Warren Harding

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					       Chapter Seven:
Early Stages of the New Deal
           Jennifer Hill

         Latoya Anderson

        Viviana Gonzalez

          Krista Marsala
                         Warren Harding

      •    The 29th president
      •    During 1921-1923
      •    Represented the state of Ohio
      •    A member of the Republican party
      •    He was first United State Senator to be
           elected president
                   About Harding…
• He was known for his corrupt
   – Charges of patronage and wrongdoing
• He pledge to return nation to “normalcy”
  (he made up that word.)
• *Teapot Dome Scandal*
                                                       Edward Doheny

          Albert B. Fall
Cartoon about teapot
            Calvin Coolidge

• Thirtieth President
• he polled more than 54
  percent of the popular
• Coolidge was both the
  most negative and remote
  of Presidents, and the
  most accessible.
• His first message to
  Congress in December
  1923 called for isolation in
  foreign policy, and for tax
  cuts, economy, and
  limited aid to farmers.
• He was trying to clean up
  the mess that Harding left
  Quote from Walter Lippmann
was his talent for effectively doing nothing: "This active
inactivity suits the mood and certain of the needs of the
country admirably. It suits all the business interests which
want to be let alone.... And it suits all those who have
become convinced that government in this country has
become dangerously complicated and top-heavy...."
                                   Herbert Hoover

• He said then: "We in America
  today are nearer to the final
  triumph over poverty than ever
  before in the history of any
• Within months the stock market
  crashed, and the Nation spiraled
  downward into depression
• He was more genuine
• Known for being a
               How he got his reputation
• Caught in China during
  the boxer rebellion
  (1900), Hoover organized
  a relief for trapped
• He also helped Americans
  during the outbreak of
  World War I
• He exhibits impressive
  ability in helping to
  procure food for some
  nine million people whose
  country had been overrun
  by the German army.
             The Stock Market Crash of 1929
  Dow Jones Industrial Average soared, investors quickly bought shares
  • Stocks seen as extremely safe by most economists,
  •Investors soon purchased stock on margin- borrowing of stock for the
  purpose of getting more leverage.
  •1921 to 1929, the Dow Jones rocketed from 60 to 400, Millionaires were
  created instantly.
  •Investors mortgaged their homes, and invested their life savings in hot
  stocks, such as Ford and RCA.
  • On Thursday, October 24 1929, panic selling occurred as investors
  realized the stock boom had been an over inflated bubble.


                                                    Migrant Family
Vanderbilt bedroom                        
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                                               Rockefeller Home
           Period of Denial: 1929-1933
Massive unemployment, depressed stock prices, bankrupt companies, deflated
Herbert Hoover:
• Elected 1928
• Orchestrated massive food relief for Europe after WWI
• Believed that modest tinkering with economic system would bring the economy
•Passed Reconstruction Finance Corporation that gave loans
to banks and corporations to encourage economic activity, but
they had to prove that they were bankrupt or on the verge of
• Believed that private agencies (Red Cross and other family
service agencies) could address the needs of unemployed
and poverty stricken Americans without Government
•Welfare issues belonged to the local government and private
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Herbert Hoover Continued…
• Did not address growing economic needs of local government, which were going
bankrupt with welfare increases
Pressure from Congress to help local government led to the passing of the
Emergency Relief Construction Act of 1932
• This gave federal loans to local governments that could prove their bankruptcy
Liberal politicians in the House and Senate proposed federal funding of major
public works projects, development of federally funded employment offices, funding
of unemployment and old age insurance, development of dams, and reforestation
projects to create jobs and economic growth in rural areas

The Nation’s confidence in Hoover and business began to waver by 1930…

• Expressed more sympathy for unemployed
• Advocated a balanced budget and conservative fiscal policies
• Derided Hoover for spending too much federal money
After three ineffective Republican presidents, the Democrats were given a shot…
• FDR was the Governor of NY state from 1928-1932, and oversaw operations of the
state’s labor department
• Administered variety of regulations relation to child labor and work safety
     • Temporary Emergency Relief Administration which provided funds for outdoor
     relief of unemployed
Eleanor Roosevelt had been involved with a range of social reforms during the
1920’s and was an added bonus to having FDR as president.
The Era of Emergency Reform
      It was unclear what FDR would do
• The banking crisis

