Unit VIII – Boom Unit VIII – Boom Times and Times and ChallengesChallenges

Chapter 26 – The Great Chapter 26 – The Great DepressionDepression

Section 2 – Roosevelt’s New Section 2 – Roosevelt’s New DealDeal

Roosevelt’s New Roosevelt’s New DealDealThe Big Idea

Franklin Roosevelt’s New Deal included government programs designed to relieve unemployment and

help the economy recover.

Main Ideas

• Congress approved many new programs during the Hundred Days.

• Critics expressed concerns about the New Deal.

• New Deal programs continued through Roosevelt’s first term in what became known as the Second New Deal.

• Roosevelt clashed with the Supreme Court over the New Deal.

Keynesian TheoryKeynesian Theory• KeynesianKeynesian economicseconomics, , also called

Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of 20th century British economist John Maynard Keynes.

• An economic theory stating that active active government interventiongovernment intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability

• The government would borrow money to government would borrow money to spend on such things as public worksspend on such things as public works; ; and that deficit spending, in turn, would createcreate jobsjobs and increase purchasing power.

The New Deal The New Deal

Main Idea 1:Main Idea 1: Congress approved many new Congress approved many new programs during the Hundred programs during the Hundred

Days.Days.• Took office in March 1933

• Said that economic recovery was possible

• Promised that the government would help

A New President

• Roosevelt called special session of Congress that became known as the Hundred DaysHundred Days.

• President and Congress worked togetherPresident and Congress worked together to create new programs to battle the Depression and aid economic recovery.

• These programs became known as the New DealNew Deal.

The Hundred Days

The Only Thing We Have to Fear Is Fear Itself The Only Thing We Have to Fear Is Fear Itself

(00:14)(00:14)

Banking Banking CrisisCrisis

• Temporarily Temporarily closed all the closed all the nation’s banksnation’s banks to stop panic and large-scale withdrawals- Bank Holiday

• Passed the Emergency Emergency Banking ActBanking Act

• Glass-Steagall Glass-Steagall Act created the Act created the FDICFDIC

Hundred DaysHundred Days

• Critical period of government activity

• Roosevelt pushed Congress to put most of his New New DealDeal into practice.

• The New Deal promised relief, relief, recovery and recovery and reforms.reforms.

Franklin Roosevelt as Franklin Roosevelt as PresidentPresident

Beyond the Beyond the Hundred DaysHundred Days

• FDR and Congress passed important legislation after the Hundred Days

• Created the Civil Civil Works Works AdministrationAdministration

• Passed the Indian Indian Reorganization Reorganization ActAct

Restoring ConfidenceRestoring Confidence

• Roosevelt worked to restore confidence in restore confidence in American banks.American banks.

– Ordered all banks to temporarily close

– Emergency Banking Relief ActEmergency Banking Relief Act was quickly passed .

– Government inspected financesGovernment inspected finances of a bank before it was allowed to reopen.

• Plan was announced in Roosevelt’s first fireside Roosevelt’s first fireside chatchat.

– Radio addressRadio address in which he spoke directly to the American people

– Gave many chats over the course of his administration

This Bank Closed Until Further This Bank Closed Until Further

Notice (00:30)Notice (00:30)

Selected New Deal Selected New Deal ProgramsProgramsCivil Works AdministrationCivil Works Administration– employed 4 million Americans to

build road and airports

Civilian Conservation CorpsCivilian Conservation Corps– provided jobs to thousands. Helped unemployed young men 18 to 25 years old

Tennessee Valley AuthorityTennessee Valley Authority– hired people to build dams and generators, bringing electricity and jobs to Tennessee River Valley

Farm Credit AdministrationFarm Credit Administration– helped farmers refinance mortgages so they could keep their farms

Agricultural Adjustment ActAgricultural Adjustment Act– stabilized agricultural prices- Helped farmers by paying them not to grow crops

National Industrial Recovery ActNational Industrial Recovery Act– passed with support from Frances Perkins, the nation’s first female Cabinet member, addressed business concerns

The New DealThe New Deal

• National Industrial Recovery Act (NIRA)National Industrial Recovery Act (NIRA)

– Helped business by requiring that businesses in the same industry cooperate with each other to set prices and output

– Started Public Works Administration (PWA)Public Works Administration (PWA)

– Labor received federal protection for the right to organize.

