Franklin D. Roosevelt, distant cousin of Theodore Roosevelt, gained
popularity as Governor of New York by helping people economically.
Ch. 10. Roosevelt and the
New Deal (1933-1939).
► FDR only president to serve more than 2 terms (re-elected 4x, 1933-45).
► The 22 Amendment, passed in 1947, limits president to 2 terms.
Adolf Hitler appointed Chancellor in 1933; Japan withdraws from
League of Nations in 1933; Spanish Civil War in 1936; Hitler
annexes Austria in 1938.
Before FDR’s inauguration, unemployment still rose, bank runs
increased, Governors declared “bank holidays” before bank runs put
them out of business; only 1 in 4 workers was employed.
Total employment in US, in millions, excluding farms and WPA.
I. The First New Deal.
During inauguration address:
“…let me assert my firm
belief that the only thing we
have to fear is fear itself...”
Franklin Delano Roosevelt (FDR) elected President in 1932 in a
landslide against Hoover.
In FDR’s nomination acceptance speech, he pledged “to a new deal
for the American People.”
The New Deal was the title
President Franklin D. Roosevelt
(FDR) gave to a sequence of
programs and promises he initiated
between 1933 - 1938 with the goal
of giving reform to the people and
economy of the U.S. during the
To fight the Depression, FDR
believed the first thing to do was
to restore peoples confidence
In the banks.
Had polio, but had great attitude and said “If you had spent two years
in bed, trying to wiggle your big toe, after that anything else would
Not an intellectual or strong ideology, but practical, sought range of
advice, chose advisers that disagreed with him and each other,
wanted to hear different opinions, but always made final decision.
A. “Hundred Days” – Congress passed
15 major bills to meet economic crisis.
Set pace for legislation that’s never been equaled.
Together, the 15 acts known as the First New Deal.
B. Fixing the Banks and Stock Market.
1. Emergency Banking Relief Act –
Required federal examiners to survey
the nation’s banks and issue licenses
to those financially sound.
Let Americans know what he was trying to do’ Assured people the
banks were safer than putting money under their mattress.
Next day, deposits outweighed withdrawals; the banking crisis was over.
a) Fireside Chat – FDR’s direct
talks over the radio w/
2. Regulating Brokers.
a) Securities and Exchange
Commission (SEC) – Regulate
the stock market and prevent
fraud/another crash (1934).
Supported the Securities Act of 1933 – required companies that sold
stocks to provide complete and truthful information to investors.
b) Federal Deposit Insurance
Corporation (FDIC) – Gov’t
insurance for bank deposits.
FDR signs the
Banking Act of
1933, a part of
Sen. Glass of
VA on the left
and Rep. Steagall
of AL on the right.
June 16, 1933
Insured up to certain amounts; Increased public’s confidence in banking.
Created by the Banking Act, aka the Glass-Steagall Act.
C. Managing Farms and Industry.
1. Agricultural Adjustment Administration
(AAA) – Gov’t paid farmers not to
grow certain livestock and crops.
is considered the 1st
modern U.S. farm bill.
Such as hogs, cotton, corn, wheat, and tobacco.
Mostly successful, but criticized for raising prices during Depression
and not all farmers benefited like poor tenant farmers, many African
Americans, who became homeless and unemployed when landlords
chose their fields to be taken out of production.
The National Industrial Recovery
Act (NIRA) created the NRA.
2. National Recovery Administration
(NRA) – codes of fair competition for
Eleanor Roosevelt hanging an
NRA sign: "We Do Our Part"
Schechter v. the United States ruled
the NRA as being unconstitutional.
Schechter Poultry Corporation
That the code of fair business practice established under the National
Industrial Recovery Act of 1933 could not affect its business because
the code did not have the force of law.
Date of Decision
27 May 1935
That the federal legislation establishing the National Recovery
Administration was unconstitutional in that it delegated too much law-
making power to non-governmental individuals.
The decision overturned the major effort of the first administration of
Franklin Roosevelt (1933-1937) to regulate and control the economy
during the Great Depression.
