FDR – 100 Days Legislation FDR – 100 Days Legislation

Document Sample
FDR – 100 Days Legislation FDR – 100 Days Legislation Powered By Docstoc
					FDR – 100 Days Legislation

        US History AP
       Unit 7, Lesson 1
         Mr. Melvin
      Lame Duck Session
Winter -1932-33: Despair gripped US
more tightly.
During lame duck period, Hoover without
influence and FDR without power
– Hoover insisted on passing policies that FDR
      Lame Duck Session
February 1933 – Hoover asked FDR to
make series of conservative declarations
– If FDR agreed, would pretty much ruin his
  Democratic platform
– FDR Rejected
      Lame Duck Session
Disaster continued to affect banks
– More and more people played it safe by
  converting savings to cash (withdrawing
    Created runs on banks
    Led to Michigan governor making a bank holiday in
    mid-February (temporarily order closing of banks)
     – Hoover: “We are at the end of our rope.”
  Franklin Delano Roosevelt
FDR - child of Progressive Era
Believed government was instrument of general
– Use active government to fix problems and bring
  about economic recovery
Identified himself with both action and planning
Assembled group of advisors during campaign –
Professors from Columbia University
– “brain trust”
               Brain Trust
Adolf Berle and Gardiner Means (1932)
– Trend toward economic concentration
– Had transformed old free market into
  administered market
    Decisions made by those who ran big
    corporations, rather than supply and demand
    Rendered classic laissez-faire theories obsolete
               Brain Trust
Rexford Tugwell
– Called for public and government planning
    If concentration inevitable, shouldn’t be left in
    private hands (led to cause of Depression)
    Better for government to be in control for all of
               Brain Trust
Raymond Moley
– Head of brain trust

– Believed US should revert to wartime
  government agencies to try and stop
    Treat depression like a war
               Brain Trust
– Bernard Baruch, Hugh Johnson, and George
    Began sponsoring schemes for industrial and
    agricultural planning

– Louis Brandeis & Felix Frankfurter
    Didn’t like the idea of national planning
    Create policies that foster more competition
             Brain Trust
William Jennings Bryan
– Inflationist
– Devalue Currency to help farmers, etc

Lewis Douglas (Republican)
– Gold Standard
– Balanced Budget
               Brain Trust
– As all groups exerted influence, political
  clashes grew

– FDR loved disagreement and arguing
    Felt that critical questions would be debated to its
        Cabinet Members
Even chose Cabinet with Different Political
– State – Cordell Hull (conservative democrat)
– Henry Wallace – Agriculture (Progressive
– Harold Ickes – Interior (Prog. Rep.)
– Frances Perkins – Labor – 1st woman cabinet
   Roosevelt’s Inauguration
Sworn in on March 4, 1933
“We have nothing to fear but fear itself!”
Asked for broad powers to wage war
against Depression
– Compared it to war
          The 100 Days
FDR declared a bank holiday as soon as
in office
Closed banks for a day
Hope that this will restore confidence and
stop people from pulling money out
               100 Days
Called special session of Congress on
March 8

Passed Emergency Banking Bill (1)
– Allowed banks to convert their assets to cash
– Gives more cash – now can reopen or stay
Passed Bill that reduced gov’t
expenditures and Veterans’ Pensions (2)
               100 Days
Last emergency bill (3)
– Legalized the sale and consumption of beer
  and wine (again)
– No effect economically
– Just confidence
– People have it rough, let them have a drink if
  they want!
           Fireside Chats
FDR gave radio
addresses throughout
Kept people “in loop”
towards country’s
Made President a
household figure
1933 - 1944
          Agricultural Plan
March 16, 1933 – FDR sent message to
Congress regarding agricultural planning
Farmers REALLY needed help
– 1929-1932 – net income of farmers dropped
  from $162 to $48
    Purchasing power dropping since 1929
    Still had fixed expenditures (mortgages) to pay for
     – Saw only way to make more $ was to produce and sell
          Lowered prices
         Agricultural Plan
Administration proposed agricultural
Increase farm income by controlling
Offered benefit payments to farmers that
agreed to regulate crops to the national
        Agricultural Plan
Financed through processing taxes
collected at mills or packing houses
Program couldn’t go into affect until
farmers agreed to it via referendum
Goal was to increase purchasing power
         Agricultural Plan
May 12, 1933 – Agricultural Adjustment
Act passed
Established Agricultural Adjustment
Administration (AAA)
– Began to destroy cotton crops in return for
  benefit payments
– Also slaughtered hogs to keep prices down as
         Agricultural Plan
Seemed ironic
– Destoying food and crops in a time of need