• Federal Securities Act Federal Securities Act

– Helped investors, restored confidence in the markets

• Securities and Exchange Commission (SEC)Securities and Exchange Commission (SEC)

• Tennessee Valley Authority (TVA)Tennessee Valley Authority (TVA)

– Helped build dams and other projects along the Tennessee River and its tributaries

Section 3 Activity Section 3 Activity Relief, Recovery and ReformRelief, Recovery and Reform

• FDR came into office with no clear or FDR came into office with no clear or specific plan for what to do. specific plan for what to do.

• Roosevelt used to say "try something, if it Roosevelt used to say "try something, if it doesn't work try something else." He and doesn't work try something else." He and his his brain trustbrain trust recognized, at least, that recognized, at least, that they must try to do something. they must try to do something.

• These attempts at least gave Americans These attempts at least gave Americans the hope that the hope that somethingsomething was being done. was being done.

• Roosevelt's basic philosophy of Roosevelt's basic philosophy of Keynesian economics manifested itself in Keynesian economics manifested itself in what became known as the three "R's" of what became known as the three "R's" of relief, recovery and reform. relief, recovery and reform. – The programs created to meet these goals The programs created to meet these goals

generated jobs and more importantly, hope. generated jobs and more importantly, hope. – They also generated what is refered to today as They also generated what is refered to today as

"alphabet soup;" a series of acts and agencies "alphabet soup;" a series of acts and agencies that created a huge federal bureaucracy.that created a huge federal bureaucracy.

The New DealThe New Deal

ReliefRelief Immediate action taken to halt the Immediate action taken to halt the

economies deterioration.economies deterioration.

RecoveryRecovery "Pump - Priming" Temporary programs to "Pump - Priming" Temporary programs to

restart the flow of consumer demand.restart the flow of consumer demand.

ReformReform Permanent programs to avoid another depression and Permanent programs to avoid another depression and

insure citizens against economic disasters.insure citizens against economic disasters.

Bank Holiday Bank Holiday Declared so that the panic would be Declared so that the panic would be

stopped. stopped.

Agricultural Adjustment Act (AAA)Agricultural Adjustment Act (AAA)Taxed food processors and gave the money Taxed food processors and gave the money

directly to farmers as a payment for not directly to farmers as a payment for not growing food. This decreased supply so price growing food. This decreased supply so price

would go up.would go up.

Securities & Exchange Commission (SEC)Securities & Exchange Commission (SEC)Permanent Agency set up to monitor stock market activity Permanent Agency set up to monitor stock market activity

and ensure that no fraud or insider trading was taking and ensure that no fraud or insider trading was taking place.place.

Emergency Banking ActEmergency Banking ActClosed the insolvent banks and only Closed the insolvent banks and only

reopened the solvent ones.reopened the solvent ones.

National Industrial Recovery Act National Industrial Recovery Act (NIRA)(NIRA)

Created the NRA (National Recovery Created the NRA (National Recovery Administration) a consortium of businesses Administration) a consortium of businesses organized by the government and given the organized by the government and given the power to set rules and regulations for the power to set rules and regulations for the

economy. Members of the NRA displayed a economy. Members of the NRA displayed a blue eagle. blue eagle.

Federal Deposit Insurance Corporation (FDIC)Federal Deposit Insurance Corporation (FDIC)Permanent Agency designed to insure depositors money in Permanent Agency designed to insure depositors money in

savings banks. Originally insured up to $5,000 per savings banks. Originally insured up to $5,000 per depositor today it has increased to $100,000.depositor today it has increased to $100,000.

Federal Emergency Relief Act Federal Emergency Relief Act (FERA) (FERA)

Gave immediate help to those that Gave immediate help to those that needed it in the form of cash needed it in the form of cash

payments.payments.

