Chapter 22U.S. History 2

Roosevelt and the New Deal

• 23.1 Roosevelt Takes Office• 23.2 Roosevelt’s First New Deal• 23.3 The Second New Deal• 23.4 The New Deal Coalition

23.1 Roosevelt Takes Office

• Roosevelt’s Rise to Power• Roosevelt is

Inaugurated

Roosevelt’s Rise to Power

• The Republicans nominated Herbert Hoover to run for a second term as president.

• The Democrats selected New York Governor Franklin Delano Roosevelt.

• Roosevelt became the first to deliver an acceptance speech to a nominating campaign.

Roosevelt’s Rise to Power• Roosevelt’s policies to end the

depression became known as the New Deal.

• Roosevelt won the election in a landslide.

• Roosevelt’s political career began in 1910, with a seat in the New York State Senate.–He supported progressive reform.–He opposed party bosses.

Video clip on New Deal

Roosevelt’s Rise to Power

• He was appointed assistant secretary of the navy by Woodrow Wilson.

• In 1920, he caught polio, a paralyzing disease with no cure.

• His wife, Eleanor, kept his name prominent in politics.

Few people knew FDR was actually paralyzed.

Warm Springs, Georgia

Roosevelt’s Rise to Power• Roosevelt narrowly won the race for New York

governor. • As governor, he used government power to help

people deal with the economic challenges.• His popularity in New York paved the way for his

run for president.

Roosevelt is Inaugurated

• Franklin Roosevelt won the November 1932 presidential election.

• His inauguration would not occur until March 1933.

• During this time, unemployment continued to rise, bank runs increased, and people began converting their money into gold.

Roosevelt is Inaugurated• Some feared Roosevelt

would end the gold standard, which would reduce the dollar’s value.

• At that time, an ounce of gold equaled a set number of dollars.

• To reduce the value of the dollar, the U.S. would have to stop exchanging dollars for gold.

Roosevelt is Inaugurated

• People began taking gold and currency out of banks.

• This resulted in over 4,000 banks collapsing by March 1933.

• Many governors declared bank holidays, which closed the banks before bank runs could put them out of business.

Bank run

23.2 Roosevelt’s First New Deal

• The Hundred Days Begin• Fixing the Banks and the

Stock Market• Managing Farms and

Industry• Providing Debt Relief• Spending and Relief

Programs

The Hundred Days Begin• Roosevelt sent many bills to

Congress between March 9 and June 16, 1933.

• This period is referred to as the Hundred Days,

• Congress passed 15 major acts to help the economic crisis.

• These programs made up the First New Deal.

The Hundred Days Begin• Roosevelt’s advisers were divided into three

main groups.– The first group supported the “New

Nationalism” of Theodore Roosevelt.– It believed government and business

should work together to manage the economy.

– The second group wanted government to run key parts of the economy.

– The third group supported the “New Freedom” of Woodrow Wilson.

– It believed government should restore competition to the economy.

Fixing the Banks and the Stock Market

• Roosevelt wanted to restore confidence in the banking system first.• He called a national bank

holiday and called Congress into special session.

Fixing the Banks and the Stock Market

• Congress passed the Emergency Banking Relief Act.– It required federal examiners

to survey the nation’s banks.– They issued Treasury

Department licenses to financially sound banks.

FDR on banking

Fixing the Banks and the Stock Market

• Roosevelt used fireside chats, where he spoke on the radio directly to the people.

• In his first fireside chat, he assured Americans that the banks were secure.

• The next day, deposits outweighed withdrawals, ending the banking crisis. Video on FDR fireside chats

Fixing the Banks and the Stock Market

• The new Securities Act of 1933 required companies that sold stocks and bonds to provide complete and truthful information to investors.

• The Securities and Exchange Commission (SEC) was created to regulate the stock market and prevent fraud.

