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THE NEW DEAL 1933-1941

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					     THE NEW DEAL: 1933-1941
• The Hundred Days
  – by FDR’s inauguration,
     • disintegration (during lame duck pd.) of banking
       system convinced conservatives & radicals alike of
       necessity for gov’t intervention
  – during 1st “hundred days” presidency,
     • Cong. passed impressive body of legislation




                                                     1
– March 5, 1933, pres. declared “bank holiday”
– legislation of 100 Days created
  1. Federal Deposit Insurance Corporation (FDIC),
  2. separation of investment & commercial banking,
  3. extended power of Fed. Reserve Bd,
  4. established Home Owners Loan Corporation
     (HOLC),
  5. regulated securities exchange

                                               2
– FDR had no comprehensive plan of action;
  • ad hoc approach,
     –sometimes resulted in contradictory policies
– most measures designed to stimulate economy,
  • Economy Act
     –reduced salaries of fed. employees & cut
      veterans’ benefits
        »Hurt economy
                                                 3
– National Industrial Recovery Act (NIRA),
   • controversial
      – created Public Works Administration (PWA),
          » allowed manufacturers to establish price &
            production limits,
      – established min. wage & max. hours,
   • guaranteed labor right to bargain collectively
   • variant on idea of corporate state,
      – envisaged sys. of industry-wide organizations of
        capitalists & workers
          » supervised by gov’t
          » resolve conflicts internally
                                                     4
• National Recovery Administration (NRA)
  – Under NIRA
  – problems of unemployment & industrial stagnation
     • highest priority
  – oversaw drafting & operation of business codes
  – Cong. appropriated $500 m. for aid to needy
  – Civilian Conservation Corp (CCC) employed tens
    of thousands of young men

                                                     5
– NIRA failed to end depression
  • dominant producers in ea. industry supervised
    drafting & operation of the bus. codes
     – used their power to raise prices & limit
       production
        »rather than hire more workers & increase
         output



                                                    6
– even though NIRA provided protection for collective
  bargaining,
  • conservative & craft-oriented AFL didn’t want to
    enroll unskilled workers on an industry-wide basis
– John Lewis & other labor leaders created alternative
  to AFL
  • established Congress of Industrial
    Organizations,
     – organized workers on an industry-wide basis
       w/out regard to craft
                                                 7
• Agricultural Adjustment Administration (AAA)
  of 1933
   – combined compulsory production limitations w/
     gov’t subsidization of staple farm commodities
      • in effect, AAA paid farmers to produce less
        –some farmers benefited,
           »others, particularly sharecroppers and
            tenant farmers, did not


                                                     8
• Tennessee Valley Authority (TVA) of 1933
  – created bd. authorized to construct dams, power
    plants, & transmission lines,
     • mkt electrical power to individuals & communities
  – provided “yardstick” for evaluating rates &
    efficiency of private power companies
  – engaged in flood control, soil conservation, &
    reforestation projects
  – never became comprehensive regional planning
    organization some of its sponsors intended;
     • But did improved standard of living for many in
                                                    9
       valley
• New Deal Spirit
  – FDR infused his adm. W/ wave of optimism
     • receptive to new ideas
     • increased New Deal bureaucracies
         – drew academics & professionals into gov’t service
  – never clearly stated ideological movement
     • drew heavily on populism, T. Roosevelt’s New
       Nationalism, & Wilsonian tradition
  – DC became battleground for special interests
     • gave interest groups other than big bus. a voice in DC
        – on other hand, slighted unorganized majority   11
• The Unemployed
  – 1934, at least 9 m. still unemployed,
     • most were in desperate need
  – nevertheless, Democrats increased their majorities in
    Congress
     • FDR’s unemployment policies accounted, at least
       in part, for Democratic successes at polls
  – FDR appointed Harry L. Hopkins to head Federal
    Emergency Relief Administration (FERA) in 1933


                                                    12
– Hopkins insisted unemployed needed jobs, not handouts
   • Nov. 1933, persuaded Roosevelt to create Civil Works
     Administration (CWA)
      – employed millions on public works projects
          » cost of the CWA frightened Roosevelt,
          » soon abolished it
– 1935, Roosevelt put Hopkins in charge of new Works
  Progress Administration (WPA)
   • Ms. Pojer’s WPA.ppt



                                                       13
– in spite of these efforts,
   • at no time during depression did unemployment
    fall below 10 % of total work force
– FDR’s fear of deficit spending meant that many New
  Deal measures did not provide sufficient stimulus to
  economy




