Chapter 34: The Great Depression and the New Deal 1933-1939

FDR: Politician in a Wheelchair:

  • FDR: patience, tolerance, compassion, will power, could turn on charm like a faucet.
  • Eleanor Roosevelt: Most active first lady. Controversial, battled for the impoverished and oppressed.
  • FDR nominated at Democratic convention 1932 => repeal prohibition, blamed depression on Hoover, budget balance, economic and social reforms.

Presidential Hopefuls of 1932:

  • FDR on the offensive. Preached "New Deal" for the "forgotten man" - speeches and New Deal legislation written by "Brain Trust" - intellectualist kitchen cabinet.
  • Hoover tried to campaign with "the worst is over" and they new ways of FDR would further depression, reaffirmed faith n free enterprise

Hoover's Humiliation in 1932:

  • FDR won 472 to 59 (electoral)
  • Blacks (suffering from the depression) switched to the Democratic party
  • Last months in office, Hoover tried to get FDR to start working out stuff, but he refused. During this deadlock, depression worsened.

FDR and the Three R's: Relief, Recovery, Reform:

  • Powerful inaugural address - wage war on the depression, "the only thing we have to fear is fear itself"
  • Democratic Congress met "Hundred Days" March-June 1933.
  • Congress was giving FDR blank-check powers - he alone could sign off on certain measures given to legislative branch - Congress was his bitch.
  • New Deal renewed old Progressive ideas: unemployment insurance, minimum wage, conservation, restrictions on child labor.

Roosevelt Tackle Money and Banking:

  • Emergency Banking Relief Act of 1933 - gave President power to regulate banking transactions and foreign exchange and REOPEN BANKS!
  • FDR's "fireside chats" over the radio told people that it was now safer to put their money in a reopened bank than keep it under their mattresses.
  • Hundred Days Congress => Glass-Steagall Banking Reform Act: formed Federal Deposit Insurance Corporation - insured individual deposits up to $5000 to end bank failures.
  • Ordered all private gold-owner to give gold to Treasury in exchange for paper currency, took country off gold standard -> "managed currency"
  • Goal was inflation. Treasury purchased gold at increasing prices. Gold went from $21 to $35 an ounce in 1934 (it stayed at this rate for quite a while). It did increase the amount of dollars in circulation, got criticism though.
  • February 1934 - FDR had to return to limited gold standard for internation trade only. $35/ounce fixed rate. Gold still prohibited domestically.

Creating Jobs for the Jobless:

  • 1/4 of workers unemployed when FDR took office - highest level of unemployment in US history - before and after.
  • Hundred Day Congress => creation of Civilian Conservation Corps (CCC): employment for 3 million uniformed men on government camps (reforestation, fire fighting, swamp drainage). Recruits required to send money home to their parents to stimulate the economy.
  • Federal Emergency Relief Act: FERAdministration (Harry L. Hopkins): granted $3 billion to the states for direct dole payments, pref. for wages on works projects.
  • Agricultural Adjustment Act (AAA): millions $$ to help farmers meet their mortgages.
  • Home Owners Loan Corporation (HOLC): refinanced mortgages on nonfarm homes - helped about a million households.
  • Civil Works Administration (CWA): branch of FERA (Hopkins), designed temporary jobs - leafraking and make-work tasks. Criticized!

A Day for Every Demagogue:

  • Father Charles Coughlin - Catholic priest who broadcasted anti-New Deal crap: anti-Semitic, fascistic.
  • Senator Huey ("Kingfish") Long - Louisiana - "share our wealth" program, every family was to receive $5000 from the prosperous. Assassinated 1935 cause he was radical and crazay.
  • Dr. Francis E. Townsend - senior citizen plan for everyone 60+ to receive $200/month.
  • Works Progress Administration (WPA) 1935: (Hopkins) - $11 billion on buildings, bridges, and road to create jobs (9 million!). Gave part-time jobs to artists and writers.

A Helping Hand for Industry and Labor:

  • Hundred Day congress => National Recovery Administration (NRA). Designed to assist industry, labor, and the unemployed. "Fair competition" - reduced hours of labor (so work could be spread over more people), max hours, minimum wage, right of workers to bargain and organize collectively, antiumion laws forbidden, child labor restrictions. Symbol was a blue eagle. Businesses started hating "that damn Roosevelt buzzard" (Henry Ford).
  • 1935 Schechter decision - Congress could not delegate their powers to President AND Congressional control of interstate commerce couldn't apply to local business. Killed NRA.
  • Public Works Administration (PWA) - (SOInterior Harold L. Ickes) - $4 billion for project like buildings and highways. Grand Coulee Dam built - Columbia River.
  • Hundred Days Congress => legalized light wine and beer (alc. content 3.2% w/ $5 tax on every barrel. Stimulated liquor industry -> 21st amendment repealed prohibition.

