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FDR & the New Deal

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Michael Ungar

on 26 January 2016

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Transcript of FDR & the New Deal

Frances Perkins

Social Security Act
Mary McLeod Bethune
Daughter of former slaves
Head of the Division of Negro Affair of the NYA
Provided job training and other benefits
FDR & The New Deal
The Hundred Days
March 9th to June 16, 1933
Major amount of work done
Congress passed 15 pieces of New Deal legislation
Federal gov't takes a role in the economy

A New Deal Fights the Depression
20th Amendment - The inauguration date is pushed forward
Election of 1932 Herbert Hoover vs. Franklin Delano Roosevelt
2 term Governor of NY
Believed in reforms
Worked to ease poverty and unemployment

The Brain Trust
After winning FDR picked advisers
Professors, lawyers, journalists
Goal was to construct new policies that would make an impact
The New Deal - the 3 "R's"
, economic
, and financial

Banking and Finance Reforms
March 5th 1933 - Bank Holiday - banks are close to prevent further withdrawals
Emergency Banking Relief Act
Treasury Dept looks at the banks
Sound ones could reopen but the others would remain closed
Public has confidence in the open banks

Regulating Banking and Finance
Glass-Steagall Act
- (1933) established the
Federal Deposit Insurance Corporation (FDIC)
Individual bank accounts were federally insurance

Federal Securities Act
- (1933) Corporations must provide all info on stock offerings
Liable for any misrepresentations
Securities and Exchange Commission (SEC)
Regulate the Stock Market
No inside information

The 21st Amendment - End of Prohibition
Raise money by taxing alcohol

Helping the American People
Agricultural Adjustment Act
(AAA) - Lower crop prices by lowing production
Gov't paid farmers to leave land unseeded
Some disapproved ... why?
Plow Up 1/4 of some crops - timing
Civil Works Administration
- 4 million immediate jobs
Some were critical
National Industrial Recovery Act
(NIRA) - money for states to build schools and community buildings
Home Owners Loan Corporation (HOLC)
Gov't loans to prevent foreclosure
Creation of Federal Housing Administration (FHA)
Federal Emergency Relief Administration
$500 million for direct relief
States were to use 1/2 to support work relief programs
Jobs were important to morale
American Liberty League
opposed New Deal policies
violated the rights of individuals and properties
Senator Huey Long
(LA) - Wanted to run for president
The Tennessee Valley Authority (TVA) - experiment in regional development and public planning
Thousands of jobs provided
Rebuilding and constructing new dams
Hydro-electricity & flood control
Political payoff?
Civilian Conservation Corps
(CCC) - young man (18-25) received free food and lived in work camps
Built roads and bridges, developed parks, soil erosion, flood control, reforestation
Prevent another Dust Bowl
National Recovery Administration
(NRA) - set prices of many products and established standards
Promote recovery and establish strict but fair practices
Workers have the right to unionize
Fireside Chats
Radio talks that explained his New Deal goals
First one - the nation's welfare depended on public support of the gov't and banking system
To withdraw an entire savings from a weakens a bank
The radio talks were popular and successful

Students teach the class
Helping Farmers
Second Agricultural Adjustment Act
The New Deal Comes Under Attack
Deficit Spending
NIRA (1935) and AAA (1936) declared unconstitutional (Kosher chickens derail the New Deal!)
NIRA = gov't over stepped boundaries of executive and federal power
AAA = should be regulated by states
Spending more money than the government makes
FDR = Necessary Evil
Liberal Critics = not enough
Conservative Critics = too much spent on direct relief
Interfered with a free-market economy
1937 FDR pushed a bill to appoint 6 new Supreme Court justices
Violated separation of powers
A justice retires, FDR appointed the liberal Hugo S. Black
The Second New Deal Takes Hold
Second New Deal
or the Second Hundred Days
Eleanor Roosevelt
- humanitarian
Shared opinions with husband
First First Lady to take an active part
1936 Presidential Election
Alfred Landon (R) - governor of KS
Win for FDR
Reflected public confidence in the New Deal
Resettlement Administration - monetary loans to small farmers to buy land
Replaced by
Farm Security Administration
Helped tenant farmers become land owners and established camps for migrant workers
Agency hired
Dorothea Lange
Removed the part that was unconstitutional
Help for sharecroppers, migrant workers, and poor farmers
Improving Labor and Other Reforms

Roosevelt Extends Relief
Works Progress Administration
Harry Hopkins
8 million jobs created
Construction and repair of roads, airport, and public buildings
Women - sewing or social work
Lower paying
Professional Artists - writing, murals, acting
National Youth Administration
Education, jobs, counseling, and recreation
Financial aid in exchange for part-time positions
Improving Labor Conditions
Wagner Act
- National Labor Relations Act
Created the National Labor Relations Board (NLRB) - federal arbitration of labor disputes
Protected the right to unionize and collective bargaining
Maximum hours and minimum wage
Social Security Act
Secretary of Labor - Frances Perkins
Old age insurance for retirees 65 or older, and their spouses
Unemployment compensation system
Aid to families with dependent children and the disabled
Expanding and Regulating Utilities
Laws to promote rural electrification
Rural Electrification Administration
Public Utility Holding Company Act of 1935
Outlawed ownership of utilities by multiple holding companies
The New Deal and Women
Minimum wage was less
WPA would hire widows or women with absent or disabled husbands
CCC did not hire women
No female equivalent
The New Deal Affects Many Groups
Eleanor Roosevelt
encouraged many women to vote
Humanitarian issues
Received many letters from the American public
Urged husband to appoint women to gov't positions
Organized a group of African Americans to advise the administration
"Black Cabinet"
But New Visibility for Blacks

ER invited Marian Anderson to sing at the Lincoln Memorial on Easter Sunday
Mexican Americans - few benefits of the new deal
Mainly farm laborers
Faced opposition to unionization
Migrant workers couldn't qualify for programs
No permanent addresses
Native Americans - 1924 full citizenship
John Collier
- Indian Reorganization Act of 1934
Land was restored to tribal ownership
The Act mandated changes in three areas:
: Native American lands belong to the entire tribe
Gov't can't take and sell unclaimed land
: children could attend schools on the reservation
: Can elect tribal councils to govern the reservation
Mixed feelings
FDR Creates the New Deal Coalition
New Deal Coalition
Diverse groups
Supported of the Democratic Party
The New Deal created better working conditions
FDR was seen as a "friend of labor"
Union membership grew during the Depression
American Federation of Labor (AFL) opposed industry-wide unionization
Congress of Industrial Organization
Unions backed his reelection
FDR is elected in 1936
Persuasive to urban voters
More opportunities for women and minorities
The Indian Reorganization Act and John Collier
Union support
Main Ideas:
Financial Reforms
Bank Holiday, Glass-Steagall Act, FDIC, SEC
New Deal Programs
Second New Deal Reforms:
WPA, NYA, Wagner Act, Social Security Act
Deficit Spending, Court Packing Bill, Huey Long
New Deal Legislation

March 9 Emergency Banking Act

March 20 Government Economy Act

March 22 Beer-Wine Revenue Act

March 31 Creation of Civilian Conservation Corps

April 19 Abandonment of Gold Standard

May 12 Federal Emergency Relief Act

May 12 Agricultural Adjustment Act

May 12 Emergency Farm Mortgage Act

May 18 Tennessee Valley Authority Act

May 27 Securities Act

June 5 Abrogation of Gold Payment Clause

June 13 Home Owners Loan Act

June 16 Glass-Steagall Banking Act

June 16 National Industrial Recovery Act

June 16 Emergency Railroad Transportation Act

June 16 Farm Credit Act
New Deal Legislation - the First 100 Days
March 9 Emergency Banking Act
March 20 Government Economy Act
March 22 Beer-Wine Revenue Act
March 31 Creation of Civilian Conservation Corps
April 19 Abandonment of Gold Standard
May 12 Federal Emergency Relief Act
May 12 Agricultural Adjustment Act
May 12 Emergency Farm Mortgage Act
May 18 Tennessee Valley Authority Act
May 27 Securities Act
June 5 Abrogation of Gold Payment Clause
June 13 Home Owners Loan Act
June 16 Glass-Steagall Banking Act
June 16 National Industrial Recovery Act
June 16 Emergency Railroad Transportation Act
June 16 Farm Credit Act
As late as 1935, more than 6 million of America's 6.8 million farms had no electricity. Unlike their sisters in the city, farm women had no washing machines, refrigerators, or vacuum cleaners. Nor did private utility companies intend to change things. Private companies insisted that it would be cost prohibitive to provide electrical service to rural areas.
The New Deal - How Did It Work Out? The Case of Agriculture
The AAA got off to a horrible start. The 1933 crops had already been planted by the time Congress established the AAA, the administration ordered farmers to plow their crops under. The gov't spent over $100 million to plow under 10 million acres of cotton. The gov't also purchased and slaughtered 6 million pigs, salvaging only 1 million pounds of meat for the needy. The public neither understood nor forgave the agency for destroying food while jobless people went hungry.

