The New Deal

1932 Election

Herbert Hoover Franklin Delano Roosevelt

FDR

• NY-D• Governor of NY• Wanted change• Fought unemployment & poverty• Likeable (unlike Hoover)

1932 Election

• Democrats DOMINATE• Senate – 2/3 majority• House – ¾ of seats• FDR– 472 votes– 57.4%

• Hoover– 59 votes– 39.7%

New Deal

• FDR works with lawyers, professionals, journalists– “Brian Trust”

• Work to help solve Great Depression

• Called New Deal– Promised a new deal for the American people

New Deal

• 3 goals1. Relief for the needy2. Economic recovery3. Financial reform

Hundred Days

• March 9 – June 16• Congress passes over 15 pieces of New Deal

legislation• Expanded role of federal government

Bank Holiday

• First order of business, reform banks & finance• March 5, declared bank holiday– All banks closes to prevent more withdrawals

Bank Holiday (con’t)

• Emergency Banking Relief Act– Treasury can inspect banks– Sound banks (reliable) could reopen– Insolvent banks (can’t pay debts) stay closed– Troubled banks get loans

• Revived confidence in banks

Fireside Chat

• Radio talks about issues Americans worried about

• Explained New Deal in simple language• Felt like he was talking to you

Fireside Chat

“When you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money….A comparatively small part of the money that you put in the bank is kept in currency – an amount which in normal times is wholly sufficient to cash the cash needs of the average citizen”

Fireside Chat

• When too many people demand money in cash, banks will fail.

• Next few weeks, most return $ to banks

Regulating Banks

• Glass-Steagall Act– Federal Deposit Insurance Corporation (FDIC)– Insures bank accounts up to $5000– Reassured customers that their $ was safe

• Federal Securities Act– Corporations had to be open and honest about their

stocks• Securities & Exchange Commission (SEC)– Regulated stock market

21st Amendment

• To raise revenue, FDR convinces Congress to allow the manufacture & sale of some alcohol

• Leads to passage of 21st Amendment (ending Prohibition)

Helping Farmers

• Agricultural Adjustment Act (AAA)– Raise crop prices by lowering production– Pay farmers to leave some land unseeded

• Pro:– Raised prices to help farmers

• Con:– Wasted food while many were starving

Tennessee Valley Authority

• TVA• Renovated 5 dams• Built 20 new ones• Thousands of jobs• Flood control• Hydroelectric power

Works Projects

• Civilian Conservation Corps (CCC)– Young men 18-25 worked– Roads, parks, trees (to prevent another dust bowl)– By 1942, helped 3 million men

Works Projects

• National Industrial Recovery Act (NIRA)– Money to states to create schools & community

buildings– Didn’t help unemployment– Creates Civil Works Administration• 4 million immediate jobs in Winter 1933-34• 40k schools• 50k teachers• 500,000 miles of road

Works Projects

• National Recovery Administration (NRA)– Created by NIRA– Set prices of many products• Stop wage cuts• Stop falling prices• Stop layoffs

• Guaranteed workers rights to unionize

Food, Clothing, Shelter

• Home Owners Loan Corporation (HOLC)– Gov’t loans to homeowners facing foreclosure

• Federal Housing Authority (FHA)– Helped secure loans – Still around today)

Food, Clothing, Shelter

• Federal Emergency Relief Administration (FERA)– Direct relief to the needy ($500 million)– Not just money to the poor, helped them get jobs

Use a Book

• Why did the New Deal come under attack?

• How did Liberal & Conservative critics differ in their opposition to the New Deal

• How did the Supreme Court React?

• What were the 3 largest critics of the New Deal? Explain their opposition to the New Deal.