CHAPTER 12 SECTION 1 The First New Deal
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1 CHAPTER 12 SECTION 1 The First New Deal
2 Roosevelt s Rise to Power Big Ideas: Franklin Roosevelt, former Secretary of the Navy and Governor of New York, campaigned on a promise of a new deal between Americans and their government. Roosevelt was upbeat, enthusiastic, and optimistic about the country s future.
3 Roosevelt s Rise to Power Franklin Roosevelt grew up in a wealthy family in Hyde Park, NY. He was a former governor of New York, Secretary of the Navy, and a Vice Presidential candidate. In 1921 he was struck by the polio disease which left him without the use of his legs.
4 Roosevelt s Rise to Power Polio was one of the most dreaded diseases of the early 19oos. Roosevelt used his influence to create the organization known as The March of Dimes. They collected dimes to fund research. Jonas Salk developed a vaccine for the viral disease in 1954.
5 Promoting recovery In his acceptance speech for the Democratic nomination for president, FDR said, I pledge to you, I pledge to myself, to a new deal for the American people. From this point on, Roosevelt s policies for ending the depression became known as the New Deal.
6 Promoting recovery Roosevelt won a landslide victory, and a nervous public began pulling their savings out of banks. People were worried that FDR would end the gold standard. Under the gold standard the value of a dollar was directly tied to the price of gold. 1 oz. of gold was worth $ You could always take in your dollars and exchange them for gold coin.
7 Promoting recovery During the winter of 1933 more than 4000 banks had collapsed due to bank runs. 9 million savings accounts were lost. Governors ordered bank holidays, allowing the banks to close, as a defense against runs.
8 Bank Failures
9 The 100 Days Big Ideas: FDR was inaugurated on March 4, 1933, and he immediately began sending bills to Congress. In just the first 100 days, Congress passed 15 major acts to deal with the economic crisis. a legislative pace that has never been equaled
10 Banks and Debt Relief The first thing Roosevelt set out to do was restore trust in the banking system. The House of Representatives only took 38 minutes to pass FDR s Emergency Banking Relief Act. Under the law, federal examiners would survey the nation s banks and issue certificates to those that were found to be financially sound.
11 Banks and Debt Relief After the passage of the bank act, Roosevelt addressed 60 million listeners over the radio informing them that the banks were a safe place to put their money. The radio addresses FDR used to keep citizens informed of his plans for action became known as fireside chats.
12 The FDIC and the SEC In 1933 Congress passed the Securities Act which required people who sold stocks and bonds to tell the truth to investors. Congress created the Security and Exchange Commission to regulate the stock market. The Glass-Steagall Act made it illegal for banks to risk customer deposits in the stock market.
13 The FDIC and the SEC Congress also set up the Federal Deposit Insurance Corporation (FDIC). If a bank failed, customers would get their money back because it was insured by the FDIC. This increased confidence in banks.
14 Mortgage and Debt Relief To help home owners pay their mortgages, the government purchased the loans from the banks through the Home Owners Loan Corporation. The government extended the loans so that payments would be less expensive. This only helped those who still had a job and were not farmers.
15 Mortgage and Debt Relief To help out the farmers, the Farm Credit Administration was established to lend money to farmers so they could stay on their property. It helped the farmers in the short term, but probably hurt the overall recovery effort.
16 Farms & Industry Big Ideas: Roosevelt s economic advisors knew that farmers and businesses were suffering from overproduction and low prices. Many advisors wanted the government to manage the economy.
17 Farms & Industry Secretary of Agriculture Henry Wallace drafted the Agricultural Adjustment Act. The AAA would pay farmers to not grow certain crops and raise certain livestock. In order to raise prices, farmers slaughtered 6 million piglets, 200k sows, and plowed under 10 million acres of cotton.
18 Farms & Industry Farmers received more than $1 billion in support payments. While this did increase food prices, that was not good news for customers. Also, most of the cotton fields landlords plowed under, were worked by African American tenant farmers.
19 Farms & Industry To help manufacturing, the government created the National Recovery Administration. The NRA set prices, regulated factory schedules, and set a minimum wage, and gave workers the right to unionize.
20 Farms & Industry The government had no way to enforce the rules, but businesses that agreed to the rules received an NRA sign for their shop and, Americans were encouraged to only shop at places featuring the NRA sign.
21 Farms & Industry The NRA was not very effective because it was voluntary and tended to favor big business over small business. Also, businesses didn t like that gave workers the right to form unions. The Supreme Court unanimously ruled the NRA unconstitutional in 1935 because it regulated more than just interstate commerce.
22 Relief Programs Big Ideas: Roosevelt and his advisors didn t want to simply give cash to needy people. Instead they wanted to create jobs so unemployed people could earn an income. It would also keep men busy, making them less likely to join subversive groups such as the fascists and communists.
23 Relief Programs One of the most successful of the New Deal program was the Civilian Conservation Corps (CCC). The CCC offered young men jobs working with the Forest Service planting trees, creating trails, and fighting forest fires.
24 Relief Programs The men lived in work camps. The government paid them $5 a month and sent $25 a month to their family. The CCC also taught 40,000 men to read and write. More than 3 million men worked for the CCC including 80,000 Native Americans and 250,000 veterans.
25 Relief Programs The Federal Emergency Relief Administration (FERA) channeled money to state and local government programs to help the unemployed.
26 Relief Programs The Public Works Administration (PWA) was created to provide jobs for construction workers. The PWA built highways, sewer systems, schools, and other government facilities.
27 Relief Programs The PWA did not hire workers directly, but issued contracts to private companies. The PWA was the only government program to insist that contractors not discriminate against African American workers.
28 Relief Programs By 1933 the FERA and PWA had not been enough to significantly reduce unemployment, so FDR authorized the creation of the Civil Works Administration The CWA hired workers directly for the construction of highways, sewer systems, schools, and other government facilities. However the program spent $1 billion in just 5 months, so FDR had it discontinued the following spring.
29
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