• Many panicked and withdrew

• Banks were forced to close by
  order of the government
•   FDR „s speech on the bank crisis

• Some closed doors for good as
  a result of inefficient funds
   Unemployment and Economic

• 20% to 60% of Americans were
  unemployed at this time
• Those who were affected were
• The Unskilled
• The Uneducated
• People of color
• As well as…
• Drought in Oklahoma caused          • Many lost or were forced to see
  many to flee to other states such     their farms due to the falling
  as California                         prices of produce
        Business was in disarray

• Supply and demand – there was
  not a demand for supplies,
  therefore prices of products
  were decreased

• Business were going bankrupt

• Many people affected
  committed suicide

• Unions collapsed

• Many homeless         
      Roosevelt was faced with several
       difficult choices and decisions
Focus on the unemployed and
What should he do to help       If action is taken – who
  these individuals?               should be responsible?
                                   Who is capable of
                                   handling this situation?
What programs to implement      Federal, state, or local
 for these people                  governments?

Decide whether to declare the   •   Many of Roosevelt advisors
  situation an emergency or         encouraged him to implement
  whether to implement              limited, local, and temporary
                                    programs however, the situation
  permanent programs                required him to consider ongoing,
                                    federal programs
 ROOSEVELT IS VICTOR IN FINAL DIGEST POLL; 3-to-2 Lead in the Popular Vote Is
   Revealed in tabulation of 3,064,497 Ballots. ELECTORAL TALLY 474 TO 57 37% of
Governor's Supporters Were Republican in 1928 -- 55% of All for Him. PRESIDENT GAINS
SLIGHTLY But Magazine Sees a Possibility Hoover Will Carry Only Maine and Vermont --
                                     Some States Close

  • Roosevelt‟s victory in
  1932 was the largest
  plurality a president
  had received since
    Most of those who sought help from
                FDR were
• Working Class
•    Wanted the Government to take an active stance in addressing issues

• Middle Class
•    Many were directly affected by the depression

• Others that suffered
•    People of all social classes were overwhelmed with economic hardship as
     many families lived off the wages of a single worker.
•    Many white collar workers feared foreclosure and were fearful that neighbors
     would discover they were on relief.
                  Lorena Hickok
 Reporter, commissioned by Eleanor Roosevelt to document
               suffering around the country
                        found that

• Many dealing with
  malnutrition and
• Many children placed in
  summer camps in hopes
  that they would receive
  adequate food
• No medical service for
  those who could not afford
• Foreclosures, evictions,
  layoffs, and suicide
      Roosevelt searched for solutions

• Trial and error – he wasn‟t
  exactly sure what would
• Through trial and error,
  Roosevelt implemented
  policies that created a
  welfare state in America

               Emergency Relief
•   Roosevelt created a variety of programs that propelled the
    federal gov‟t for the first time into the social welfare arena.

•   Provided relief, jobs, and food to Americans who needed

•   Most notable programs were the Federal Emergency Relief
    Administration (FERA), Civilian Works Administration
    (CWA), Civilian Conservation Corps (CCC), and the Public
    Works Administration.
    Federal Emergency Relief Administration
•Provided funds to states for people who needed financial

•Technically supposed to provide welfare payments only for
unemployed people, but many states also gave funds to the
working poor, many whom were unable to survive on their own.

•Also helped college students with loans, funded cooperatives
among farmers, and purchased 4 million acres of land for resale
to tenant farmers.

•Represented the first major federal welfare program in the
nation‟s history.
           Civilian Works Administration
•   It was a job creation program, in which funds came from the FERA budget.
•   Between November 1933 – January 1934 the federal gov‟t initiated 1900,000
    work projects that employed 16 million Americans.
•   State employment offices certified that CWA workers were unemployed and
    had tried to find jobs in the private sector.
•   It was a bold initiative that gave new social welfare roles to the federal gov‟t.
•   Roosevelt, under severe pressure to cut spending to reduce deficits, terminated
    the CWA in 1934.

           Civilian Conservation Corps
• Enacted in 1933 and provided assistance to 2.5. million young men.
• Eligibility was restricted at first to males between the ages of 18-25
  who were currently on welfare rolls.
  - Due to protest, was later changes to allow unemployed youths to
• Recruits were paid as little as $1 a day and were required to send half
  of their wage to their parents.
• Critics feared that the CCC was militarizing America‟s youth by
  placing them in regimented settings under the control of the army.
• Others said that the CCC did not prepare youths after they left the
• African American youths were placed in segregated camps and did not
  address the needs of women.