Although the AAA raised farm income, but did little for sharecroppers & tenant farmers--the groups hardest hit by the agricultural crisis. Farm incomes doubled between 1933 and 1936, but large farmers reaped most of the benefits. Many large landowners used government payments to purchase tractors and combines, allowing them to mechanize farm operations, increase crop yields and reduce the need for sharecroppers and tenants.

One Mississippi planter bought 22 tractors with his payments and, subsequently, evicted 160 tenant families. The New Deal farm policies unintentionally forced at least 3 million small farmers from the land. For all its inadequacies, however, the AAA established the precedence for a system of farm price supports, subsidies, and surplus purchases that still continues more than half a century later.
NRA concept = representatives of business, labor, and gov't to establish codes of fair practices that set prices, production levels, minimum wages, & maximum hours within each industry.

NRA also supported workers' right to join labor unions.

NRA objective = stabilize the economy by ending ruinous competition, overproduction, labor conflicts, and deflating prices.

(side comment)

In New York City, burlesque show strippers agreed on a code limiting the number of times that they would undress each day. By the end of the summer, the nation's ten largest industries had been won over, as well as hundreds of smaller businesses. All across the land businesses displayed the "Blue Eagle," the insignia of the NRA, in their windows. Thousands participated in public rallies and spectacular torchlight parades.

The NRA - Did It Work?
NRA was plagued by endless squabbling by reps of sectors.

The NRA boards were dominated by representatives of big business & drafted codes that favored their interests over those of small competitors.

Business leaders resented the NRA for interfering in the private sector. - to them NRA stood for "national run-around."

Labor - mixed blessing. NRA abolished child labor and set up fed. regulation of minimum wages and max hrs. Also drew large numbers of unskilled workers into unions.
BUT - NRA codes set wages well below what labor demanded and excluded farm workers (why?)
By 1942, when the program ended, 2.5 million men had served in Roosevelt's "Tree Army." Despite its immense popularity, the CCC failed to make a serious dent in Depression unemployment. It excluded women, imposed rigid quotas on blacks, and offered employment to only a miniscule number of the young people who needed work.
The CCC - Did It Work?
CWA put 2.6 million men to work in its first month & in 2 months it employed 4 million men building 250,000 miles of road, 40,000 schools, and 3,700 playgrounds.

But after 5 months Roosevelt ends CWA because he (like Hoover) did not want to run a
budget deficit
or to create
a permanent dependent class

(side note)
As gov't funding slowed down, the Depression deepened in 1934. This intense despair triggered a series of violent strikes, which culminated on Labor Day 1934, when 500,000 garment workers launched the single largest strike in the nation's history. All across the nation, critics attacked Roosevelt for not doing enough to combat the Depression.
The CWA - Did It Work?
Critique from on the left: 3 figures stepped forward to challenge Roosevelt:
Huey Long, a Louisiana senator;
Father Charles Coughlin, a Catholic priest from Detroit
Francis Townsend, a retired California physician.
"Share Our Wealth" program. Vowing to make "every man a king," he promised to soak the rich by imposing a stiff tax on inheritances over $5 million and by levying a 100 percent tax on annual incomes over $1 million. The money would be distributed to the people, guaranteeing every American family an annual income of no less than $2,000. The money would be more than enough to buy "a radio, a car, and a home." By 1935, Long's followers had organized over 27,000 "Share Our Wealth" clubs. Roosevelt had to take him seriously, for a Democratic poll revealed that Long could attract three-to-four million voters to an independent presidential ticket.
The 1935 Social Security Act - goal of reformers
since the Progressive era

Many historians agree that the SSA was the single
most important piece of legislation in the last century and a half.

Mandatory payroll deductions levied equally on
employees & employers financed both the retirement system and the unemployment insurance.

Conservatives: SSA = socialism.
Progressives - wanted greater protections - "cradle to grave"

SSA - only gave pitifully small payments;

Huge groups of workers uncovered:
migrant workers, civil servants, domestic servants, merchant seamen, and day laborers

Budget came from a regressive tax scheme that placed a disproportionate tax burden on the poor; and it failed to provide health insurance.

Despite these criticisms, the SSA committed the government to a social welfare role & greatly expanded the public's sense of entitlement and the support people expected government to give to all citizens.
Most New Deal programs discriminated against blacks.
FDR could not lose the support of Southern white Democrats who controlled committees.