Fixing the Banks and the Stock Market• The Glass-Steagall Act separated

commercial banking from investment banking.– It no longer allowed depositors’

money to be risked on the stock market. – It created the Federal Deposit

Insurance Corporation (FDIC) that provided government insurance for bank deposits up to a certain amount.

AHSGE Exam Alert!:Tennessee Valley Authority

• Look on pages 684.• Read “Why it Matters.”• Summarize your reading

in your own words in your notes.

• This may be on your AHSGE Exam.

Managing Farms and Industry

• Congress passed the Agricultural Adjustment Act.

• The law was a plan that paid farmers not to raise certain crops to lower crop production.

Managing Farms and Industry

• The act was administered by the Agricultural Adjustment Administration (AAA).

• The plan reduced production, increased prices, and helped some farmers, especially large commercial farmers.

• Thousands of tenant farmers remained unemployed or homeless.

Managing Farms and Industry

• The National Industrial Recovery Act (NIRA) suspended antitrust laws.

• It allowed business, labor, and government to cooperate to establish voluntary codes of fair competition.

Managing Farms and Industry

• The program was run by the National Recovery Administration (NRA).

• It urged consumers to buy only from companies who signed agreements with the NRA.

• The Supreme Court declared it unconstitutional in 1935.

Providing Debt Relief

• The Home Owners’ Loan Corporation (HOLC) bought the mortgages of homeowners behind on payments.

• It restructured them for longer terms with lower interest rates.

• The HOLC gave loans only to those employed.

Old headquarters

Providing Debt Relief

• It foreclosed on property if payment could not be made.

• The Farm Credit Administration (FCA) helped farmers refinance their mortgages.

• The FCA loans helped farmers in the short term but may have slowed overall economic recovery.

Spending and Relief Programs

• The Civilian Conservation Corps (CCC) gave unemployed men aged 18 to 25 the opportunity to –work with the national

forestry service planting trees– fighting forest fires– building reservoirs

• The CCC had employed three million men by 1942.

CCC building a road

Spending and Relief Programs• The Federal Emergency

Relief Administration (FERA) channeled money to help state and local agencies fund relief projects.

• In 1933, the Public Works Administration began a series of construction projects creating more jobs.

Public Works Administration

Spending and Relief Programs

• Harry Hopkins, the head of FERA, set up the Civil Works Administration (CWA).

• It hired workers directly and put them on the government’s payroll.

• Roosevelt shut it down because he feared too much money was being spent on the it.

Spending and Relief Programs

• The most important aspect of the New Deal was the change in the spirit of the American people.• People became optimistic

again.

23.3 The Second New Deal

• Challenges to the New Deal

• Launching the Second New Deal

• The Rise of Industrial Unions

• The Social Security Act

Challenges to the New Deal

• Support of Roosevelt and his New Deal began to fade in 1935.

• Many began to question the effectiveness of the New Deal.

• Roosevelt used deficit spending to pay for his programs.

Challenges to the New Deal• He abandoned a balanced

budget and borrowed money to pay for his programs.

• The American Liberty League was created as businessmen and politicians from both parties organized to oppose the New Deal.

Challenges to the New Deal

• Democratic senator Huey Long proposed a redistribution of wealth. • Father Charles Coughlin, a

Catholic priest in Detroit, supported Huey Long through his popular radio broadcast.

Launching the Second New Deal• Roosevelt hoped the second

New Deal would increase his chances of being re-elected in 1936.

• The Works Progress Administration (WPA) was a federal agency headed by Harry Hopkins.

• It spent $11 billion over several years, creating jobs for workers.

Launching the Second New Deal• Its most controversial

aspect was offering work to artists, musicians, actors, and writers.

• In Schechter v. United States, the Supreme Court struck down the National Industrial Recovery Act.

Launching the Second New Deal

• The Court ruled that Congress could not delegate its powers to the executive branch.• It ruled the NIRA

codes unconstitutional.

Launching the Second New Deal

• Roosevelt feared that the Court would strike down the New Deal.

• He ordered Congress to remain in session until his new bills were passed.

