Launching the New Deal

1
Launching the New Deal

• Much of Roosevelt's success was a result of his
  ebullient personality, he assured Americans the
  the only thing we have to fear is fear its self
  in his inaugural address, he was the first
  president to make regular use of the radio, he
  used his Fireside Chats to explain his programs
  to the people, helped build public confidence in
  the administration

2
Launching the New Deal

• Bank Holiday on March 6, 1933 FDR issued a
  proclamation closing all American banks for 4
  days until Congress could meet in special session
  to consider banking reform legislation

3
Launching the New Deal

• The Emergency Banking Act was designed primarily
  to protect the larger banks from being dragged
  down by the weakness of smaller banks, the
  Treasury Department inspected all banks before
  they would be allowed to reopen and provided
  federal assistance to some troubled institutions,
  helped dispel the panic, 75 of the banks in the
  Federal Reserve system reopened within the month,
  provided an end to the immediate banking crisis

4
Launching the New Deal

• The Economy Act was designed to balance the
  federal budget by cutting the salaries of
  government employees and veterans by as much as
  15, this act drew protests from the progressives
  in Congress

5
Launching the New Deal

• The Beer Act legalized the manufacture and sale
  of beer with a 3.2 alcohol content, this was an
  interim measure pending the repeal of
  prohibition, which was accomplished with the 21st
  Amendment which ended prohibition in 1933

6
Launching the New Deal

• Agricultural Adjustment Act (May 1933) it was
  designed to reduce crop production to end
  agricultural surpluses and halt drop in farm
  prices, producers of seven basic commodities
  (wheat, cotton, corn, hogs, rice, tobacco, and
  dairy) would decide on production limits for
  their crops,

7
Launching The New Deal

• The government (through the Agricultural
  Adjustment Administration) would then tell
  individual farmers how much they should produce
  and would pay them subsidies for leaving some of
  their land idle, this subsidy would be paid for
  by a tax on food processing, farm prices were to
  be subsidized up to the point of parity

8
Launching the New Deal

• The results of the AAA brought about a rise in
  prices for farm commodities and made the
  agricultural economy more stable and prosperous
  than it had been in many years, but it favored
  larger farmers over smaller ones and made
  payments directly to landowners resulting in
  tenant farmers being kicked off their land in
  order to qualify for payments, the Supreme Court
  ruled the government had no right to require
  farmers to limit production and struck down the
  AAA in 1936

9
Launching the New Deal

• Soil Conservation and Domestic Allotment Act
  permitted the government to pay farmers to reduce
  production to "conserve soil", this was not
  struck down by the Supreme Court

10
Launching the New Deal

• The Resettlement Administration and its successor
  the Farm Security Administration provided loans
  to help farmers cultivating sub marginal soil to
  relocate to better lands, the Rural
  Electrification Administration worked to make
  electric power available to thousands of farmers
  through utility cooperatives

11
Launching the New Deal

• The Roosevelt administration relaxed antitrust
  provisions for businesses in exchange for
  employer recognition of workers rights to bargain
  collectively through unions, to insure that
  incomes rose along with prices, to help create
  jobs and to increase consumer buying power the
  administration added a major program of public
  works spending

12
Launching the New Deal

• The National Industrial Recovery Act (June 1933)
  created the National Recovery Administration led
  by Hugh S. Johnson, Johnson called on every
  business in the nation to accept a temporary
  "blanket code" that included a minimum wage of 30
  to 40 cents an hour, a maximum workweek of 35 to
  40 hours, and the abolition of child labor,
  adherence to the blanket code would raise
  consumer purchasing power and increase
  employment.

