LECTURE 03_The New Deal

UNIT 5

CHAPTER 22 – CRASH AND DEPRESSION CHAPTER 23 – THE NEW DEAL

THE GREAT DEPRESSION

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PRESIDENTS OF THE UNITED STATES George Washington; Federalist (1788)

John Adams; Federalist (1796) #21 - … Thomas Jefferson (1800) Chester A. Arthur; Republican (1881) James Madison (1808) Grover Cleveland; Democrat (1884) James Monroe (1816) Benjamin Harrison; Republican (1888) John Quincy Adams (1824) Grover Cleveland; Democrat (1892) Andrew Jackson; Democrat (1828) William McKinley; Republican (1896) Martin Van Buren; Democrat (1836) Theodore Roosevelt; Republican (1901) William Henry Harrison; Whig (1840) William Howard Taft; Republican (1908) John Tyler; Whig (1841) Woodrow Wilson; Democrat (1912) James K. Polk; Democrat (1844) Warren G. Harding; Republican (1920) Zachary Taylor; Whig (1848) Calvin Coolidge; Republican (1923) Millard Fillmore; Whig (1850) Herbert Hoover; Republican (1928) Franklin Pierce; Democrat (1852) James Buchanan; Democrat (1856) Franklin D. Roosevelt; Democrat (1932) Abraham Lincoln; Republican (1860) Andrew Johnson; Democrat (1865) Ulysses S. Grant; Republican (1868) Rutherford B. Hayes; Republican (1876) James Garfield; Republican (1880)

America: Pathways to the Present

Chapter 23

The New Deal (1933–1941)

OBJECTIVES • CORE OBJECTIVE: Analyze the causes/effects of the Great Depression as well as the costs/benefits of the New Deal

• Objective 5.5: Describe the programs and areas of reform for the New Deal. • Objective 5.6: What were the main criticisms, setbacks, and limitations of New Deal policies? • Objective 5.7: Describe effects the New Deal had on American culture and lasting effects on American society.

• THEME: President Roosevelt’s New Deal proved to be only partially successful at ending the Great Depression. Though critics were quick to point out the New Deal’s many failures, it was hard to argue against its resounding success in bringing hope to the nation and creating a lasting influence on social and political attitudes.

America: Pathways to the Present Chapter 23: The New Deal (1933–1941) Section 1: Forging a New Deal

Section 2: The New Deal’s Critics Section 3: Last Days of the New Deal

CHAPTER 23 SECTION 1 – FORGING THE NEW DEAL President Roosevelt sought to end the Great Depression through the federal programs of the New Deal.

100 DAYS • Franklin Delano Roosevelt (FDR) and Eleanor Roosevelt, the First Lady, knew that restoring a sense of hope and building public confidence were essential to calming panic and creating support for the President’s plans. • FDR promised “a new deal for the American people,” but he did not have a sure plan for it.

• In the first hundred days of his presidency, Roosevelt pushed many programs through Congress to provide relief, create jobs, and stimulate the economy.

• Some of FDR’s programs were based on the work of federal agencies that had controlled the economy during World War I and on agencies created by state governments to ease the Depression. • Former Progressives figured prominently, inspiring New Deal legislation or administering programs.

• PUSHED THROUGH 15 MAJOR PIECES OF LEGISTLATION

THE NEW DEAL • The term New Deal came to refer to the programs that were aimed to fight the Great Depression. • RELIEF • “stop the bleeding”, immediate action to halt economic deterioration

• Provide emergency help to suffering Americans • Jobs, housing, food

• RECOVERY

• Jumpstart American business and productivity • Enacting temporary programs to begin the flow of consumer goods

• REFORM

• Install permanent changes to avoid another depression

RELIEF • Stabilizing Financial Institutions • FDR wanted to restore public confidence in the nation’s banks. • He imposed an emergency “bank holiday” to close all banks and inspect their health (Emergency Banking Act)

• Congress passed the Emergency Banking Act, which authorized the government to inspect the financial health of all banks.

• Providing Relief and Creating Jobs

• FDR persuaded Congress to establish the Federal Emergency Relief Administration (FERA). FERA put money into public works programs, government-funded projects to build public facilities and create jobs. • One public works program was the Civilian Conservation Corps (CCC). The CCC put more then 2.5 million men to work maintaining forests, beaches, and parks.