Home Owners Loan Corp.Home Owners Loan Corp. Gave loans to home owners so they could Gave loans to home owners so they could

pay their mortgages. This prevented people pay their mortgages. This prevented people from going homeless and prevented banks from going homeless and prevented banks

from going under.from going under.

Social Security AdministrationSocial Security AdministrationPermanent agency designed to ensure that the older Permanent agency designed to ensure that the older

segment of society always would have enough money to segment of society always would have enough money to survive. The key here is that they would then also be able survive. The key here is that they would then also be able

to spend throughout their lives.to spend throughout their lives.

Civil Works Administration Civil Works Administration (CWA) (CWA)

Provided temporary jobs repairing Provided temporary jobs repairing roads and bridges.roads and bridges.

Works Progress Administration (WPA)Works Progress Administration (WPA)Provided long term government jobs Provided long term government jobs

building schools and other public works building schools and other public works projects.projects.

National Labor Relations Act and National Labor National Labor Relations Act and National Labor Relations Board (NLRA/NLRB)Relations Board (NLRA/NLRB)

Otherwise known as the Wagner Act it helped unions and thus Otherwise known as the Wagner Act it helped unions and thus helped workers. This acted created the NLRB (National Labor helped workers. This acted created the NLRB (National Labor Relations Board) which enforced labor law and made sure that Relations Board) which enforced labor law and made sure that

fair business practices where upheldfair business practices where upheld. .

Civilian Conservation Corps Civilian Conservation Corps (CCC) (CCC)

Temporary jobs to unmarried single Temporary jobs to unmarried single adults filling sand bags and helping adults filling sand bags and helping

out at disaster type situations. out at disaster type situations. Participants lived in barracks type Participants lived in barracks type

housinghousing..

Tennessee Valley Authority (TVA)Tennessee Valley Authority (TVA) Agency created to build dams in the Agency created to build dams in the Tennessee river valley. These dams Tennessee river valley. These dams

provided more stable irrigation and cheap provided more stable irrigation and cheap hydroelectric power.hydroelectric power.

Soil Conservation ActSoil Conservation Act Laws mandating proper soil maintenance to make sure that Laws mandating proper soil maintenance to make sure that

another dust bowl was avoided.another dust bowl was avoided.

EARLY NEW DEAL MEASURES – Are they Relief, Recovery or Reform?

______________ FAIR LABOR STANDARDS ACT -- provided minimum wage for workers. ______________ FEDERAL SECURITIES ACT -- required full disclosure of information related to new stock issues.______________ NATIONAL EMPLOYMENT SYSTEM ACT -- created US employment service. ______________ HOME OWNERS REFINANCING ACT -- use of government bonds to guarantee mortgages._____________ BANKING ACT OF 1933 -- created Federal Deposit Insurance Corp., guaranteeing the safety of bank deposits.____________ NATIONAL INDUSTRIAL RECOVERY ACT -- minimum wages and self regulation of industry --- ended in 1935.______________ PUBLIC WORKS ADMINISTRATION -- appropriated funds to construct roads and other federal projects.______________ NATIONAL HOUSING ACT -- federal housing administration insured loans of private banks and trust companies for construction of homes. ______________ COMMUNICATIONS ACT – regulated communication for wire and radio ____________ NATIONAL HOUSING ACT -- construction of low cost public housing and slum clearance.____________ SOIL CONSERVATION ACT -- established federal soil conservation services.____________ RESETTLEMENT ADMINISTRATION -- built new model communities for low income city workers____________ RURAL ELECTRIFICATION ADMINISTRATION -- created and administered program of bringing electricity to rural areas.__________ NATIONAL YOUTH ADMINISTRATION -- federal work relief and employment for young people.

EARLY NEW DEAL MEASURES – Are they Relief, Recovery or Reforn?