D. Providing Debt Relief.
1. Home Owners’ Loan Corporation
(HOLC) – Helped homeowners pay
2. Farm Credit Administration (FCA) –
Helped farmers refinance mortgages.
E. Spending and Relief Programs.
1. Civilian Conservation Corps (CCC) –
Men 18-24 to work outdoors.
CCC workers on
Ohio in 1936.
Most highly praised of new programs.
Under national Forestry Service, planting trees, fighting forest fires,
construction, and building water reservoirs.
Return home after 6 months; program ended in 1942 after putting
almost 3 million people to work.
2. The Civil Works Administration
(CWA) – Hired 4 million people to get
through the winter of 1933/34).
The CWA created construction
jobs, mainly improving or
constructing buildings & bridges.
It ended on March 31, 1934 after
costing $200 million a month.
Included 300,000 women; Build or improved 1,000 airports, 500,000
miles of roads, 40,000 schools, and 3,500 playgrounds, parks,
and playing fields; Lasted only 5 months (winter of 1933/34).
3. Federal Emergency Relief
Administration (FERA) – $ ½ Billion
to state & local agencies for relief
FERA training camp
for unemployed women,
► Authorized a couple weeks after the CCC.
► From May 1933 - December 1935, it gave states and localities $3.1 billion
to operate local work projects and transient programs.
► FERA provided work for over 20 million people and developed facilities
on public lands across the country.
The Tennessee Valley Authority (TVA)
RED = Reservoirs
is a federally owned corporation in the U.S.
YELLOW = Fossil plants
created in May 1933 to provide navigation,
PURPLE = Nuclear plants
flood control, electricity generation, fertilizer
manufacturing, and economic development
in the Tenn Valley, a region particularly
impacted by the Great Depression.
The New Deal produced visible effects in the Tenn Valley Authority (TVA)
dam-building project, which created flood control, conserved forestlands,
and brought electricity to rural America.
20 dams, employed 40,000 workers, reforested millions of acres, build
power plants, strung thousands of miles of electric wires.
Many business groups opposed the TVA in the 1930’s on the grounds that it
unfairly competed with private power companies.
Today, provides power for almost 8 million people, and recreation for
millions of others.
The "alphabet soup" agencies of
FDR addressing Congress the New Deal included the TVA,
CCC, WPA, FDIC, SEC and IRA.
By end of first year in office, he convinced Congress to pass many
Did not restore prosperity, but reflected FDR’s zeal for action,
willingness to try, and brought a new sense of hope and optimism
in their nation, restoring faith in America.
II. The Second New Deal (1935).
The first New Deal
was only in effect for
2 years and created
2 million new jobs,
But 10 million were
With improvement to the economy slower than expected, FDR faced
opposition from several different people and groups.
1935, FDR began the Second New Deal, including the Works
Progress Administration (WPA) and several other programs.
A. Challenges to the New Deal.
Liberal Moderate, Conservative
(Democratic party) or in the middle (Republican party)
(for civil rights, (Lower taxes,
working class) less immigration)
With improvement to the economy slower than expected, FDR faced
opposition from several different people and groups.
The Right wing (conservative Republicans and southern Dems) opposed
New Deal from the start, imposed too many regulations on business &
expanded the federal gov’ts power at states rights expense.
1. American Liberty League – Anti-New
Deal politicians from both parties
Heavy taxes Wealth”
on rich, (liberal)
Purpose was to organize opposition to the New Deal.
The Right (conservatives) believed programs hurt business; The Left
said it didn’t go far enough to intervene in the economy and shift
wealth fro the rich to the middle and lower classes.
Challenges to FDR came from Huey Long and Father Coughlin.
To pay for New Deal programs, Roosevelt abandoned
a balanced budget and began using deficit spending.
2. Deficit Spending – FDR began
borrowing money to pay for programs.
The Depression was an emergency
the scale of which could only be
matched by a war. To combat this,
FDR resorted to deficit spending in
order to bring relief to the economy.
FDR abandoned a balanced budget
to spend money on relief and
A 1936 cartoon
shows the GOP
platform from the
The U.S. is spending in excess of current receipts (income from taxes)
by $1 billion per day (2007).
B. Launching the Second New Deal.
The "First New Deal" (1933)
had something for almost
every group, and the
"Second New Deal"
introduced class conflict,
business and unions.
FDR at a Civilian Conservation
A second round of programs and reforms to speed economic recovery
and security for every American.
Similar to the ‘Public Works Administration’
(PWA) in 1933 which hired contractors to
build projects; required to hire people of
color and helped break racial barriers.
1. Works Progress Administration
(WPA) – 1935, Federal $ for work
relief & increase employment by
building useful projects.
Michigan artist Alfred
Castagne sketching WPA
(May 19, 1939)
Over next several years, hired 8.5 million workers and spent $11 billion
to build 650,000 miles of highways, roads, and streets, 125,000
public buildings, over 8,000 parks; Built or improved 124,000
bridges and 853 airports.
The WPA employed
2 to 3 million
WPA summarized its achievements.
The federal government commissioned a series of
public murals from the artists it employed under the
WPA. William Gropper's "Construction of a Dam"
(1939), is characteristic of much of the art of the
1930s, with workers seen in heroic poses, laboring
in unison to complete a great public project.
Most controversial part of program – Hired artists, musicians, and theatre
people to create thousands of murals, sculptural works, and to
beautify public walls and halls.
FDR said the artists “have to eat just like other people.”
C. Rise of Industrial Unions.
1. The Wagner Act created the National
Labor Relations Board (NLRB) –
Workers allowed to organize unions
w/out interference from employers &
to bargain collectively.
The National Labor Relations Act,
also known as the Wagner Act, is
often referred to as the Magna Carta
of organized labor because it
dramatically strengthened the ability
of labor unions to represent workers.
2. Binding Arbitration – A neutral party
listens to both sides to decide on
Binding Arbitration benefited dissatisfied unions.
3. Sit-down strikes – Workers stopped
working & sat down.
by United Auto
at a GM plant in
Interrupted the work flow and prevented the employers from bringing
in replacement workers.
Aided by the Wagner Act (National Labor Relations Act), workers used
sit-down strikes to protect their rights to organize, and union
membership increased rapidly.
4. Fair Labor Standard Act (1938) –
established a national
minimum wage & a 40-hour
workweek; abolished child
The Equal Pay Act of 1963 amended Fair Labor Standards Act
and made it illegal to pay workers lower wages on the basis on their
sex. It is often summed up with the phrase “Equal pay for equal work.”
This was a major step towards closing the wage gap in women’s pay.
D. The Social Security Act –
1935, gov’t guaranteed insurance
benefits for elderly & unemployed.
One of most important pieces of legislation in U.S. history !!!
Included two insurance programs: A federal program provided
retirement insurance (monthly payment at age 65).
States administer the unemployment compensation using federal $.
The Payroll contributions (tax):
“give the contributors a legal, moral,
and political right to collect their
pensions and unemployment benefits”
Social Security also provides modest welfare payments to other needy
people, including people with disabilities and poor families with young
FDR did not count on Congress borrowing money from Social Security
to pay for other programs while failing to raise payroll deductions
enough to pay for benefits.
III. New Deal Coalition.
A. FDR’s Second Term.
FDR won reelection in 1936 (one of largest landslide victories in history;
60% of vote and carries all but 2 states (Maine & Vermont),
The diagram shows the historic
political realignment of African
Americans and other minorities
triggered by the New Deal.
Democratic Party now was a coalition of (fewer) southerners, farmers,
laborers, African Americans, new immigrants, ethnic minorities,
women, progressives, and intellectuals.
1. Frances Perkins – FDR appointed the
first woman to a cabinet post (Secty
Perkins also headed team that designed the Social Security program.
(LA) in 1932.
Eleanor Roosevelt played a big part in bringing about the African-
American and women vote (made modest gains under the New Deal).
She showed strong sympathies for diverse groups as she toured the
B. The Court-Packing Plan.
1. Court-Packing – Increase size of
Supreme Court w/ like-minded
The Supreme Court
NRA and AAA
The Court disagreed w/ the New Deal and declared some unconstitutional.
Saying the court was overworked, if any justice served over 10 years and
did not retire in 6 months after reaching 70 years old, the president
could appoint an additional justice to the court.
First political mistake; appeared to be power hungry; Southerners feared
FDR would appoint anti-segregationists, African Americans feared
future president would appoint anti-civil rights justices.
The Supreme Court would over-rule
several measures of the New Deal,
which led FDR to propose some
changes to the structure of the Court.
This proposal created a threat to
the checks and balances of our
system and resulted in some of
the harshest criticism FDR would
experience as President.
FDR faced controversies over the plan to increase the size of the
Supreme Court and over a recession caused by his desire to stop
Keynes ideas, called Keynesian economics,
had a major impact on modern economic and
political theory as well as on many gov’ts'
fiscal policies. He advocated interventionist
gov’t policy, by which the gov’t would use fiscal
and monetary measures to mitigate the adverse
effects of economic recessions, depressions and
booms. He is one of the fathers of modern
Keynes appeared on Dec 31,
1965 edition of TIME magazine.
Keynes argued that the solution to depression was to stimulate the economy
("inducement to invest") through some combination of two approaches :
A reduction in interest rates.
Government investment in infrastructure.
John Maynard Keynes – British economist favored the heavy gov’t
spending during a recession, even running a deficit, to jumpstart the
economy (Keynesian economics).
After almost a
decade of the
that the New
Deal did not
live up to its
C. The Legacy of the New Deal.
There are several New Deal programs still
in operation; the largest such programs
today are Social Security, the FDIC, CCC, &
Securities and Exchange Commission (SEC) - the
primary regulator of publicly traded U.S. firms.
The New Deal increased gov’t control over FDR and Eleanor at
the economy and money supply, intervention Warm Springs, Georgia,
to control prices and agricultural production, 1939.
the beginning of the federal welfare state, and
the promotion of trade unions.
New Deal expanded the federal gov’ts role in society and the economy
by providing a safety net for people.
The economy would not fully recover until WWII, but the New Deal gave
many Americans a sense of security and stability.
1. Broker State – Working out conflicts
among different interests.
2. Safety net – Safeguards &
relief programs that protect
against economic disaster.
Franklin D. Roosevelt primarily blamed the excesses of big business for causing an
unstable bubble-like economy. Democrats believed the problem was that business
had too much power, and the New Deal was intended as a remedy, by empowering labor
unions and farmers and by raising taxes on corporate profits. Some New Deal regulations
(the NRA and AAA) were declared unconstitutional by the U.S. Supreme Court. Most
New Deal regulations were abolished or scaled back in the 1970s and 1980s in a
bipartisan wave of deregulation. However the Securities and Exchange Commission,
Federal Reserve, and Social Security won widespread support.
The New Deal was the inspiration for
President Lyndon B. Johnson's Great Society
in 1960s. Johnson (on right) was elected to
Congress from Texas in 1938.
During Roosevelt's 12 years in office, there was a dramatic
increase in the power of the federal government as a whole.
FDR’s large array of agencies (New Deal liberalism) protected
various groups of citizens—workers, farmers, and others—
who suffered from the crisis, and enabled them to challenge
the powers of the corporations.
The wartime Fair Employment Practices Commission (FEPC)
executive orders that forbade job discrimination against
African Americans, women and ethnic groups was a major
breakthrough that brought better jobs and pay to millions of
In groups of 2-3, discuss:
► What values and policies do you
associate with today’s political
► What political party would you
join? (Democratic, Republican,
Green, Libertarian, Independent?)
Cab Calloway and
The Cotton Club
photo of His High-
Ho-de-Ho and the