13
Launching the New Deal

• In addition to these the Industrial Codes
  negotiated by Johnson applied to major industries
  and set floors below which no company would lower
  prices or wages in search of a competitive
  advantage and they included provisions for
  maintaining employment and production, he quickly
  won agreements with every major industry in the
  US

14
Launching the New Deal

• NIRA Difficulties the codes were hastily and
  often poorly written, administrating them was
  beyond the capacities of federal officials with
  no prior experience in running so large a
  program, large producers dominated code writing
  process and wrote them to their advantage,
  sometimes they artificially raised prices leading
  to a decline in industrial production, Section
  7(a) promised workers the right to form unions
  and engage in collective bargaining but contained
  no enforcement mechanisms

15
Launching the New Deal

• The Public Works Administration was established
  to administer the spending programs of NIRA but
  only gradually allowed the money to flow out, not
  until 1938 was the PWA putting a large amount of
  money into the economy, industrial production
  declined from July to December in 1933, by early
  1934 many businesses were flaunting its
  provisions, FDR pressured Johnson to resign in
  the fall of 1934 and established a new board of
  directors to oversee the NRA

16
Launching the New Deal

• In the Schecter Case (1935), the Supreme Court
  ruled that the Roosevelt administration did not
  have the power to draft the NRA codes (instead it
  belonged to Congress) and the case involved
  intrastate commerce not interstate commerce and
  therefore the federal government had acted in an
  unconstitutional manner, Roosevelt criticized the
  Court for its horse and buggy interpretation of
  the interstate commerce clause

17
Launching the New Deal

• The AAA and the NRA reflected the beliefs of New
  Dealers who favored economic planning but wanted
  private interests (farmers or business leaders)
  to dominate the planning process, others believed
  that the government should be doing the planning
  for the economy

18
Launching the New Deal

• The Tennessee Valley Authority was authorized to
  complete the dam at Muscle Shoals (started during
  WWI but never finished) and build others in the
  region, to generate and sell electricity from the
  dams to the public at reasonable rates, it was
  also intended to be an agent for a comprehensive
  redevelopment of the entire region, it improved
  water transportation, provided electricity,
  stopped flooding problems, power rates declined,
  but the Tennessee Valley remained generally
  impoverished

19
The Tennessee Valley Authority
20
Launching the New Deal

• Roosevelt considered the gold standard a major
  obstacle to the restoration of adequate prices,
  he signed an executive order shifting the US off
  the gold standard, the US now had
  government-managed currency, where the dollars
  value could be raised or lowered by government
  policy according to economic circumstances, this
  did not have any major impact on the economy

21
Launching the New Deal

• The Glass-Steagall Act gave the government
  authority to curb irresponsible speculation by
  banks, it established the Federal Deposit
  Insurance Corporation, which guaranteed all bank
  deposits up to 2,500

22
Launching the New Deal

• The Truth in Securities Act required corporations
  issuing new securities to provide full and
  accurate info about them to the public, another
  act created the Securities and Exchange
  Commission in order to police the stock market,
  JP Morgans son and successor could not even get
  a respectful hearing on Capital Hill to address
  the issue

23
Launching the New Deal

• Federal Emergency Relief Administration provided
  cash grants to states to prop up bankrupt relief
  agencies, Harry Hopkins was chosen to lead the
  agency but had misgivings about establishing a
  government "dole"

24
Launching the New Deal

• The Civil Works Administration put 4 million
  people to work on temporary projects constructing
  roads, schools, and parks, the important thing to
  Hopkins was pumping money into an economy badly
  in need of it and providing assistance to people
  with nowhere else to turn

25
Launching the New Deal

• The Civilian Conservation Corps was designed to
  provide employment to the millions of young men
  who could not find jobs in the cities, they
  created camps in the national parks, forests, and
  other wilderness areas, the men worked in a
  semi-military environment on such projects as
  planting trees, building reservoirs, developing
  parks, and improving agricultural irrigation, the
  CCC was segregated and the vast majority of jobs
  went to whites, women were excluded altogether

26
Launching the New Deal

• The Farm Credit Administration provided mortgage
  relief for millions of farm owners and homeowners
  by refinancing 1/5th of all farm mortgages in the
  US, the Home Owners Loan Corporation refinanced
  the mortgages of 1 million homeowners by 1936,
  and the Federal Housing Administration was
  established to insure mortgages for new
  construction and home repairs

27
The New Deal In Transition

• By early 1935 with no end to the Depression in
  sight, the New Deal found itself the target of
  fierce public criticism, most of the criticism
  came from the right but some came from the left
  (Communist and Socialist Parties)

