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FDR & The New
Deal
The "Do Nothing" President
Review of Herbert Hoover
President Hoover was criticized for not doing more to end the depression.
- Tens of thousands of businesses failed and unemployment rose to 25%
- The American banking system collapsed
- Hoover initially relied on rugged individualism but offered relief checks and job programs, but it was seen as too little, too late.
- By the election of 1932, Hoover ran for re-election but Americans wanted hope and strong leadership.
Franklin D. Roosevelt’s Appeal
Election of FDR
Americans see Roosevelt as man of action, strong leader
- Friendly, approachable, confident
- Polio paralyzed him
- Used the press to advantage
- Open to new ideas
- Two-term governor of New York
- Cousin of Teddy Roosevelt
- Results: landslide victory for Democrats (both presidency and Congress)
First Hundred Days
FDR's plan
When Roosevelt was inaugurated as president, unemployment was at an all-time high.
- "The only thing we have to fear is fear itself
- When FDR became president he promised decisive government action to combat the depression
- FDR believed the government should use deficit spending (to stimulate the economy
- Deficit spending = spending that causes debt
In his first 100 days in office, FDR and Congress passed a broad platform of legislation to attack the depression called the "The First New Deal."
New Deal = a series of programs and projects instituted during the Great Depression by President Franklin D. Roosevelt that aimed to restore prosperity to American
FDR's first action was to address the bank crisis
The Banks
By 1933, 25,000 banks had failed and the USA was in a complete financial collapse
- FDR declared a four day "bank holiday"
- All banks were closed and inspected by federal regulators to determine which banks were healthy
- Only healthy banks could reopen after the holiday
- He persuaded Congress to pass the Emergency Relief Act, which authorized the Treasury Department to inspect the nation’s banks
- Next, FDR passed the Glass-Steagall Act which established the Federal Deposit Insurance Corporation
- The FDIC insured account holders up to $5,000 & set strict standards for banks to follow (today = $100,000)
Fireside Chats
FDR used the power of the radio to communicate to the American people the steps the government was taking to address the problems of the depression.
- FDR's "fireside chats" used simple, clear language to explain New Deal programs.
- These weekly radio addresses gave people confidence that the government was actively fighting the depression
- People felt connected to FDR
Fireside Chats
The New Deal focused on the three "Rs"
- Relief - Relief checks and job programs to lower unemployment
- Recovery - Programs to stimulate agriculture, industry, and the economy to end the depression
- Reform - Programs to correct problems in the economy and prevent future depressions.
The greatest success of the New Deal was its ability to offer relief to unemployed citizens with unemployment checks and job programs.
- 15% of Americans received a relief check
Three R's
Alphabet Agencies
The government helped relieve unemployment by creating jobs.
- The Civilian Conservation Corps (CCC) was a work program for young men aged 18-25 years old
- The CCC built roads, parks, soil erosion projects...
- 200 million trees were planted in Dust Bowl areas
- Employed 3 million men
- The Public Works Admin (PWA) hired 2 million to build airports, damns, schools, hopitals, parks
- Hoover Dam (Pictured in this prezi!!!)
- The Tennessee Valley Authority The geography of the Tennessee River Valley had long been a problem for its residents. Centuries of resource exploitation contributed to soil erosion and massive, unpredictable floods that left parts of seven states impoverished and underutilized.
- Funds were authorized to construct 20 new dams and to teach residents better soil management.
- The hydroelectric power generated by the TVA was sold to the public at low prices, prompting complaints from private power companies that the government was presenting unfair competition.
- Soon FLOOD CONTROL ceased to be a problem and FDR considered other regional projects.
- The SECURITIES AND EXCHANGE COMMISSION (SEC) was created to serve as a watchdog on the stock market.
Lasting effects
The New Deal created long-term reforms to address weaknesses in the American economy and address the causes of the Great Depression.
Long Term Reform
- Securities and Exchange Commission (SEC) was created to regulate the stock market and prevent another crash.
- The FDIC was created to guarantee customer bank accounts and restore public confidence in banks
- Insures up to $250,000 in each bank account.
- The Tennessee Valley Authority (TVA) was created to bring electricity to the South and create jobs.
- The TVA built hydroelectric power plants in seven Southern states providing issued cheap power
- Agricultural Adjustment Act (AAA) was created to help farmers and stimulate agriculture
- The AAA paid farmers not to produce; The gov't hoped to increase crop prices by reducing supply
- The AAA helped farmers but they never made enough to stimulate the economy
Did not bring the Great Depression to an end,
but it did lift American spirits
Critics of the New Deal
Huey Long!
FDR's Criticism
From 1933 to 1935, FDR's New Deal programs helped lower unemployment and restored hope, but the Great Depression had not come to an end.
- FDR's failure to end the depression led to criticism of the New Deal
- The most vocal critic was Louisiana Senator Huey Long
- Long's Share the Wealth plan proposed taxing all personal income over $1 million and give each US family $2,500 per year.
- Threatened to run as a 3rd party candidate but was assassinated in 1935
- Claims that the New Deal was too expensive
- Did not eliminate unemployment
- Did not end depression
- As a result, FDR backed off government funded job programs, but unemployment quickly rose.
- The New Deal was not stimulating the economy to end the Great Depression
FDR soon began to fear that the Supreme Court would weaken the New Deal
- This outraged the general public
- Overstepping constitutional powers
- After 1938, no more New Deal laws were passed