The New Deal

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The New Deal

• Chapter 23

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Keep in Mind

• Throughout this chapter you need to think about
  what FDR did for America and how different he was
  from any other president.
• Pre- FDR government was small and didnt play a
  role in peoples lives
• Post- FDR government agencies control many
  different aspects of your life.

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Roosevelts Rise to Power 1932 Election

• A. The Republicans nominated Herbert Hoover to
  run for a second term as president. The Democrats
  selected New York Governor, Franklin Delano
  Roosevelt.
• B. Roosevelts policies to end the depression
  became known as the New Deal. Roosevelt won the
  election in a landslide.
• C. Roosevelt came from a wealthy New York family
  and was educated at Harvard and Columbia Law
  School. He caught polio and was paralyzed in
  1920. He was a distant cousin of President
  Theodore Roosevelt. Franklin married Theodores
  niece, Eleanor.

http//historymatters.gmu.edu/d/5057
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Discussion Question

• What did Americans see in Roosevelt?
• (Americans saw Roosevelt as a sign of hope in
  their challenging economic times. His energy and
  optimism and his own struggle with polio gave him
  a better understanding of what Americans were
  going through.)

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II. Roosevelt Is Inaugurated

• A. Franklin Roosevelt won the November 1932
  presidential election, but his inauguration would
  not occur until March 1933. During this time,
  unemployment continued to rise, bank runs
  increased, and people began converting their
  money into gold.
• B. Some bank runs occurred out of fear that
  Roosevelt would end the gold standard, which
  would reduce the value of the dollar.
• C. People began taking gold and currency out of
  banks, resulting in over 4,000 banks collapsing
  by March 1933. Many governors declared bank
  holidays, which closed the remaining banks before
  bank runs could put them out of business.

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Discussion Question

• Why did bank runs occur before Roosevelts
  inauguration?
• (Many Americans feared Roosevelt would abandon
  the gold standard and reduce the value of the
  dollar in order to fight the depression. Many
  Americans and foreign investors with deposits in
  American banks took their money out of the banks
  and converted it into gold before it lost its
  value.)

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No more lame ducks

• Between Franklin Roosevelts election in November
  1932 and his inauguration in March 1933, the
  Twentieth Amendment was added to the
  Constitution. This amendment changed the
  inauguration date from March 4 to January 20.

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III. The Hundred Days BeginsRelief, Recovery
and Reform

• A. Between March 9 and June 16, 1933, referred to
  as the Hundred Days, Roosevelt sent many bills to
  Congress. Congress passed 15 major acts to help
  the economic crisis.
• B. To generate new ideas and New Deal programs,
  Roosevelt put together a group of advisers in the
  fields of academia, business, agriculture,
  government, law, and social work. Named the Brain
  Trust.

• These programs made up
• the First New Deal.

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Discussion Question

• Why did Roosevelt choose advisers with differing
  views?
• (Roosevelt purposely chose advisers who
  disagreed to hear many points of view)

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IV. Fixing the Banks and the Stock Market

• A. When Roosevelt took office, he knew the first
  thing he needed to do was to restore confidence
  in the banking system. He called a national bank
  holiday and called Congress into special session.
• B. Congress passed the Emergency Banking Relief
  Act, which required federal examiners to survey
  the nations banks and issue Treasury Department
  licenses to financially sound banks. In
  Roosevelts first fireside chat, where he spoke
  on the radio directly to the people, he assured
  Americans that the banks were now secure. The
  following day deposits in every city outweighed
  withdrawals, ending the banking crisis.

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You and Alphabet Soup!

• You are going to divide into groups and research
  an Alphabet soup program. You must Create a
  poster answering the following
• Where does it fall in the slogan Relief,
  Recovery, Reform?
• How did the program change history?(meaning why
  was it needed)
• How effective was it during the depression?
• What if any are its impacts today?
• Use pictures to show what the programs were
  about.
• SEC,FDIC,AAA,TVA,NIRANRA,HOLC,FCA,CCC,FERA,PWA,CW
  A,WPA,NLRB,SS

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Did You Know?

• The game Monopoly was created by an unemployed
  engineer, Charles Darrow, during the Great
  Depression. The goal of the game is to make money
  while forcing opponents into bankruptcy. Today
  the game is popular throughout the world and is
  published in more than 25 nations in 19 languages.

