the Second New deal FDR helped pass the National Labor Relations Act (NLRA)/Wagner act

• This legislation protected workers, ensured collective bargaining, and preserved the right to unionize

• Labor unions had more political voice and grew in numbers

Wagner Act:

• Created powerful new National Labor Relations board

• Administrative purposes

• Reasserted right of labor to engage in self-organization
  Considered Magna Carta of labor, Wagner Act proved to be major milestone for American workers

• CLayton and Wagner Act were important congressional acts which supported the labor movements in this country

A New Deal for Labor

• Under sympathetic National Labor relations board

• CIO is not a new deal agency not created by a fed. gov

• Unskilled workers began to organize into effective unions

• The Leader was John L. Lewis and was the boss of United mine Workers

• Formed Committee for Industrial Organization (changes to congress for industrial organization) within skill-craft AFL

• AFL included skilled, CIO embraced unskilled workers (a lot were minorities)

• Hundreds of thousands were going to join unions in the CIO, it's how Democrats win more support from black community

• In 1936, AFL asuspected CIO

• Restored to sit-down strike

• Refused to leave factory building of General Motors at Flint, Michigan

• Prevented importation of strikebreakers

• Victory when General motors recognized CIO as sole bargaining agency for its employees

• CIO still exists today

Congress Protects Workers

• In 1938, Congress passed the Fair Labor Standards Act which set maximum hours at 44 per week and minimum wage at 25 cents per hour

  • There were limited hours so that more people are put on the payroll (first federal minimum wage was set at 25 cents per hours)

• Wagner and FLSA is what congress did to replace NRA when it was unconstitutional

Labor by children under sixteen was forbidden and under 18 if the occupation dangerous

Fair Labor Standards was bitterly opposed by industrialists, especially textiles

Excluded agricultural , service, and domestic workers and the Forgotten man was forgotten

• Meant many Blacks, Mexican Americans, and women not benefit from act

Landon Challenges the Champ

• Upcoming election of 1936

• Democrats renominated Roosevelt on platform squarely endorsing New Deal

• Republicans hard-pressed to find a candidate

• Settled on homespun governor of Kansas, Alfred M. Landon

• Landon a moderate who accepted some New Deal reforms but not popular Social Security Act

• Republicans condemned New Deal of Franklin "Deficit' roosevelt for its radicalism, experimentation, confusion, and "Frightful waste"

• Landon backed by Hoover (called for holy crusade for liberty) and American liberty league of wealthy conservatives

• FDR's campaign was I'm FDR

The Roosevelt Coalition/New Deal Coalition was Diverse group helped them w/national politics

• Republicans were still relying on their traditional base of political support (big business, big farmer, and conservatives)

• Democrats broadened their constituency, appealing to small farmers in the Midwest, urban political bosses (urbanites), ethnic blue collar workers (immigrants in unions or nonunion workers), Jews, intellectuals, AFrican Americans, and Southerners

• Election of 1936: Landslide

• Democrats now claimed more than ⅔ of seats in House and same proportion in Senate

Election of 1936:

• Roosevelt won because he appealed to "forgotten man" whom he never forgot

• Some supporters only pocketbook-deep: "reliefers"

• Roosevelt forged powerful and enduring coalition (roosevelt Coalition)

• New Immigrants- mostly Catholics and Jews

• In 1920s one out of every 25 federal judgeships went to a Catholic

• Roosevelt appointed Catholics to one out of every four

• 1936 was the most bitter since Bryan's defeat in 1896

• Partially bore out REpublican charges of class warfare

• CIO contributed generously to FDR's campaign

• Many left-wingers turned to FDR, as third-party protest vote declined sharply

• Blacks switched to Democratic party

• Made the Democratic party the majority party

• Created a new Democratic coalition composed of both traditional elements and new elements

• Showed that the American people rejected radical solutions to Depression

  • The radical solutions were socialism or communism

  • critics are going to paint the New Deal liberalism as very radical but it's not, there's a free market and we're still capitalists,  there's just a social safety net

Nine Old Men on the Bench

• Roosevelt took presidential oath on January 20, 1937

• Twentieth AMendment ratified in 1933

• Swept away postelection lame duck session of Congress

• Shortened by 6 weeks awkward period before inauguration

• Roosevelt interpreted reelection as mandate to continue New Deal

• TO him, Supreme Court judges were stumbling blocks

• In 9 major cases involving New Deal, they had thwarted New Deal reforms seven times

• Last president to be inaugurated on March 4, and first president to be inaugurated on January 20

Supreme Court Reacts

• By the mid 1930s, the Supreme Court struck down some agencies claiming them as unconstitutional (citing too much gov. Control over industry)

• Court ultra-conservative; 6/9 judges over 70

• Roosevelt had not appointed anyone to Court in first term

• Some justices held on primarily to curb "socialistic" New Deal

• FDR believed voters (presidential elections of 1932 and 1936 and congressional elections of 1934) had clearly demonstrated support for New Deal

• To FDR, the Court was obstructing democracy

FDR attempts to protect New Deal

• FDR afraid Supreme Court might rule that other New Deal programs are unconstitutional

• He tries to protect New Deal programs by:

• 1937: Court-Packing scheme

• Plan says presidents can add a new Justice for every Justice over 70 years old

• Would increase court from 9 members to 15

• FDR would have been able to add SIX new justices

• He alleged Court far behind in its work- which proved to be false and brought accusations of dishonesty

• Headstrong FDR not realize that Court, in popular thinking, had become sacred

The Court changes course

• Congress deem the AAA/NRA unconstitutional

  • FDR felt he needed to change the composite of the court it was also a failure because he wanted to change the justices from 9 to 15

  • Evidence to support it: FDR won 1940 elections by slimmer margins and conservative democrats formed a coalition with republican

• Court packing scheme hurts him

  • conservative democrats thought he was an autocratic and form an alliance with republicans in congress and stall any major new deal legislation of being passed *never label courts w/parties*

• Public viewed the same thing and thought FDR was on the road to a dictator

• A switch in time saves 9

• Justice Owen J. Roberts previously conservative, began to vote with liberals

• March 1937: Court upheld state minimum wage law for women

• Reversal of a similar case from 1936

• 1937: Congress voted full pay for retired justices over 70

• One of the oldest conservatives retired

• REplaced by more liberal Hugo Black

• New Deal laws upheld by new majority

In succeeding decisions, Court became more sympathetic to New Deal

• Upheld National Labor RElations Act and Social Security Act

• Congress finally passed court reform bill

• Watered down version applied only to lower courts

• ROosevelt suffered first major legislative defeat at hands of his own party in congress

• Court does change course and becomes more liberal

Roosevelt recession in 1937

• Roosevelt's first term did not banish depression

• Unemployment persisted in 1936 at about 15% down from 25% of 1933, but still high

• Recovery was modest

• FDR wanted balanced budget and get rid of deficit spending

• Then in 1937, economy took another sharp downturn:

• Surprising severe depression–within–the depression that critics dubbed "Roosevelt recession"

• Government policies caused nosedive

• Just as new social security taxes began to take effect

• REduction in gov. Spending to try to balance budget

• June 1942: 7 months after pearl harbor there is a massive buildup of US military

Twilight of the New Deal

• John Maynard Keynes : during bad economic times, advocate gov. Running deficits to heat up the economy because more gov. Spending during bad times

• Keynesianism

• Opponent Freidrich Hayek argued that it makes gov. Too powerful and temporary programs will become permanent

• Starting in 1937, FDR announces he will follow Keynesian policy and budget deficits grow

Deficit spending: spend more than you have in revenue

• The purpose was giving people jobs and reliefs with programs, which would be a catalyst for economic growth, which would kickstart economy and lead to road to recovery

Butler vs. US: AAA was unconstitutional

Groups & Culture of the New Deal

• The New Deal Affects Many Groups

• Groups in Roosevelt's New Deal Coalition: (Supporters of the Democratic Party)

• Women, AFrican AMericans, Labor Unions, Southern Whites, immigrants

• Blue Collars were Labor Unions, SOuthern Whites, immigrants who did manual or physical labor

• New Deal Affects Many Groups

• First Lady Eleanor Roosevelt helped women gain higher political positions during the New Deal

• Eleanor was influential in her role as advisor to the president

Women: Gains made vs. problems not solved

• Frances Perkins: Secretary of Labor and 1st woman appointed to a presidential cabinet position

• Gains women made under the New Deal

• Women appointed to important federal positions

• Slight increase in the number of women working outside the home

• Contemporary problems for women: Workplace discrimination; discriminatory wages; discriminatory hiring practices

• Women made modest/slight gains during the great depression

AFrican Americans gain political positions

• FDR appointed over 100 African Americans to positions within the government

• Despite these gains, FDR was never full committed to Civil Rights

• FDR calculated and pressing problems was depression;

  • FDR was not racist

• Feared losing southern democrats in congress, which would stall his new deal progress

Near the end of his fourth term, FDR died:

April 1945: FDR was succeeded by Harry Truman

• first president in 1948 who publicly supported the civil rights movement

• his fair deal stalled in congress because southern democrats lined up with republicans because of his support of civil rights)

• Kennedy campaigned to civil rights and Conservative democrats lined up with republicans

African Americans during the New Deal

• Mary McLEod Bethune: Head of the office of minority affairs of the National Youth Administration

  • She also helped to organize the "Black Cabinet¨ a group of influential African Americans that advised FDR on racial issues

  • Gains African Americans made under the New Deal:

  • Increased political voice through greater access to the president

  • Organizations created for tenant farmers

  • Problems of African Americans not solved by the New Deal: Segregation, racial violence, discrimination in all areas of life; poll taxes (when voting you have to pay), which was a Slight gain

• The 1930s witnessed a growth of activism for Black Americans

• A. Philip Randolph became head of the nation's first all-Black union—the Brotherhood of Sleeping Car Porters

• He Puts pressure on FDR to make sure there's no discrimination in Federal projects (threatens massive demonstrations) and his Ideas influence MLK Jr to have massive demonstrations

Native AMericans Make Gains

• Native AMericns made advances during the 1920s and 1930s

• Full citizenship granted in 1924

John Collier

• Commissioner of INdian Affairs and a strong advocate of Native AMerican rights

• He helped create the Indian Reorganization act of 1934

• Reversed assimilation policies of Dawes Act (1887) & encouraged tribes to preserve culture and set up self-government

• Policy was moving away from assimilation towards autonomy

Labor Unions: Names of unions organized during the New Deal

Made substantial gains

COngress of INdustrial Organizations (CIO): Created w/in the AFL by unskilled workers but it is NOT An agency

• Gains unions made under the NEw Deal

• Better working conditions; increased bargaining power

• Dramatic increase in union membership

• Problems of unions not solved by the New Deal:

• Strike violence

• Big business opposition to labor unions

Other Coalition Groups

• Southern WHites

• Various urban groups

• Immigrants

• Various religious groups and ethnic groups

Reasons they supported the Democratic Party:

• New Deal labor laws and work-relief programs aided many of them

• FDR made direct and persuasive appeals to them

• FDR appointed many officials of urban-immigrant backgrounds

Radio: Original Entertainment

• Nearly 90% of American homes owned a radio

• Radio production thrived

Roosevelt's Fireside Chat:

Direct, honest and frank with the american people

FDR communicated to Americans via radio

Kept Americans informed of the government's efforts during the Depression

Popular Radio Shows:

• Entertainment industry offered people escapism during difficult times

Famous Radio Moments

• Orson welles created a radio special called war of the worlds

• It was an epic drama about aliens landing in America

• Unfortunately, many thought it was a news broadcast and panicked

Live News Coverage

• Zeppelin (Blimp)--> first worldwide broadcasts was the horrific crash of the Hindenburg a German Zeppelin (blimp)

• Such immediate news coverage became a stable in society

Culture in the 1930s

• 65% of Americans were attending the movies at least once per week at one of the nation's 15000 movie theaters

• Comedies, lavish musicals, love stories and gangster films dominated the movie industry

• Gone with the Wind, Wizard of Oz, and Snow White and the Seven Dwarfs

Art During the Great Depression

• The Federal Art Project (Branch of the WPA) paid artists a living wage to paint

• Conservatives criticized because why paint people to paint?

American Gothic, Dorothea Lange, Grant Wood, Edward HOpper

Woody GUnthrie

Writers:

• Federal Writers' Project (Branch of WPA) paid writers to write

• Richard Wright's acclaimed Native Son was written for the project

• John Steinbeck wrote the The Grapes of Wrath

Physical Rehabilitation of Country

• Attacked soil erosion

• Built dams and planted trees to prevent floods

• Reclaimed the grasslands of the Great Plains

• Developed water power resources

• Encouraged regional reconstruction projects like the TVA and Columbia River project

Human Rehabilitation

• Both TR and FDR believed in welfare for the people (Square Deal: after mine strike)

• Est. the principle that gov. Has responsibility for the health, welfare, and security, as well as the protection and education of its citizens

• Embraced social security, public health, housing

• Entered the domain of agriculture and labor

Revitalization of Politics

• Strengthened executive branch

• REasserted presidential leadership

• Revitalized political party as a vehicle for the popular will and as an instrument for effective action

• roosevelt coalition and urban bosses led to high voter turnout for democrats, which enables democrats to dominate politics in 1930s/1940s

Extension of Democracy

• Redefined the concept of democracy so that it included not only political rights but economic security and social justice as well

Maintenance of Democratic System

• The New Deal maintained a democratic system of government and society in a world threatened by totalitarianism

• Increased size and scope of government to meet needs of the depression

• Provided the leadership that enabled Congress to put through the necessary relief, recovery, and reform measures

• Sponsored moderate legislation to neutralize the popularity of radical opponents

• Militarists in Japan, Totalitarianism in Soviet (Stalin) and Fascist (hitler and mussolini)

• US could be victim to that but we did not

• during trying times, dictators most likely come to power and people seek out what they believe to be strength

The Impact of the New Deal

• Over time, opinions about the merits of the New Deal and FDR have ranged from harsh criticism to high praise—usually along partisan lines

• Conservatives felt FDR made government too large and too powerful

• Liberals countered that FDR socialized the economy because Americans needed help to alleviate human suffering (had been accomplished)

Legacies of the New Deal:

FDIC- banking insurance critical to sound economy

Deficit spending- has become a normal feature of gov.

Social security- is a key legacy of the New Deal in that the Feds have assumed a greater responsibility for the social welfare of citizens since 1935

Wagner Act, SEC, FLSA

Role of gov:

• More involvement in citizens' lives; more regulations, increased taxes to pay for gov. Programs

Criticism of The New Deal

• Waste, incompetence, and graft (use public funds for personal gain) (bribery)

• Fear it was remaking US into communist or socialist state

• Increased size and power of bureaucracy

• Doubling of deficit ($19 billion to $40 billion); WWII would increase it to $258 billion

• Business believed it could get US out of Depression w/o government interference

• Despite years and billions, US was still in Depression

  • Depression was not solved

  • The massive amount of spending for WW2 got us out of depression

• No major progress in Civil Rights

Arguments in favor of the new deal

• Relief—not the economy—was primarily what gov. Was attacking

• Graft was minimal compared to amt. Spent

• Gov.'s obligation to help the masses

• Capitalism saved from collapse (purged worse abuses to save it from itself)

• Fairer distribution of income achieved

• Stopped more radical solutions to Depressions

• Left solutions: Communism and Socialism

• Right: Fascism

• Kept armed revolt and upheaval occurring in Europe out of US

FDR Drove "The Car" Down Middle Road

• Called Greatest American conservative—-needed to do more

• He was forced by times to be more liberal (but originally conservative)

• Chose middle road between radical conservatives who wanted little or no gov. Action and radical left-winters who wanted to end capitalism

• Both Hamiltonian and Jeffersonian

• Supported big-government action (Hamiltonian) and Remembered the "Forgotten man" (Jeffersonian—-faith in the masses)

• FERA: big gov. Action and gave autonomy to states on how to spend the money (Jeffersonian)

Capitalism:

• Lack of equitable distribution of wealth was a failing of capitalism

• Socialism itself does not work

The American Safety Net is created and it will only grow larger