Paying Farmers Not to Farm:

  • Farm overproduction! => AAA: "artificial scarcity" could establish "parity prices" (1909-1914 prices) for basic commodities. Payed growers to reduce crop acreage, money for payments raised by taxing processors of farm products. Wasted food, gopt criticism. 1936, Supreme Court killed it (declared regulatory taxation unconstitutional)
  • Soil Conservation and Domestic Allotment Act of 1936: paid farmers to plant soil-conserving crops or nothing at all in the name of "conservaation"
  • 2nd AAA - 193: if farmers observed acreage restrictions on cotton and wheat, they'd be eligible for parity payments.

Dust Bowls and Black Blizzards:

  • Mississippi Great Plains: drough + wind = dust stroms. Okies and Arkies migrated to California, where there was crazy competition for jobs. Finally got jobs in WWII industries.
  • Frazier-Lemke Farm Bankruptcy Act 1934: suspended mortgage foreclosures for 5 years, changed to 3 years in 1935.
  • Indian Reorganization Act of 1934 ("Indian New Deal"): encouraged tribes to establish local self-governments and preserve native crafts and traditions.

Battling Bankers and Big Business:

  • Hundred Days Congress=> Federal Securities Act = "Truth in securities" - required promoters to transmit info on stocks and bonds to investors.
  • 1934 Securities and Exchange Commission (SEC): monitored stock market to prevent fraud and inside trading.
  • 1935 Public Utility Holding Company Act: "death sentence" to bloated growth of business, except when economically needful

The TVA Harnesses the Tennessee River:

  • Government thought electric-power industry was monopolistic.
  • Hundred Days Congress=> Tennessee VValley Authority (TVA) 1933 - (Sen. George W. Norris) - agency to develop Tenn. River for reforming power monopoly and giving people jobs. Most revolutionary thing of the New Deal!
  • Wanted to discover how much production and distribution of electricity cost, to test fairness of private company rates
  • Outcries - "creeping socialism!"
  • TVA project => employment, cheap power, low-cost housing, restored soil, reforestation; made the poverty-cursed area a flourishing region! Precedent for future federally built dams.

Housing Reform and Social Security:

  • 1934 Federal Housing Administration (FHA) - established USHA to lend $$ to states or communities to improve dwellings or make new ones. Got opposition. Shrank slums.
  • Social Security Act of 1935: federal-state unemployment insurance. Retired workers receive regular monthly payments, financed by payroll tax on employers and employees - you had to be employed to get coverage.

A New Deal for Unskilled Labor:

  • After the NRA blue eagle was chopped into poultry by the sick chicken case, the Wagner Act of 1935 (National Labor Relation s): created NLRBoard for admin purposes and reasserted labor's right to organize and bargain collectively.
  • John L. Lewis formed Committee for Industrial Organization (CIO). Not cool enough for AFL, so moved to auto industry w/ sit-down strikes -> recognized by GM as sole bargaining agency for employees.
  • 1935 - Fair Labor Standards Act (Wages&Hour Bill): industries involved in interstate commerce set up minimum wage and maximum hours. 40 cents/hour. 40 hrs/week. Child labor 16 and under prohibited.
  • CIO legitly broke away from AFL, became "Congress" instead of Committee, labor union feuding CIO vs. AFL.

Landon Challenges "the Champ" in 1936:

  • FDR - Democrats- New Deal
  • Republicans - Alfred M. Landon - moderate who accepted some New Deal reforms (but not SS). Republicans (backed by Hoover) condemned New Deal, wanted to fight "socialistic schemes"
  • FDR won 523 to 8 (Vermont and Maine). Democrats had 2/3 of Congress. FDR got vote from BLACKS, poor (why would they bite the hand that feeds them?), South, immigrants, "the forgotten man"

FDR's Court-Packing Scheme:

  • 6/9 Supreme Court justices were over 70, ultraconservative, hindering FDR's New Deal. 1937, FDR asked Congress to add a new judge in the Supreme Court for every justice over 70, with a maximum of 15 judges.
  • Congress, even the Democrats hated this!! They were like "hell no, Roosevelt"
  • Former Conservative justice Owen J. Roberts started voting liberal => Supreme Court start allowing New Deal legislation
  • Congress voted full pay for justices 70+ to retire
  • Congress passed Court Reform Bill only to lower courts
  • Death and resignations => FDR got to appoint 9 justices

The Twilight of the New Deal:

  • 1937 - sharp turn downward in economy - "Roosevelt's Recession." SS biting into payrolls, admin cut back on spending for "balanced budget"
  • FDR started to embrace British economist John Maynard Keynes' idea of deficit spending.
  • More conservative Congress => Reorganization Act: gave FDR limited power for administrative reform
  • Hatch Act of 1939 - barred federal administration from active political campaigning and soliciting -> loopholes so ineffective.

New Deal or Raw Deal, FDR's Balance Sheet, Varying Viewpoints: