CHAPTER 34 THE NEW DEAL

CHAPTER 34 THE NEW DEAL

Election of 1932 GOP re-nominates Hoover why? Dems nominate Franklin Roosevelt Gov. of New York Heavy state spending Repeal prohibition Very vague about plans Young advisors known as the Brain Trust FDR won big - remained quiet about plans

Election of 1932

First 100 Days - Banks Needed to stop banks from closing Declared a Bank Holiday Emergency Banking Act (8 hours to pass) Gave the govt. the power to regulate banking transactions and reopen good banks Glass-Steagall Banking Reform Act Created the FDIC

Unemployment during the Depression

First 100 Days - Jobs Civilian Conservation Corps (CCC) Employed about 3 million young men Flood control, reforestation, conservation Were required to send $ home to family

Civilian Conservation Corps

Direct Relief Finally Federal Emergency Relief Act (FERA) Led by Harry Hopkins member of the brain trust Provided about $3 million for direct relief and public works projects Harry Hopkins

Other First 100 Days Legislation Agricultural Adjustment Act (AAA) $ to help farmers pay mortgages Homeowner s Loan Corp. (HOLC) Civil Works Administration Jobs, make work tasks Helped get through winter of 33 All this was more than any Prez ever dreamed of doing - needed more

Critics of the New Deal Fr. Charles Coughlin Priest with a radio show and lots of listeners Dr. Frances Townsend Wanted $200 a month for those over 60 On the condition they spend it

The Kingfish The most powerful critic of the New Deal was Louisiana Senator Huey Long Share our Wealth program Guaranteed $5,000 income for every American family Got the money by heavily taxing the rich

FDR s Response to the Critics Works Progress Administration $ for public building projects provided 9 million with jobs jobs for college students, artists, actors, & musicians National Recovery Administration (NRA) Individual industries were to work out fair competition codes Labor unions were formally given the right to organize and bargain collectively Later found unconstitutional (Sick Chicken Case)

Public Works Administration Originally part of the NRA Provided about $4 billion for public works programs Grand Coulee Dam on the Columbia River Paid for by taxes on alcohol 1933-21st Amendment - repealed prohibition

Farmers During the Depression Agricultural Adjustment Adm. (AAA) Set parity prices for certain goods Paid farmers to actually grow less $ came from a tax on processors of farm products Was passed after lots of crops already had been planted Land was plowed up and livestock slaughtered Very controversial Found unconstitutional

Farmers During the Depression Soil Conservation & Domestic Allotment Act Paid farmers to grow soil-conserving crops or to let land sit for a time period Second Agricultural Adjustment Act Gave farmers parity prices if they did not grow over a certain amount of certain crops Dust Bowl Over tilling of land, drought, high winds Govt. helped by moving farmers and planting trees to stop the wind

Indian Re-Organization Act U.S. govt. policy still shaped by the Dawes Act This new law encouraged tribes to establish local self-govt. Also encouraged tribes to preserve their native crafts & traditions Some tribes refused to organize under it

Reform - Banking & Business Truth in Securities Act Sound information must be provided about stocks Securities & Exchange Commission Est. to monitor the stock exchange Housing construction Federal Housing Administration Small loans to homeowners to improve homes of build new ones U.S. Housing Authority Lent $ to states & communities for low cast construction (lots of opposition)

Tennessee Valley Authority (1933) Govt. built a series of dams along the Tennessee River Partly to see how much it really cost to produce power (not as much as was thought) Some viewed govt. ownership of a public utility like this very socialistic Very popular for many Led to cheap power, jobs, improvements in farming, transformed the area

Tennessee Valley Authority (1933)

Social Security Act (1935) Three major parts: 1) federal/state unemployment insurance 2) pensions for the elderly Paid for by a tax on employees and employers 3) money for the blind, disabled, children and other dependents Met heavy GOP opposition Needed because of boom & bust cycle of capitalism

Business Cycle

New Deal & Labor Unions NRA did a lot for labor, but declared unconstitutional Wagner Act / National Labor Relations Act (1935) Created the National Labor Relations Board Reasserted the right of unions to organize and bargain collectively

New Deal & Labor Unions Organization of unskilled labor shot up Led by John L. Lewis Committee for Industrial Organization (CIO) Split with the AFL, later became Congress of Strikes had not been effective new tactic - sit down strike Successful at a GM plant in Detroit John L. Lewis

Sit-Down Strike

Fair Labor Standards Act Est. a minimum wage and maximum # of hours for industries involved in interstate commerce 40 / hour..40 hrs. / week Forbade child labor under the age of 16 Overall, labor made huge strides with the support of FDR

Election of 1936 Dems were doing well with FDR GOP nominates Alfred Landon moderate Gov. of Kansas who supported some New Deal programs Said FDR was too radical, experimental, and wasteful FDR won big

Election of 1936

FDR & the Supreme Court FDR saw his victory as a mandate for his ideas and programs He decided to go after the Supreme Court - had won against him 7 of 9 times Was very old and conservative 6 of 9 justices over 70 years old FDR thought the public would support him in an attempt to change the court

FDR & Court-Packing FDR proposed adding one justice for all those over the age of 70 (6 total) Congress and the public were both against this the Court was something you don t mess with The Court did start to vote more liberally after this Was a major defeat for FDR He did eventually appoint 8 justices

FDR & Court-Packing Qualifying Test for the Supreme Court Great! Now, once more all together!

New Deal Success??? As of 1936 unemployment was still a problem 1937 - things started to look up Government Debt How is all this being paid for? John Maynard Keynes A British economist who believed deficit spending by the govt. was the only way to get a country out of a severe depression Changed the role of the govt. in the economy

Other New Deal Programs Re-Organization Act Gave the Prez unlimited powers for administrative reforms Allowed a sweeping reorganization of the executive to streamline efficiency Hatch Act A response to $ used in the New Deal and its potential political effects (campaign $) Federal officials can not solicit $ for campaign contributions (except for certain high ranking officials)

Effects of the Depression & the New Deal New Deal lost momentum as the focus of the population changed to Europe - pending war Effects: Some said no effect at all - WWII ended it Federal bureaucracy grew National debt went way up Some saw the negative effects of direct relief Change in the theory behind govt s role Actively help unfortunate citizens Capitalism was saved, worst aspects fixed?