Chapter+24+The+Great+Depression+and+New+Deal

** The Great Depression  **  **  After the economic & social roar of the 1920’s, the Great Depression hit the nation with unbreakable force. When the nation bought on credit in the Twenties, it caused the economy to crash with the new decade. With Franklin D. Roosevelt elected into office, he developed the New Deal, in order to help the nation recover from the Great Depression. This differed greatly from Herbert Hoover’s “rugged individualism.” FDR’s New Deal focused on creating programs that will help citizens with employment, food, and education. It was focused on the 3 ‘Rs’: __R__elief, __R__ecovery, and __R__eform. **  Bull Market  - This term describes a situation in which the value of stocks is rising quickly. 1929, the New York Stock Exchange had reached an all time high, with stocks selling for more than 16 times their actual worth. Unfortunately, it was not a true bull market and led to a crash.  Buying on margin  - Brought new customers to the stock market. Investment trusts, similar to today’s mutual funds, attracted many new investors with promises of high returns based on their manager’s expert knowledge of the market. Black Tuesday  - This is the name given to October 29th, 1929. This date signaled a selling frenzy on Wall Street, days before, stock prices had plunged to desperate levels. Investors were willing to sell their shares for pennies on the dollar or were simply holding on to the worthless certificates. POUR  - President’s Organization for Unemployment Relief- created by Hoover in 1931, did little more than encourage local groups to raise money to help the unemployed. Walter S. Gifford, chairman of POUR and president of AT&T, insisted that local relief groups could handle the needs of Americans in distress. <span style="font-family: 'Cambria','serif';">Bonus Army <span style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This group of World War I veterans marched on Washington in 1932 to demand early release of bonuses promised by Congress. They set up a makeshift encampment around the Capitol. Eventually the group was joined by thousands more veterans and their families. Demands were not met, and a clash ensued with police that resulted in the deaths of two marchers. President Hoover called in the US army to quash the riot, which used tear gas and tanks on the unarmed protestors. The army burned the encampment, driving the veterans from Washington D.C. <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';"> <span style="font-family: 'Cambria','serif';">Election 1932 <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Franklin Delano Roosevelt (D) vs. Herbert Hoover (R) …FDR wins by over 7 million popular votes and over 300 electoral votes. <span style="font-family: 'Cambria','serif';">brain trusters <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This term refers to the group of economists, professors, and politicians appointed by President Roosevelt to advise him on matters of economic and political policy. <span style="font-family: 'Cambria','serif';">fireside chats <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">President Roosevelt delivered these weekly radio addresses to inform and soothe an American public that was still weary from the pain of unemployment and poverty. <span style="font-family: 'Cambria','serif';"> Bank holiday <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">A four day “bank holiday” starting March 5, 1933, to shore up the country’s ailing financial system. More than 1,300 banks failed in 1930, more than 2,000 in 1931. <span style="font-family: 'Cambria','serif';">Emergency Banking Act <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Passed on March 9, 1933, reopened solvent banks. It was mentioned in the first of FDR’s “fireside chats” <span style="font-family: 'Cambria','serif';">Glass-Steagall Act <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This act paved the way for the Federal Deposit Insurance Corporation which would protect American’s banking deposits up to $5,000 per deposit. <span style="font-family: 'Cambria','serif';">FDIC <span style="font-family: 'Calibri','sans-serif'; font-size: 11pt;">- <span style="font-family: 'Cambria','serif'; font-size: 11pt;">Federal Deposit Insurance Corporation- a United States government corporation created by the <span style="font-family: 'Cambria','serif'; font-size: 11pt;">[|Glass–Steagall Act] <span style="font-family: 'Cambria','serif'; font-size: 11pt;">of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in failed banks. <span style="font-family: 'Cambria','serif';">The New Deal <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This is the name for the period of 1933 to 1935. It began with a banking holiday. President Roosevelt ordered financial institutions to close for two days; only those banks that were solvent could reopen their doors. The other banks’ assets were seized by the federal government. FDR began his “Fireside chats” during this time. Several acts designed to assist in the relief effort were also passed. Beginning what was called an “alphabet soup” of agencies acts like the PWA (Public Works Administration), the Civilian Conservation Corps (CCC), and the Tennessee Valley Authority (TVA) were born. <span style="font-family: 'Cambria','serif';">The First Hundred Days <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This is the term applied to president Roosevelt’s first three months in taking office. During this time, FDR had managed to get congress to pass an unprecedented amount of new legislation that would revolutionize the role of the federal government from that point on. This era saw the passage of bills aimed at repairing the banking system and restoring America’s faith in the economy, starting government works projects to employ those out of work, offering subsides for farmers, and devising a plan to aid in the recovery of the nation’s industrial sector. <span style="font-family: 'Cambria','serif';">CCC <span style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Civilian Conservation Corps- employed young college and high-school aged young men to reforest America. <span style="font-family: 'Cambria','serif';"> <span style="font-family: 'Cambria','serif';"> FERA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Federal Emergency Relief Administration- direct federal money for relief, funneled through state and local governments. <span style="font-family: 'Cambria','serif';">AAA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Agricultural Adjustment Act- This act was deemed unconstitutional by the Supreme Court in 1935, but not before aiding many of America’s farmers. The act paid farmers subsidies to destroy or plow under fields so as to create artificial scarcity, thereby increasing the price of foodstuffs. <span style="font-family: 'Cambria','serif';">NIRA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">National Industrial Recovery Information- This administration, passed during the first new deal, was the most proactive legislation to date in preventing the abuse of labor and capital by big business. The administration was comprised of a board of trustees responsible for setting policy for industry in the US. The board set maximum work hours, minimum wages, and price floors. It was also responsible for setting production quotas and inventories to prevent overproduction or price gouging. <span style="font-family: 'Cambria','serif';">TVA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Tennessee Value Authority- This program worked to electrify the impoverished Tennessee Valley by hydroelectric power. <span style="font-family: 'Cambria','serif';"> PWA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Public Works Administration- This program was designed to employ thousands of Americans to rebuild the country’s infrastructure. <span style="font-family: 'Cambria','serif';"> Father Charles Coughlin <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">A Catholic priest in suburban Detroit at first supported FDR and the new deal, and tried to build a close personal relationship with him. But by 1934, was frustrated by his limited influence on the administration and began attacking FDR. <span style="font-family: 'Cambria','serif';"> Dr. Francis Townsend <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Advocated a federal tax that would provide $200 a month for every retired American over the age of 60. His old age revolving pension plan gathered millions of supporters who agreed that if retirees were given this pension and required to spend it all within a month, it would help stimulate the economy. FDR decided that he would opt for a much less radical plan, which became the Social Security Act. After its passage, this man criticized the president for not pushing for more. <span style="font-family: 'Cambria','serif';"> Huey Long <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Senator from Louisiana, a critic of FDR, had long advocated a “robin hood” plan to take from the rich and give to the poor called “Share Our Wealth.” His plan would impose heavy taxes on inheritance and estates to fund a minimum salary of $5,000 a year for every American. He controlled all government offices in Louisiana, both state and local. Felled by an assassin’s bullet in 1935, this man could have given FDR a run for the Democratic nomination in 1936. <span style="font-family: 'Cambria','serif';"> Share Our Wealth Society <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Huey long’s theory (see above) <span style="font-family: 'Cambria','serif';">Second Hundred Days <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This period focused more on relief and reform. Another round of congressional acts continued to increase the federal government’s role in the lives of the Americans. To encourage more public works projects and the employment of “nontraditional” workers such as artists and young people, the WPA employed Americans to build bridges, refurbish parks, and write plays. The new Social Security act guaranteed benefits for retirees, the disabled, and the unemployed. <span style="font-family: 'Cambria','serif';">WPA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Works Progress Administration- To encourage more public works projects and the employment of “nontraditional” workers, this program employed Americans to build bridges, refurbish parks, write plays, and paint murals. <span style="font-family: 'Cambria','serif';">Harry Hopkins <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Leader of the WPA, driven by a deep moral passion to help the less fortunate and impatient with bureaucracy, Hopkins emerged