ReliefRelief FAIR LABOR STANDARDS ACT -- provided minimum wage for workers. ReformReform FEDERAL SECURITIES ACT -- required full disclosure of information related to new stock issues.ReformReform NATIONAL EMPLOYMENT SYSTEM ACT -- created US employment service. RecoveryRecovery HOME OWNERS REFINANCING ACT -- use of government bonds to guarantee mortgages.ReformReform BANKING ACT OF 1933 -- created Federal Deposit Insurance Corp., guaranteeing the safety of bank deposits.RecoveryRecovery NATIONAL INDUSTRIAL RECOVERY ACT -- minimum wages and self regulation of industry --- ended in 1935.RecoveryRecovery PUBLIC WORKS ADMINISTRATION -- appropriated funds to construct roads and other federal projects.RecoveryRecovery NATIONAL HOUSING ACT -- federal housing administration insured loans of private banks and trust companies for construction of homes. Reform Reform COMMUNICATIONS ACT – regulated communication for wire and radio. ReformReform NATIONAL HOUSING ACT -- construction of low cost public housing and slum clearance.ReformReform SOIL CONSERVATION ACT -- established federal soil conservation services.ReliefRelief RESETTLEMENT ADMINISTRATION -- built new model communities for low income city workersReformReform RURAL ELECTRIFICATION ADMINISTRATION -- created and administered program of bringing electricity to rural areas.ReliefRelief NATIONAL YOUTH ADMINISTRATION -- federal work relief and employment for young people.

FDR Visits Virginia FDR Visits Virginia (00:49)(00:49)

The Hundred DaysThe Hundred Days

• Recall-Recall- What did Roosevelt promise What did Roosevelt promise in his inaugural address?in his inaugural address?

• IdentifyIdentify – Who worked together on – Who worked together on the New Deal?the New Deal?

• RateRate – How would you judge the – How would you judge the value of programs such as CWA, the value of programs such as CWA, the CCC, and the TVA?CCC, and the TVA?

Main Idea 2:Main Idea 2: Critics expressed concerns about Critics expressed concerns about

the New Deal.the New Deal.

New Deal: New Deal: Goes Too FarGoes Too Far

• Criticized expansion expansion of federal of federal governmentgovernment

• American Liberty League argued New Deal gave president too much authority.too much authority.

• Business leaders concerned about potentially higher higher taxestaxes

New Deal: New Deal: Not EnoughNot Enough

• U.S. senator Huey Huey LongLong believed the rich should pay rich should pay extra taxesextra taxes to support the poor.

• Some felt that the New Deal helped New Deal helped only business only business interests.interests.

Radical Reactions to the New Deal

Conservative Reactions to the New Deal

• Believed the New Deal did not go far enoughnot go far enough in reforming the economy

• Wanted a complete overhaul of capitalismcomplete overhaul of capitalism

• Huey P. Long, Father Charles Coughlin, Dr. Francis Huey P. Long, Father Charles Coughlin, Dr. Francis TownsendTownsend

• Attacked the New Deal as a radical break with traditional American ideals

• Thought the New Deal would drive the country to New Deal would drive the country to destructiondestruction. .

• American Liberty LeagueAmerican Liberty League

Trouble for the New DealTrouble for the New Deal

Leading Critics of the Leading Critics of the New DealNew Deal

• Huey P. LongHuey P. Long (senator from Louisiana)

– Believed Roosevelt’s policies were too friendly to banks and businessmen (started the Share Our Wealth SocietyShare Our Wealth Society)

• Father Charles CoughlinFather Charles Coughlin (the “radio priest”)

– Believed Roosevelt was not doing enough to curb the power of not doing enough to curb the power of bankers and financial leadersbankers and financial leaders

• Dr. Francis TownsendDr. Francis Townsend

– Criticized the New Deal for not doing enough for older not doing enough for older AmericansAmericans (wanted pensions for people over 60)

• The American Liberty LeagueThe American Liberty League

– Believed that the New Deal went too far and was anti-businessNew Deal went too far and was anti-business

• Opposition from the courts

– Critics of the New Deal feared that it gave the president too president too much powermuch power over other branches of government.

– Schechter Poultry CorporationSchechter Poultry Corporation v. v. United StatesUnited States

– United StatesUnited States v. v. Butler Butler

New Deal CriticsNew Deal Critics

• Recall-Recall- What stopped Huey Long What stopped Huey Long from running for President?from running for President?

• ExplainExplain – Why were business – Why were business leaders critical of New Deal leaders critical of New Deal programs?programs?

