The Great Depression, FDR, & the New Deal

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Brother, can you spare me a …

The Great Crash

• 1928--soaring stock prices attract individual, corporate investment

• 1929--stock market crashes– directly affects 3 million– credit crunch stifles business

• Businesses lay off workers

• Demand for consumer goods declines

Unemployment, 1929-1942

Effects of the Depression

• Hardship affects all classes

• The middle class loses belief in ever-increasing prosperity

• Thousands of young homeless, jobless

Fighting the Depression

• Republican attempts to overcome catastrophe, flounder.

• Depression gives Democrats opportunity to regain power.

Pres. Hoover and Voluntarism

• Herbert Hoover initially seeks solution through voluntary action, private charity

• Eventually aids farmers and bankers

• Resists Democratic efforts to give direct aid to the unemployed– perceived as indifferent to human

suffering– programs seen as incompetent

Bank Failures, 1929-1933

The Emergence of FDR

• Franklin Delano Roosevelt– born to wealth and privilege– 1921--crippled by polio– 1928--elected governor of New York– talented politician

• 1932--defeats Hoover with farmer- worker-immigrant-Catholic coalition

FDR, The New Deal, 100 days

The New deal (1933-36)A series of economic programs implemented in the US & passed by Congress during the first presidential term of FDR (1933-1937).

They were responses to the Great Depression, and focused on "3 Rs":

•R for relief for the unemployed and poor;

•R for recovery of the economy to normal levels; and

•R for reform of the financial system to prevent a repeat depression.

The New Deal made the Democratic Party the majority (held the White House for 7 out of 9 Presidential terms from 1933 to 1969), with its base in liberal ideas, big city machines, and newly empowered labor unions, ethnic minorities, and the white South. The Republicans were split, either opposing the entire New Deal as an enemy of business and growth, or accepting some of it and promising to make it more efficient. It dominated most American elections into the 1960s.

The Hundred Days

FDR closed all the banks for 100 days and did not open unless they were trusted by him. Ever since, presidents

have been judged against FDR for what they accomplished in their first 100 days.

• Banking system saved from collapse

• Fifteen major laws provide relief

• New Deal aims to reform and restore, not nationalize, the economy

The Tennessee Valley Authority

• A federally owned corporation in the US created by congressional charter in 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly affected by the Great Depression.

• TVA's service area covers most of Tennessee, parts of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, and Virginia.

• It was the first large regional planning agency of the federal government and remains the largest.

• TVA became a model for America's governmental efforts to modernize Third World agrarian societies.

The TVA

Roosevelt and Recovery

• National Recovery Administration (NRA)– industries formulate codes to eliminate cut-

throat competition, ensure labor peace– codes favor big business, unenforceable– 1935--NRA ruled unconstitutional

• Agricultural Adjustment Act of 1933– farmers paid to take land out of cultivation– prices increase– sharecroppers, tenant farmers dispossessed

NRA UNCONSTITUTIONAL?

• The Supreme Court found certain government-imposed regulations of the poultry industry, such as price- & wage-fixing, unconstitutional. The "codes of fair competition" would have allowed the President to dictate pricing and other competitive aspects of the agribusiness

• The National Recovery Administration (NRA) was closed.

• However, many of NRA policies, such as setting minimum wage and restricting work hours, were successfully reenacted under the National Labor Relations Act (aka Wagner Act) passed in July 1935.

Roosevelt and Relief

• 1933--Aid to unemployed

• 1933--Civilian Conservation Corps provides employment to young people

• 1935--Works Progress Administration (WPA) place unemployed on federal payroll

• Programs never sufficiently funded

Social Security

• 1935--Social Security Act passed

• Criticisms– too few people would collect pensions – unemployment package inadequate

• Establishes pattern of government aid to poor, aged, handicapped

Labor Legislation

• 1935--Wagner Act – allows unions to organize – outlaws unfair labor practices

• 1938--Fair Labor Standard Act – maximum hour – minimum wage

Impact of the New Deal

• Had a broad influence on the quality of life in the U.S. in the 1930s

• Helps labor unions most

Rise of Organized Labor

• 1932--National Recovery Act spurs union organizers

• Congress of Industrial Organization (CIO) formed by John L. Lewis

• CIO unionizes steel, auto industries

• 1940--CIO membership hits 5 million, 28% of labor force unionized

Women at Work

• Position of women deteriorates in ‘30s– jobs lost at a faster rate than men– hardly any New Deal programs help

• Progress in government– Frances Perkins, Secretary of Labor, the

first woman cabinet member– women appointed to several other posts– Eleanor Roosevelt a model for activism

End of the New Deal

• 1936--New Deal peaks with Roosevelt’s reelection

• Congress resists programs after 1936

The Election of 1936

• FDR’s campaign– attacks the rich – promises further reforms – defeats Republicans

• Democrats win majorities in both houses of Congress

• FDR coalition: South, cities, labor, ethnic groups, African Americans, poor

The New Deal in Decline

• 1936--cutbacks for relief agencies

• 1937--severe slump hits economy

• Roosevelt blamed, resorts to huge government spending

• 1938--Republican party revives

The New Deal and American Life

• New Deal’s limitations– depression not ended– economic system not fundamentally

altered – little done for those without political clout

• Achievements– Social Security, the Wagner Act – political realignment of the 1930s