Industry been doing it for years
– Cutting production
          Agricultural Bill
Bill also gave federal government:
Authority to maintain prices through loans
on non-perishable crops (1)
– Would then keep the crops in government
Authority to withdraw land from cultivation
through leasing (2)
           Agricultural Bill
Regulate release of products into system
through marketing agreements (3)
– Government could prevent overuse of market
  but also save up for bad harvest years
President can issue greenbacks, coin
silver and alter gold content of dollar (4)
Farm Credit Administration provided
mortgage relief to farmers (5)
Program worked
– As production declined,
  prices increased
– 1932-1936 – farm income
  increased by 50%
– Benefits really went to
  large commercial farmers
     Tenant farmers and
     sharecroppers suffered
            Fixing Industry
By 1933, industry employing 5 million fewer
workers than 1929 and producing less goods.
Businesses lowered wages and laid people off in
order to keep profiting
– More people laid off led to less purchasing power
Only way to stop decline - joint planning by
government and business
Backed by FDR and US Chamber of Commerce
            Fixing Industry
Spring 1933 – FDR worked out 2 part industrial
recovery bill
Part 1 - Designed to promote proper trade
organization through usage of fair competition
codes that were exempted from anti-trust suits
– Section 7a – federal guarantees for trade unions to
  organize and collectively bargain
Part 2 – Established the Public Works
Administration (3.3 billion budget)
         Fixing Industry
FDR signs National Industrial Recovery
Act on June 16, 1933
            Fixing Industry
2 agencies were set up under National
Industrial Recovery Act

(1) PWA – Harold Ickes
– Not very successful
    Ickes too strict on who to give money for public
    works to
           Fixing Industry
(2) National Recovery Administration
(NRA) – Hugh Johnson
– Developed blanket codes for industries
    Negotiating codes for individual businesses too
– Employers observed NRA standards on
  minimum wages and maximum hours
    Would be given a “blue eagle” sign if businesses
           Fixing Industry
Because of codes, managers were
protected from competition – able to stop
cutting prices and wages.
Protected marginal businesses from failure
and larger ones that would have only
made profits by laying people off
– Codes decreased probability of investing in
  new facilities
            Fixing Industry
NRA attempted to pursue long term recovery
and reform
– Bring about permanent reemployment by raising
  wages and shortening work hours
– Sought abolition of child labor, improvement of
  working conditions, and encouragement of labor
Eventually began to overextend itself
– Began seeking codes for local and service trades
Bogged it down in petty enforcement fights
                Fixing Industry
NRA people wanted to use codes as a method of raising
– Businesses believed this would be a good trade for their
  concessions on wages and hours
– Others argued that price fixing would defeat policy of expanding
  purchasing power
Section 7a gave rise to more unions, which aggravated
Hugh Johnson’s personality made many people angry
– FDR forced him out in fall of 1934
      By 1935, most of FDR administration were fine with the NRA being
      struck down by the courts
    Other 100 Days Actions
FDR didn’t want currency inflation, but
wanted price increase
– April 18, 1933 – FDR abandoned gold
  standard by executive order
    Few weeks later, Congress approved by passing
    its own similar bill
   Other 100 Days Actions
– Gold Act of 1934 – gave treasury large
  authority to manage value of dollar abroad
  and credit conditions at home
    All of this shifted financial power of nation to DC,
    and away from NYC
     – DC made it much easier for businesses to borrow (low
       interest rates)
     – However, this still didn’t produce recovery
     – But, did establish public authority over a financial system
       previously dominated by private interests
    Other 100 Days Actions
1935 Federal Reserve Act - concentrated
authority of federal reserve to Board of
Governors, a public agency in DC (away
from private bankers)
Securities Act of 1933 – required
disclosure of relevant information in the
issuance of new stocks on the market
     Other 100 Days Actions
Glass-Steagall Act (1933)
– separated commercial
and investment banking
to limit bank speculation
Securities and Exchange
Commission (1934) –
prevent fraud and punish
misrepresentation and
fraud in stock market
    Other 100 Days Actions
Other actions designed to help banks and
reduce human cost of depression
Home Owners’ Loan Act – provided means for
refinancing mortgages (saved homes)
Similar refinancing occurred for farm mortgages
under Farm Credit Administration
 – Banks would receive government bonds for
   unpaid mortgages
 – Could turn these bonds into cash at any time
    Other 100 Days Actions
Federal Deposit
Corporation – set up
system of insurance
for savings deposits
in banks
– Helped restore
  confidence in banks
Showed New Deal’s
commitment to saving
capitalism while
reforming it
            Relief Efforts
Federal Emergency Relief Act –
established first system of federal relief
Harry Hopkins as director
Supplied states with cash for assistance
Soon after, began experiment of “work
relief” rather than cash handouts
             Relief Efforts
Civilian Conservation Corps (CCC) – linked
relief to conservation of natural resources
Recruited men ages 18-25 to work countryside
 – Protecting and developing watersheds,
   reservoirs, forests and parks
      Dust Bowl of early 1930’s made people
      realize conservation was necessary
 – Planted shelter belt of trees from Canada to
  Tennessee Valley Authority
Tennessee Valley
Authority best example of
relief to an entire region
(most successful)
Tennessee Valley
impoverished, no
electricity, floods, erosion
Still housed one of most
valuable power sites in
Muscle Shoals, AL
  Tennessee Valley Authority
FDR saw problems in Valley connected to a single one
Could be fixed with development under a single authority
April 1933 – called on Congress to create a corporation
clothed in power of federal government but having
flexibility of private enterprise
May 1933 – Congress passed TVA (director – David
 – Built dams, powerhouses, cleared rivers, replenished
    soil, rebuilt forests, and brought electricity to the
 – Also systematically excluded blacks from participation

Shared By: