Relief Reform and Recovery FDR and the New

Relief, Reform, and Recovery FDR and the New Deal

Focus �You’re the newly elected President. �What will you tell people in your inaugural speech. �Remember that these people overwhelmingly elected you during their time of great crisis.

Inaugural Quotes – FDR 1933 �“The only thing we have to fear is fear itself. ” ◦ Who is he talking to here? �“This nation asks for action and action now!” ◦ What former economic policy is sure to be changing?

Inaugural Quotes – FDR 1933 �“The people of the United States have not failed…. . they have asked for discipline and direction under leadership. They have made me an instrument of their wishes. In the spirit of the gift, I take it. ”

Roosevelt the Man �Extensive Political Experience ◦ New York Legislature 1910 ◦ Assistant Secretary of the Navy ◦ Governor of New York �Very personable approach to people ◦ Reached out to Ams. in weekly radio address called the fireside chats ◦ Held frequent press conferences – liked by the press

Roosevelt the Man Con’t �Focused attention on Washington D. C. �Had overcome personal adversity – polio ◦ Left him paralyzed

Roosevelt’s Leadership �Used the advice of the Brain Trust ◦ Advisors in Economics, Political Science, and Attorneys ◦ Represented all viewpoints �Very diverse cabinet ◦ Some republicans held posts ◦ Francis Perkins – named Sec. of Labor �First female cabinet officer

Roosevelt’s Leadership Con’t �Relied on Wife – Eleanor Roosevelt ◦ Called on to travel on behalf of FDR and be his eyes and ears ◦ Fought for social justice for poor, women, underprivileged, African Americans �Roosevelt calls for ◦ A strong presidency ◦ Significant action

Bank Holiday �Emergency Session �Closes banks ◦ Banks would be examined ◦ Healthy banks will be reopened ◦ Encouraged people to return $ to bank �Ends bank crisis

The Hundred Days �March 9 – June 16, 1933 �Congress passes 15 major bills = The First New Deal ◦ Most submitted by the President ◦ Aimed at recovery, relief, and reform ◦ Believed that gov’t measures could help jump start the economy �Hopefully the economy would take recovery on its own.

Securities Act � Came from desire to reform stock exchange practices which create a weak market. � Requires companies that sell stocks provide complete/truthful info to stock purchaser/investor � Leads to development of the SEC = Securities and exchange commission to oversee the market and prevent fraud

Glass-Steagall Banking Act �Came from the need to reform banking practices not already addressed in the Emergency Banking Act. �Separate commercial banking from investment banking. �With commercial banks not able to speculate w/customer deposits leads to a more stable banking system.

Federal Deposit Insurance Corporation FDIC �Came from the 9 million savings account lost b/c of the bank crisis. Depositors need protection in order to build confidence in the banking system. �Provides government insurance for bank deposits. �Led to increased confidence in banking system.

Home Owners Loan Corporation �Came from need to provide debt relief so that people could meet mortgage demands and still act as a “consumer” �HOLC bought mortgages of individuals who were behind in payments and restructured loans with longer terms and lower interest. �Assisted 10%; not farmers; not unemployed; not those who lost jobs after restructuring

Farm Credit Administration �Came from need to assist farmers with debt relief on farm mortgages. �Offered outright loans to farmers to assist with lower interest rates �Saved millions of farm from foreclosure but may have slowed recovery saving marginal farms when it could have assisted more “efficient” businesses.

Tennessee Valley Authority (TVA) �Came from need to bring relief and reform to a seriously impoverished 7 state region and prevent flood and erosion in an overworked stretch of land. �Employed workers to build 20 dams for flood control/improve others. Moved farmers from marginal lands, reforested, built power plants, fertilizer factories, started new towns. �Continues to bring power and address environmental concerns today.

Agricultural Adjustment Act ~ AAA �Came from ~ to address overproduction and low agricultural prices �Government paid farmers to reduce growth of basic crops like cotton, wheat, tobacco, corn, hogs, dairy. $1 Billion in support payments. �Reduced farm surpluses and increased prices w/some farmers plowing under acreages, killing pigs, not planting. Actually hurt some small farmers, migrant workers, sharecroppers

National Industrial Recovery Act = NIRA and the NRA �Addressed failing firms, joblessness, wages/prices �Suspended antitrust laws. Allowed business, labor, government to cooperate to come up with “codes of fair competition” which set prices, shortened hours, set minimum wages, limited to two shifts/day, allowed unions to bargain - Overseen by the National Recovery Administration~NRA �Disliked by employers, difficult to enforce, failed, declared UNCONSTITUTIONAL

Civilian Conservation Corps CCC �To provide a work program to “younger” unemployed as a form of “relief”. �Offered outdoor work to 18 -25 yr. old single men; planting trees, fight forest fires, build reservoirs, stop soil erosion. Earned $30/month ($25 back to family) Also taught to read/write �Provided opportunity to “Wild Boys of the Road”, Native Americans; later WWI veterans

Federal Emergeny Relief Administration - FERA �To assist states, cities, local charities in providing immediate relief to unemployed on verge of starvation. “People don’t eat in the long run ~ they eat every day” (Harry Hopkins) �Gov’t made outright grants to states/cities to distribute as they chose usually in the form of the dole ~ gifts of $, food, clothing. �Brought both immediate relief and criticism.

