Franklin D. Roosevelt

• Governor of New York, he was nominated as a Democratic candidate. Republicans nominate Hoover again, who promised that the worst of it was over and again expressed his support of big business, which made him further lose trust among the public → FDR wins the Election of 1932.

• From a wealthy family, but suffered from polio, which humbled him and taught him tolerance and patience. Also had a suave and conciliatory personality; his optimism gave the disheartened American public hope for a better future.

• His wife Eleanor Roosevelt played a significant role in his political campaigns. She joined the Women's League and worked in settlement houses, and her empathy for the struggling public further reassured people that FDR would work with the public's interest in mind.

• New Deal philosophy: aimed to solve Depression era problems by providing relief

  to the unemployed and build on Progressive-era reforms to expand on the welfare state → advocating for the ‘forgotten man,’ like poorer classes and minorities, and highly experimental methods.

• Brain Trust: diverse group of FDR's trusted advisors that helped him develop his New Deal programs. Secretary of Labor Frances Perkins was the first woman in a presidential cabinet.

• New Deal: had three goals

  • immediate relief during the Depression

  • long term recovery that would stabilize the fragile economy

  • reform that would improve the nation and prevent a similar situation from happening again.

FDR and the Depression

• First 100 days: in his first 100 days of office, FDR had Congress pass remedial laws to resolve the current emergency, giving him a significant amount of power to make sweeping, Progressive reforms.

  • started with a bank holiday, where banks across the nation were forced to close until they could be formally open on a sound basis.

• Fireside chats: FDR used the radio to reassure Americans that banks were stable → as people gained more confidence in banks, they put more money in them, which further helped the banks rebuild.

• Emergency Banking Relief Act (1933): gave the president the power to regulate banking transactions, foreign exchange and reopen banks → shows how the President's power has drastically increased because people are desperate.

• Glass-Steagall Banking Act: this est. the FDIC (Fed. Deposit Insurance Corporation), which insured individual bank deposits and essentially ending the unstable, unregulated banking system that had caused the Depression in the first place.

• Creating Jobs:

  • CCC (Civilian Conservation Corps): employed jobless men in restoration projects and park maintenance.

  • FERA (Fed. Emergency Relief Act): gave states direct relief payments that were also used for wages on work projects

  • AAA (Agricultural Adjustment Act): paid farmers to cut crop production — govt. didn’t have to worry about a surplus of goods and farmers get subsidies that helped them pay their mortgages.

  • HOLC (Homeowners Loan Corp): refinanced the homes of struggling middle class families

FDR’s Critics

• Conservative critics despised the increased size of the fed. govt and the extension of their regulatory powers — believed the New Deal was socialist and too experimental. Also disliked deficit spending, which FDR believed was necessary to stimulate economic growth

• Meanwhile, liberal critics said FDR wasn't doing enough

• Demagogues: politicians who gains power and popularity by distorting problems using emotions and people's prejudices, often championing the people's cause against aristocrats (often false promises they don't care about.

  • Francis Townshend: promised the elderly $600 a month.

  • Charles Coughlin: Catholic priest who used the radio to preach, saying FDR was too friendly to the banks. (his organization was eventually shut down after it became increasingly anti-Semitic and fascist).

  • Huey Long: popularized his “Share the Wealth” program, where every family would receive $5,000 at the expense of the wealthy.

• Ultimately, all these people frightened Americans by suggesting there was a link between economic crisis and the rise of fascism domestically; essentially, they believed FDR was taking advantage of the fragile nation and could turn out to be a dictator → this fear intensified as Hitler came to power in Germany.

What changes were made

Industry and Labor Reform

• National Recovery Administration (NRA): aimed to help industry, labor, and the unemployed through immediate relief and long-term reform. Industries had to reduce working hours per person so that it could give more People jobs.

  • Labor wins: est. a max. number of working hours per person, a minimum wage, and forbade anti-union contracts. Additionally, workers were given the right to organize and bargain collectively through union representatives of their choosing (NOT one chosen by

    the employer).

• Big business is extremely upset by this because the fed. govt is advocating for the working class → retaliate by violating the est. codes.

• Schechter v. US (1935): ruled the NRA unconstitutional because it gave too much legislative power to FDR and allowed Congress to control individual businesses, not just interstate commerce.

• Public Works Administration (PWA): intended to provide long term recovery, spending $4 billion on 30,000 infrastructure projects (like dams, highways and public buildings).