WHAT ARE THEY DOING?

• Regulating the Economy

RECOVERY

• In 1933, Congress passed the National Industrial Recovery Act (NIRA). NIRA established the National Recovery Administration (NRA)

• Tried to balance the unstable economy through extensive planning.

• The NRA established codes for fair business practices.

• These codes regulated wages, working conditions, production, and prices, and set a minimum wage.

• Assisting Home-owners and Farmers

• The Federal Housing Administration (FHA) worked to improve housing standards and conditions, and insure mortgages. • The Agricultural Adjustment Administration (AAA) raised farm prices through subsidies.

• They paid farmers not to raise certain crops and livestock, hoping that lower production would cause prices to rise.

• The Tennessee Valley Authority (TVA) provided jobs, hydroelectric power, flood control, and recreational opportunities to farmers in the underdeveloped Tennessee Valley.

REFORM • FDIC • Congress passed the Glass-Steagall Banking Act of 1933. This act established a Federal Deposit Insurance Corporation which is a permanent agency designed to insure depositors money in banks. • Originally insured up to $5,000 per depositor today it has increased to $100,000

• Securities & Exchange Commission (SEC) • set up to monitor stock market activity and ensure that no fraud or insider trading was taking place

BANK FAILURES BEFORE AND AFTER THE GLASSSTEAGALL BANKING REFORM ACT OF 1933

KEY PLAYERS • FDR surrounded himself with a “brain trust”

• This was an informal group of intellectuals to advise the president

• Harry Hopkins, Raymond Moley (Columbia), Rex Tugwell, Adolf Berle (Harvard)

• FDR was the first President to appoint a woman to a Cabinet post.

• Frances Perkins, a former Progressive, became the Secretary of Labor. She held the position until 1945. • FDR also broke new ground by hiring African Americans in more than a hundred policymaking posts.

• Eleanor Roosevelt was one of FDR’s most important colleagues. • She threw herself into supporting the New Deal.

THE SECOND NEW DEAL • When the New Deal failed to bring about significant economic improvement, critics began to attack the programs.

• Opponents warned that New Deal agencies were giving increasing power to the federal government.

• The Supreme Court declared the NIRA unconstitutional because it gave the President lawmaking powers and regulated local rather than interstate commerce.

• The Supreme Court also struck down the tax that funded AAA subsidies to farmers.

• In response to the critics & Supreme Court rulings against programs, FDR’s administration launches a new wave of programs in 1935. The Second New Deal included more social welfare benefits, stricter controls over business, stronger support for unions, and higher taxes on the rich.

2ND ND PROGRAMS • The New Deal also brought electricity to rural America.

• The Rural Electrification Administration (REA) offered loans to electric companies and farm cooperatives for building power plants and extending power lines. • Before the 1930’s, only 10% of rural communities had electricity

• Congress passed the Social Security Act. • This act provided financial security for people who could not support themselves. The three types of insurance: • Old-age pensions • Unemployment insurance • Aid for dependent children & disabled

THE 1936 ELECTION • FDR won a landslide victory over Republican candidate Alfred M. Landon.

• FDR carried every state except Maine and Vermont, winning 523-8 in the electoral college.

• FDR’s 1936 election victory showed that most Americans supported the New Deal.

FORGING A NEW DEAL— ASSESSMENT Frances Perkins was the first woman Cabinet member. What post did she hold? (A) Secretary of Defense (B) Secretary of the Interior (C) Energy Secretary (D) Secretary of Labor How did the National Recovery Administration try to balance the unstable economy? (A) By raising interest rates (B) By limiting the money supply (C) By establishing codes for fair business practices (D) By creating a Social Security system

FORGING A NEW DEAL— ASSESSMENT Frances Perkins was the first woman Cabinet member. What post did she hold? (A) Secretary of Defense (B) Secretary of the Interior (C) Energy Secretary (D) Secretary of Labor How did the National Recovery Administration try to balance the unstable economy? (A) By raising interest rates (B) By limiting the money supply (C) By establishing codes for fair business practices (D) By creating a Social Security system