Franklin D. RooseveltFranklin D. Rooseveltand the New Dealand the New Deal

Redefined Democracy: Redefined Democracy: Economic Security Economic Security ++

+ + Social Justice +Social Justice +

He He changed the role of the Federal Government changed the role of the Federal Government foreverforever

Situation When FDR Entered Office

In March 1933, the country was virtually leaderless and

the banking

system had collapsed.

FDR Restored Confidence In his inaugural address,

he said “The only thing we have to fear is fear itself….”

He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

FDR’s Personal Qualities He was a practical politician

who practiced the art of the possible.

He was a charismatic person who exhibited a warmth and understanding of people.

He provided dynamic leadership in a time of crisis.

He was willing to

experiment

Sources of New Deal Ideas Brain Trust: specialists and

experts, mostly college professors, idea men

New Economists: government spending, deficit

spending and public works, government should prime economic pump

Roosevelt Cabinet: included conservatives, liberals, Democrats, Republicans, often conflicting, compromising & blending ideas

Investopedia explains 'Deficit Spending ’--John Maynard Keynes was an advocate of deficit spending as a fiscal policy tool to help stimulate an economy in recession. During a recession, increased government spending can stimulate business activity, create jobs and spur consumer spending. This creates a multiplier effect in which $1 of government spending helps increase GDP by more than $1.

The government borrows $---Spend more than you have.

The Hundred DaysThe New Deal Begins.. The 3R’s

Relief: to provide jobs for the unemployed and to protect farmers from foreclosure- “help the needy”

Recovery: to get the economy back into high gear, “priming the pump”-spend $

Reform: to regulate banks, to abolish child labor and to conserve farm lands

FDR’S : “NEW DEAL” a REVOLUTION in American society - changed

completely & significantly EXPANDED the Federal Government’s role in the nations economy.

FDR believed government involvement was crucial to stimulate the economy

Step 1 – EMERGENCY BANKING RELIEF ACT The banking crisis – “BANK HOLIDAY” Closed for inspection & Government loans to banks in need -

allowed to reopen when deemed healthy.

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Fireside Chats

Step 2 - Stock Market Reform— Regulating Banking and Finance

• Glass-Steagall Act established Federal Deposit Insurance Corporation -- FDIC- insured individual bank accounts $5,000 & regulated banking practices

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NEXT

Federal Securities Act- full disclosure-companies must give all information on company

performance & stock* Securities and Exchange Commission created to regulate stock market/fair practices (SEC)

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• FDR gets law allowing production of some alcoholic beverages. Why?

• 21st Amendment repeals prohibition by end of 1933

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Executive Order 6102-April 1933

All citizens MUST surrender Gold Coins, Gold Bullion & Gold Certificates to the FED Res Bank- Paid cash- $20 per Troy Ounce

GRADE A-F

Keynesian economics- government intervention in the marketplace & monetary policy is the best method of ensuring economic growth & stability—

Government Spending-included-- Deficit Spending (spend more than you make).

Agricultural Adjustment Act (AAA)

Civilian Conservation Corp (CCC)

Purpose: Relief for suffering Jobs to men between the ages of 18

and 25-$30 per month-$25 went back to the family Built roads and parks, planted 3 billion

trees-preventing soil erosion & flooding, built fire lanes, stocked rivers & streams

Free food, shelter & uniforms Created 300,000 jobs each year- $ 3 billion cost to Gov’t African Americans –segregated

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Federal Emergency Relief Admin (FERA)

Purpose: relief for the needy

$500 million in Direct Relief Gave money to states and

municipalities so they could distribute money, clothing and food to the

unemployedGRADE= A-F

National Industrial Recovery Act (NIRA) & National Recovery Admin. (NRA)

Purpose: recovery of industry Create codes of fair practices & regulate

Industry and Industrial growth-issued by the President

Set limits on what should be produced, how many of each item & set prices on many products to ensure fair competition.

gave rights to Unions GRADE= A-F Set maximum work hours & minimum wages

Tennessee Valley Authority (TVA) Renovated many dams & built 20 new ones

Flood control Inexpensive Hydro-electric power – from

Government run and owned plants Government run factories also produce cheap

fertilizer nationalization vs. privatization GRADE= A-F

Mortgage Relief

• Home Owners Loan Corporation-(HOLC) gives government loans to prevent foreclosures

• Federal Housing Administration-(FHA) gives government loans for mortgages & repairs.

GRADE= A-F

Critics

Criticisms of Conservative Opponents Conservative opponents said the New Deal went too far:

It was socialism (killed individualism) It added to the national debt ($35 billion) It wasted money on relief and encouraged idleness It violated the constitution & states rights It increased the power of the

Presidency (FDR was reaching toward dictatorship, Congress arubber stamp, independenceof judiciary threatened, separation of powers shattered)

Criticisms of Liberal Opponents

Liberal opponents said the New Deal did not go far enough.

Dr. Francis Townsend

Old Age Pension Plan $200/month to all over age

60 The program would be

financed by a 2% national sales tax and each pensioner would be required to spend the money in 30 days. This would stimulate the economy.

Father Charles E. Coughlin Father Charles Coughlin was

a rabble-rousing radio priest from Detroit.

He claimed there was an international bankers conspiracy and Jews were responsible.