                                                 14
• Literature in the Depression
   – John Dos Passos published his harshly anticapitalist & deeply
     pessimistic trilogy,
       • U.S.A., b/w 1930 & 1936
   – John Steinbeck’s The Grapes of Wrath (1939) perhaps best
     portrayed the desperate plight of America’s poor
   – Thomas Wolfe’s autobiographical novels
       • Look Homeward Angel (1929) & You Can’t Go Home Again
         (1940)
           – offered a stark & vivid view of the confusion of urban life
             and the impact of hard times
   – William Faulkner wrote vividly of southern poverty, pride, and
     racial problems in his novels
       • b/w 1929 & 1932, published The Sound and the Fury, Light in
         August, As I Lay Dying, and Sanctuary                    16
• The Critics: Long, Coughlin, Townsend
  – FDR’s moderation provoked extremists on both the left
    and right
  – most formidable was the “Kingfish,” Huey Long, a
    senator from La.
     • never challenged white supremacy, but plight of all
       poor people concerned him
  – after initially supporting Roosevelt, Long split from the
    adm.
     • introduced his “Share Our Wealth” plan,
         – intended to redistribute the nation’s wealth
                                                         17
– less powerful than Long but more widely influential
 was Father Charles E. Coughlin, the “Radio Priest”
  • urged currency inflation (silver & gold)
  • attacked the alleged sympathy for communists and
    Jews w/in FDR’s adm.
– resembled fascism more than anything else
– FDR took U.S. off gold standard

                                                 18
– Dr. Francis E. Townsend proposed “old-age
 revolving pensions,”
   • would give $200 per month to nation’s elderly
      – on conditions that they not hold jobs & that
       they spend money within 30 days
– the collective threat of these radical reformers forced
 FDR to adopt a bolder approach toward solving
 problems of depression
                                                    19
• The 2nd New Deal
  – despite Roosevelt’s efforts, depression continued
    unabated
  – spring of 1935, launched 2nd New Deal
     • Wagner Act (1935)
        – ensured right of labor to collective bargaining
        – prohibited employers from interfering w/ union
          organizational activities


                                                        20
– Social Security Act (1935)
   • established fed. system of old-age pensions &
     unemployment insurance
– Rural Electric Administration (REA)
   • electric power to rural areas
– Wealth Tax (1935)
   • raised taxes on lg incomes, estates, and gifts
– critics worried that New Deal restricted liberty
– cost also alarmed them
                                                 22
– by 1936, some members of adm. had fallen under
 the influence of John Maynard Keynes,
   • advocated deficit spending to stimulate
    consumption
– FDR never totally accepted Keynes’s theories,
   • but imperatives of depression forced him to
    increase spending beyond gov’t’s income



                                                   23
• Election of 1936
  – matched Governor Alfred M. Landon of Kansas and
    Roosevelt
  – Congressman William Lemke of North Dakota ran on
    the Union party ticket, a coalition of extremist groups.
  – Roosevelt won easily, carrying every state except Maine
    and Vermont
  – Democrats also made large gains in city and state
    elections


                                                       24
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• Roosevelt Tries to Undermine the Supreme Court
  – conservative majority in Supreme Court
    declared several major New Deal programs
    unconstitutional
  – by 1937, all major measures of the 2nd New
    Deal appeared doomed
  – Roosevelt responded w/ proposal to increase #
    of sitting justices,
     • “packing the court”
         –thinly disguised attempt to stack the Court
           w/ his own appointees
  – Roosevelt severely misjudged opposition to plan
                                                  26
– Cong. & public strenuously objected to his tampering
  w/ system of checks and balances
– Pres. eventually yielded to pressure & w/drew his
  plan
– alarmed by the attack on the Court,
   • 2 justices changed their positions
       – voted to uphold New Deal legislation
– moreover, death & retirement created enough
  vacancies on the Court to allow Roosevelt to appoint
  a lg. pro-New Deal majority
– However, Roosevelt’s personal & political prestige
  suffered from the affair                       27
• The New Deal Winds Down
   – the Court battle marked beginning of end of the
     New Deal
   – series of bitter strikes, starting in 1937,
      • alarmed public
   – June 1937, FDR responded to a moderate increase
     in econ. conditions by curtailing gov’t expenditures
      • resulting “Roosevelt Recession”
          – included a downturn in stock market, rising
            unemployment, and declining industrial
            output

                                                      28
– in response, FDR finally committed himself to heavy
  deficit spending, beginning in April 1938
– at his urging, Cong. passed a $3.75 billion public works
  bill, new AAA programs, and the Fair Labor Standards
  Act
   • did little to ease the recession & alienated
     conservatives
– particularly after mid-term elections in 1938,
   • coalition of Republicans & conservative Democrats
     gained enough power to halt expansion of New Deal
     reforms
                                                    29
• Significance of the New Deal
  – outbreak of WW II ended depression
  – New Deal eased suffering but failed to revive the
    economy
  – Roosevelt’s willingness to try diff. approaches made
    sense b/c no one knew what to do
  – however, his vacillating policies & his desire to maintain
    a balanced budget often proved counterproductive



                                                        31
– as a result of the New Deal, the nation began to look
  to the fed. gov’t as the guarantor of its public welfare
    • Broker state
– Roosevelt expanded the fed. bureaucracy & increased
  the power of the presidency
– Fed. bureaucracies now regulated formerly private
  sectors
– if the New Deal failed to end the depression,
    • changes it effected altered Am. life & society

                                                    32
Economics and History
Examine the graph on page 703 of your textbook showing
unemployment figures, and then answer the questions on the
following slides.
• Women as New Dealers: The Network
  – largely because of the influence of Eleanor Roosevelt
    and Molly Dewson, head of the Women’s Division of
    the Democratic National Committee,
     • the Roosevelt administration employed more women
       in positions of importance than earlier
       administrations
  – Secretary of Labor Frances Perkins became the first
    woman to hold a cabinet post

                                                      36
– Molly Dawson and Eleanor Roosevelt headed an
  informal, yet effective, “network” of influential women
  whose goal was the placement of reform-minded
  women in government
– Eleanor Roosevelt exerted significant influence,
  particularly in behalf of civil rights
   • Marian Anderson




                                                     37
• Blacks During the New Deal
  – while minimal in 1932, the shift of black voters from
    the Republican to the Democratic party became
    overwhelming by 1936
  – however, Roosevelt remained unwilling to alienate
    southern members of Congress and deferred to them on
    racial matters
  – new Deal programs often treated blacks as second-class
    citizens
  – in 1939, black unemployment was twice that of whites,
    and wages paid to whites were double those received by
    blacks
     • A. Philip Randolph’s threat of a march on DC in
       1941                                            38
– despite this situation, an informal “Black Cabinet,”
  including Mary McLeod Bethune and Charles Forman,
  lobbied the federal gov’t in behalf of better
  opportunities for blacks
– in the labor movement, the new CIO recruited black
  members
– thus, while black Americans suffered during the
  depression, the New Deal brought some relief and a
  measure of hope



                                                  39
• A New Deal for Indians
  – the New Deal built on earlier policies toward Native
    Americans
  – while retaining many paternalistic and ethnocentric
    attitudes, government policies improved after the
    appointment of John Collier as Commissioner of Indian
    Affairs in 1933
  – under Collier, the government expressed a willingness to
    preserve traditional Indian cultures
  – at the same time, it attempted to improve economic and
    living conditions
                                                      40
– the Indian Reorganization Act of 1934 allowed a
  degree of autonomy by attempting to reestablish tribal
  governments and tribal ownership of Indian lands
– some critics, including many Indians, charged Collier
  with trying to turn back the clock
– others attacked him as a segregationist
– not all Indians, moreover, particularly those who owned
  profitable allotments, were willing to yield their privately
  held land to a tribal corporation



                                                        41
• The Role of Roosevelt
  – how much credit for New Deal policies belongs to FDR is
    debatable
     • left most details and some broad principles to his
       subordinates
     • his knowledge of economics was skimpy
     • his understanding of many social problems remained
       superficial
  – nevertheless, FDR’s personality marked every aspect of the
    New Deal
     • his ability to build & manipulate coalitions made the
       program possible
  – personified the gov’t & made citizens believe that the president
                                                               42
    cared about the condition of ordinary Americans
• The Triumph of Isolationism
  – although an internationalist at heart, FDR, like other
    world leaders, placed the economic recovery of his
    own nation ahead of global recovery
  – isolationist sentiment in America intensified during the
    1930s
  – Senator Gerald P. Nye headed an investigation (1934-
    1936),
      • the findings of which convinced millions of
        Americans that financiers & munitions makers had
        been responsible for America’s entry into WW I
                                                        43
– Congress passed a series of neutrality acts, which
  severely restricted the options available to the White
  House and State Department
– in part because of domestic problems and in part because
  of his own vacillation, Roosevelt seemed to lose control
  over foreign policy




                                                       44
• War Again in Europe
  – the aggression of Japan, Italy, and Germany convinced
    Roosevelt of the need to resist aggression
  – fear of isolationist sentiment, however, led Roosevelt to
    move cautiously and to be less than candid in his public
    statements
  – the invasion of Poland and subsequent declarations of
    war by Great Britain and France budged Congress to
    adopt cash and carry legislation


                                                        45
– in the fall of 1939, Roosevelt sold arms to Britain and
  France, although he lacked legal authority to do so
– Roosevelt also approved a secret program to build an
  atomic bomb
– when Britain ran out of money in 1940, Roosevelt
  swapped destroyers for British naval bases
– in September 1940, Congress established the nation's 1st
  peacetime draft




                                                     46
• A Third Term for FDR
  – Roosevelt ran for an unprecedented third term in the
    presidential election of 1940
  – partisan politics and his belief that only he could control
    the isolationists undoubtedly played a role in Roosevelt’s
    decision to seek reelection
  – Wendell L. Willkie, a moderate from Indiana, headed the
    Republican ticket


                                                         47
– since he supported the basic structure of the New Deal,
  Willkie focused on opposing the trend of Roosevelt’s
  foreign policies
– while rejecting isolationism, Willkie accused Roosevelt
  of intending to take the United States to war
– Roosevelt won the election handily




                                                     48
• The Undeclared War
  – FDR’s victory in 1940 encouraged him to expand aid to
    Great Britain
  – in March 1941, Congress approved the Lend-Lease Act
  – the American navy began to patrol the North Atlantic
    and to pass intelligence data to the British navy
  – in April 1941, the U.S. occupied Greenland;
     • in July it occupied Iceland
  – after the Greer incident and the sinking of the Reuben
    James, the U.S. had, for all practical purposes, although
    not officially, gone to war                         49

				
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