• This was nicknamed the “second hundred days” by the press.

The Rise of Industrial Unions• In July 1935, the National

Labor Relations Act (Wagner Act) was passed.

• It guaranteed workers the right to organize unions without employer interference.

• It set up the National Labor Relations Board (NLRB).

The Rise of Industrial Unions

• The NLRB organized factory elections by secret ballot to determine if workers wanted a union.

• Binding arbitration required a neutral party would listen to both sides and decide the issue.

• In 1935, the Committee for Industrial Organization (CIO) organized industrial unions.

The Rise of Industrial Unions

• Two union men were demoted at the General Motors auto-body plant in Cleveland.

• Workers protested with a sit-down strike where they stopped working but refused to leave the plant.

• Workers at the GM plant in Flint, Michigan, did the same.

The Rise of Industrial Unions

• After violence broke out, the company gave in.• The United Auto Workers

(UAW) was formed and quickly became one of the most powerful unions in the U.S.

The Social Security Act

• In 1935, the Social Security Act helped the elderly, unemployed workers, and others.

• The bill would provide a monthly retirement benefit and unemployment insurance.

The Social Security Act

• Workers earned the right to receive the benefits by paying premiums.

• It helped many people.• Initially, it left out many

of the neediest members of society, such as farmers and domestic workers.

23.4 The New Deal Coalition

• Roosevelt’s Second Term

• The Last New Deal Reforms

• The Legacy of the New Deal

Roosevelt’s Second Term

• Before 1936, Democratic Party included mainly white Southerners.

• It began to include farmers, laborers, blacks, immigrants, minorities, women, progressives, and intellectuals.

• Eleanor Roosevelt persuaded FDR to include their concerns in his New Deal programs.

Roosevelt’s Second Term

• His Secretary of Labor, Frances Perkins, was the first woman appointed to the cabinet.

• Roosevelt won the 1936 election in a landslides.

• The Supreme Court did not support the New Deal programs.

Roosevelt’s Second Term• In June of 1936, the Court

declared the Agricultural Adjustment Act unconstitutional.

• FDR attempted to change the political balance of the court with the court-packing plan.

• He wanted to increase the number of justices on the Supreme Court.

Roosevelt’s Second Term

• It was a political mistake and split the Democratic Party.

• Americans felt it would give the president too much power.

• In 1937 a sudden rise in unemployment further hurt Roosevelt’s popularity.

Roosevelt’s Second Term

• Treasury Secretary Henry Morgenthau wanted to balance the budget and cut spending.• Others pushed for

more government spending.

Roosevelt’s Second Term

• They supported “Keynesianism,” the theories of British economist John Maynard Keynes.

• He argued that the government needed to spend heavily to jump-start the economy.

• In 1938 Roosevelt asked Congress for $3.75 billion for the PWA, WPA, and other programs.

The Last New Deal Reforms• His successes were limited in

his second term in office.• Eleanor Roosevelt promoted

the 1937 National Housing Act.

• It created the United States Housing Authority to subsidize loans for builders willing to buy blocks of slums and build low-cost housing.

The Last New Deal Reforms

• The Farm Security Administration gave loans to tenant farmers to purchase farms.

• Congress kept appropriations low, believing that the plan made agricultural problems worse.

The Last New Deal Reforms

• The Fair Labor Standards Act of 1938 gave:–protection to workers– abolished child labor– created a 40-hour

workweek for workers. • Congress began to turn

against the New Deal.• The New Deal era had ended

by 1939.

The Legacy of the New Deal

• The New Deal had limited success but gave Americans a stronger sense of security and stability.

• The New Deal operated to balance competing economic interests.

• The New Deal’s mediating role established the broker state, which helped work out conflicts among different interests.

The Legacy of the New Deal

• The New Deal brought a new public attitude regarding the government.

• The program gave Americans a safety net.

• It provided safeguards and relief programs to protect them from economic disaster.

Test Tomorrow!

Test Tomorrow!