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Ch. 33 Notes: The Great Depression and the New Deal

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1 Ch. 33 Notes: The Great Depression and the New Deal

2 In the presidential election of 1932, Franklin D
In the presidential election of 1932, Franklin D. Roosevelt will defeat Herbert Hoover in a landslide. FDR promised a “New Deal” for the American people which would include a balanced budget and sweeping social and economic reforms This election is also the first one in which large numbers of African Americans voted Democrat – largely because they suffered the worst during the Great Depression. FDR

3 The “New Deal” Roosevelt didn’t exactly know what the New Deal would entail. He was assisted by his “Brain Trust” – a collection of social, economic and political thinkers who advised him in developing his New Deal agencies. He was also greatly aided (and influenced) by his wife, Eleanor – she often time served as his “legs”, inspecting things around the country and reporting back to her husband. He also appointed Francis Perkins to the position of Secretary of Labor – the first woman to serve on the Cabinet (she was a big supporter of workers’ rights and unions).

4 Eleanor Roosevelt and Francis Perkins

5 The Three “R”’s The three main goals of the New Deal were known as the Three R’s: relief – immediate action to half the economy’s deterioration and aid those in need (Federal Emergency Relief Act and Works Progress Administration). recovery – temporary programs designed to restart the flow of consumer demand - “priming the pump” (Civilian Conservation Corp and Public Works Administration). reform – permanent programs designed to avoid another depression and insure U.S. citizens against economic disasters (Securities and Exchange Commission and Social Security Act).

6 The Bank Holiday FDR’s first order of business was to address the problem of bank failures. On March 6, 1933, he closed all of the banks in the U.S. (four days). On March 9, 1933, Congress passed the Emergency Banking Relief Act, which allowed only the most financially sound banks to reopen. On March 12, 1933, FDR made his first radio address to the nation (known as fireside chats) to explain what was happening with the banks – this stopped the run on banks. Congress also passed the Glass-Steagall Banking Reform Act, which created the Federal Deposit Insurance Corporation – insured bank deposits up to $5000 then, today it’s $250,000.

7 The 100 Days The initial meeting of Congress is known as the 100 Days (March 9th – June 16th). During the 100 Days, Congress (which was controlled by the Democrats) passed more than fifteen major pieces of legislation that significantly expanded the government’s role in the nation’s economy and welfare. These programs gave he president broad authority over the nation’s economy – so broad that some of the programs will later be declared unconstitutional by the U.S. Supreme Court.

8 The 100 Days

9 The Alphabet Agencies The Securities and Exchange Commission required stock information to be accurate and truthful. The Federal Securities Act prevented insider trading and other fraudulent practices. The Agricultural Adjustment Act raised crop prices by lowering production. The Civilian Conservation Corp put young men to work (ages 18 – 25) building roads and parks and planting trees – especially in the Dust Bowl region.

10 The Alphabet Agencies The Federal Emergency Relief Act provided around $3 billion to give out as direct payments or for wages on work projects. The Home Owners’ Loan Corp was created to assist with low interest rage home loans. The Public Works Administration (part of the National Industrial Recovery Act) provided money to states to construct schools and community buildings. The Civil Works Administration built roads and schools and provided money for the salaries of teachers in rural areas. The Federal Housing Administration provided home loans for mortgages and repairs.

11 One of the most controversial New Deal programs was the Tennessee Valley Authority.
The TVA was designed to bring relief to the Tennessee Valley region by building dams – this would create jobs and provide cheap hydroelectric power to the region. Critics claimed the government shouldn’t be competing with private utility industries – too much like socialism. TVA

12 The Dust Bowl To make matters worse during the Great Depression, late in 1933 a prolonged drought hit the midwest. The drought, along with the cultivation of marginal farmlands, the dry-farming techniques that were in use and soil erosion, led to tons of topsoil being blown across the Great Plains.

13 The Dust Bowl

14 The Migration of the “Okies”
Many midwestern farmers went west to California, looking for work. However, when they arrived in California, there wasn’t enough work to go around and the farmers still struggled for food and shelter. FDR eventually created the Resettlement Administration to help Dust Bowl victims move to better land – they also set up relief camps in California to help provide for the migrants.

15 John Steinbeck and The Grapes of Wrath
Author John Steinbeck wrote The Grapes of Wrath to describe the plight of the migrant workers as they headed to California. It was widely read and also harshly criticized. It was even banned in many communities, especially in California.

16 The Indian Reorganization Act
In 1934 Congress passed the Indian Reorganization Act. This law gave Native Americans more control over their reservations – moved away from assimilation and allowed the Native Americans to preserve their cultures through tribal government.

17 Critics of the New Deal There were many critics of the New Deal – liberals felt the programs didn’t do enough while conservatives felt the government had gone too far and we were headed down the road to socialism. Three critics in particular gained popular support for their ideas.

18 Father Charles Coughlin
Catholic priest Father Charles Coughlin believed FDR was too friendly with the country’s bankers. He called for monetary reforms, the nationalization of major industries and protection for labor. His anti-Semitic rants eventually turned off listeners.

19 Dr. Francis Townsend Retired physician Dr. Francis Townsend wanted more help for the elderly. He called for everyone over sixty to receive $200 a month. His influence eventually led to the Social Security Act, which not only created old-age pensions but also contained unemployment insurance and help for the disabled and minors.

20 Huey Long The biggest threat to FDR was Louisiana Senator Huey Long.
Long’s “Share the Wealth” program promised to tax the rich and give to the poor. Long had serious designs on challenging FDR for the Democratic nomination for president in 1936 but was assassinated in Louisiana in 1935.

21 New Deal Setbacks The National Recovery Administration was established to combine immediate relief with long-range recovery and reform. It was designed to assist industry, labor and the unemployed – industries were to work out “fair competition” codes which set lower maximum hours and minimum wages so that more people could work. It also provided benefits for workers and unions. However, because it depended on people being willing to sacrifice during times of hardship, it began to collapse from within. Before it could collapse, though, the U.S. Supreme Court declared it unconstitutional (along with the AAA) - Congress had delegated too much of its authority to the president.

22 FDR Attempts to “Pack the Court”
After being easily reelected in 1936, FDR beliefs that the people of the U.S. support the New Deal and want it to continue. However, the Supreme Court (which was conservative) had blocked several of FDR’s plans. So FDR proposed a law which would add a justice for each on on the court over 70 who wouldn’t retire (that would have added six more justices). The nation and his own party balked at the idea – he was messing with the traditional system of checks and balances. Congress refused to support his “court packing” proposal and it hurt him politically – he didn’t have the total support of Congress that he did during his first term. However the court did become more sympathetic to New Deal legislation after this. FDR eventually appointed nine justices to the Supreme Court either due to death or retirement.

23 “Court Packing”

24 The “Roosevelt Recession”
During FDR’s first time, the Great Depression lingered in spite of the New Deal programs. In 1937, the economy took a downturn, largely due to new Social Security taxes and cutbacks on spending (FDR was trying to balance the budget).

25 Keynesianism Because of the downturn, FDR once and for all embraced the ideas of John Maynard Keynes, which was a policy of government spending (deficit spending) to prime the pump and encourage consumer spending. This deficit spending caused the national debt to double from around $19 billion to $40 billion by 1939.

26 Works Progress Administration
The WPA was created to create as many jobs as possible as quickly as possible. The WPA spend over $11 billion to give jobs to over 8 million people. The WPA built roads, airports and various public buildings – it even paid artists, writers and photographers to create art.

27 The CIO During the Great Depression, the Congress of Industrial Organizations was created – its members were non-craftsmen who felt their needs weren’t being met by the AFL. The AFL tried to organize all workers within an industry.

28 The New Deal and Labor Unions made numerous gains during the Great Depression. During FDR’s second term, the Wagner Act was passed to create the National Labor Relations Board. The NLRB protected workers by ensuring the right to unionize and to participate in collective bargaining. In 1938, Congress passed the Fair Labor Standard Act which set maximum hours at 44 a week and created a minimum wage of 25 cents an hour.

29 New Deal Amendments The 20th Amendment changed the date of the presidents inauguration from March 4th to January 20th – shortened the “lame duck” period. The 21st Amendment repealed the 18th Amendment, ending prohibition in the U.S. The 21st Amendment is the only amendment passed for the explicit purpose of repealing another amendment.

30 Effects of the New Deal In the end, the New Deal was not able to end the Great Depression – the industrial production of WWII will do that. However, the New Deal did provide moderate reform without any type of radical revolution or reactionary fascism like that taking place in several European countries (Germany, Italy, Spain, Soviet Union).

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