Mr



Mr. McCormack

American History II

Central Dauphin High School

Chapter Sixteen – The New Deal (1933-1941)

I. Forging a New Deal

A. Following the election, Franklin and Eleanor Roosevelt attempted to restore the nation’s hope

1. Building public confidence seemed essential to calming panic

2. FDR’s easy manner and confidence helped restore the public’s hope

3. Helped elevate spirits through direct appeals to the people

a. Met frequently with the press – often twice a week

b. Gave regular radio addresses – fireside chats

B. Roosevelt Inauguration – March 4, 1932

1. Inaugural Address - “The only thing we have to fear is fear itself.”

2. Final president to be inaugurated in March

a. Twentieth Amendment, ratified early in 1933, changed Inauguration Day to January 20

b. Known as the “Lame Duck” Amendment, it reduced the time that an outgoing President would serve

C. Promise of “Bold, Persistent Experimentation” and a “New Deal”

1. FDR had no sure plan for government under his leadership, but proved open to ideas

2. “New Deal” came to mean the relief, recovery, and reform programs of the FDR administration

D. First Hundred Days

1. From March to June, 1933

2. Roosevelt pushed programs to provide relief, create jobs, and stimulate the economy through Congress

3. Many programs based on older agencies that controlled the economy during WWI

4. First step was to stabilize the financial institutions

a. March 5 – ordered four day bank holiday

b. March 9 – Congress passes the Emergency Banking Act

i. Authorized the government to inspect the health of banks

ii. Restored public trust in health of banks

c. March 15 – Two-thirds of banks reopened

d. Glass-Steagall Banking Act of 1933 – Creates Federal Deposit Insurance Corporation (FDIC) to insure deposits

5. Congress attempts to correct the problems that led to the Crash

a. Federal Securities Act, May 1933, required companies to provide information about their finances if they sold stock

b. 1934 – Congress creates the Securities and Exchange Commission (SEC) to regulate the stock market

c. Congress gave the Federal Reserve power to regulate buying on the margin

E. Roosevelt drops the Gold Standard

1. Devalues currency (it decreases in value) in an effort to increase prices

2. Attempt at stimulating the economy and exports

3. Many, including FDR’s budget director, Lewis Douglas, thought it was “the end of Western civilization”

F. Creating Jobs

1. May, 1933 – Congress established the Federal Emergency Relief Administration (FERA) to send funds to local relief agencies

2. FERA directed by Harry Hopkins, an old friend and advisor of FDR

3. Created public works programs

a. Created the Civil Works Administration (CWA) in November, 1933

i. Built or improved roads, parks, airports and other facilities

ii. Employed more than 4 million people

b. Created the Civilian Conservation Corps (CCC) in March, 1933

i. Became FDR’s favorite program

ii. More than 2.5 million young, unmarried men to work

iii. Worked to maintain forests, beaches, and parks

iv. Salary of $30 a month, room and board, medical care, job training

v. Eleanor Roosevelt persuaded the CCC to start a program for women

G. New Deal for Native Americans

1. John Collier, Commissioner of Indian Affairs, used New Deal funds to build schools, hospitals, and irrigation systems

2. Indian Reorganization Act of 1934 ended the sale of tribal lands under the Dawes Act of 1887

3. Some land was restored to Indian owners

H. Regulating the Economy

1. National Industrial Recovery Act (NIRA) of June, 1933

a. Sought to increase prices for industrial goods

b. Falling prices caused many business failures and unemployment

c. NIRA created many federal codes, sometimes through collaboration with affected businesses

i. Created minimum wage

ii. Restrained wage competition

iii. Controlled working conditions

iv. Set prices

v. Regulated production

vi. Recognized organized labor and collective bargaining rights

d. Higher prices set by NIRA led many consumers to stop buying, leading to further economic weakness

e. Many viewed the codes as too complicated and rigid

2. Public Works Administration (PWA)

a. Led by Secretary of the Interior Harold Ickes

b. Projects included Grand Coulee Dam in Washington State, NYC Triborough Bridge, and the Florida Keys’ Overseas Highway

I. Assisting Homeowners and Farmers

1. Home Owners’ Loan Corporation (HOLC)

a. Changed the terms of mortgages to help people make their payments

b. Between 1933 and 1936, HOLC made about 1 million loans

2. Federal Housing Administration (FHA)

a. Created by National Housing Act of 1934

b. Created to improve housing standards and conditions, insure mortgages, and stabilize the mortgage market

c. FHA still exists today

3. Agricultural Adjustment Administration (AAA)

a. Set up in May, 1933

b. Tried to raise farm prices by paying subsidies to farmers who cut production

c. Paid for subsides with a new tax on agricultural product processors

d. Many Americans could not understand letting food go to waste when there were hungry people

e. Large commercial farms that cut back on production put their farm employees out of work

i. Hurt many tenant and sharecropping farmers in the south

ii. Many Mexican Americans, struggling to survive, moved to Mexico

4. Tennessee Valley Authority

a. Created in May, 1933

b. Helped farmers in one of the country’s least developed regions

c. Reactivated hydroelectric power facility from WWI to provide cheap electric power, flood control, and recreational opportunities

d. Worked with Rural Electrification Administration

J. Key Players in the New Deal

1. FDR surrounded himself with eager and hard-working advisors

a. Brain Trust – an informal group of intellectuals who drafted policies

b. Columbia University Professors Raymond Moley, Adolf A. Berle, and Rexford G. Tugwell were influential advisors

2. FDR made many groundbreaking appointments

a. First female Cabinet Secretary – Secretary of Labor Frances Perkins

b. More than 100 African Americans held policy making posts

i. Highest ranking African American woman – Mary McLeod Bethune

ii. Appointed director of the Division of Negro Affairs of the National Youth Administration (NYA)

3. Eleanor Roosevelt

a. Traveled and gathered information for FDR

b. Made important visit to Second Bonus March soon after inauguration

i. Veterans appreciated her visit and supported FDR

ii. Demonstrated compassion and soothed fears of radicals

c. Independence proved problematic for FDR sometimes

i. Protests Jim Crow laws at a conference in Alabama in 1938

ii. Many believed the First Lady should be a gracious hostess only

d. Wrote her own newspaper column called “My Day”

e. Helped organize Marion Anderson’s Easter Concert at the Lincoln Memorial in 1939

f. Eventually served as a delegate to the United Nations

K. A Second New Deal

1. The first New Deal failed to bring about significant improvement

2. Many feared the federal government was growing too powerful

a. President Hoover warned that it resembled tyranny

b. Supreme Court struck down many New Deal laws as unconstitutional

3. Second New Deal launched after elections of 1934 (Second Hundred Days)

4. Included even more ambitious programs, more welfare benefits, stricter controls of business, stronger support for unions, and higher taxes on the rich

5. Works Progress Administration (WPA) set up in 1935

a. Lasted eight years

b. Employed 8 million citizens

c. Built or improved thousands of playgrounds, schools, hospitals, airfields, and supported artists and writers

6. National Youth Administration (NYA)

a. Set up in June, 1935, as part of the WPA

b. Provided education, jobs, recreation, and counseling for young men and women ages 16 to 25

7. Resettlement Administration

a. Set up in May, 1935

b. Started by Rexford Tugwell, an economist in the Agriculture Department

c. Agency loaned money to owners of small farms and helped resettle tenants and sharecroppers

d. Replaced by Farm Security Administration (FSA) in 1937

i. Loaned more than $1 billion to farmers

ii. Set up camps for migrant workers

8. Rural Electrification

a. By the 1930s, nearly 90% of urban Americans had electricity, but only 10% of rural Americans did

b. Power companies saw no profit in running long wires to serve a few customers

c. Rural Electrification Administration (REA) set up in 1935

i. Offered loans to electric companies and farm cooperatives to build power plants and extend power lines

ii. Offered loans to farmers to wire their homes

iii. By 1940, 25% of rural households had electricity

iv. Helped boost demand for appliances

v. REA eventually helps bring electricity to 98% of American farms

9. New Labor Legislation

a. Unions supported NIRA because it granted the right to organize and bargain collectively

b. When NIRA was declared unconstitutional, unions sought more protection

c. National Labor Relations Act passed in 1935

i. Called Wagner Act after leading sponsor, NY Senator Robert Wagner

ii. Legalized collective bargaining and closed shops (workplaces only open to union members)

iii. Outlawed spying on unions and blacklisting (agreeing not to hire union leaders)