28
The New Deal In Transition

• The American Liberty League was formed by a group
  of the most fervent and wealthiest Roosevelt
  opponents, designed to arouse public opposition
  to the New Deal's dictatorial policies and
  attacks on free enterprise, did not attract much
  popular support

29
The New Deal In Transition

• Dr. Francis E. Townsend, an elderly California
  physician, led a movement of more than 5 million
  members with his plan for federal pension for the
  elderly, the Townsend Plan stated that all
  Americans over the age of 60 would receive
  monthly government pensions of 200, provided
  they retired and spent the money in full each
  month, the public sentiment behind this proposal
  directly led to the Social Security System which
  Congress approved in 1935

30
The New Deal In Transition

• Father Charles E. Coughlin was a Catholic priest
  in Detroit, his weekly sermons broadcast
  nationally over the radio, advocate for changing
  the banking and currency systems, he proposed the
  re-monetization of silver, issuing greenbacks,
  and the nationalization of the banking system, he
  became a critic of FDR for not dealing harshly
  enough with the money powers and established
  the National Union for Social Justice

31
The New Deal In Transition

• Governor Huey P. Long from Louisiana, rose to
  power based on his strident attacks on the banks,
  oil companies, utilities and on the conservative
  political oligarchy allied with them, he became a
  dictator in the state of Louisiana but the people
  loved him because of his progressive
  accomplishments such as building roads, schools,
  hospitals, revising the tax codes, distributing
  free textbooks, and lowering utility rates.

32
The New Deal In Transition

• He easily won election to the Senate in 1930, an
  early supporter of FDR he broke with the
  President and proposed an alternative to New Deal
  which advocated a drastic program of wealth
  redistribution

33
The New Deal In Transition

• The Share-Our-Wealth Plan called for using the
  tax system to confiscate the surplus riches of
  the wealthiest men and women in America and
  distribute them to the rest of population, this
  would allow the government to guarantee every
  family a homestead of 5,000 and an annual wage
  of 2,500, a poll by the Democratic National
  Committee in the Spring of 1935 showed that Long
  might attract more than 10 of the vote if he ran
  as a third-party candidate for President

34
The New Deal In Transition

• The Second New Deal was launched in the spring of
  1935 and FDR was now willing to attack corporate
  interests openly
• The Holding Company Act of 1935 was designed to
  break up the great utility holding companies that
  held monopolies in most metropolitan areas

35
The New Deal In Transition

• In 1935 the Supreme Court struck down the
  National Industrial Recovery Act, which
  invalidated Section 7(a) that allowed workers to
  organize into unions and bargain collectively to
  improve wages and working conditions

36
The New Deal In Transition

• A group of progressives in Congress led by
  Senator Robert Wagner (NY) introduced the
  National Labor Relations Act (Wagner Act) which
  provided workers with a crucial enforcement
  mechanism missing from the 1933 law, the National
  Labor Relations Board would have the power to
  compel employers to recognize and bargain with
  legitimate unions

37
The New Deal In Transition

• The American Federation of Labor remained
  committed to the idea of the craft union which
  organized workers on the basis of their skills,
  but the bulk of industrial workers were now
  unskilled and so a new labor organization emerged
  to challenge craft unionism

38
The New Deal In Transition

• Industrial Unionism argued that all workers in a
  particular industry should be organized in a
  single union, regardless of what functions the
  workers performed, all autoworkers should be in a
  single automobile union, all steelworkers in a
  single steel workers union, united in this way
  all workers would greatly increase their power.

39
The New Deal In Transition

• John L. Lewis (United Mine Workers) created the
  Congress of Industrial Organizations (CIO) in
  1936, expanded the constituency of the labor
  movement, more receptive to women and blacks,
  targeted previously unorganized industries
  (textiles, laundries, tobacco factories, etc.)
  more militant than the AFL

40
The New Deal In Transition

• The United Auto Workers utilized the Sit-Down
  strike against General Motors factories in
  Detroit, employees simply sat down inside the
  plants refusing to work or leave, thus preventing
  the company from using strikebreakers, this
  technique spread to 17 other GM factories, the
  strikers ignored court orders and police efforts
  to force them to vacate the buildings, Michigan
  had a progressive governor who refused to call
  out the National Guard, GM became the first major
  manufacturer to recognize the UAW

