THE DUST BOWL AND THE NEW DEAL The

THE DUST BOWL AND THE NEW DEAL

The Dust Bowl

Dust Bowl (lasted almost 10 years) • Causes: • Poor agricultural practices, • drought and winds • 1931 -1934 worst drought ever • 1935 - FDR under the FERA gives $525 million for drought relief • WPA-puts 8. 5 million to work • Okies – migrated to California • 1939 -RAIN finally arrives

Running from Dust Storm Okies

THE NEW DEAL Roots of the New Deal Programs

The New Deal • Name FDR gave to his new program to fight the Depression • It was a revolution in American society - changed completely the way gov't functions • the first phase of the New Deal dealt exclusively w/ eco. Reform • unlike Hoover, FDR believed gov't legislation/involvement was crucial to stimulate the economy

Roots of New Deal • Progressive Reform • use gov’t to solve problems • World War I: • War Boards regulate economy • New York Gov. FDR: • relief for needy • pensions • unemployment insurance • public power projects

Basic Ideas Behind New Deal on how to Solve the Great Depression • Pump Priming and Deficit Spending – Pump money into the economy: • put cash into people’s hands; • Fed. Emergency Relief Administration ($500 mill. to states) • Spend money the Federal Government does not have • Use “deficit spending” (Keynesian economics) spend more to create jobs for unemployed • Create scarcity to increase prices • problem of over-production AAA & NIRA • Regulate banks & stock market, • restore confidence of investors: • Emergency Banking Act/FDIC /Security & Exchange Commission SEC

Basic Ideas (cont. ) • Cheap electricity, control flooding (gov’t controlled) • provide jobs • Tennessee Valley Authority (TVA) • Protect the elderly & disabled • Social Security Administration (insurance, not welfare) • Increase economic activity

NEW DEAL IDEALS • Relief Of Unemployment PWA, CCC, WPA, FERA • Recovery Of the American Economy NRA, AAA, TVA • Reform Programs to Prevent Another Depression FDIC, SEC, Social Security

Supporters of the New Deal • New Deal Coalition • Voters who supported FDR and his policies • Made up of: • Laborers • Farmers • Unemployed • Young • Old • Intellectuals • Minorities

NEW DEAL PROGRAMS

FDR’S PROGRAM • First New Deal (1 st One Hundred Days): • 1933 -35 Immediate relief, regulate business, banks & stock market • Second New Deal (2 nd One Hundred Days): • 1935 -1937 More social reform affects ordinary Americans

The First Hundred Days “This nation asks for action, and action now. ” March 4 -National Bank Holiday March 9 -Emergency Banking Act March 20 -Government Economy Act March 31 -Civilian Conservation Corp (CCC) April 19 -Renunciation of the Gold Standard May 12 -Federal Emergency Relief Act May 12 -Emergency Farm Act May 12 -Agricultural Adjustment Act (AAA) May 18 -Tennessee Valley Authority (TVA) May 27 -Truth-in-Securities Act June 5 -Abrogation of the Gold Clause June 13 -Home Owner’s Loan Act June 16 - National Industry Recovery Act June 16 -Glass-Steagall Banking Act June 16 -Farm Credit Act June 16 -Railroad Coordination Act

Banking Relief • Banking Holiday • 3/5 – 3/9, 1933 • All banks are closed • Inspected by treasury • If sound reopen on Monday • Restores peoples’ confidence in banks • Need people to deposit $ so banks can give out loans to people and business • Fireside Chats – informs people of actions gov’t is taking and why

Gov’t actions in Economy • Security Exchange Commission (SEC) • Police NYSE • Regulate buying on margin • More Money into Circulation • Off the gold standard • Gov’t buys up more gold • More money in circulation = increase in wages, prices and causes inflation • Gov’t should spend money to stimulate economy • Keynesian Economics

Gov’t Actions in the Economy • Glass – Steagall Banking Reform Act (1934) • Limits investment practices of banks • FDIC • Gov’t backs up bank accounts to $2, 500

Alphabet Soup Programs

National Recovery Administration (NRA) • Part of National Industry Recovery Act • Established to encourage fair business practices in order to help business Recover during Great Depression • Ruled Unconstitutional • Schechter Poultry v. U. S.

(PWA) Public 1935 Works Administration

Triborough Bridge PWA Project

Fort Knox PWA Project

Civilian Conservation Corps

CCC Built Pool

Works Progress Administration

Agricultural Adjustment Act (AAA) - 1933 • Restore farmers' purchasing power and to restore the family farm • Paid farmers SUBSIDIES to not produce certain crops or breed certain animals • Criticisms • Paying farmers to not farm when millions are starving • Plantation owners are paid not to farm so they fire sharecroppers • Food Stamp Act of 1939 • Excess food used to feed hungry • Ruled Unconstitutional in Butler v. U. S. • Rewritten and passed again

TENNESSEE VALLEY AUTHORITY

• TENNESSEE VALLEY AUTHORITY (TVA) - used to promote hydroelectric power, control flooding - lower rates private industry, manuf. fertilizer fed. gov't. took ownership (nationalization v. privatization)

TVA Built Dams Which led to…

SOCIAL SECURITY • Unemployment Insurance • Old Age Pension Payments

• Social Security Act (1935)- feared by opponents as "creeping socialism"- this act typifies the WELFARE STATE unemployment insurance, old age pensions • Problem: it took some $ out of circulation (payroll deductions) at a time when purchasing power was already low- also, it only covered the unemployed • 1936 - "Soak The Rich" tax

• Minimum Wage • Maximum # of Hrs. per Workweek

SCOTUS RULES ON THE NEW DEAL Schechter v. U. S. (1935) U. S. v. Butler (1935)

THE SUPREME COURT • Challenges to the New Deal • 1935: Schechter v. US: struck down NRA • “Sick chicken case” – Schechter brothers were accused of selling unhealthy chickens to buyers in violation of NRA Cods • NRA codes were written by business leaders, but if Pres. agreed with codes they could be given power of “law” • SC says Schechter was intra-state trade • separation of powers – FDR had taken legislative powers of Congress and was regulating trade within a state • 1935: U. S. v Butler: struck down AAA • gov’t can’t tax one group (processors) to then give to farmers for not farming all of their land • Can tax, but the tax was coercive and led to unconstitutional ends

FDR’s Court Packing Plan • FDR takes his reelection in 1936 as a mandate from the people to continue his actions and the New Deal • FDR wanted to increase the # of Supreme Court Judges from 9 to 15 to get his New Deal laws passed. • FDR was afraid the Supreme Court would find many of his programs unconstitutional • By increasing the # of judges he could appoint judges who would uphold his programs • Violates separation of powers • Congress does not pass the Act • Eventually FDR gets to appoint new judges