iv. Set up the National Labor Relations Board (NLRB) to enforce the law

d. Fair Labor Standards Act of 1938

i. Outlawed child labor

ii. Established a minimum wage for all workers covered by the act

10. Social Security Act of 1935

a. Provided regular payments to people who could not support themselves

b. Old-age pensions and survivors’ benefits

c. Unemployment insurance

d. Aid for dependent children, the blind, and the disabled

e. Excluded farmers and domestic servants until 1954

L. FDR cruises to a landslide victory over Kansas governor Alfred M. Landon in 1936

1. Electoral College margin of 523-8

2. FDR carries every state except Maine and Vermont

3. Victory shows most Americans supported the New Deal

II. The New Deal’s Critics

A. New Deal did too little

1. First minimum wage was only 25 cents an hour and covered fewer than a quarter of all employed workers

2. Government agencies did not do enough for women

a. NRA codes permitted lower wages for women’s work

b. Men and boys received preferences in job programs

c. No New Deal program protected domestic service

3. Government did not do enough for minorities

a. Federal programs reinforced segregation in the south

b. African Americans received lower pay for the same work

c. FDR abandoned support for an anti-lynching bill in 1938

4. Government programs were not radical enough for Socialists

a. Upton Sinclair, muckracking journalist and author of The Jungle, argued that the entire economic system needed reform

b. Sinclair, running for Governor of California to “End Poverty in California” (EPIC), advocated state takeover of factories and farms

i. EPIC clubs formed throughout the state and he won the Democratic primary

ii. Opponents produced fake newsreels connecting Sinclair to Russian communists

c. Progressives reemerged in Minnesota and Wisconsin

i. Robert and Philip La Follette led to union between Progressives and Socialists in Wisconsin

ii. Philip La Follette became governor of Wisconsin in 1934

B. New Deal did too much

1. Many viewed FDR’s programs as socialistic

2. Some thought the Social Security system penalized successful workers and would lead to a regimented society

3. Many protested higher taxes aimed at the rich (Wealth Tax Act or Revenue Act of 1935)

4. American Liberty League

a. Formed in 1934

b. Led by former Democratic presidential candidate Alfred E. Smith

c. Supported by National Association of Manufacturers and many businesses

d. Claimed the New Deal limited individual freedoms in an unconstitutional, un-American manner

e. Protested that the New Deal was similar to Bolshevism

C. Demagogues – leaders who manipulate followers with half-truths, deceptive promises, and fear – emerge to challenge the New Deal

1. Father Charles E. Coughlin

a. Dynamic speaker and radio broadcaster

b. “Radio Priest” of Detroit

c. Very popular through 1930s; weekly audience of 10 million people in 1934

d. Formed the National Union for Social Justice in 1934

e. By the end of the 1930s, began issuing anti-Jewish statements and praising Hitler and Mussolini

f. In 1942, Catholic officials ordered him to stop broadcasting

2. Huey Long

a. Powerful leader from Louisiana

b. Poor country lawyer who became governor in 1928 and US senator in 1932

c. Worked on improving education, medical care, and public services

d. Advocated “Share-Our-Wealth” – a radical plan to limit and redistribute individual wealth which was mathematically impossible but very popular

e. Assassinated in September, 1935, by the son-in-law of a political enemy

f. Might have been a factor in the 1936 election

g. Inspired Robert Penn Warren’s All the King’s Men

D. Modern Critics

1. New Deal hindered economic progress

2. New Deal limited free enterprise

3. New Deal encouraged the inefficient use of resources

4. New Deal created dangerously powerful Federal bureaucracy

5. New Deal usurped the historical role of state governments

6. New Deal relied on heavy taxes

7. New Deal relied on deficit spending (borrowing) which increased the debt and limited the amount of money available for private lending

E. Court Packing Fiasco

1. FDR’s most unpopular proposal to increase the size of the Court

2. FDR grew increasingly frustrated that the Supreme Court was ruling against his programs

i. “Four Horsemen” – Conservatives – James Clark McReynolds, George Sutherland, Willis Van Devanter, and Pierce Butler

ii. “Three Musketeers” – Liberals – Louis Brandeis, Benjamin Cardozo, and Harlan Stone

iii. Chief Justice Charles Evans Hughes and Owen J. Roberts controlled the balance

iv. Hughes often sided with the liberals, Roberts with the conservatives

3. In February, 1937, FDR suggested adding an additional Justice to assist every justice older than 70

4. Number of Justices had been stable since 1869, but FDR would have expanded it from 9 to 15

5. Appointing supporters to the Court was viewed as a step toward totalitarianism (dictatorship), not unlike what was happening in Europe

6. An alliance between Republicans and Southern Democrats helped stymie the plan, which died without a vote

i. Justice Roberts seemed to begin supporting New Deal programs less than two months after FDR’s proposal, the famous “Switch in Time that Saved Nine”

ii. Justice Van Devanter’s retirement in 1937 reduced the opportunity for serious opposition from the Court

iii. FDR would eventually appoint seven associate justices and one chief justice

III. Last Days of the New Deal

A. The Recession of 1937

1. Massive government spending led to temporary economic improvement

2. With signs of improvement, FDR cut back on government spending and increased taxes in an attempt to balance the budget

