The New Deal (1933 to 1938)

 

FDR’s First Hundred Days

1)      Inaugural Address – “The only thing we have to fear is fear itself”

2)      FDR and the “Brain Trust”

3)      Banking Holiday

·        stabilize the banking system

·        restore hope and confidence

·        Emergency Banking Act

·        Federal Deposit Insurance Corporation (FDIC)

4)      Fireside Chats – FDR speaking directly to the people – use of mass media (radio)

5)      21^st Amendment – repeal of the 18^th amendment – makes the country “wet” again – federal govt. will tax booze – appealed to immigrant communities in the cities especially hard hit by the Depression 

6)      Federal Emergency Relief Act (FERA)

·        provided $500 million to cities and states for emergency relief

·        created Civil Works Administration (CWA) – gave people federal jobs – built roads, schools, parks, airports, etc….

7)      Civilian Conservation Corps (CCC)

·        responsible for preserving the nation’s resources

·        put thousands to work

·        set up camps where young men from all over the country would come to plant trees, create ponds and lakes, build fire towers, etc….

8)      Tennessee Valley Authority (TVA)

·        focused on the Tennessee Valley – one of the most impoverished sections of the country

·        built a series of dams along the Tennessee River and its tributaries

·        brought electricity to millions of poor rural families

·        boldest and biggest federal experiment in regional planning

9)      Agricultural Adjustment Act (AAA)

·        designed to help farmers

·        raised the price of farm products by limiting production

·        farmers got money to grow less food

·        thousands of farmers plowed under fields and slaughtered livestock

·        many people were angered by the waste of food – in a time when thousands of people in the cities were going hungry

·        didn’t help poorest farmers (tenant farmers who didn’t own their land)

·        declared unconstitutional by the Supreme Court

10)  National Industrial Recovery Act (NIRA)

·        worked to limit industrial competition – thus increasing profits

·        industry wide agreements on prices – “price fixing”

·        Suspended antitrust laws that outlawed price fixing (unconstitutional)

·        National Recovery Administration (NRA) -- new agency

1.      Blue Eagle – NRA symbol designed to inspire patriotism for the industrial reform program

2.      Forced labor and business to cooperate

3.      Akin to “Corporatism” in Italy

4.      Labor did gain some important rights, such as the right to organize, but workers had to give up wages

5.      Designed to federally regulate competition

6.      Shot down by the Supreme Court in 1935 as unconstitutional

11)  Federal Housing Administration (FHA)

·        helped low income people get mortgages with very small down payments

·        mortgages were through banks, but were backed up by the federal govt.

·        still around today

 

Conservative critics charged that many of the New Deal programs were unconstitutional – They were.  Others charged that the New Deal programs didn’t go far enough.  Still others charged that FDR’s real plan wasn’t relief, but rather politics.

 

Critics of the New Deal

1)      Huey P. Long

·        The “Kingfish” – LA governor

·        “Share our Wealth”

·        promised to make “Every Man a King”

·        Redistribution of Wealth

·        Criticized FDR for not going far enough

·        Loud and Flamboyant

·        FDR considered Huey P. the most dangerous man in America

·        Grassroots movement – looked like a real challenge to FDR in 1936 – the New Deal hadn’t ended the Depression by 1935

·        Shot by an assassin in 1935 on the steps of the LA capital building

2)      Father Coughlin

·        Catholic priest from Michigan

·        Started radio broadcasts in 1930 (before FDR)

·        At his height, his audience numbered 40 million

·        Considered himself a reformer

·        Early supporter of FDR, but by 1934 he turned against the president and the New Deal (it wasn’t working fast enough for Coughlin)

·        “Social Justice”

o       attacked the twin evils of Communism and international banking

o       saw Communism as evil (comes from the Vatican)

·        supported the NAZI regime for its stance on Communism

·        became anti-Semitic

·        finally taken off the air in 1942

 

 

Second New Deal (1935 to 1938)

 

1)      Works Progress Administration (WPA)

·        Huge government plan to provide employment – mostly for the young

·        Ultimately spent $11 billion on internal improvements and other “public projects”

·        Built schools, stadiums, roads, etc…

·        Also employed actors, writers, musicians and other artists

·        Many cynical taxpayers were angry over what they saw as waste

·        WPA Slave Narratives of 1934 – great primary source almost lost to time

·        Eventually employed 8.5 million people over 8 yrs

·        Finally terminated in 1943

2)      Social Security Act of 1935

·        Provided retirement pensions for older Americans, paid for by those still working

·        Provisions for disabled workers and children as well

·        Still exists

 

As the 1936 election approached, the Depression had lessened, but not gone away.  Republicans charged that FDR’s “socialistic” schemes had done little to alleviate real suffering.  Americans, however, saw FDR as their president, one who had spoken to them directly (radio).  FDR was reelected in a landslide.  With such a victory, FDR felt confident enough to take on the one branch of government that stood in the way of permanent reform.

 

FDR’s scheme to “Pack the Court”

 

1)      In a message to Congress early in 1937, FDR proposed to reform the judiciary by allowing him to appoint a new judge (or justice) anytime a current judge reached the age of 70 years and refused to retire. 

2)      In 1937 – 6 of the 9 justices were over 70.

3)      FDR was looking to fill the Court with his men – liberal justices who wouldn’t declare New Deal programs unconstitutional.

4)      Even supporters of FDR were shocked at the idea – the Supreme Court was like a sacred institution by 1937.

5)      Congress (overwhelmingly Democratic) voted the bill down.

6)      FDR took a hit over the issue – enemies charged that the president wanted to be a dictator.

7)      Conservative Democrats now felt strong enough to vote against the president on other issues.

 

 

End of the New Deal (1937-38)

 

1)      Although the New Deal put people to work, by 1937, the country still faced unemployment numbers over 15%.

2)      1937 also brought a sharp downturn in the business sector – due in some measure to government meddling in the affairs of business.

3)      In 1936, the economy seemed to be recovering a bit too fast (govt. economists thought) and inflation shot up.

4)      When the Fed took steps to curb inflation by scaling back reform/relief monies, the economy turned sharply downward.

5)      By 1938, the country was beginning to look at events abroad, rather than be concerned with internal problems.

6)      By 1939, unemployment briefly reached 20% again, but it didn’t last long. World War II would quickly bring the economic boom needed to end the Depression.

 

 

Legacy of the New Deal

 

1)      The New Deal DID NOT end the Depression

2)      It did represent a fundamental shift in government policy

3)      Americans as well now believed that the government should and must help individuals and society in a time of crisis.

4)      Keynesian economics – has ruled America for over 60 years

5)      We are no longer dependent on Supply and Demand – Govt plays a fundamental role in the economy’s growth and stability.