THE FIRST NEW DEAL. Chapter 12 Section 1 US History

Transcription

1 THE FIRST NEW DEAL Chapter 12 Section 1 US History

2 THE FIRST NEW DEAL ROOSEVELT S RISE TO POWER MAIN IDEA Franklin D. Roosevelt was governor of New York, when he was elected president in 1932, promoting a New Deal for the American people.

3 ROOSEVELT S RISE TO POWER Distant cousin of Theodore Roosevelt, grew up in New York Like TR, learned to love conservation and rural America Went to Harvard and Columbia Law School Met TRs niece, Eleanor whom he later married

4 ROOSEVELT S RISE TO POWER FDR was very competitive Liked being in control, very social and charming (good for politics) Roosevelt began in politics in 1910 Elected to New York State Senate 3 years later, reputation as Progressive reformer, became Assistant secretary of Navy in Wilson Administration 1920 won VP nomination but was not successful

5 ROOSEVELT S RISE TO POWER After loss in 1920, withdrew from Politics and in 1921 caught polio No cure, (causes paralysis) Roosevelt refused to give in, created exercise program to restore muscle control Eventually by wearing braces, was able to walk short distances Had to lean on cane or someone s arm During this time depended on aid Lewis Howe and wife Eleanor to keep his name in politics Eleanor became effective public speaker

6 ROOSEVELT S RISE TO POWER By the mid 1920s Roosevelt back in Democratic Party 1928, ran for Governor of New York Campaigned to demonstrate illness not hinder him in office Narrowly won in 1928 but 2 years later reelected in a landslide Popularity in New York paved way for Presidential nomination in 1932

7 ROOSEVELT S RISE TO POWER Republican s nominated Herbert Hoover to run for second term. Roosevelt was nominated for Democrat s and flew to Chicago to accept (first time) Gave a speech about we needed a new deal for the economy From then on his policies for ending the Depression became known as New Deal American s saw energy, confidence and optimism that gave them hope complete opposite of Hoover Roosevelt won by a landslide on election day (won electoral vote in all but 6 states

8 THE FIRST NEW DEAL THE HUNDRED DAYS MAIN IDEA Upon taking office, FDR launched the New Deal by sending 15 major pieces of legislation to Congress

9 THE HUNDRED DAYS Roosevelt Elected in November 1932 but didn t take office till March 1933 Throughout winter unemployment rose and bank runs increased Bank runs occurred because people feared Roosevelt would abandoned the Gold Standard Reduce value of dollar in order to fight Depression Gold standard -> one ounce = specific amount of dollars To reduce, would have to stop exchanging dollars for gold investors wanted to convert to gold before that happened

10 THE HUNDRED DAYS By March 1933 more than 4,000 banks collapsed Wiped out 9 million savings accounts 38 states governors declared Bank Holidays Closing banks before they went out of business

11 THE HUNDRED DAYS On inauguration day, Most banks were closed 1 in 4 workers unemployed President Roosevelt declared First of all, let me assert my firm belief that the only thing we have to fear is fear itself

12 THE HUNDRED DAYS The New Deal Begins Roosevelt and advisors ( brain trust ) with a lot of ideas and no clear path to end Depression Had said country needed bold, persistent experimentation Began to send bills to congress from March 9 June 16 (became known as Hundred Days ) Congress passed 15 major acts to resolve economic crisis (later became known as New Deal)

13 THE HUNDRED DAYS A Divided Administration To get new ideas, Roosevelt chose advisers who disagreed with each other he wanted to hear different points of view With advisors against each other he would always have final say All of them generally favored some sort of gov t intervention in economy, just disagreed on what role gov t should take One group supported New Nationalism of TR Gov t should work with businesses to regulate wages, prices and production

14 THE HUNDRED DAYS Second group went further than TRs New Nationalism Distrusted big business, blamed leaders for causing Depression Wanted gov t to run key parts of economy Third Group support New Freedom of Woodrow Wilson Wanted Roosevelt to support trust busting with breaking up companies and allowing competition to set wages, prices and production levels Thought gov t should impose regulations

15 THE FIRST NEW DEAL BANKS AND DEBT RELIEF Main Idea President Roosevelt took steps to strengthen banks and the stock market and to help farmers and homeowners keep their property.

16 BANKS AND DEBT RELIEF Roosevelt knew none of proposed solutions to Depression would work if banks remained closed. First thing he had to do was restore confidence in the banking system First night in office told Secretary of Treasury (William H. Woodlin) wanted emergency banking bill for Congress in less than 5 days Next day declared a Bank Holiday, closed all banks and called Congress for a special session on March

17 BANKS AND DEBT RELIEF Same day, Congress passed Emergency Banking Relief Act Required federal examiners to survey nation s banks and issue Treasury Department licenses to ones with good finances March 12 President address public through radio First of many Fireside Chats that let American people know what he wanted to accomplish Said banks were secure and safe to put money back in bank (not under mattresses) When banks reopened March 13, more deposits than withdrawals

18 BANKS AND DEBT RELIEF The FDIC and SEC Restored faith but wanted to take it further, advisors pushed for new regulations for banks and stock market Roosevelt agreed and supported Securities Act of 1933 and Glass-Steagall Banking Act Securities Act said companies that sold stocks and bonds had to supply truthful information to investors Gov t created Securities and Exchange Commission (SEC) to regulate stock market

19 BANKS AND DEBT RELIEF Glass-Steagall Act separated commercial banking from investment banking. Commercial banks handle everyday transactions and were no longer allowed to risk depositors money in stock market speculations Glass-Steagall Act also created Federal deposit Insurance Corporation (FDIC) Provided gov t insurance for bank deposits (limit amount) Increased public confidence in banks

20 BANKS AND DEBT RELIEF Mortgage and Debt Relief Many of Roosevelt s advisors felt that debt was more problem for Depression than just low wages American s had to spend little money earned on paying debt with little leftover to buy goods Afraid of losing homes, American s cut back on spending Roosevelt instituted policies to help American s with Debt

21 BANKS AND DEBT RELIEF The Home Owners Loan Corporation (HOLC) Helped home owners make mortgage payments Bought mortgages of home owners who were behind and restructured them with longer repayment and lower interest rates 10% of homeowners received HOLC loan Did not help everyone Not farm owners Had to be employed Unemployed and couldn t pay = foreclosure Between HOLC made loans to cover 1 million mortgages (1 out of 10 in the United States)

22 BANKS AND DEBT RELIEF The Farm Credit Administration Three days after HOLC, Congress authorized Farm Credit Administration (FCA) to help farmers with mortgages Next 7 months, FCA lent 4 times as much money to farmers as entire banking system in years before Able to make interest rates lower, saved millions of farmers from foreclosure Helped in short term, but not helpful in long term? Gave loans to less efficient farmers Money was then not available to more efficient businesses

23 REVIEW QUESTIONS 1. What events in Roosevelt s life shaped his ideas and character? 2. What 3 different ideals did Roosevelt s advisers support? 3. How did the government restore confidence in the banking system? 4. Define: polio 5. Define: bank holiday

24 THE FIRST NEW DEAL FARMS AND INDUSTRY Main Idea New Deal legislation tried to raise crop prices and stabilize industry

25 FARMS AND INDUSTRY Roosevelt s advisors believed farmers and businesses were suffering because prices were too low and production too high Favored creating federal agencies to manage the economy. Believed competition was inefficient and bad for economy

26 FARMS AND INDUSTRY The AAA Help Farmers, Secretary of Agriculture Henry Wallace drafted Agricultural Adjustment Act Idea was price for farm goods low because farmers produced too much food New program said gov t would pay farmers to NOT raise certain livestock or grow certain crops Farmers destroyed crops and livestock to raise prices and was all overseen by the Agricultural Adjustment Administration (AAA) Next 2 years farmers received more than 1 billion in support for not growing crops Program accomplished its goal, surplus was reduced, prices rose and farm income increased by 50% But raising food prices drew criticism along with other parts of the bill

27 FARMS AND INDUSTRY The NRA In June 1933 gov t turned attention to industry problems when Roosevelt and Congress passed the National Industrial Recovery Act (NIRA) Suspended anti-trust laws Allowed business, labor and gov t to set up voluntary rules for each industry Rules known as codes of fair competition Set prices, established minimum wage, and limited factories to 2 shifts per day (to spread production) Shortened workers hours -> goal to create more jobs Guaranteed workers right to form unions Help business develop codes of fair competition

28 FARMS AND INDUSTRY The National Recovery Administration (NRA) ran the program Business owners signed code agreements and gave NRA power to enforce code at their business Stores had blue eagle sign, American s urged to buy from these stores only NRA did help a few industries but mostly unsuccessful Small companies felt codes favored big business Employers disliked the union codes (higher prices due to union wage bargaining) Difficult to administer and business leaders often ignored them Declared unconstitutional in 1935, by that point production fell and bill was not stimulating economy

29 THE FIRST NEW DEAL RELIEF PROGRAMS Main Idea Programs such as the CCC, the PWA, and the WPA provided jobs for some unemployed workers.

30 RELIEF PROGRAMS Roosevelt and Advisors thought that getting money to needy individuals would be fastest remedy to Depression. Didn t want to just give money to unemployed so created and supported work programs for unemployed to earn money

31 REFLIEF PROGRAMS The CCC Civilian Conservation Corps (CCC) Most highly praised New Deal work program Unemployed men opportunity to work in forestry service Planting trees, fighting forest fires and building reservoirs Planted more than 200 million trees (shelter belt) to avoid repeat of dust bowl from Texas to North Dakota Workers lived in camps near work areas and earned $30 a month ($25 sent directly to their families) Workers returned home after 6-12 months and had greater self respect Taught 40,000 workers to read and write By time CCC closed in 1942, put 3 million young men to work Included 80,000 Native Americans 250,000 veterans put to work as well (Bonus Army)

32 REFLIEF PROGRAMS FERA and the PWA Weeks after CCC, congress established Federal Emergency Relief Administration (FERA) Harry Hopkins, former social worker, ran organization Channeled money to state and local agencies to fund their relief programs In first 2 hours on the job Hopkins spent 5 million on relief programs June 1933 congress created Public Works Administration (PWA) Put unemployed construction workers back to work making highways, dams, sewer systems, schools and other facilities Did not hire workers directly but gave contracts to construction companies Insisted companies not discriminate against African Americans

33 RELIEF PROGRAMS THE CWA Fall of 1933 FERA and PWA hadn t reduced employment significantly Hopkins realized needed to act quickly for coming winter (or a lot of people in severe distress) With Roosevelt authorization, created Civil Works Administration (CWA) Hired workers directly Built or improved 1000 airports, 500,000 miles of roads, 40,000 school buildings and 3,500 playgrounds CWA spent 1 billion in first five months Helped people got through winter but Roosevelt didn t like money it was spending Did not want Americans to get used to gov t provided jobs, was shut down following spring

34 REFLIEF PROGRAMS Success of the First New Deal Congress, with Roosevelt s convincing, passed a large amount of legislation First New Deal programs did not restore prosperity but reflected Roosevelt s zeal for action and willingness to experience Most important result: Noticeable change in the spirit of American people Inspired and restored faith in America

35 REVIEW QUESTIONS 1. What were the goals of the Agricultural Adjustment Act and the National Industrial Recovery Act? 2. What types of projects did public works programs undertake? 3. Which Relief Program did Roosevelt not like? 4. How successful were the first New Deal programs? 5. What was the most noticeable result of the New Deal Programs?