as a key figure in the New Deal relief programs. People often referred to him as “assistant president.” He oversaw the employment of over 8 million Americans within seven years. <span style="font-family: 'Cambria','serif';">Social Security Act <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This act passed in 1935 guaranteed benefits for retirees, the disabled, and the unemployed. Monies were collected from a worker’s pay on a monthly basis, to be paid back monthly after the worker turned 65. Unfortunately, the law was biased; it did not apply to millions of service workers such as domestics, nannies, and janitors who were largely African American. Nonetheless, the act provided protection and a guaranteed pension to further shield America’s most vulnerable from abject poverty. <span style="font-family: 'Cambria','serif';">Wagner Act, RA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">1935 act after the senator who penned the bill, strengthened the language of Section 7a of the NIRA. Even though all labor unions fought for the protection of workers, not all agreed on who should be protected. The American Federation of labor was compromised mainly of white skilled workers who did not agree that all workers should be protected by the union. <span style="font-family: 'Cambria','serif';">John L. Lewis, CIO <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Congress of Industrial organizations- Led by John L. Lewis, of the US Mine Workers. This organization focused on unskilled laborers in America’s heavy industrial sector such as steel, automobiles, and mines. <span style="font-family: 'Cambria','serif';"> Dust Bowl <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">This is the term given to the Great Plaines where a severe drought hit, killing all of the crops of the region. The topsoil turned into a fine, powdery dust that blew away with the severe, hot winds that wreaked havoc on the farmers who remained. The area earned this name because Plains farmers saw their land literally blow away. <span style="font-family: 'Cambria','serif';">SCS <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Soil Conservation Service- conducted research into controlling wind and water erosion, set up demonstration projects, and offered technical assistance, supplies, and equipment to farmers engaged in conservation work on farms and ranches. The SCS pumped additional federal funds into the Great Plains and created a new rural organization, the soil conservation district, which administered conservation regulations locally. <span style="font-family: 'Cambria','serif';">Boulder/Hoover Dam <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Building began during the Hoover administration, was designed to harness the Colorado River to help prevent flood. More benefits included the irrigation of California’s Imperial Valley, the supplying of domestic water for southern California, and the generation of cheap electricity for Los Angeles and southern Arizona. <span style="font-family: 'Cambria','serif';">Merriam Report <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">1928, prepared by the Institute for Government Research, had offered a scathing and widely publicized critique of BIA mismanagement. <span style="font-family: 'Cambria','serif';">John Collier <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">1933, appointed by FDR to bring change to the BIA. Collier had deep roots in progressive-era social work and community organizing in eastern big city slums. Became the driving force behind the Indian Reorganization Act (IRA) of 1934. <span style="font-family: 'Cambria','serif';">IRA <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Indian Reorganization Act- reserved the allotment provisions of the Dawes Severalty Act of 1887 which had weakened tribal sovereignty by shifting the distribution of land from tribes to individuals. The new legislation permitted the restoration of surplus reservation lands to tribal ownership and allocated funds for the purchase of additional lands and for economic development. <span style="font-family: 'Cambria','serif';">Federal Project No.1 <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">An umbrella agency covering writing, theater, music, and the visual arts, proved to be one of the most innovative and successful New Deal programs. Offered work to desperate artists and intellectuals. //<span style="font-family: 'Cambria','serif';">Schecter v. US // <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Found the NRA unconstitutional in its entirety. <span style="font-family: 'Cambria','serif';">Court-Packing bill <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="color: black; font-family: 'Cambria','serif';">President Franklin D. Roosevelt tried to increase the number of justices on the Supreme Court that would place one new justice on the Court for each sitting justice over the age of 70.5, up to a maximum of six new justices. Roosevelt's intent was to stop the Court from overturning New Deal legislation, an action that would give the President excessive influence over the Supreme Court. Congress stripped Roosevelt's plan from the Judiciary bill. <span style="font-family: 'Cambria','serif';"> <span style="font-family: 'Cambria','serif';">Eleanor Roosevelt <span style="font-family: 'Cambria','serif';">- <span style="color: black; font-family: 'Cambria','serif';"> Most active First Lady in history. She powerfully influenced the policies of the national government, battling for the impoverished and oppressed. Also, she worked vigorously for anti-lynching legislation, compulsory health insurance, child labor reform, and fought against racial discrimination. <span style="font-family: 'Cambria','serif';"> <span style="font-family: 'Cambria','serif';">Frances Perkins <span style="font-family: 'Calibri','sans-serif'; font-size: 11pt;">- <span style="font-family: 'Cambria','serif'; font-size: 11pt;">The US Secretary of Labor from 1933 to 1945, and the first woman appointed to the US Cabinet. As a loyal supporter of her friend, Franklin D. Roosevelt, she helped pull the labor movement into the New Deal coalition. She and Interior Secretary Harold Ickes were the only original members of the Roosevelt cabinet who remained in offices for his entire presidency. During her term as Secretary of Labor, Perkins championed many aspects of the New Deal, including the Civilian Conservation Corps, the Public Works Administration and its successor the Federal Works Agency, and the labor portion of the National Industrial Recovery Act. With The Social Security Act she established unemployment benefits, pensions for the many uncovered elderly Americans, and welfare for the poorest Americans. <span style="font-family: 'Cambria','serif';">Roosevelt Recession <span style="line-height: normal; margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"> - <span style="font-family: 'Cambria','serif';">Economy improved by 1937. Unemployment declined to 14%, farm prices improved to 1930 levels, and industrial production was slightly higher than the 1929 mark. Large reductions in federal spending. <span style="font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">The Great Depression and the New Deal <span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">As the **election of 1932** neared, unemployment and poverty brought dissent of President Hoover and a demand for a change in policy. The Republicans nominated __Herbert Hoover__ to run for president in the election of 1932. The Democrats chose __Franklin Delano Roosevelt__. He had been born to a wealthy New York family and served as the governor of New York. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">FDR: Politician in a Wheelchair **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Franklin D. Roosevelt's wife, __Eleanor Roosevelt__, was to become the most active First Lady in history. She powerfully influenced the policies of the national government, battling for the impoverished and oppressed. <span style="color: black; font-family: 'Cambria','serif';">Roosevelt's commanding presence and golden speaking voice made him the premier American orator of his generation. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Presidential Hopefuls of 1932 **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">In the Democratic campaign of 1932, Roosevelt attacked the Republican Old Deal and concentrated on preaching a New Deal for the "forgotten man." He promised to balance the nation's budget and decrease the heavy Hooverian deficits. <span style="color: black; font-family: 'Cambria','serif';">Although the campaign for the Republicans was dire, Herbert Hoover reaffirmed his faith in American free enterprise and individualism. He predicted prosperity if the Hawley-Smoot Tariff was repealed. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Hoover's Humiliation in 1932 **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Franklin Roosevelt won the election of 1932 by a sweeping majority, in both the popular vote and the Electoral College. <span style="color: black; font-family: 'Cambria','serif';">Beginning in the election of 1932, blacks became, notably in the urban centers of the North, a vital element of the Democratic Party. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">FDR and the Three //R//'s: Relief, Recovery, Reform **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Franklin Roosevelt was inaugurated on March 4, 1933. <span style="color: black; font-family: 'Cambria','serif';">On March 6-10, President Roosevelt declared a national banking holiday as a prelude to opening the banks on a sounder basis. The **Hundred Days** **Congress/Emergency Congress** (March 9-June 16, 1933) passed a series laws in order to cope with the national emergency (The Great Depression). <span style="color: black; font-family: 'Cambria','serif';">Roosevelt's **New Deal** programs aimed at 3 //R//'s: **relief**, **recovery**, **reform**. Short-range goals were relief and immediate recovery, and long-range goals were permanent recovery and reform of current abuses. <span style="color: black; font-family: 'Cambria','serif';">Congress gave President Roosevelt extraordinary **blank-check powers**: some of the laws it passed expressly delegated legislative authority to the president. <span style="color: black; font-family: 'Cambria','serif';">The New Dealers embraced such **progressive** **ideas** as unemployment insurance, old-age insurance, minimum-wage regulations, conservation and development of natural resources, and restrictions on child labor. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Roosevelt Tackles Money and Banking **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">The impending banking crisis caused Congress to pass the **Emergency Banking Relief Act of 1933**. It gave the president power to regulate banking transactions and foreign exchange and to reopen solvent banks. President Roosevelt began to give "fireside chats" over the radio in order to restore public confidence of banks. <span style="color: black; font-family: 'Cambria','serif';">Congress then passed the **Glass-Steagall Banking Reform Act**, creating the **Federal Deposit Insurance Corporation** (**FDIC**). A reform program, the FDIC insured individual bank deposits up to $5,000, ending the epidemic of bank failures. <span style="color: black; font-family: 'Cambria','serif';">In order to protect the shrinking gold reserve, President Roosevelt ordered all private holdings of gold to be given to the Treasury in exchange for paper currency and then the nation to be taken off the gold standard-Congress passed laws providing for these measures. <span style="color: black; font-family: 'Cambria','serif';">The goal of Roosevelt's "managed currency" was **inflation**, which he believed would relieve debtors' burdens and stimulate new production. Inflation was achieved through gold buying; the Treasury purchased gold at increasing prices, increasing the dollar price of gold. This policy increased the amount of dollars in circulation. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Creating Jobs for the Jobless **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">President Roosevelt had no qualms about using federal money to assist the unemployed in order to jumpstart the economy. Congress created the **Civilian Conservation Corps** (**CCC**), which provided employment for about 3 million men in government camps. Their work included reforestation, fire fighting, flood control, and swamp drainage. <span style="color: black; font-family: 'Cambria','serif';">Congress's first major effort to deal with the massive unemployment was to pass the **Federal Emergency Relief Act**. The resulting **Federal Emergency Relief Administration** (**FERA**) was headed by __Harry L. Hopkins__. Hopkins's agency granted about $3 billion to the states for direct relief payments or for wages on work projects. Created in **1933**, the **Civil Works** **Administration** (**CWA**), a branch of the FERA, was designed to provide temporary jobs during the winter emergency. Thousands of unemployed were employed at leaf raking and other manual-labor jobs. <span style="color: black; font-family: 'Cambria','serif';">Relief was given to the farmers with the **Agricultural Adjustment Act** (**AAA**), making available millions of dollars to help farmers meet their mortgages. <span style="color: black; font-family: 'Cambria','serif';">The **Home Owners' Loan Corporation** (**HOLC**) assisted many households that had trouble paying their mortgages. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">A Day for Every Demagogue **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">As unemployment and suffering continued, radical opponents to Roosevelt's New Deal began to arise. __Father Charles Coughlin's__ anti-New Deal radio broadcasts eventually became so anti-Semitic and fascistic that he was forced off the air. Senator __Huey P. Long__ publicized his "Share Our Wealth" program in which every family in the United States would receive $5,000. His fascist plans ended when he was assassinated in 1935. __Dr. Francis E. Townsend__ attracted millions of senior citizens with his plan that each citizen over the age of 60 would receive $200 a month. <span style="color: black; font-family: 'Cambria','serif';">Congress passed the **Works Progress Administration** (**WPA**) in **1935**, with the objective of employment on useful projects (i.e. the construction of buildings, roads, etc.). Taxpayers criticized the agency for paying people to due "useless" jobs such as painting murals. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">A Helping Hand for Industry and Labor **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">The **National Recovery Administration** (**NRA**) was designed to assist industry, labor, and the unemployed. Individual industries, through "fair competition" codes, were forced to lower their work hours so that more people could be hired; a minimum wage was also established. Workers were formally guaranteed the right to organize and bargain collectively through representatives of their choosing, not through the company's choosing. <span style="color: black; font-family: 'Cambria','serif';">Although initially supported by the public, collapse of the NRA came in **1935** with the Supreme Court's **//Schechter//** decision in which it was ruled that Congress could not "delegate legislative powers" to the president and that congressional control of interstate commerce could apply to local fowl business. <span style="color: black; font-family: 'Cambria','serif';">The **Public Works Administration** (**PWA**) was intended for both industrial recovery and for unemployment relief. Headed by __Harold L. Ickes__, the agency spent over $4 billion on thousands of projects, including public buildings and highways. <span style="color: black; font-family: 'Cambria','serif';">In order to raise federal revenue and provide a level of employment, Congress repealed prohibition with the **21st Amendment** in late **1933**. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Paying Farmers Not to Farm **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Congress created the **Agricultural Adjustment Administration** (**AAA**). It established "**parity prices**" for basic commodities. "Parity" was the price set for a product that gave it the same real value, in purchasing power, that it had from 1909-1914. The agency also paid farmers to reduce their crop acreage, eliminating surpluses, while at the same time increasing unemployment. <span style="color: black; font-family: 'Cambria','serif';">The Supreme Court struck down the AAA in **1936**, declaring its regulatory taxation provisions unconstitutional. <span style="color: black; font-family: 'Cambria','serif';">The New Deal Congress passed the **Soil Conservation** and **Domestic Allotment Act of 1936**. The reduction of crop acreage was now achieved by paying farmers to plant soil-conserving crops. <span style="color: black; font-family: 'Cambria','serif';">The **Second Agricultural Adjustment Act of 1938** continued conservation payments; if farmers obeyed acreage restrictions on specific commodities, they would be eligible for parity payments. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Dust Bowls and Black Blizzards **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Late in **1933**, a prolonged drought struck the states of the trans-Mississippi Great Plains. The **Dust Bowl** was partially caused by the cultivation of countless acres, dry-farming techniques, and mechanization. <span style="color: black; font-family: 'Cambria','serif';">Sympathy towards the affected farmers came with the **Frazier-Lemke Farm Bankruptcy Act**, passed in **1934**. It made possible a suspension of mortgage foreclosures for 5 years. It was struck down in **1935** by the Supreme Court. <span style="color: black; font-family: 'Cambria','serif';">In **1935**, President Roosevelt set up the **Resettlement Administration**, given the task of moving near-farmless farmers to better lands. <span style="color: black; font-family: 'Cambria','serif';">The **Indian Reorganization Act of 1934** encouraged Native American tribes to establish self-government and to preserve their native crafts and traditions. 77 tribes refused to organize under the law, while hundreds did organize. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Battling Bankers and Big Business **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">In order to protect the public against fraud, Congress passed the "Truth in Securities Act" (**Federal Securities Act**), requiring promoters to transmit to the investor sworn information regarding the soundness of their stocks and bonds. <span style="color: black; font-family: 'Cambria','serif';">In **1934**, Congress took further steps to protect the public with the **Securities and Exchange Commission** (**SEC**). It was designed as a watchdog administrative agency. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">The TVA Harnesses the Tennessee River **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Zealous New Dealers accused the electric-power industry of gouging the public with excessive rates. <span style="color: black; font-family: 'Cambria','serif';">2.5 million of America's most poverty-stricken people inhabited Muscle Shoals. If the government constructed a dam on the Tennessee River in Muscle Shoals, it could combine the immediate advantage of putting thousands of people to work with a long-term project for reforming the power monopoly. <span style="color: black; font-family: 'Cambria','serif';">In **1933**, the Hundred Days Congress created the **Tennessee Valley Authority** (**TVA**). It was assigned the task of predicting how much the production and distribution of electricity would cost so that a "yardstick" could be set up to test the fairness of rates charged by private companies. <span style="color: black; font-family: 'Cambria','serif';">The large project of constructing dams on the Tennessee River brought to the area full employment, the blessings of cheap electric power, low-cost housing, abundant cheap nitrates, the restoration of eroded soil, reforestation, improved navigation, and flood control. The once-poverty-stricken area was being turned into one of the most flourishing regions in the United States. <span style="color: black; font-family: 'Cambria','serif';">The conservative reaction against the "socialistic" New Deal would confine the TVA's brand of federally guided resource management and comprehensive regional development to the Tennessee Valley. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Housing Reform and Social Security **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">To speed recovery and better homes, President Roosevelt set up the **Federal Housing Administration** (**FHA**) in **1934**. <span style="color: black; font-family: 'Cambria','serif';">To strengthen the FHA, Congress created the **United States Housing Authority** (**USHA**) in **1937**. It was designed to lend money to states or communities for low-cost construction. <span style="color: black; font-family: 'Cambria','serif';">The more important success of New Dealers was in the field of unemployment insurance and old-age pensions. The **Social Security Act of 1935** provided for federal-state unemployment insurance. To provide security for old age, specified categories of retired workers were to receive regular payments from Washington. <span style="color: black; font-family: 'Cambria','serif';">Republicans were strongly opposed to Social Security. Social Security was inspired by the example of some of the more highly industrialized nations of Europe. <span style="color: black; font-family: 'Cambria','serif';"> In an urbanized economy, the government was now recognizing its responsibility for the welfare of its citizens. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">A New Deal for Unskilled Labor **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">When the Supreme Court struck down the National Recovery Administration (NRA), Congress, sympathetic towards labor unions, passed the **National Labor Relations Act of 1935** (**Wagner Act**). This law created a powerful **National Labor Relations Board** for administrative purposes and reasserted the rights of labor to engage in self-organization and to bargain collectively through representatives of its own choice. <span style="color: black; font-family: 'Cambria','serif';">The stride for unskilled workers to organize was lead by __John L. Lewis__, boss of the United Mine Workers. He formed the **Committee for Industrial Organization** (**CIO**) in **1935**. The CIO led a series of strikes including the sit-down strike at the General Motors automobile factory in 1936. <span style="color: black; font-family: 'Cambria','serif';">Congress passed the **Fair Labor Standards Act** (**Wages and Hours Bill**) in **1938**. Industries involved in interstate commerce were to set up minimum-wage and maximum-hour levels. Labor by children under the age of 16 was forbidden. <span style="color: black; font-family: 'Cambria','serif';">In **1938**, the CIO joined with the AF of L and the name "//Committee// for Industrial Organization" was changed to "**//Congress// of Industrial Organization//s//**."-led by John Lewis. By 1940, the CIO claimed about 4 million members. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Landon Challenges "the Champ" in 1936 **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">As the **election of 1936** neared, the New Dealers had achieved considerable progress, and millions of "reliefers" were grateful to their government. <span style="color: black; font-family: 'Cambria','serif';">The Republicans chose __Alfred M. Landon__ to run against President Roosevelt. The Republicans condemned the New Deal for its radicalism, experimentation, confusion, and "frightful waste." <span style="color: black; font-family: 'Cambria','serif';">President Roosevelt was **reelected** as president in a lopsided victory. FDR won primarily because he had appealed to the "forgotten man." He had forged a powerful and enduring coalition of the South, blacks, urbanites, and the poor. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">Nine Old Men on the Supreme Bench **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Ratified in **1933**, the **20th Amendment** shortened the period from election to inauguration by 6 weeks. FDR took the presidential oath on January 20, 1937, instead of the traditional March 4. <span style="color: black; font-family: 'Cambria','serif';">Roosevelt saw his reelection as a mandate to continue the New Deal reforms. The ultraconservative justices on the Supreme Court proved to be a threat to the New Deal as the Roosevelt administration had been thwarted 7 times in cases against the New Deal. <span style="color: black; font-family: 'Cambria','serif';">With his reelection, Roosevelt felt that the American people had wanted the New Deal. If the American way of life was to be preserved, he argued, and then the Supreme Court had to get in line with public opinion. President Roosevelt released his plan to ask Congress to pass legislation allowing him to appoint one new justice to the Supreme Court for every member over the age of 70 who would not retire; the maximum number of justices would now be 15. Shocking both Congress and the public, the plan received much negative feedback. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">The Court Changes Course **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">President Roosevelt was belittled for attempting to break down the checks and balances system among the 3 branches of government. <span style="color: black; font-family: 'Cambria','serif';">Justice __Owen J. Roberts__, formerly regarded as a conservative, began to vote liberal. In March 1937, the Supreme Court upheld the principle of state minimum wage for women, reversing its stand on a different case a year earlier. The Court, now sympathetic towards the New Deal, upheld the National Labor Relations Act (Wagner Act) and the Social Security Act. <span style="color: black; font-family: 'Cambria','serif';">A succession of deaths and resignations of justices enabled Roosevelt to appoint 9 justices to the Court. <span style="color: black; font-family: 'Cambria','serif';">FDR aroused conservatives of both parties in Congress so that few New Deal reforms were passed after 1937. He lost much of the political goodwill that had helped him to win the election of 1936. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">The Birth of the New Deal **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">In Roosevelt's first term, from 1933-1937, unemployment still ran high and recovery had been relatively slow. In **1937**, the **economy** took another **downturn** as new Social Security taxes began to cut into payrolls and as the Roosevelt administration cut back on spending out of the continuing reverence for the orthodox economic doctrine of the balanced budget. <span style="color: black; font-family: 'Cambria','serif';">The New Deal had run deficits for several years, but all of them had been somewhat small and none was intended. Roosevelt embraced the recommendations of the British economist __John Maynard Keynes__. The newly-accepted "**Keynesianism**" economic program was to stimulate the economy by planned deficit spending. <span style="color: black; font-family: 'Cambria','serif';">In **1939**, Congress passed the **Reorganization Act**, giving President Roosevelt limited powers for administrative reforms, including the new Executive Office in the White House. <span style="color: black; font-family: 'Cambria','serif';">Congress passed the **Hatch Act of 1939**, barring federal administrative officials from active political campaigning and soliciting. It also forbade the use of government funds for political purposes as well as the collection of campaign contributions from people receiving relief payments. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">New Deal? **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">Foes of the New Deal charged the president of spending too much money on his programs, significantly increasing the **national debt**; by 1939, the national debt was at $40,440,000,000. Lavish financial aid and relief were undermining the old virtue of initiative. <span style="color: black; font-family: 'Cambria','serif';">Private enterprise was being suppressed and states' rights were being ignored. The most damning indictment of the New Deal was that it did not end the depression; it merely administered "aspirin, sedatives, and Band-Aids." Not until World War II was the unemployment problem solved. <span style="color: black; font-family: 'Cambria','serif';"> **<span style="color: black; font-family: 'Cambria','serif';">FDR's Balance Sheet **<span style="color: black; font-family: 'Cambria','serif';"> <span style="color: black; font-family: 'Cambria','serif';">New Deal supporters had pointed out that relief, not economy, had been the primary objective of their war on the depression. Roosevelt believed that the government was morally bound to prevent mass hunger and starvation by "managing" the economy. <span style="color: black; font-family: 'Cambria','serif';">FDR was a Hamiltonian in his idea of big government, but a Jeffersonian in his concern for the "forgotten man." <span style="line-height: normal; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="color: black; font-family: 'Cambria','serif';"> <span style="line-height: normal; margin: 0in 0in 10pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">**<span style="color: black; font-family: 'Cambria','serif';">New Deal Acronyms ** <span style="font-family: 'Cambria','serif';">
 * <span style="font-family: 'Cambria','serif';">Chapter 24  **
 * **<span style="font-family: 'Cambria','serif';">ACRONYM **<span style="font-family: 'Cambria','serif';"> || **<span style="font-family: 'Cambria','serif';">DEFINITION **<span style="font-family: 'Cambria','serif';">  ||
 * <span style="font-family: 'Cambria','serif';">AAA || <span style="font-family: 'Cambria','serif';">Agricultural Adjustment Administration  ||
 * <span style="font-family: 'Cambria','serif';">CCC || <span style="font-family: 'Cambria','serif';">Civilian Conservation Corps  ||
 * <span style="font-family: 'Cambria','serif';">CWA || <span style="font-family: 'Cambria','serif';">Civil Works Administration  ||
 * <span style="font-family: 'Cambria','serif';">FERA || <span style="font-family: 'Cambria','serif';">Federal Emergency Relief Administration  ||
 * <span style="font-family: 'Cambria','serif';">FHA || <span style="font-family: 'Cambria','serif';">Federal Housing Administration  ||
 * <span style="font-family: 'Cambria','serif';">FSA || <span style="font-family: 'Cambria','serif';">Farm Security Administration  ||
 * <span style="font-family: 'Cambria','serif';">HOLC || <span style="font-family: 'Cambria','serif';">Home Owners Loan Corporation  ||
 * <span style="font-family: 'Cambria','serif';">NRA || <span style="font-family: 'Cambria','serif';">National Recovery Administration  ||
 * <span style="font-family: 'Cambria','serif';">NYA || <span style="font-family: 'Cambria','serif';">National Youth Administration  ||
 * <span style="font-family: 'Cambria','serif';">PWA || <span style="font-family: 'Cambria','serif';">Public Works Administration  ||
 * <span style="font-family: 'Cambria','serif';">REA || <span style="font-family: 'Cambria','serif';">Rural Electrification Administration  ||
 * <span style="font-family: 'Cambria','serif';">SSA || <span style="font-family: 'Cambria','serif';">Social Security Administration  ||
 * <span style="font-family: 'Cambria','serif';">TVA || <span style="font-family: 'Cambria','serif';">Tennessee Valley Authority  ||
 * <span style="font-family: 'Cambria','serif';">WPA || <span style="font-family: 'Cambria','serif';">Work Projects (Progress) Administration  ||