  • Dams, in particular, allowed for the irrigation of farmland and generated plenty of electricity, which would become essential during World War 2.

• FDR repealed the prohibition amendment to help the alcohol industry because the govt. needed a way to raise revenue and provide more employment opportunities.

Farmer Problems

• Farmers struggled from low crop prices due to overproduction, which led to farm foreclosures b/c they weren't able to pay their mortgages.

• Agricultural Adjustment Administration (AAA): attempted to reduce crop surpluses in order to increase crop prices (paid farmers not to farm).

• Supreme Court declared the AAA unconstitutional (1936) because it’s taxation programs were illegal. Additionally, the AAA required the destruction of food, which the public found horrific since many families were starving during the Depression

• Congress responds with Soil Conservation and Domestic Allotment Act (1936): reduced crop acreage by paying farmers to plant soil conserving crops.

• Dust Bowl: caused by drought, wind, and, it affected trans-Mississippi states. Displaced families traveled to California as New Deal legislation relieved their burdens, like temporarily suspending mortgage foreclosures.

Battling Big Business

• Federal Securities Act: required that people who sell investments must inform investors of any financial risks.

• Securities and Exchange Commission (SEC): provided oversight for the stock market and gave the public more protection against fraud and insider manipulation.

• Tennessee Valley Authority (TVA): project started by New Dealers who accused the electric power industry of overcharging the public for electricity.

• constructed dams on the Tennessee River to give the govt. information on how much money was required to produce and distribute electricity — TVA power was found to be a lot less expensive

  • critics said this was proof of rising socialism in US, while companies said said it was a result of dishonest book-keeping. However, it turned a poverty-stricken area into a prosperous one and provided employment in the region

Housing and Social Security

• Fed. Housing Administration (FHA) (1934): gave small loans to homeowners so that they could improve their homes or buy new ones.

• US Housing Authority (USHA) (1937): lent money to states and communities for low cost housing development — less slum areas in US

• Social Security Act (1935): provided insurance for the unemployed and elderly, which was financed by a payroll tax on the employer.

• Although Republicans saw the Act as ‘handouts’ that promoted a ‘cult of leisure’ (where people wouldn't work because they received fed. benefits). They believed the money on ‘useless’ people.

• The SSA est. the principle of fed. responsibility for social welfare, providing support for urbanized Americans who now relied on the unpredictable boom-and-bust cycle of the economy.

Other Labor Reforms

• Wagner Act (1935): considered the Magna Carta because it protected the right of labor to organize in unions and bargain collectively with employers. A board was also est. to monitor unfair labor practices by employers.

• Fair Labor Standards Act (1938): regulated the min. wages and maximum hours worked by interstate commerce workers and outlawed child labor.

• However, because it excluded agricultural and service workers, African Americans, Mexican-Americans, and women did not benefit (since they were most concentrated in those working sectors)

• CIO (Committee of Industrial Organization): a labor union that broke away from the AFL to organize unskilled industrial workers regardless of their economic status or craft — another win for labor.

End of the Depression

• Election of 1936: Republicans choose Alfred Landon, and Democrats choose FDR (obviously).

  EDR wins because of his wide appeal to the ‘forgotten man’ (some Southerners, black people, and

  poor people)

• Conflict with the Supreme Court:

  • Background: the Supreme Court was filled with conservative judges who opposed the ‘socialist’ New Deal reforms — FDR believes the judges should be more liberal and in line with

  • Court Packing Plan (1937): allowed FDR to add a new justice for every sitting justice over 70 years old who wouldn't retire — HIGHLY CONTROVERSIAL.

• Both Republicans and Democrats accused FDR of trying to defy the checks and balances system, marking his first political defeat among the public.

• However, some conservative judges become more liberal to preserve the Supreme Court as it was.

• Recession occurs in 1937, caused by reduced consumer spending due to social security taxes that cut into payrolls. The fed. govt. had also cut down spending to keep a balanced budget.

• FDR adopts Keynesianism: economic theory where banks would adjust interest rates and the govt

  spend more, which would in turn increase economic prosperity.

• Meanwhile, critics said New Dealers were spending too much money and that it was suspicious >

  Hatch Act is passed to stop corruption, but isn’t effective.

• Ultimately, although FDR was relatively bipartisan in his reforms, both sides

  either thought he was doing too little or too much.