41
The New Deal In Transition

• The United Steelworkers of America targeted
  United States Steel and launched an organizing
  drive in March 1937, US Steel recognized the
  union rather than risk a costly strike when it
  sensed that the company was on the verge of
  recovering from the Depression

42
The New Deal In Transition

• Little Steel was far less accommodating, on
  Memorial Day 1937, a group of striking workers
  from Republic Steel gathered with their families
  for a picnic and demonstration on the South Side
  of Chicago, when they attempted to march toward
  the factory police opened fire on the strikers,
  10 were killed and another 90 wounded, the
  Memorial Day Massacre had the desired effect,
  the 1937 strike failed

43
The New Deal In Transition

• In 1937 there were 4,720 strikes, and over 80
  were settled in favor of the unions, union
  membership went from 3 million in 1932 to 8
  million in 1937 to 10 million in 1941

44
The New Deal In Transition

• Secretary of Labor Frances Perkins had been
  lobbying for a system of federally sponsored
  social insurance for the elderly and the
  unemployed, the Social Security Act (1935)
  provided two types of assistance for the elderly-
  those presently destitute received 15 a month in
  federal assistance, those presently working were
  incorporated into a pension system to which they
  and their employers would contribute by paying a
  payroll tax.

45
The New Deal In Transition

• It would then provide them with an income upon
  retirement, payments would begin in 1942 and then
  would provide 10 to 85 a month to recipients,
  domestic servants and agricultural laborers were
  not included

46
The New Deal In Transition

• The Social Security Act also created a system of
  unemployment insurance which made it possible for
  workers laid off from their jobs to receive
  temporary government assistance, established a
  system of federal aid to people with disabilities
  and dependent children, the framers of Social
  Security wanted to create a system of insurance
  not welfare

47
The New Deal In Transition

• In 1935 the Works Progress Administration was
  created which established a system of work relief
  for the unemployed, under the direction of Harry
  Hopkins, it had a beginning budget of 5 billion,
  kept an average of 2.1 million workers employed,
  the WPA built or renovated 110,000 public
  buildings (schools, post offices, etc),
  constructed almost 600 airports, 500,000 miles of
  roads, and over 100,000 bridges.

48
The New Deal In Transition

• it also offered assistance to those whose
  occupations did not fit into any traditional
  category of relief (Federal Writers Project,
  Federal Arts Project, Federal Music Project,
  Federal Theater Project, etc.)

49
The New Deal In Transition

• The governments response to the Depression dealt
  with the two sexes in very different ways, for
  men the government concentrated on work relief
  (CCC, CWA, and the WPA, for women cash assistance
  was provided mainly through the Aid to Dependent
  Children program of Social Security

50
The New Deal In Transition

• In the middle of 1936 the economy was visibly
  reviving, there was not much doubt that FDR would
  get a second term in the 1936 election, the
  Republicans nominated the moderate governor of
  Kansas, Alf Landon, who did not wage much of a
  campaign, Huey Long was assassinated in September
  1935, Roosevelt polled just under 61 , carried
  every state except Maine and Vermont, and the
  Democrats increased their already large
  majorities in both houses

51
The New Deal In Transition

• The Democrats now had a broad coalition of
  western and southern farmers, the urban working
  class, the poor and the unemployed, the black
  communities of northern cities, and traditional
  progressives and committed new liberals, this
  coalition constituted a substantial majority of
  the electorate and it would be decades before the
  Republicans could create a lasting majority
  coalition of its own

52
The New Deal in Disarray

• FDR believed that the American people had given
  him a mandate in the 1936 election and FDR was
  concerned that no program of reform could long
  survive the conservative justices on the Supreme
  Court who had already struck down the NRA and AAA

53
The New Deal in Disarray

• In 1937 Roosevelt asked for a general overhaul of
  the federal court system that would add six new
  justices to the Supreme Court, FDR said that the
  courts were overworked and needed additional
  manpower and younger blood to enable them to cope
  with their increasing burdens, the real purpose
  was to give FDR the opportunity to appoint new,
  liberal justices and change the ideological
  balance of the Court

54
The New Deal in Disarray

• The Supreme Court packing plan outraged
  conservatives and even disturbed some supporters
  of FDR who were concerned about the presidents
  hunger for power, in March, April, and May of
  1937 the Supreme Court upheld a state
  minimum-wage law, the Wagner Act, and the Social
  Security Act by identical 5 4 votes, and the
  Supreme Court was no longer an obstacle to the
  New Deal.

55
The New Deal in Disarray

• The court-packing plan was easily defeated in
  Congress, but it did lasting political damage to
  Roosevelt's administration, southern Democrats
  and other conservatives voted against FDRs
  measure much more often than they had in the past

56
The New Deal in Disarray

• By 1937 the national income had risen to almost
  where it was in 1929, other economic indices
  showed similar gains, FDR seized on these
  improvements as an excuse to try to balance the
  federal budget, many economists were convinced
  that the danger was now inflation not the
  Depression

57
The New Deal in Disarray

• Recession of 1937 (Roosevelt Recession) seemed
  to be a direct result of his administrations
  unwise decision to reduce spending, 4 million
  additional workers lost their jobs, and economic
  conditions quickly worsened, FDR asked Congress
  for an emergency appropriation of 5 billion for
  public works and relief programs, leading to
  another tentative recovery

58
The New Deal in Disarray

• Temporary National Economic Committee (TNEC)
  members included representatives of both houses
  of Congress and officials from several executive
  agencies, in order to examine that unjustifiable
  concentration of economic power with an eye to
  major reforms in the antitrust laws

59
The New Deal in Disarray

• Fair Labor Standards Act (1938) established a
  national minimum wage, a 40 hour work week, and
  placed strict limits on child labor

60
The New Deal in Disarray

• By the end of 1938 the New Deal had essentially
  come to an end, the threat of world crisis was
  real, and FDR began to prepare a reluctant nation
  for the possibility of war

61
Limits and Legacies of the New Deal

• Broker State elevated and strengthened new
  interest groups so as to allow them to compete
  more effectively in the national marketplace, the
  federal government was a mediator in the
  continuous competition, a force that could
  intervene when necessary to help some groups and
  limit the power of others,

62
Limits and Legacies of the New Deal

• By the end of the New Deal American business was
  competing for influence with a powerful labor
  movement, an organized agricultural economy, and
  with aroused consumers, the Broker State would
  eventually expand to include racial, ethnic, and
  religious minorities, women, gays, and others

63
Limits and Legacies of the New Deal

• One major legacy of the New Deal was to make the
  federal government a protector of interest groups
  and a supervisor of the competition among them,
  rather than an instrument attempting to create a
  universal harmony of interests.

64
Limits and Legacies of the New Deal

• The experience of the New Deal suggests that
  assistance goes largely to those groups able to
  exercise enough political or economic power to
  demand it, in the 1930s farmers and workers
  finally won important protections from the
  federal government, also winning federal
  assistance were imperiled homeowners, the
  unemployed, and the elderly

65
Limits and Legacies of the New Deal

• The New Deal did relatively little to assist
  African Americans, but Eleanor Roosevelt spoke on
  behalf of racial justice and put continuing
  pressure on her husband and others in the federal
  government to ease discrimination against blacks

66
Limits and Legacies of the New Deal

• Marian Anderson was refused permission to give a
  concert in the auditorium of the Daughters of the
  American Revolution, Eleanor Roosevelt resigned
  from the organization and helped secure
  government permission for her to sing on the
  steps of the Lincoln Memorial, it attracted
  75,000 people and became the first civil rights

67
Limits and Legacies of the New Deal

• FDR appointed a significant number of African
  Americans to his administration, Robert Weaver,
  William Hastie, and Mary McLeod Bethune, created
  an informal network of officeholders who
  consulted frequently with one another and became
  known as the Black Cabinet

68
Limits and Legacies of the New Deal

• By 1935, 25 of all African Americans were
  receiving some form of government assistance, and
  in the election of 1936 more than 90 of African
  Americans voted Democratic, they supported FDR
  because they knew he was not their enemy

