2 Herbert HooverElected in 1928 primarily because the Republicans were associated with prosperityBeliever in individualism, free enterprise, and laissez-faire
3 Conditions which helped produce or intensify the Depression OverproductionUnequal distribution of wealthOverexpansion of creditThe depressed condition of agricultureStock Market speculation: buying on marginUnwise government policiesHigh tariff, no curbs on Stock Market
4 Hoover Policies Calls for voluntary cooperation Asks leading industrialists not to cut pay, production, or workersAsks labor leaders to discourage demands for strikes and higher payAsks governors and mayors to spend more on public works to create jobsBut economy continues to tumble
5 HooverOptimistic: “prosperity just around the corner”
6 Agricultural Marketing Act 1929To help farmers help themselves, largely through producers’ cooperativesEstablished Federal Farm Board which had no real power to reduce production.
7 Hawley-Smoot Tariff 1930 Increased prices on foreign-made goods Intended to increase buying of American-made goodsEuropean countries responded with tariffs on American-made goods.Not successful.
8 FDR and the New Deal“I pledge you, I pledge myself, to a new deal for the American people.”Election of 1932 ushered in an era of a different kind of a politician.Master politician: intelligent, confident, charmingMaster communicator: fireside chats
9 Preparing to LeadThe Cabinet: Frances Perkins was the first woman to hold a Cabinet post (Labor).The “Brain Trust”: Informal group of advisors consisting of intellectuals, lawyers, and economistsHumanitarian wife Eleanor had a great deal of influence.
10 New Deal in Action RELIEF for those people who were suffering. RECOVERY for the economy so that it could grow again.REFORM measures in order to insure against future depressions.
11 Stages of the New Deal: dealt with relief and recovery; most passed in the “First Hundred Days”: The “Second New Deal”: focused more on social reform1936 election: high point of the N.D.: recession due in part to New Deal cutbacks in spending1938: N.D. ended to opposition in Congress and WWII
12 New Deal StrategiesUse of commerce and elastic clauses of the Constitution to take direct government action.Fiscal action to stimulate economy and lower unemployment by lowering taxes and increasing government spending.Government responsibility for the general welfare of citizens.Increase regulatory role over banks, businesses, and the stock exchange.Deficit spending: Keynesian Economics
13 Relief Legislation Emergency Banking Act (1933) Federal Emergency Relief Act (FERA) (1933)Public Works Administration (PWA) (1933)Civilian Conservation Corps (CCC) (1933)Works Progress Administration (WPA) (1935)
14 Recovery Legislation National Industrial Recovery Act (NIRA) 1933 Home Owners Loan Corporation (HOLC) 1933Federal Housing Administration (FHA) 1934First and Second Agricultural Adjustment Acts (AAA) (1933 and 1937)Tennessee Valley Authority (TVA) (1933)
15 Reform Legislation Glass-Steagall Banking Act (1933): created the FDIC Securities Exchange Act (1934)Social Security Act (1935)National Labor Relations Act (1935): also known as the Wagner Act; collective bargainingFair Labor Standards Act (1938) set a minimum wage
16 Reactions to the New Deal FDR built up a “New Deal coalition”“Solid Democratic South”“new immigrant” workersBig citiesAfrican-AmericansOrganized laborElderlyBusiness peoplefarmers
17 Criticism to the New Deal Strongest opposition came primarily from Big BusinessAmerican Liberty League: attacked FDR for using too much power; free enterprise was being attackedDr. Francis Townsend: provide government pensions for the elderlyFather Charles E. Coughlin: blamed business owners, especially Jewish ones, for the economic crisisSenator Huey Long: income and inheritance taxes on wealthy to give each American a $2500 income, a car, and a college education
18 Supreme Court Reacts to New Deal NIRA declared unconstitutional in Schecter Poultry Corporation v. United States (1935): law illegally gave power to Congress to regulate intrastate commerceUnited States v. Butler (1936) ruled that AAA was unconstitutional on grounds that agriculture was a local matter
19 FDR Reacts to New Deal“Court-Packing”: FDR asked Congress to increase the number of judges from 9 to 15Aimed at making the S.C. approve the N.D.
20 Andrew Mellon Secretary of the Treasury Believed course of depression had to be runDepression a good thing because values would be adjusted, people will work harder