Chapter 26 FRANKLIN D. ROOSEVELT & THE NEW DEAL

1. Chapter 26FRANKLIN D. ROOSEVELT & THE NEW DEAL America Past and Present

2. The Great Depression • 1920s optimism drove increase in expectations of continual improvement • Stock market collapsed, factories closed, unemployment went up, optimism shattered p.750

3. The Great Crash • Productive capacity of the automobile & appliance industries grew faster than the demand • Each yr after 1924, the rate of sales of cars, refrigerators, ranges, etc. slowed • If corporate leaders had understood the warning signs, they would have raised wages & lowered prices, both effective ways to stimulate purchasing power • Those w/ excess cash began investing heavily in the stock market, betting prices would bring them windfall profits • The basic explanation for the Great Depression lies in the fact that US factories produced more goods than the American people could afford to consume p.750-752

4. The Great Crash • Factory productivity had increased 43%, but wages had gone up only 11%. If the $Bs that went into stock market speculation had been used instead to increase consumer purchasing power; production & consumption could have been brought into balance • The law of supply & “affordable” demand • Layoffs lowered purchasing power even further p.752

5. Unemployment ~ 1929–1942 p.751

6. Effects of the Depression • Difficult to measure the human cost • People lived in lean-tos made of scrap wood & metal ~ families went without meat & fresh vegetables for months, existing on diets of soup & beans • Crops rotted in the fields because prices were too low to make harvesting worthwhile • Af Ams who left the South for factory jobs in the North were among the first to be laid off • Missouri Pacific RR reported 200k vagrants riding the rails in 1931 p.752-754

7. Fighting the Depression • The Great Depression presented an enormous challenge • The inability of the Republicans to overcome the economic catastrophe provided the Democrats w/ the chance to regain power • Although they failed to achieve full recovery before the out break of WWII, the Democrats did succeed in alleviating some of the suffering & establishing political dominance p.754

8. Hoover & Voluntarism • HH was the Great Depression’s most prominent scapegoat • He rejected proposals for bold action & relied instead on voluntary cooperation within businesses that said “yes” & then reneged • HH believed that unemployment relief should come from private charities & local govt • By 1932, after some too little, too late govt programs, his efforts had clearly failed p.754

9. Hoover & Voluntarism • HH’s public image suffered its sharpest blow when he ordered Gen Douglas MacArthur to clear out the Bonus Army, a group of 22k WWI vets who marched on Washington to pressure the Senate to pay them a bonus that was due them in 1945 • After the Senate turned them down, some of the vets stayed in DC, living in ramshackle huts along the Potomac River ~ 1932 p.754

10. Hoover & Voluntarism • Mounted troops drove the vets out of the capital, blinding them w/ tear gas & burning their shacks p.754

11. Bank Failures ~ 1929–1933 p.754

12. The Emergence of Roosevelt • Franklin D. Roosevelt • Born to wealth & privilege • 1921 ~ Crippled by polio • 1928 ~ Elected governor of New York • Talented & persuasive politician • 1932 ~ Defeated Hoover • Farmers & workers, immigrants & native born, Protestants & Catholics rallied behind the new leader who promised to restore prosperity p.755

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15. The Hundred Days • When FDR was inaugurated, unemployment stood at 25% • Speaking on the steps of the Capitol, he declared “First of all, let me assert my firm belief that the only thing we have to fear is fear itself” • He called Cong into special session & requested “broad executive power to wage war against the emergency” • New govt supervision & aid to banks prevented impending collapse p.755-757

16. The Hundred Days • FDR sent 15 requests to Cong & received 15 pieces of legislation • The creation of the Tennessee Valley Authority (TVA) was one of the most ambitious of the New Deal measures • Called for a program to build a series of dams in 7 states to control floods, ease navigation, & produce electricity • Brought modernization & jobs to desolate areas of the upper rural south p.755-757

17. The Tennessee Valley Authority p.757

18. Roosevelt & Recovery • National Recovery Administration (NRA) • Aimed at achieving economic advance thru experimentation w/ planning & cooperation among govt, biz, & labor • Companies asked to cooperate in writing codes of fair competition, production limits, price guidelines, & protection of labor (max hrs/min wages) • Rules too complicated to easily enforce, big biz took advantage ~ didn’t really work • 1935 ~ SC ruled NRA unconstitutional p.757-759

19. Roosevelt & Recovery • Agricultural Adjustment Act (AAA) • Farmers paid to reduce their production • Prices increased, mainly because of govt payments, but Dust Bowl helped by cutting supply • Farm income rose for the first time since WWI • Measures most beneficial to larger farms • Sharecroppers, tenant farmers did not fare as well • Received very little of the govt payments & had their land taken out of production • 3M people left farms & crowded into the cities where they swelled the relief rolls p.757-759

20. Roosevelt & Relief • 1933 ~ Reconstruction Finance Corporation (RFC) estab’d to provide direct relief ($500M) • Enabled many to avoid starvation & stay out of breadlines • 1933 ~ Civilian Conservation Corps (CCC) provided employment to young males from city families on relief • Clear land, plant trees, pave roads, build bridges p.759

21. Roosevelt & Relief • 1935 ~ Works Progress Administration (WPA) placed unemployed on fed payroll • Similar to CCC in that it did construction projects, etc.; it also tried to preserve the skills of American artists, actors, & writers by producing plays, circuses, etc. p.759-760

22. Roosevelt & Relief • 1935 ~ Works Progress Administration (WPA) placed unemployed on fed payroll p.759-760

23. Roosevelt & Reform • 1935 ~ Focus shifted from relief to reform • Early New Deal programs tried to assist bankers, & industrialists, large farmers, & members of of the labor unions, but it did little to help unskilled workers & sharecroppers • The continuing depression & high unemployment began to build pressure for more sweeping changes p.760-762

24. Social Security • Democrats (FDRs Party) made significant gains in the 1934 Congressional mid-term elections • They were ready to enact virtually any proposal FDR made • At that time, the US, alone among the modern industrial nations, had never developed a welfare system to aid the aged, disabled, & unemployed • 1935 ~ Social Security Act passed • Established pattern of govt aid to aged, unemployed, handicapped, needy elderly, & dependent children • Old age pensions scheduled to begin in 1942 were paltry: $10 to $85 per month • Farmers, domestic servants not covered p.762-764

25. Labor Legislation • 1935 ~ National Labor Relations (Wagner) Act • Compelled companies to allow workers to organize & bargain collectively • Outlawed union busting tactics • 1938 ~ Fair Labor Standards Act • Estab’d maximum hrs/minimum wage • 40 hrs/wk & $0.40/hr • Rural Electrification Administration brought electricity to 90% of farmers who did not have it in 1930 p.764-765

26. Impact of the New Deal • There was a broad influence on the quality of life in the US in the 1930s • Many programs brought long-overdue improvements • Most important advances came with the growth of labor unions • Conditions for working women & minorities in non-union industries showed no comparable advance p.765

27. Rise of Organized Labor • Trade unions were weak at the onset of the Great Depression • <3M belonged, mostly to the AFL which organized craft (skilled) workers • Congress of Industrial Organization (CIO) formed by John L. Lewis to organize the steel & auto industries • 1940 ~ CIO membership hit 5M • Still, only 28% of labor force unionized p.765-766

28. The New Deal Record on Help to Minorities • AAA crop reduction program led to eviction of 1000s of black tenants & sharecroppers • Relief employment programs helped a little • Despite the bleak record, Af Ams rallied behind FDR & began a change from the Republican to the Democratic party • Overall, relatively little federal assistance for Mexican Americans • 1934 ~ Indian Reorg Act attempted to help • Native Ams remained the most impoverished p.766-768

29. Women at Work • Position of women deteriorated in ‘30s • Jobs lost at a faster rate than men • Few New Deal programs help women • Progress in government • Frances Perkins, Secretary of Labor, the first woman cabinet member • Women appointed to several other posts • Eleanor Roosevelt a model for activism • Marion Anderson p.768

30. End of the New Deal • 1936 ~ New Deal reached its high point when Roosevelt was overwhelmingly re-elected & Demo party strengthened its hold on Congress • In spite of his past success, FDR met with resistance in Congress after 1936 p.769

31. The Election of 1936 • FDR’s campaign • Opposed wealthy industrialists who formed the Liberty League & saw the New Deal as an attack on property rights • Promised further reforms • Reps nominated governor Alfred Landon of Kansas, a moderate, colorless figure • He refused to campaign against the New Deal programs • FDR appealed to the “common man” p.769

32. The Election of 1936 p.769

33. The Supreme Court Fight • During FDR’s first term, the SC ruled several New Deal programs unconstitutional (e.g., NRA & AAA) • FDR thought the SC was too old & to conservative, so he asked Congress to replace each member >age of 70 • Called a “Court Packing Scheme” • Cong did not go along • Surprisingly, after the scheme failed, the SC issued rulings approving several New Deal programs p.772-774

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36. The New Deal in Decline • Aside from the minimum wage & maximum hour law passed in 1938, Cong did not extend the New Deal into any new areas • The slow improvement in the economy suddenly gave way to a 1937 recession • The political result was a strong upsurge for the Republicans in the 1938 mid-term elections • Resulted in the formation of a new bipartisan Congressional conservative coalition that would prevail for a quarter century p.774-775

37. The New Deal & American Life • New Deal lasted only five years • Impact on American life enduring • Roosevelt’s success at relieving human suffering must be balanced w/ his failure to achieve complete economic recovery during the 30s • With adoption of Social Security, the govt acknowledged for the first time its responsibility to provide for those who could not care for themselves • The Wagner Act enabled the labor unions to balance their power against the industrial corporations & the min wage law provided a base for many workers • FDR was the leader America needed in the 30s p.775-776

38. Chapter 26FRANKLIN D. ROOSEVELT & THE NEW DEAL America Past & Present End