          Public Works Administration
• Was developed in 1933 to address natural disasters (floods and
droughts) or to build airports, roads, bridges, and military

• Represented the first massive peacetime involvement by the
federal gov‟t in complex public projects.

•By 1937, the PWA had constructed astonishing numbers of
bridges, airports, dams, and school buildings.
        Reform of the Economic System
• FERA, CWA, CCC, and PWA rescued people for brief periods
  from economic misery, but did not directly address the
  collapse of the economic system itself.

• Roosevelt drastically increased social spending even though it
  led to unprecedented peacetime deficits.

• Federal taxes were raised by 1933, but federal revenues were
  still wholly insufficient to cover the cost of the New Deal
                  Security and Exchange Commission/
                 Federal Deposit Insurance Corporation
•   During the 1920‟s, many banks had insufficient reserves to provide a margin of
    safety if large numbers of depositors decided to withdrawal their funds or cover bad
    loans and investments.
•   Federal Deposit Insurance Corporation (FDIC) was established in 1933, it provided
    federal insurance to cover deposits when banks became bankrupt.
•   Security and Exchange Commission was established in 1934. It put restrictions on
    the stock market, jumped in before undue speculation by investors and stock
•   Roosevelt most difficult problem was to devise strategies for arresting the vicious
    circle of bankruptcies, price slashing, curtailment of production and decreased
    spending power that contributed to the Depression. This cause him to make up the
    National Recovery Administration.
                  National Recovery Administration

•   Was established by the National Industrial Act of 1933.

•   Business leaders in various economic sectors such as steel, coal, and mining industries, were
    convened to agree on prices that they would charge for products in their sectors so as to arrest the
    destructive slashing prices and the erosion of profit margins.

•   They were also required to establish common wage levels for specific kinds of workers.

•   Roosevelt established safeguards for this. Business leaders had to agree to establish using child labor,
    to allow workers to join unions, to honor specified minimum working conditions, to exclude women
    from dangerous occupations, and to include union representative in industry wide negotiations.

•   Some claimed it was unconstitutional because it allowed businesses to use monopolistic practices
    that were forbidden by the Sherman Antitrust Act.

•   Was terminated in 1935 when the Supreme Court declared that its delegation of power to
    nongovernmental entities was unconstitutional.

        Agricultural Adjustment Agency
•   Depressed prices were also a problem in rural areas, where millions of farmers
    were verging on bankruptcy.
•   It convened producers of the same crops to negotiate the amounts of acreage
    they would grow and reimburse farmers for not planting some of their land.
•   Hoped that by curtailing productions, farmers would get a higher price for
    their crops.
•   Developed safeguards to prevent abuse of tenant farmers by landowners, but
    because it lacked the staff to monitor landowners, evictions continued.
•   Required landowners to pass on to tenants a specified percentage of the
    monies they obtained from the gov‟t for withdrawing acreage from production,
    but many landowners gave a smaller percentage or nothing at all.

1.What was the scandal Called that Harding was involved in?
    A. Teapot Scandal
    B. Watergate
    C. Saucer Scandal
    D. Tornado Scandal
2. Who were the two people that were heavily involved in the scandal?
     A. Andrew Jackson and Bill Clinton
     B. Herbert Hoover and Franklin D. Roosevelt
     C. Albert B. Fall and Edward Doheny
     D. Harry Hopkins and William H. Matthews

3. What year was the Stock Market Crash?
     A. 1927
     B. 1920
     C. 1929
     D 1932
4. Who was the President at time of the Stock Market Crash?
     A. FDR
     B. Harding
     C. Coolidge
     D. Hoover
5. Up to what percent of Americans were unemployed in the early 1930‟s?
           A. 20%
           B. 33%
           C. 60%
           C. 66%
6.What population was the majority that voted for FDR?
           A. Working Class
           B. Middle Class
           C. Others that suffered
           D. All of the Above
           E. None of the Above
7.What does NRA stand for?
           A. National Rifle Association
           B. National Recovery Administration
           C. National Reserves Act
           D. National Relief Association
8. Which program did not include women?
           A. Civilian Conservation Corps
           B. Security and Exchange Commission
           C. FERA
           D. Civilian Works Administration

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