3. Economy entered another recession – a period of slow business activity

4. National debt was $21 billion in 1933, $43 billion in 1940

B. Unions Triumph

1. Union membership rose from about 3 million in 1933 to 10.5 million in 1941

2. By 1945, about 36% of all workers were unionized (an historic high)

3. American Federal of Labor spawned the Committee for Industrial Organization in 1935

a. Led by United Mine Workers President John L. Lewis

b. Tried to attract unskilled industrial workers to the AFL

c. Sent organizers to steel mills, auto plants, and southern textile mills

d. AFL, favoring skilled labor, actually suspended CIO unions in 1936

e. CIO grew to 4 million members by 1938 and changed its name to Congress of Industrial Organizations

f. Main tool was the strike

4. Wagner Act was designed to bring industrial peace but encouraged the opposite

a. CIO often resorted to sit-down strikes, when workers refuse to work and also refuse to leave the workplace (helped prevent non-union workers from taking their jobs)

i. Most famous sit-down strike began 12/31/36 at GM’s main plants

ii. GM turned off the heat and blocked entrances to the plants

iii. Local police clashed violently with picketers outside the plants

iv. Women – wives and employees – organized food deliveries

v. By February, GM gave in

vi. Supreme Court outlawed the sit-down strike in 1939

b. Henry Ford continued to resist unionism

i. In a 1937 strike, Ford men beat United Auto Workers officials

ii. Ford became the great villain of organized labor

c. Republic Steel Company refused to sign union workers

C. New Deal Effects on Culture

1. Federal funds supported artists

2. Literature

a. Let Us Now Praise Famous Men (1941)

i. Book of photographs and stories gathered by writer James Agee and photographer Walker Evans during a six-week journey through Alabama in 1936

ii. Trip was funded by Fortune Magazine

b. The Good Earth (1931)

i. Written by Pearl Buck

ii. A saga of peasant struggle in China

c. Their Eyes Were Watching God (1937)

i. Written by folklorist Zora Neale Hurston

ii. Novel about an African American woman

d. The Grapes of Wrath (1939)

i. Written by John Steinbeck

ii. Novel about Dust Bowl farmers who travel to California

2. Radio and Movies

a. Comedy shows provided a major source of entertainment

i. Jack Benny

ii. Fred Allen

iii. George Burns and Gracie Allen

b. First daytime dramas

i. Called soap operas because of their business sponsors

ii. Fifteen minute stories provoked strong emotional responses

iii. Meant to appeal to women at home

c. Symphonic music and opera flourished

d. Movies provided an escape from hard times

i. Double features (introduced in 1931) cost a quarter

ii. The whole family could go to the drive-in (introduced in 1933)

iii. Federal agencies produced pictures to publicize their work

iv. Hollywood focused on optimistic films about good beating evil, like Columbia Pictures’ Mr. Smith Goes to Washington in 1939

v. Comedies like the Marx Brothers’ Monkey Business (1931) and Duck Soup (1933) were popular

vi. The Wizard of Oz (1939) allowed an escape to a new world

vii. Musicals and dance movies attracted large audiences

viii. Walt Disney’s Mickey Mouse cartoons and Snow White and the Seven Dwarfs (1938) delighted moviegoers

3. WPA and the Arts

a. FDR wanted to support unemployed artists, musicians, historians, actors, and writers

b. Federal Writers’ Project (1935) assisted more than 6,000 writers

i. Supported Richard Wright, Saul Bellow, Margaret Walker, and Ralph Ellison

ii. Historians wrote guidebooks and organized records

c. Federal Music Project started community symphonies, organized free music lessons, and preserved folk music

d. Federal Art Project (1935) produced 2,000 murals, 100,000 other paintings, 17,000 sculptures, and other works

e. Federal Theatre Project proved most controversial

i. Led by Vassar College Professor Hallie Flanagan

ii. Tried to use theatre to raise social consciousness

iii. Helped launch careers of Burt Lancaster, Arthur Miller, John Houseman, and Orson Welles

iv. Investigated by the House Un-American Activities Committee in 1938 and 1939 for supporting communism

v. Congress eliminated the program in 1939

D. Lasting New Deal Achievements

1. New Deal did not end the Depression, but led to profound changes in American life

2. Voters began to expect a president to formulate programs and solve problems

3. People began to accept more government control of their lives

4. Many New Deal bridges, dams, tunnels, public buildings, and hospitals are still used

5. Some federal agencies (FDIC, SEC, etc.) continue to exist

6. Some federal programs (Social Security, etc.) are still used

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