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ALPHABET SOUP BEGINS!

• C. New regulations for banks and the stock market
  were implemented with the Securities Act of 1933
  and the Glass-Steagall Banking Act. Under the
  Securities Act of 1933, companies that sold
  stocks and bonds had to provide complete and
  truthful information to investors.
• D. The Securities and Exchange Commission (SEC)
  was created to regulate the stock market and
  prevent fraud.

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• E. The Glass-Steagall Act separated commercial
  banking from investment banking. It no longer
  allowed depositors money to be risked by
  speculating on the stock market. The act created
  the Federal Deposit Insurance Corporation (FDIC)
  that provided government insurance for bank
  deposits up to a certain amount.

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Discussion Question

• How did the FDIC change public opinion of the
  banking system?
• (The FDIC increased public confidence in the
  banking system. Bank deposits were now insured up
  to a certain amount, so people could deposit
  money without fear that it would be lost.)

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V. Managing Farms and Industry

• A. Roosevelt asked Congress to pass the
  Agricultural Adjustment Acta plan that paid
  farmers not to raise certain crops to lower crop
  production. The act was administered by the
  Agricultural Adjustment Administration (AAA).
  While the plan reduced production, increased
  prices, and helped some farmers, thousands of
  tenant farmers were unemployed and homeless.
  Large commercial farmers who raised one crop
  profited more than small farmers who raised
  several products.

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• B. The National Industrial Recovery Act (NIRA)
  suspended antitrust laws and allowed business,
  labor, and government to cooperate in setting up
  voluntary rules, known as codes of fair
  competition, for each industry. The program was
  run by the National Recovery Administration
  (NRA), and it urged consumers to buy only from
  companies who signed agreements with the NRA. The
  gains of the NRA were short-lived and actually
  caused industrial production to fall. It was
  declared unconstitutional by the Supreme Court in
  1935.

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Discussion Question

• What were codes of fair competition?
• (These rules set prices, established minimum
  wages, and limited factories to two shifts per
  day to spread production to as many companies as
  possible. Other codes shortened hours to create
  additional jobs and gave workers the right to
  form unions.)

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VI. Providing Debt Relief

• A. Several policies were introduced by Roosevelt
  to help Americans deal with their debt.
• B. The Home Owners Loan Corporation (HOLC)
  bought the mortgages of homeowners behind on
  payments and restructured them with longer terms
  of repayment and lower interest rates. The HOLC
  gave loans only to those employed. It foreclosed
  on property if payment could not be made. The
  result was 100,000 foreclosures. However, the
  HOLC refinanced 1 out of every 5 mortgages in the
  United States.
• C. The Farm Credit Administration (FCA) was
  established to help farmers refinance their
  mortgages. While the FCA loans helped many
  farmers in the short term, the loans may have
  slowed overall economic recovery by giving money
  to poor inefficient farmers instead of to
  businesses.

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Discussion Question

• How did the HOLC and the FCA help provide debt
  relief?
• (The HOLC bought the mortgages of homeowners
  behind on payments and restructured them with
  longer terms of repayment and lower interest
  rates. The HOLC refinanced 1 out of every 5
  mortgages in the United States. The FCA was
  established to help farmers refinance their
  mortgages.)

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VII. Spending and Relief Programs

• A. Roosevelt supported a series of government
  agencies to begin work programs for the
  unemployed.
• B. The Civilian Conservation Corps (CCC) gave
  unemployed men aged 18 to 25 the opportunity to
  work with the national forestry service planting
  trees, fighting forest fires, and building
  reservoirs. By the time it closed in 1942, the
  CCC had employed three million men.
• C. The Federal Emergency Relief Administration
  (FERA) was created to channel money to help state
  and local agencies fund relief projects.

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• D. In 1933 Congress authorized the Public Works
  Administration to begin a series of construction
  projects, creating additional jobs.
• E. Harry Hopkins, the head of FERA, set up the
  Civil Works Administration (CWA), which hired
  workers directly and put them on the governments
  payroll. It was shut down when Roosevelt became
  fearful of the amount of money spent on the
  program.
• F. The most important aspect of Roosevelts New
  Deal was the change in the spirit of the American
  people. People became hopeful and optimistic, and
  their faith in America was restored.