Public Works Administration PWA �To assist states and cities in providing work to unemployed and to address critics of the FERA fearful that the dole damage selfrespect, job skills, creates dependency. �Provided jobs on construction projects (highways, dams, schools, sewer systems). Insisted contractors receiving $ hire African Americans. �Work relief for unemployed, broke some long standing racial barriers in construction.

Civil Works Administration �FERA and PWA not enough and winter is coming. Gov’t feels need to give jobs directly. �Employed 4 million people; many women building or improving airports, roads, school buildings, parks, playgrounds, playing fields. �Huge criticism from $1 Billion price tag in 5 months. Shut down in the spring due to cost and worries over creating dependency.

Was it worth it? �Changes ◦ Size of government grows larger than ever. ◦ Precedent has been set for extreme gov’t intervention ◦ Banks reopened ◦ More kept homes/farms ◦ More people employed ◦ People had more hope/faith in nation

Criticisms � 10 million still unemployed �Federal gov’t power is increasing at expense of state rights �Increased size of the federal deficit. “Who’s going to pay for all of this? ” “You are!” �Others thinking New Deal hasn’t gone far enough.

Critics �Huey Long - Senator for Louisiana ◦ Criticized the dole ◦ Proposed confiscating the property of the rich, giving every family a home, $2, 000/yr, free college education ◦ Followers create share our wealth clubs ◦ Planned to run for president/assassinated

Critics con’t �Father Charles Coughlin - “Radio Priest” ◦ Accused FDR of turning the “New Deal” into a “Raw Deal” ◦ Proposed a more socialist plan to tax the wealthy and guaranteed income for everyone �Dr. Francis Townsend ◦ Former public health official shocked by plight of elderly Americans who can’t get jobs ◦ Relief for elderly ~ gov’t pays Ams. Over 60 a pension of $200/month. Would be required to spend $ w/i 30 days

Review Questions � What was one of Roosevelt’s first actions as President to stop a panic that was worsening the Depression? � How did Roosevelt reassure the American people even apart from the passage of New Deal programs? � How did the American Government pay for New Deal programs? � What New Deal program was passed to help regulate the stock market? � What New Deal act encouraged business and labor to work together to set codes of fair competition?

2 nd New Deal �Response to continued needs �Response to criticisms

Works Progress Administration ~ WPA �More job relief �Puts people to work on public works projects (see PWA and CWA) �Federal Number 1 - employs artists, musicians, actors, writers, teachers. �Federal Number 1 creates record of life stories of immigrants, enslaved, native Americans.

Wagner Act and National Labor Relations Board �To address problems with employer/employee relations �Wagner Act sets up the NLRB which allows factory workers to hold secret elections to vote in a union. �NLRB arbitrates grievances, reinstatement of workers fired for union activity. �Formally recognizes/gives power to labor unions. Brings a burst of labor union activity. �Leads to development of CIO - organized industrial unions.

Social Security Act �To help unemployable �Gov’t financed unemployment insurance plan through payroll taxes to care for unemployable ◦ Mothers with dependent children ◦ Disabled ◦ Elderly retirement benefits at 65 ◦ Didn’t protect farm or domestic workers

United States Housing Authority �Provides assistance to construction firms willing to build low income housing.

Farm Securities Administration �Give loans to tenant farmers so they could purchase land/farms

Fair Labor Standards Act �Abolishes child labor �Limits work week (44) �Sets minimum wage ($. 25) �New Deal is done - Congress changes hands and will not pass any more New Deal legislation

The Court Packing Plan �See Reading or page 670 �Roosevelt’s first serious political mistake ◦ Was Roosevelt overstepping bounds? ◦ Was he trying to undermine the court system? ◦ American’s in general saw this as a threat to the checks and balance system/balance of power ◦ Court upheld Wagner Act and Social Security ◦ Conservative D’s start working with R’s to block further New Deal programs

Recession of 1937 �Economy seemed to be in recovery �Roosevelt tries to balance the budget and cuts WPA and PWA � 2 million people thrown out of work

New Deal Legacy �Immediate/Long Term ◦ Unemployment high and recovery lagged until WWII ◦ Gave Americans a sense of security/stability ◦ Increased federal power over the economy ◦ Allowed the gov’t to mediate b/w “competing groups” -> introduces the “broker state” ◦ Gov’t created and maintains safety nets despite increasing size and expense ◦ America debates �How much intervention should we have? �How much responsibility for taking care of disadvantaged