Political Response to Great Depression From Hoover’s inaction to Roosevelt’s New Deal

Hoover Belief in voluntary action by business failed – Despite their promises, businesses cut wages Congress passed the Hawley-Smoot tariff to protect domestic industries from foreign imports – slowed down international trade Great Depression led Republicans to lose the House in the 1930 midterm elections

Republicans grow unpopular Hoover’s unpopularity grows with govt.’s response to Bonus Army – Summer of 1932, 20,000 WWI vets marched on Washington – General MacArthur used force to disperse them Federal government did not offer relief to states until 1932

Election of 1932 Hoover - Republican Believed in limited government role in economy Did not offer states relief from federal government Thought confidence in the American economy would solve the problems of the Depression Roosevelt - Democrat Believed in government spending as a way to jumpstart the economy As governor of New York, he had set up an unemployment commission and relief administration, the first state agencies to help the poor during the Depression

Change in role of government Roosevelt won by 7 million popular votes Urban workers, coal miners, immigrants of Catholic and Jewish descent voted for him Americans turned from belief that they had to “make it on their own” to hope that the government would help them. “The only thing we have to fear is fear itself.” FDR First Inaugural Address, 1933

The New Deal President Roosevelt promised the country a “new deal” Came to refer to the relief, recovery, and reform programs of FDR’s administration that were aimed at combating the Great Depression Restored a sense of hope among the people

FDR’s First Hundred Days Inauguration in March through June 1933 Pushed programs through Congress to provide relief, create jobs, stimulate economic recovery Restored confidence in the banking system through a bank holiday – Banks closed while they were inspected for financial health – Congress established FDIC to insure deposits Congress set up SEC to regulate stock market Decreased value of American currency by taking it off the gold standard

Hundred Days (cont) Public Works Programs: government funded projects to build public facilities – Civilian Conservation Corps (CCC) Maintained forests, beaches, parks Employed > 2.5 million men National Recovery Administration (NRA) – Spelled out fair business practices – Gave organized labor collective bargaining rights

Assisting Homeowners & Farmers Federal Housing Administration (FHA) – Helped people keep their homes – Still exists today – Insures mortgages Agricultural Adjustment Administration (AAA) – Paid subsidies to farmers to cut production – Caused prices to rise Tennessee Valley Authority (TVA) – Reactivated a hydroelectric power facility, – brought electric power, flood control, and recreational opportunities to 7 states

Second New Deal Wagner Act (1935) – Legalized collective bargaining and closed shops – Outlawed spying on union activities and blacklisting Fair Labor Standards Act (1938) – Banned child labor and established a minimum wage Social Security (1935) offered insurance for: – Old-age pensions and survivor’s benefits – Unemployment – Aid for dependent children, the blind and disabled