NRA - offered whites the first crack at jobs & set separate and lower pay scales for blacks.

Federal Housing Authority (FHA) refused to guarantee mortgages for blacks who tried to buy in white neighborhoods.

CCC maintained segregated camps.

Social Security Act excluded jobs blacks traditionally filled.

PA - colorblind & blacks in northern cities benefited. Harold Ickes had several blacks on his staff, poured federal funds into black schools and hospitals in the South.

Mary McLeod Bethune
Daughter of former slaves
Head of the Division of Negro Affair of the NYA
Provided job training and other benefits
Organized a group of African Americans to advise the administration - "Black Cabinet"

During the Great Depression the Federal Bureau of Immigration & local authorities rounded up Mexican immigrants and naturalized Mexican American citizens and shipped them to Mexico to reduce relief roles.

Pressure from Labor Unions and local gov't.

Over 400,000 repatriodos, many of them US citizens, were deported. The Mexican-born population in Texas was reduced by a third.

Los Angeles also lost a third of its Mexican population.

Still, the New Deal offered Mexican Americans some help. Farm Security Admin. established camps for migrant farm workers & the CCC and WPA hired unemployed Mexican Americans on relief jobs.

Many, however, did not qualify for relief assistance because they did not meet residency requirements as migrant workers. Furthermore, agricultural workers were not eligible for benefits under workers' compensation, Social Security, and the National Labor Relations Act.

Native-American Affairs
-- FDR appointed a leading reformer, John Collier, as commissioner of Indian affairs.

At Collier's request, Congress created the Indian Emergency Conservation Program (IECP), a CCC-type project for the reservations which employed more than 85,000 Indians. Collier also made certain that the PWA, WPA, CCC, and NYA hired Native Americans.

In 1934, Collier persuaded Congress to pass the Indian Reorganization Act. The act terminated the allotment program of the Dawes Act of 1887; provided $ for tribes to purchase new land; offered gov't recognition of tribal constitutions; and repealed prohibitions on Native American languages and customs. Federal $ provided to local school districts, hospitals, and social welfare agencies to assist Native Americans.

Ida May Fuller - 1st recipient of SSA
How much did
she receive?
1. $145.74
2. $573.94
3. $66.83
4. $22.54
the New Deal
Taking Stock of
The Never Ending Debate
The New Deal had been in effect for two years, yet the economy had shown only a slight improvement.

Although more than 2 million new jobs had been created, more than 10 million workers remained unemployed, and the nation’s total income remained about half of what it had been in 1929.
The Townsend Plan would require the raising of about $29 billion per year in new taxes. This would be more than double the total combined tax revenue of all federal, state and local taxes then being collected!

Impossible to generate this much revenue from a 2% tax.

This tax burden would grow year to year as the percentage of the population age 60 and older grew, as it was projected to do.
Share The Wealth platform included:

No person would be allowed to accumulate a personal net worth of more than 300 times the average family fortune, which would limit personal assets to between $5 million and $8 million. A graduated capital levy tax would be assessed on all persons with a net worth exceeding $1 million.
Annual incomes would be limited to $1 million and inheritances would be capped at $5.1 million.
Every family was to be furnished with a homestead allowance of not less than one-third the average family wealth of the country.
Every family was to be guaranteed an annual family income of at least $2,000 to $2,500, or not less than one-third of the average annual family income in the United States. Yearly income, however, cannot exceed more than 300 times the size of the average family income.
An old-age pension would be made available for all persons over 60.
To balance agricultural production, the government would preserve/store surplus goods, abolishing the practice of destroying surplus food and other necessities due to lack of purchasing power.

Free education and training for all students to have equal opportunities in all schools, colleges, universities, and other institutions for training in the professions and vocations of life.
The raising of revenue and taxes for the support of this program was to come from the reduction of swollen fortunes from the top, as well as for the support of public works to give employment whenever there may be any slackening necessary in private enterprise.[1]

How Could Every Man Be a King?

Huey Long promised to ensure that the average American would have an income of at least $2000
But the per capita income of Americans in 1935 was $474!
Social Security helped many people, but initially it
left out many of the neediest members of society—
farm and domestic workers.

Some 65% of all African American workers in the 1930s fell into these categories.

In 1939 the act was expanded to also include dependents and survivors of workers. It was
not until 1950 that the coverage was again expanded this time to include full-time farm and domestic
Verdict on the New Deal - did it work?
Full transcript