1. Essential Question:
In what ways did President Franklin Roosevelt’s “New Deal” provide relief, recovery, & reform during the Great Depression?
Warm-Up Question: ?

2. Hoover & the Depression
From 1929 to 1932, President Hoover was criticized for not doing more to end the depression
Unemployment reached 25%
U.S. banking collapsed
Hoover offered gov’t intervention (relief check, job programs) but it was seen as too little, too late
By the election of 1932, Americans wanted hope & strong leadership

3. Unemployment in America, 1929-1942

4. FDR & the New Deal
In 1932, Democrat Franklin Roosevelt (FDR) defeated Hoover

5. FDR’s inaugural address in 1933 inspired hope
“Let me assert my firm belief that the only thing we have to fear is fear itself; nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
FDR’s inaugural address in 1933 inspired hope

6. FDR & the New Deal
FDR initiated his New Deal, a series of laws that were designed to fight the depression by offering:
Relief: gov’t relief checks & jobs to get people back to work
Recovery: tried to end the depression by stimulating industry & farming
Reform: long-term solutions to America’s economic problems

7. The Hundred Days
In his 1st 100 days in office, FDR & Congress passed 15 major laws
FDR’s 1st action was to address the bank crisis; By 1933, people had no faith in banks
FDR declared a 4-day bank holiday after which banks were allowed to re-open only after gaining a gov’t endorsement

8. Banks recovered & Americans slowly regained confidence in banks

9. FDR’s Fireside Chats
Listen to the first few minutes of FDR’s 1st fireside chat in March 1933 in which he explains his bank holiday
FDR used the radio to sell his New Deal programs to the American people
These “fireside chats” used simple , clear language to explain his New Deal programs & gain public support for these goals
Fireside Chat 1: On the Banking Crisis (March 12, 1933)
Franklin Delano Roosevelt
By the time of Roosevelt's inauguration, nearly all of the banks in the nation had temporarily closed in response to mass withdrawals by a panicked public. Roosevelt calms the fears of the nation and outlines his plan to restore confidence in the banking system.
Transcript
I want to talk for a few minutes with the people of the United States about banking—with the comparatively few who understand the mechanics of banking but more particularly with the overwhelming majority who use banks for the making of deposits and the drawing of checks. I want to tell you what has been done in the last few days, why it was done, and what the next steps are going to be. I recognize that the many proclamations from State Capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week. First of all let me state the simple fact that when you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money in many different forms of credit-bonds, commercial paper, mortgages and many other kinds of loans. In other words, the bank puts your money to work to keep the wheels of industry and of agriculture turning around. A comparatively small part of the money you put into the bank is kept in currency—an amount which in normal times is wholly sufficient to cover the cash needs of the average citizen. In other words the total amount of all the currency in the country is only a small fraction of the total deposits in all of the banks. What, then, happened during the last few days of February and the first few days of March? Because of undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold. A rush so great that the soundest banks could not get enough currency to meet the demand. The reason for this was that on the spur of the moment it was, of course, impossible to sell perfectly sound assets of a bank and convert them into cash except at panic prices far below their real value. By the afternoon of March 3 scarcely a bank in the country was open to do business. Proclamations temporarily closing them in whole or in part had been issued by the Governors in almost all the states. It was then that I issued the proclamation providing for the nation-wide bank holiday, and this was the first step in the Government's reconstruction of our financial and economic fabric. The second step was the legislation promptly and patriotically passed by the Congress confirming my proclamation and broadening my powers so that it became possible in view of the requirement of time to entend (sic) the holiday and lift the ban of that holiday gradually. This law also gave authority to develop a program of rehabilitation of our banking facilities. I want to tell our citizens in every part of the Nation that the national Congress -- Republicans and Democrats alike -- showed by this action a devotion to public welfare and a realization of the emergency and the necessity for speed that it is difficult to match in our history. The third stage has been the series of regulations permitting the banks to continue their functions to take care of the distribution of food and household necessities and the payment of payrolls. This bank holiday while resulting in many cases in great inconvenience is affording us the opportunity to supply the currency necessary to meet the situation. No sound bank is a dollar worse off than it was when it closed its doors last Monday. Neither is any bank which may turn out not to be in a position for immediate opening. The new law allows the twelve Federal Reserve banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. The new currency is being sent out by the Bureau of Engraving and Printing in large volume to every part of the country. It is sound currency because it is backed by actual, good assets. A question you will ask is this—why are all the banks not to be reopened at the same time? The answer is simple. Your Government does not intend that the history of the past few years shall be repeated. WE do not want and will not have another epidemic of bank failures. As a result we start tomorrow, Monday, with the opening of banks in the twelve Federal Reserve Bank cities—those banks which on first examination by the Treasury have already been found to be all right. This will be followed on Tuesday by the resumption of all their functions by banks already found to be sound in cities where there are recognized clearinghouses. That means about 250 cities of the United States. On Wednesday and succeeding days banks in smaller places all through the country will resume business, subject, of course, to the Government's physical ability to complete its survey. It is necessary that the reopening of banks be extended over a period in order to permit the banks to make applications for necessary loans, to obtain currency needed to meet their requirements and to enable the Government to make common sense checkups. Let me make it clear to you that if your bank does not open the first day you are by no means justified in believing that it will not open. A bank that opens on one of the subsequent days is in exactly the same status as the bank that opens tomorrow. I know that many people are worrying about State banks not members of the Federal Reserve System. These banks can and will receive assistance from member banks and from the Reconstruction Finance Corporation. These state banks are following the same course as the national banks except that they get their licenses to resume business from the state authorities, and these authorities have been asked by the Secretary of the Treasury to permit their good banks to open up on the same schedule as the national banks. I am confident that the state banking departments will be as careful as the National Government in the policy relating to the opening of banks and will follow the same broad policy. It is possible that when the banks resume a very few people who have not recovered from their fear may again begin withdrawals. Let me make it clear that the banks will take care of all needs—and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime. It needs no prophet to tell you that when the people find that they can get their money -- that they can get it when they want it for all legitimate purposes -- the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you that it is safer to keep your money in a reopened bank than under the mattress. The success of our whole great national program depends, of course, upon the cooperation of the public -- on its intelligent support and use of a reliable system. Remember that the essential accomplishment of the new legislation is that it makes it possible for banks more readily to convert their assets into cash than was the case before. More liberal provision has been made for banks to borrow on these assets at the Reserve Banks and more liberal provision has also been made for issuing currency on the security of those good assets. This currency is not fiat currency. It is issued only on adequate security -- and every good bank has an abundance of such security. One more point before I close. There will be, of course, some banks unable to reopen without being reorganized. The new law allows the Government to assist in making these reorganizations quickly and effectively and even allows the Government to subscribe to at least a part of new capital which may be required. I hope you can see from this elemental recital of what your government is doing that there is nothing complex, or radical in the process. We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but seemed to assume that the acts of a comparative few had tainted them all. It was the Government's job to straighten out this situation and do it as quickly as possible -- and the job is being performed. I do not promise you that every bank will be reopened or that individual losses will not be suffered, but there will be no losses that possibly could be avoided; and there would have been more and greater losses had we continued to drift. I can even promise you salvation for some at least of the sorely pressed banks. We shall be engaged not merely in reopening sound banks but in the creation of sound banks through reorganization. It has been wonderful to me to catch the note of confidence from all over the country. I can never be sufficiently grateful to the people for the loyal support they have given me in their acceptance of the judgment that has dictated our course, even though all of our processes may not have seemed clear to them. After all there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail.

10. New Deal: Relief
The greatest success of the New Deal was its ability to offer relief to unemployed citizens:
The gov’t provided relief checks to 15% of Americans
The gov’t created jobs for Americans

11. Percentage of American Families Accepting Government Relief in 1933

12. New Deal: Relief
Civilian Conservation Corps (CCC) was a work program for young men aged 18-25:
The CCC built roads, soil erosion projects, & parks
The CCC employed 3 million young men

13. CCC workers paved roads, planted trees, built bridges

14. New Deal: Reforms
The New Deal created long-term reforms to address weaknesses in the American economy
Securities & Exchange Commission (SEC) was created to regulate the stock market & prevent another stock market crash

15. New Deal: Reforms
To help restore public confidence in banks, the Federal Deposit Insurance Corporation (FDIC) was created:
The national gov’t insures money in bank accounts (up to $250,000 as of 2006)

16. New Deal: Reforms
The Tennessee Valley Authority (TVA) created hydroelectric power plants in the South
TVA created dams in 7 states to provide cheap hydroelectric power & create jobs

18. New Deal: Recovery
New Deal programs tried to stimulate the economy & end the depression
Agricultural Adjustment Act (AAA) tried to help farmers by paying them not to produce
By lowering supply, the gov’t hoped to increase crop prices

20. Unemployment in America, 1929-1942
The New Deal began in 1933, but by 1935 the Great Depression had not yet come to an end

21. FDR’s Critics
The failure of the New Deal to end the depression led to frustration & criticism of FDR’s programs:
The most vocal critic was Louisiana Senator Huey Long
Long’s Share the Wealth plan suggested taxing all personal income over $1 million to give each family $2,500 per year

22. Huey Long
How many men ever went to a barbecue & would let one man take off the table what's intended for 9/10th of the people to eat? The only way you'll ever be able to feed the balance of the people is to make that man come back & bring back some of that grub that he ain't got no business with!
…then we've got to call Mr. Morgan & Mr. Mellon & Mr. Rockefeller back and say: “Come back here, put that stuff back on this table here that you took away from here that you don't need. Leave something else for the American people to consume.”
Now, how are you going to feed the balance of the people? What's Morgan & Baruch & Rockefeller & Mellon going to do with all that grub? They can't eat it, they can't wear the clothes, they can't live in the houses.
But when they've got everything on God's loving earth that they can eat & they can wear & they can live in, & all that their children can live in & wear & eat, & all of their children's children can use,…
Huey Long threatened to run as a 3rd Party candidate but was assassinated in 1935
Kingfish
“The Kingfish”

23. Court Packing
The Supreme Court declared 2 recovery programs unconstitutional
FDR feared that the Supreme Court would weaken the New Deal
FDR’s solution was to ask called court-packing: He wanted to increase the number of justices from 9 to 15
Congress rejected his radical plan

25. FDR’s Second New Deal In 1935, FDR launched the Second New Deal
The Works Progress Administration (WPA) was the biggest New Deal program
Created 10 million jobs in a variety of professions & cost the gov’t $10 billion

26. WPA Public Work Project

27. WPA Initiatives

28. WPA Arts Project

29. WPA Music Projects

30. WPA Theater Projects

31. FDR’s Second New Deal
Social Security was America’s 1st welfare program; It created
Old-age pensions to be funded by employers & workers
Welfare payments for the blind, handicapped, & needy children

32. FDR’s Second New Deal The Wagner Act:
Protected workers right to strike & collectively bargain
Outlawed unfair practices used by companies to discourage union membership

33. Conclusions FDR’s New Deal created a new role for the U.S. government:
For the 1st time, the gov’t used deficit spending (going into debt) to stimulate the economy
For the 1st time, the gov’t took responsibility for the people & created welfare programs
New Deal successfully offered relief to ease peoples’ suffering, but it did not end the Depression
The New Deal did not end the Depression. Nor did it significantly redistribute income. It did, however, provide Americans with economic security that they had never known before. The New Deal legacies include unemployment insurance, old age insurance, and insured bank deposits. The Wagner Act reduced violence in labor relations. The Securities and Exchange Commission protected stock market investments of millions of small investors. The Federal Housing Administration and Fannie Mae enabled a majority of Americans to become homeowners. The New Deal's greatest legacy was a shift in government philosophy. As a result of the New Deal, Americans came to believe that the federal government has a responsibility to ensure the health of the nation's economy and the welfare of its citizens.
The New Deal represented a significant shift in political and domestic policy in the U.S., with its more lasting changes being increased government control over the economy and money supply; intervention to control prices and agricultural production; the beginning of the federal welfare state, and the rise of trade union organizations. The success and effects of the New Deal still remain a source of controversy and debate amongst economists and historians. The historian David Kennedy comments that "debate about the New Deal's historical significance, its ideological identity, and its political, social, and economic consequences has ground on for more than half a century. Roosevelts' reforms have become an unavoidable touchstone of American political argument, a talisman invoked by all parties to legitimate or condemn as the occasion requires, an emblem and barometer of American attitudes towards government itself."
THE NEW DEAL: RELIEF
BANK HOLIDAY: 6 March closed all banks; government then investigated banks and only those that were sound were allowed to reopen.
FEDERAL EMERGENCY RELIEF ASSOCIATION [FERA]: gave direct relief in the form of money as aid to states and localities for distribution to needy. Ultimately FERA distributed about $3-billion in relief to 8 million families -- one-sixth of the population.
CIVIL WORKS ADMINISTRATION [CWA]: Money to states to build 225,000 miles of roads, 30,000 schools, and 3,700 playing fields and athletic grounds.
PUBLIC WORKS ADMINISTRATION [PWA]: Loans to private industry to build public works such as dams, ports, bridges, sewage plants, government buildings, power plants, airports, hospitals, and other useful projects.
FARM CREDIT ASSOCIATION [FCA]: helped the 40% of farms that were mortgaged by providing low-interest loans (2.25% per year) through a Federal Land Bank for 50-year terms.
CIVILIAN CONSERVATION CORPS [CCC]: provided jobs and relocation for young men (18-25) in rural settings under direction of U.S. Army. CCC workers built public parks, cut fire trails, planted trees, built small dams, helped with flood control, reclaimed ruined land, drained swamps, and helped with conservation.
HOMEOWNERS' LOAN CORPORATION [HOLC]: lowered mortgages to stop foreclosures
The Three Rs and Their Legacy
Although the New Deal sometimes comes across as a cohesive package, much of the individual legislation passed during the First Hundred Days was conceived on the fly. So many special interest groups, such as big business and organized labor, were hounding the government for change that Roosevelt and Congress often felt they were being pulled in opposite directions.
Nevertheless, the New Deal policies did much to get Americans back on their feet. They not only provided relief, recovery, and reform but also drastically changed the federal government’s role in politics and society. Roosevelt’s successful application of Keynes’s economic theories transformed the Democrats into social welfare advocates. Even decades after the Great Depression, Democratic politicians would continue fighting for more government intervention in the economy, redistribution of wealth, and aid for the neediest.
Relief
Much of the legislation that the Hundred Days Congress drafted doled out immediate relief for the American people that President Hoover and the Republicans had failed to provide. The Federal Emergency Relief Administration’s relief assistance, for example, provided millions of Americans with enough money to make ends meet. The Civil Works Administration put the unemployed to work, and the Agricultural Adjustment Administration, the Tennessee Valley Authority, the National Recovery Administration, and the Public Works Administration kept millions of others alive as well. Americans were so relieved by the federal government’s quick action that many became die-hard Democrats and Roosevelt fans. The president’s optimism and can-do attitude, combined with the success of his immediate relief programs, made him almost politically untouchable during his first term.
Recovery
Many of the same programs designed to provide immediate relief were also geared toward long-term economic recovery. The Civilian Conservation Corps and the Public Works Administration put millions of men to work not only to keep them employed but also to improve the national infrastructure. When the United States finally emerged from the Great Depression during World War II, it had hundreds of new roads and public buildings, widespread electrical power, and replenished resources for industry.
Reform
The third goal of the New Deal policies was to reform the banking and financial sector of the economy to curb bad lending practices, poor trading techniques, and corruption. The president’s decision to take the country off the gold standard proved to be a smart move because it boosted people’s confidence in the U.S. dollar. The Federal Deposit Insurance Corporation, created under the Glass-Steagall Act, eliminated untrustworthy banks that had plagued the country for more than a century. Once Americans became confident that their funds would be safe, the number of bank deposits surged. Likewise, the Securities and Exchange Commission in 1934, which weeded out bad investment habits, gave Americans more confidence in the stock market.