FRANKLIN D. ROOSEVELT AND THE NEW DEAL

Econ Weaknesses

• 1920s optimism drives increase in expectations of a better way of life

• Low savings level

• Installment plans

• Farming depressed all decade

• Int’l trade weak

The Great Crash

• 1928--soaring stock prices attract individual, corporate investment

• 1929--stock market crashes– directly affects 3 million– credit crunch stifles business

• Businesses lay off workers

• Demand for consumer goods declines

Unemployment, 1929-1942

Effects of the Depression

• Hardship affects all classes

• The middle class loses belief in ever-increasing prosperity

• 1000s of young homeless, jobless

• Suicide rate up, fertility rate down

• Fathers leave

Fighting the Depression

• Hoover – moral response

• Asks for business cooperation

• Smoot-Hawley Tariff

• Reconstruction Finance Corporation – bailouts to big businesses

Hoover and Voluntarism

• Hoover initially seeks solution through voluntary action, private charity

• Eventually aids farmers and bankers

• Resists Democratic efforts to give direct aid to the unemployed– perceived as indifferent to human

suffering– programs seen as incompetent

Bank Failures, 1929-1933

The Emergence of Roosevelt

• Franklin Roosevelt– born to wealth and privilege– 1921--crippled by polio– 1928--elected governor of New York– talented politician

• 1932--defeats Hoover with farmer- worker-immigrant-Catholic coalition

Election of 1928?

• Al Smith

• Urban

• Wet

• Lost Solid South

• Dem Party vacillates – rural-nativist, urban-immigrant

The Hundred Days

• Banking system saved from collapse -- FDIC

The Tennessee Valley Authority – jobs, cheap

hydro, soil conserv, flood control, etc.

Roosevelt and Recovery

• National Recovery Administration– codes to eliminate cut-throat competition,

ensure labor peace– favor big business, unenforceable– 1935 ruled unconstitutional

• Agricultural Adjustment Act of 1933– farmers paid to take land out of cultivation– prices increase– sharecroppers, tenant farmers dispossessed

Roosevelt and Relief

• 1933--Harry Hopkins in charge of RFC to direct aid to unemployed

• 1933--Civilian Conservation Corps employment to young

• 1935--Works Progress Administration place unemployed on federal payroll

• Programs never sufficiently funded

Roosevelt and Reform

• 1933-34--focus on immediate problems

• 1935--shift to permanent economic reform

Challenges to FDR

• Father Charles Coughlin advocates nationalizing banks, cheap money, anti-Semitism

• Francis Townsend calls for wealth redistribution from young to elderly

• Huey Long calls for redistribution of wealth (Share the Wealth)

Social Security

• 1935--Social Security Act passed

• Criticisms– too few people would collect pensions – unemployment package inadequate

• Establishes pattern of government aid to poor, aged, handicapped

Labor Legislation

• 1935--Wagner Act – allows unions to organize – outlaws unfair labor practices

• 1938--Fair Labor Standard Act – maximum hour – minimum wage

Impact of the New Deal

• Had a broad influence on the quality of life in the U.S. in the 1930s

• Helps labor unions most

• Helps women, minorities least

Rise of Organized Labor

• 1932--National Recovery Act spurs union organizers

• Congress of Industrial Organization (CIO) formed by John L. Lewis

• CIO unionizes steel, auto industries

• 1940--CIO membership hits 5 million, 28% of labor force unionized

The New Deal Record on Help to Minorities

• Crop reduction program allows whites to fire or evict blacks, Hispanics

• Public works programs help by providing employment

• New Deal figures convince minorities that govt is on side

• 1934--Indian Reorganization Act

• “Black Cabinet”

Women at Work

• Position of women deteriorates in ‘30s– jobs lost at faster rate than men– hardly any New Deal programs help

• Progress in government– Frances Perkins, Sec of Labor, first woman

cabinet member– women appointed to several other posts– Eleanor Roosevelt a model for activism

End of the New Deal

• 1936--New Deal peaks with Roosevelt’s reelection

• Congress resists programs after 1936

The Election of 1936

• FDR’s campaign– attacks rich – promises further reforms – defeats Republican Alf Landon– lopsided majorities in Congress

• FDR coalition: South, cities, labor, ethnic groups, African Americans, poor

The Supreme Court Fight

• Supreme Court blocks several of FDR’s first-term programs

• 1937--FDR seeks right to "pack" Court

• Congressional protest forces retreat

The New Deal in Decline

• 1936--cutbacks for relief agencies

• 1937--severe slump hits economy

• Roosevelt blamed, resorts to huge government spending

• 1938--Republican party revives