• RateRate – What do you think about – What do you think about Long’s “Share Our Wealth” idea?Long’s “Share Our Wealth” idea?

• America showed support of Roosevelt in the Congressional elections of 1934.

• Roosevelt continued to introduce additional New Deal legislation

– These laws became known as the Second New Deal.

• First lady Eleanor Roosevelt was an active supporter of New Deal programs

Main Idea 3:Main Idea 3: New Deal programs continued New Deal programs continued

through Roosevelt’s first term in what through Roosevelt’s first term in what became known as the Second New became known as the Second New

Deal.Deal.

Selected Second New Deal Selected Second New Deal ProgramsPrograms

Works Progress AdministrationWorks Progress Administration– employed 8.5 million

National Youth AdministrationNational Youth Administration– gave part-time jobs to young workers

• Social Security ActSocial Security Act– passed in 1935, worked to provide some financial security for the elderly, the disabled, children, and the unemployed– Placed new tax on workers and employers– First time the federal government took

direct responsibility for many citizens’ economic well-being

New Deal Labor ProgramsNew Deal Labor Programs• National Industrial Recovery ActNational Industrial Recovery Act passed in 1933.

– Required minimum wageminimum wage and allowed collective bargaining

– Declared unconstitutionalunconstitutional by Supreme Court in 1935

• National Labor Relations Act, or the Wagner ActWagner Act

– Allowed workers to join labor unionsAllowed workers to join labor unions

– Established the National Labor Relations BoardNational Labor Relations Board to oversee union activities

• Congress of Industrial OrganizationsCongress of Industrial Organizations

– Organized workers into unions based on industryindustry, not skill level

– Allowed African Americans, Hispanics, women, and African Americans, Hispanics, women, and immigrantsimmigrants as members

– Led a sit-down strikesit-down strike against General Motors in which they stayed in the factories so that they could not be replaced by new workers

The New Deal ContinuesThe New Deal Continues

• Recall-Recall- How many people were How many people were employed by the WPA?employed by the WPA?

• IdentifyIdentify – What were two benefits of – What were two benefits of Eleanor Roosevelt’s NYA?Eleanor Roosevelt’s NYA?

• ExplainExplain – What was unusual about the – What was unusual about the passage of the Social Security Act?passage of the Social Security Act?

• AnalyzeAnalyze – In what way did Americans – In what way did Americans show their support for Roosevelt and show their support for Roosevelt and his programs in the 1934 election?his programs in the 1934 election?

The New Deal ContinuesThe New Deal Continues

• Recall-Recall- What happened to the What happened to the NIRA?NIRA?

• Draw ConclusionsDraw Conclusions – In what – In what way was the CIO helpful to way was the CIO helpful to unskilled workers?unskilled workers?

• EvaluateEvaluate – What do you think – What do you think about the CIO’s attitude toward about the CIO’s attitude toward membership?membership?

Main Idea 4:Main Idea 4:Roosevelt clashed with the Roosevelt clashed with the

Supreme Court over the New Supreme Court over the New Deal.Deal.

• Roosevelt was reelected in 1936 by a huge margin.

• Supreme Court issued a series of rulings declaring several New Deal programs unconstitutional.

• Roosevelt responded by proposing a plan for reorganizing federal judiciary.reorganizing federal judiciary.– Drew harsh criticism from Congress and public

– Critics charged that Roosevelt was trying to change the Roosevelt was trying to change the balance of powerbalance of power defined in the U.S. Constitution. (Court Packing)(Court Packing)

– Congress rejected the bill.

• The Supreme Court did not overturn any more New Deal legislation.

Clashes with the CourtClashes with the Court

• Identify-Identify- Which branch of the federal Which branch of the federal government was not controlled by the government was not controlled by the Democrats in 1936?Democrats in 1936?

• DefineDefine – What is meant by “court – What is meant by “court packing”?packing”?

• CompareCompare – How did the actions of – How did the actions of President Roosevelt, the Supreme Court President Roosevelt, the Supreme Court and Congress illustrate the systems of and Congress illustrate the systems of Checks and Balances within the U.S. Checks and Balances within the U.S. government?government?