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Discussion Question

• Why did Roosevelt want Congress to establish work
  programs for the unemployed?
• (Roosevelt did not want to simply give money to
  the unemployed to help stimulate the economy. He
  and his advisers felt that work skills and
  self-respect could be maintained if people earned
  their money.)

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VIII. Challenges to the New Deal

• A. Support of Roosevelt and his New Deal began to
  fade in 1935. The effectiveness of the New Deal
  was questioned by right and left wing
  politicians.
• B. Roosevelt used deficit spending to pay for his
  programs. He abandoned a balanced budget and
  borrowed money to pay for his programs.
• C. The American Liberty League was created as
  business leaders and anti-New Deal politicians
  from both parties organized to oppose the New
  Deal.

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• D. Left wing Democratic senator Huey Long
  proposed taking property from the rich and
  dividing it up amongst the poor. It was believed
  that if he ran as a third party candidate, he
  would take 10 percent of Roosevelts vote,
  possibly enough for a Republican victory.
• E. Father Charles Coughlin, a Catholic priest in
  Detroit, gave further support to Huey Long
  through his popular radio broadcast.
• F. Dr. Francis Townsend, a former public health
  official, proposed that the federal government
  pay citizens over the age of 60 a pension of 200
  a month. This would increase spending and create
  additional jobs for younger people.

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Discussion Question

• How did the right wing and left wing politicians
  feel about Roosevelts New Deal?
• (The right wing felt the New Deal imposed too
  many regulations on business and that it expanded
  the federal governments power at the expense of
  states rights. The left wing believed that
  Roosevelt had not gone far enough. They wanted
  the government to intervene even more
  dramatically in the economy to shift wealth from
  the rich to middle-income and poor Americans.)

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IX. Launching the Second New Deal

• A. In 1935 Roosevelts second New Deal began with
  a series of programs and reforms to speed up
  recovery and provide economic security to every
  American. Roosevelt hoped the plan would increase
  his chances of being re-elected in 1936.
• B. The Works Progress Administration (WPA) was a
  federal agency headed by Harry Hopkins. It spent
  11 billion over several years, creating jobs for
  workers. Its most controversial aspect was
  offering work to artists, musicians, theater
  people, and writers.

• C. In the Supreme Court case Schechter v. United
  States, the court struck down the National
  Industrial Recovery Act. The Court ruled that the
  Constitution did not allow Congress to delegate
  its powers to the executive branch. It ruled the
  NIRA codes unconstitutional.
• D. Roosevelt feared that the Court would strike
  down the New Deal. He ordered Congress to remain
  in session until his new bills were passed. This
  was nicknamed the second hundred days by the
  press.

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Discussion Question

• Why did Roosevelt plan a Second New Deal?
• (Roosevelt feared that his political support
  could be undermined by the attacks from the left
  and right wings. He was disturbed that the New
  Deal failed to generate a rapid economic
  recovery.)

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X. The Rise of Industrial Unions

• A. New labor legislation was created because
  Roosevelt believed in high union wages to allow
  more spending power to boost the economy.
• B. In July of 1935, the National Labor Relations
  Act (Wagner Act) was passed, guaranteeing workers
  the right to organize unions without employer
  interference. The law set up the National Labor
  Relations Board (NLRB), which organized factory
  elections by secret ballot to determine if
  workers wanted to form a union. Binding
  arbitration was also set up, in which a neutral
  party would listen to both sides and decide the
  issue.
• This gave dissatisfied union members a process to
  voice their complaints.

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• C. In 1935 the Committee for Industrial
  Organization (CIO) was formed to organize
  industrial unions.
• D. After two union men were demoted at the
  General Motors auto-body plant in Cleveland,
  Ohio, workers protested with a sit-down strike
  where they stopped working but refused to leave
  the plant. Workers at the companys plant in
  Flint, Michigan, did the same. Violence broke
  out, and finally the company gave in. The United
  Auto Workers (UAW) was formed and quickly became
  one of the most powerful unions in the United
  States.

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Discussion Question

• Why did President Roosevelt and other Democrats
  push new labor legislation?
• (They knew the working class vote was important
  in winning re-election. They also believed that
  unions could help end the Depression. They
  thought that high union wages would let workers
  spend more money.)

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XI. The Social Security Act

• A. The Social Security Act became law in 1935,
  providing security for the elderly, unemployed
  workers, and other needy people. The bill would
  provide a monthly retirement benefit and
  unemployment insurance. Workers earned the right
  to receive the benefits by paying premiums.
• B. Social Security helped many people, but
  initially it left out many of the neediest
  members of society, such as farmers and domestic
  workers.

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Discussion Question

• What was the purpose of the Social Security Act?
• (Its purpose was to provide some security for the
  elderly and unemployed workers. It provided
  welfare payments to other needy people, including
  those with disabilities and poor families with
  young dependent children. The act provided a
  monthly retirement benefit for people when they
  stopped working at age 65.)

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XII. Roosevelts Second Term

• A. Millions of voters owed their jobs, homes, and
  bank accounts to the New Deal. By the election of
  1936, Democratic Party membership shifted from
  mainly white Southerners to include farmers,
  laborers, African Americans, new immigrants,
  ethnic minorities, women, progressives, and
  intellectuals. First lady Eleanor Roosevelt spoke
  with many people from these various groups, and
  she persuaded her husband to address some of
  their concerns in his New Deal programs.
• B. Roosevelts Secretary of Labor, Frances
  Perkins, was the first woman appointed to a
  cabinet post.
• C. Roosevelt won the 1936 election in one of the
  biggest landslides in American history.

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• D. The Supreme Court did not support the
  presidents New Deal programs. In January 1936,
  the Court declared the Agricultural Adjustment
  Act unconstitutional. After the election,
  Roosevelt attempted to change the political
  balance of the Supreme Court with the
  court-packing plan. Roosevelt sent Congress a
  bill to increase the number of justices on the
  Supreme Court. It was a political mistake and
  split the Democratic Party. Americans felt it
  would give the president too much power.
• E. In 1937 a sudden rise in unemployment further
  hurt Roosevelts popularity. When he cut spending
  just as the first Social Security payroll taxes
  decreased paychecks, the economy plummeted and
  two million people were out of work. This
  recession led to a debate about how to handle the
  situation. Treasury Secretary Henry Morgenthau
  wanted to balance the budget and cut spending.
  The opposition pushed for more government
  spending. They supported Keynesianism, the
  theories of British economist John Maynard
  Keynes. In his book, he argued that the
  government needed to spend heavily during a
  recession to jump-start the economy.
• F. In 1938 Roosevelt asked Congress for 3.75
  billion for the PWA, WPA, and other programs.

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Lets take a look at Eleanor

• How did Eleanor Roosevelt help bring change to
  the Democratic Party?
• You are going to read some letters written to
  Mrs. Roosevelt.
• What is the importance of these letters?

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XIII. The Last New Deal Reforms

• A. Roosevelts successes were limited in his
  second term in office.
• B. The 1937 National Housing Act, promoted by
  Eleanor Roosevelt, created the United States
  Housing Authority to subsidize loans for builders
  willing to buy blocks of slums and build low-cost
  housing.
• C. The Farm Security Administration gave loans to
  tenant farmers to purchase farms. Congress kept
  appropriations low, believing that the plan made
  agricultural problems worse.

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• D. The Fair Labor Standards Act of 1938 gave
  protection to workers, abolished child labor, and
  created a 40-hour workweek for workers.
• E. New Deal legislation began to get blocked as
  Congress began to turn against the New Deal. The
  New Deal era ended by 1939.

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Discussion Question

• Why was Roosevelts second term of office less
  successful than the first term?
• (The fight over the court-packing scheme and the
  recession of 1937 had weakened Roosevelt
  politically.)

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XIV. The Legacy of the New Deal

• A. The New Deal had limited success, but gave
  Americans a stronger sense of security and
  stability.
• B. The New Deal operated to balance competing
  economic interests. The New Deals mediating role
  established the broker state, which helped work
  out conflicts among different interests.
• C. The New Deal brought a new public attitude
  regarding the government. The program gave
  Americans a safety net that provided safeguards
  and relief programs to protect them from economic
  disaster.

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Alphabet Soup Collage

• OK you have done a ton of work and taken a lot of
  notes.
• You are going to divided into groups and explain
  a New Deal program and its importance to the
  class.
• This is a great test review!
• SEC AAA HOLC FCA CCC
• FDIC FERA PWA CWA WPA NLRB
• SSA ALPHABET SOUP

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NEXT!

• FDR leads the US through War!