69
Limits and Legacies of the New Deal

• FDR was never willing to risk losing the support
  of southern Democrats by supporting legislation
  to make lynching a federal crime, nor would he
  endorse efforts in Congress to ban the poll tax,
  New Deal relief agencies did not challenge, and
  indeed reinforced, existing patterns of
  discrimination, the Civilian Conservation Corps
  established separate black camps,

70
Limits and Legacies of the New Deal

• The National Recovery Administration codes
  tolerated paying blacks less than whites doing
  the same jobs, blacks were largely excluded from
  employment in the Tennessee Valley Authority, the
  Federal Housing Administration refused to provide
  mortgages to blacks moving into white
  neighborhoods,

71
Limits and Legacies of the New Deal

• The first housing projects financed by the
  federal government were racially segregated, and
  the Works Progress Administration routinely
  relegated black, Hispanic, and Asian workers to
  the least-skilled and lowest-paying jobs, when
  funding ebbed, minorities were the first to be
  dismissed

72
Limits and Legacies of the New Deal

• Indian Policy simply advocated continued
  assimilation, What we are trying to do is get
  rid of the Indian problem rather than add to it,
  the purpose of reforms should be to reduce the
  numbers of Native Americans who identified
  themselves as members of tribes and increase the
  number who attempt to join the larger society and
  culture

73
Limits and Legacies of the New Deal

• John Collier promoted the idea of cultural
  relativism which is the idea that every culture
  should be accepted and respected on its own terms
  and that no culture was inherently superior,
  Collier promoted legislation that would reverse
  the pressures on Native Americans to assimilate
  and would allow them to live in traditional
  Indian ways

74
Limits and Legacies of the New Deal

• The Indian Reorganization Act (1934) restored to
  the tribes the right to own land collectively,
  reversing the Dawes Act of 1887, tribal land
  holding increased by 4 million acres, and Indian
  agricultural income rose from 2 million in 1934
  to 49 million in 1947

75
Limits and Legacies of the New Deal

• FDR appointed Frances Perkins as Secretary of
  Labor becoming the first female cabinet member,
  FDR also appointed more than 100 other women to
  bureaucratic positions throughout his
  administration, Eleanor Roosevelt was a committed
  advocate of womens rights and a champion of
  humanitarian causes, Hattie Caraway (AR) became
  the first women ever elected to a full term in
  the US Senate

76
Limits and Legacies of the New Deal

• New Deal and Women did not believe in sexual
  equality, instead gave women special protections,
  supported the belief that in hard times women
  should withdraw from the workplace to open up
  more jobs for men, not actively hostile towards
  women and in many ways unprecedentedly
  supportive, it accepted the prevailing cultural
  norms

77
Limits and Legacies of the New Deal

• The West received more federal funds per capita
  through New Deal relief programs than any other
  region, and supported existing racial and ethnic
  prejudices, built great dams and power stations
  in the West, start of a huge federal presence out
  West

78
Limits and Legacies of the New Deal

• In the South, New Deal relief programs did not
  challenge racial norms, but did provide the TVA
  to address the Souths backwardness

79
Limits and Legacies of the New Deal

• The economic boom of WWII finally ended the
  depression not the New Deal, nor did the New Deal
  substantially alter the distribution of power
  within American capitalism

80
Limits and Legacies of the New Deal

• The New Deal did help elevate new groups
  (workers, farmers and others) to positions from
  which they could at times effectively challenge
  the power of the corporations.

81
Limits and Legacies of the New Deal

• It increased the regulatory functions of the
  government in ways that helped stabilize
  previously troubled areas of the economy (the
  stock market and the banking industry), it
  established the basis for new forms of federal
  fiscal policy, it created the basis of the
  federal welfare state

82
Limits and Legacies of the New Deal

• The New Deal fundamentally changed American
  politics, by the end of the 1930s state and local
  governments were clearly of secondary importance
  to the national government in Washington

83
Limits and Legacies of the New Deal

• FDR clearly established the presidency as the
  preeminent center of authority within the federal
  government, the New Deal also created a dominant
  political majority for the Democratic Party and
  greatly increased the American peoples
  expectations of government