He advocated nationalization of banking.

Huey Long“Share Our Wealth”

Limit all annual incomes to $1 million

US Families guaranteed Homestead ($5,000) Annual Income

($2,500). financed by confiscating

wealth of people who made over $1 million per year.

Governor & Senator From Louisiana – Dem.

The Supreme Court & The New Deal National Industrial Recovery Act (NIRA) & AAA-Agricultural Adjustment

Act (AAA) are ruled: UNCONSTITUTIONAL

NIRA-is illegal-Schechter Poultry Corp vs. U.S. 1935

1. Gave Legislative powers to the Executive Branch(allowed President to set industry codes-price and wage fixing)

2. - enforcement of Industry is a state right

- the National Government only has power to regulate interstate trade

The Supreme Court & The New Deal

AAA-is illegal U.S. vs. Butler 1936 Levying a tax on only the processors and

paying farmers with those tax $ is unconstitutional

regulation of Agriculture is a state right

The Second New Deal (1934-1936)

Emphasis: Permanent reform

Objectives: increase purchasing power and social security for the people

Social Security Act-1935 Purpose: Reform1. Unemployment Insurance

(funded by Federal tax on employer) $15-18 wk

2. Aid to Dependents -$ for widows, orphans, disabled etc. (funded by Federal Taxes).

3. Old Age Pension-funded by employers & employees * $10-$85 monthly

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Revenue Act of 1935

Purpose: To fund Social Security

“SOAK THE RICH” Taxes

- Raised estate taxes

- Raised corporate taxes

- Raised income taxes on the wealthy- Progressive tax on incomes over $50,000-upto

75%

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•1935 - 1943 over 8 million people were employed, building 850 airports, 110,000 public buildings including schools hospitals, and libraries, 600,000 miles of roads

•Employed included: Construction workers, teachers, writers, artists, actors, andMusicians.

Works Progress Administration By Executive Order

provided jobs for many people, especially artists by commissioning them to create posters promoting events and informing the public of important issues.

WPA Posters

$ 10.5 Billion cost to Federal Gov’t.

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The Election of 1936-“Spokesman for the Forgotten Man”

The Election of 1936 The Election of 1936:

Made the Democratic party the majority party

The Supreme Court

1937 & 1938 Recession 7 million still unemployed-14% in 1937 President slashed New Deal programs to balance the

budget Social Security Taxes collected for the 1st time =

money drained from the economy Business growth slumped=down 37% Unemployment rose to 10 million by Dec. to19% FDR decided to increase government spending again

Keynesian economics

Wagner Act-aka National Labor Relations Act & Fair Labor Standards Act (FLSA)

Purpose: Reform

& replace NIRA Union protection for workers-

rights for collective bargaining

FLSA-- Banned child labor-16 Set max hours-44 & 40 wk Set min. wages .25 hr to

. 40 hr in 1945GRADE A-F

Protection of New Deal Accomplishments Steps FDR took to protect New Deal

accomplishments (both failed): Court-Packing Plan (proposed

increasing Supreme Court from 9 to 15 members.

Attempted Purge of the Democratic Party –Congressional Election of 1938 (FDR came out strongly in favor of liberal Dem. Candidates & interfered in state campaigns, Republicans gained strength in both houses of Congress)

Decline of New Deal Reform after 1937 Reasons for decline of New Deal reform after 1937: Court-packing plan made Congress irritable. Recession of 1937-38 weakened confidence in New

Deal measures. Republicans gained strength in both houses.

Attempted purge of the Democratic party failed. Conservative Democrats were elected to office.

Resentful of attempted party purge, they joined ranks with Republicans to block New Deal legislation.

Increasing focus on foreign affairs.

The New Deal: Cost: $35 billion

Success or Failure?

1. Reduced unemployment by 7 million

2. Soil conservation.

3. The Stock Market and banks recovered.

4. Transformed the Tennessee valley.

5. Roosevelt was re-elected.

1. Still 6 million out of work in 1941.

2. Blacks were segregated from whites.

3. Women were excluded from the New Deal.

4. Tennessee benefited but many areas were still suffering.

5. $35 Billion Cost

Essential Question:

Did the New Deal end the Great Depression?

DATA /CHART Analysis………

Gather EVIDENCE to PROVE your answer.

The Significance of the New Deal

Physical Rehabilitation of Country

Attacked soil erosion Built dams and planted trees

to prevent floods Reclaimed the grasslands of

the Great Plains Developed water power

resources Encouraged regional

reconstruction projects like the TVA and Columbia River project

Human Rehabilitation Established the principle

that government has responsibility for the health, welfare, and security, as well as the protection and education of its citizens

Embraced social security, public health, housing

Revitalization of Politics

Strengthened executive branch

Reasserted presidential leadership

Revitalized political party as a vehicle for the popular will and as an instrument for effective action.

Extension of Democracy Redefined the concept

of democracy so that it included not only political rights but economic security and social justice as well.

Maintenance of a Democratic System The New Deal maintained a

democratic system of government and society in a world threatened by totalitarianism. Increased size and scope of

government to meet needs of the depression

Provided the leadership that enabled Congress to put through the necessary relief, recovery, and reform measures.

Sponsored moderate legislation to neutralize the popularity of radical opponents