A.P.
U.S. History Notes
Chapter 34: “The Great Depression and the New Deal”
~
1933 – 1938 ~
I.
FDR:
A Politician in a Wheelchair
1.
In
1932, voters still had not seen any improvement, and wanted a new president.
2.
President
Herbert Hoover was nominated again without much vigor and true enthusiasm,
and he campaigned saying that his policies prevented the Great Depression
from being worse than it was.
3.
The
Democrats nominated Franklin Delano Roosevelt, a tall, handsome man who
was the fifth cousin of famous Theodore Roosevelt and had followed in his
footsteps.
i.
FDR
was suave and conciliatory while TR was pugnacious and confrontational.
ii.
FDR
was stricken with polio in 1921, and during this time, his wife, Eleanor,
became his political partner.
a.
Eleanor
was to become the most active First Lady ever.
iii.
Franklin
also lost a friend in 1932 when he and Al Smith both sought the
Democratic nomination.
II.
Presidential
Hopefuls of 1932
1.
In
the campaign, Roosevelt seized the opportunity to prove that he was not an
invalid, and his campaign also featured an attack on Hoover’s spending
(ironically, he would spend even more during his term).
2.
The
Democrats found expression in the airy tune “Happy Days Are Here Again,” and
clearly, the Democrats had the advantage in this race.
III.
The
Humiliation of Hoover in 1932
1.
Hoover
had been swept into the presidential office in 1928, but in 1932, he was swept out
with equal force, as he was defeated 472 to 59.
2.
Noteworthy
was the transition of Blacks from the Republican to the Democratic Party.
3.
During
the lame-duck period, Hoover tried to initiate some of Roosevelt’s plans but
was met by stubbornness and resistance.
4.
Hooverites
would later accuse FDR of letting the depression worsen so that he could emerge
an even more shining savior.
IV.
FDR
and the Three R’s: Relief, Recovery, and Reform
1.
On
Inauguration Day, FDR asserted, “the only thing we have to fear is fear
itself.”
2.
He
called for a nationwide banking holiday to eliminate paranoid bank withdrawals,
and then commenced on his Three R’s.
3.
The
Democratic-controlled Congress was willing to do as FDR said, and the first 100
days of FDR’s administration were filled with more legislative activity than
ever before.
i.
Many
of the New Deal Reforms had been adopted by European nations a decade before.
V.
Roosevelt
Tackles Money and Banking
1.
The
Emergency Banking Relief Act of 1933 as passed first.
2.
Then,
Roosevelt settled down for the first of his thirty famous “Fireside Chats.”
3.
The
“Hundred Days Congress” passed the Glass-Steagall Banking Reform Act,
that provided the Federal Deposit Insurance Corporation, which insured
individual deposits up to $5000, thereby eliminating the epidemic of bank
failure and restoring faith to banks.
4.
FDR
then took the nation off of the gold standard and achieved controlled inflation
by ordering Congress to buy gold at increasingly higher prices.
i.
In
February 1934, he announced that the U.S. would pay foreign gold at a rate of
one ounce of gold per very $35 due.
VI.
Creating
Jobs for the Jobless
1.
Roosevelt
had no qualms about using federal money to assist the unemployed, so he created
the Civilian Conservation Corps (CCC), which provided employment in
fresh-air government camps for about 3 million uniformed young men.
i.
They
reforested areas, became fire fighters, drained swamps, and controlled floods.
ii.
However,
critics accused FDR of militarizing the youths and acting as dictator
2.
The
Federal Emergency Relief Act looked for immediate relief rather than
long-term alleviation, and its Federal Emergency Relief Administration
(FERA) was headed by the zealous Harry L. Hopkins.
3.
The
Agricultural Adjustment Act (AAA) made available many millions of
dollars to help farmers meet their mortgages.
4.
The
Home Owners’ Loan Corporation (HOLC) refinanced mortgages on non-farm
homes and bolted down the loyalties of middle class, Democratic homeowners.
5.
The
Civil Works Administration (CWA) was established late in 1933, and it
was designed to provide purely temporary jobs during the winter emergency.
i.
Many
of its tasks were rather frivolous and were designed for the sole purpose of
making jobs.
6.
One
FDR opponent was Father Charles Coughlin, a Catholic priest in Michigan
who disliked the New Deal and voiced his opinions on radio.
7.
Senator
Huey P. Long of Louisiana was popular for his “Share the Wealth”
program, where every family was to receive $5000, allegedly from the rich.
i.
His
chief lieutenant was former clergyman Gerald L. K. Smith.
ii.
He
was later shot by a deranged medical doctor in 1935.
8.
Dr. Francis E. Townsend of California attracted the trusting support of
perhaps 5 million “senior citizens” with his fantastic plan of each senior
receiving $200 month, provided that all of it would be spent within the month.
9.
Congress
also authorized the Works Progress Administration (WPA) in 1935, which
put $11 million on thousands of public buildings, bridges, and hard-surfaced
roads and gave 9 million people jobs in its eight year existence.
i.
It
also found part-time jobs for needy high school and college students and for
actors, musicians, and writers.
ii.
John
Steinbeck counted dogs in his California county.
VII.
A
Helping Hand for Industry and Labor
1.
The
National Recovery Administration (NRA), by far the most complicated of
the programs, was designed to assist industry, labor, and the unemployed.
i.
There
were maximum hours of labor, minimum wages, and more rights for labor union
members, including the right to choose their own representatives in
bargaining.
ii.
The
Philadelphia Eagles were named after this act, which received much support and
patriotism, but eventually, it was shot down by the Supreme Court.
a.
Besides
too much was expected of labor, industry, and the public.
2.
The
Public Works Administration also intended both for industrial recovery
and for unemployment relief.
i.
Headed
by Secretary of the Interior Harold L. Ickes, it aimed at long-range
recovery by spending over $4 billion on some 34,000 projects that included
public buildings, highways, and parkways (i.e. the Grand Coulee Dam of
the Columbia River).
3.
One
of the Hundred Days Congress’s earliest acts was to legalize light wine and
beer with an alcoholic content of 3.2% or less and also levied a $5 tax on
every barrel manufactured.
i.
Prohibition
was officially repealed with the 21st Amendment.
VIII.
Paying
Farmers Not to Farm
1.
To
help the farmers, which had been suffering ever since the end of World War I,
Congress established the Agricultural Adjustment Administration, which
paid farmers to reduce their crop acreage and would eliminate price-depressing
surpluses.
i.
However,
it got off to a rocky start when it killed lots of pigs for not good reason,
and paying farmers not to farm actually increased unemployment.
ii.
The
Supreme Court killed it in 1936.
2.
The
New Deal Congress also passed the Soil Conservation and Domestic Allotment
Act of 1936, which paid farmers to plant soil-conserving plants like
soybeans or to let their land lie fallow.
3.
The
Second Agricultural Adjustment Act of 1938 was a more comprehensive
substitute that continued conservation payments but was accepted by the Supreme
Court.
IX.
Dust
Bowls and Black Blizzards
1.
After
the drought of 1933, furious winds whipped up dust into the air, turning parts
of Missouri, Texas, Kansas, Arkansas, and Oklahoma into the Dust Bowl
and forcing many farmers to migrate west to California (ala The Grapes of
Wrath).
i.
The
dust was very hazardous to the health and to living, creating further misery.
2.
The
Fazier-Lemke Farm Bankruptcy Act, passed in 1934, made possible a
suspension of mortgage foreclosure for five years, but it was voided in 1935 by
the Supreme Court.
3.
In
1935, FDR set up the Resettlement Administration, charged with the task
of removing near-farmless farmers to better land.
4.
Commissioner of Indian Affairs John Collier sought to reverse the
forced-assimilation policies in place since the Dawes Act of 1887.
i.
He
promoted the Indian Reorganization Act of 1934 (the Indian “New Deal”),
which encouraged tribes to preserve their culture and traditions.
ii.
Not
all Indians liked it; 77 tribes refused to organize under its provisions (200
did).
X.
Battling
Bankers and Big Business
1.
The
Federal Securities Act (“Truth in Securities Act”) required promoters to
transmit to the investor sworn information regarding the soundness of their
stocks and bonds.
2.
The
Securities and Exchange Commission was designed as a watchdog
administrative agency, and stock markets henceforth were to operate more as
trading marts than as casinos.
3.
In
1932, Chicagoan Samuel Insull’s multi-billion dollar financial empire
had crashed, and such cases as his resulted in the Public Utility Holding Company
Act of 1935.
XI.
The
TVA Harnesses the Tennessee River
1.
The
sprawling electric-power industry attracted the fire of New Deal reformers.
i.
New
Dealers accused it of gouging the public with excessive rates.
2.
Thus,
the Tennessee Valley Authority (1933) sought to discover exactly how
much money it took to produce electricity and then keep rates reasonable.
i.
It
constructed dams on the Tennessee River and helped the 2.5 million extremely
poor citizens of the area improve their lives and their conditions.
ii.
Hydroelectric
power of Tennessee would give rise to that of the West.
XII.
Housing
Reform and Social Security
1.
To
speed recovery and better homes, FDR set up the Federal Housing
Administration (FHA) in 1934 to stimulate the building industry through
small loans to householders.
i.
It
was one of the few “alphabetical” agencies to outlast the age of Roosevelt.
2.
Congress
bolstered the program in 1937 by authorizing the U.S. Housing Authority
(USHA), designed to lend money to states or communities for low-cost construction.
i.
This
was the first time in American history that slum areas stopped growing.
3.
The
Social Security Act of 1935 was the greatest victory for New Dealers,
since it created pension and insurance for the old-aged, the blind, the
physically handicapped, delinquent children, and other dependents by taxing
employees and employers.
i.
Republican
attacked this bitterly.
XIII.
A
New Deal for Unskilled Labor
1.
A
rash of walkouts occurred in the summer of 1934, and after the NRA was axed,
the Wagner Act (aka National Labor Relations Act) of 1935 took its
place.
i.
Under
the encouragement of a highly sympathetic National Labor Relations Board,
unskilled laborers began to organize themselves into effective unions, one of
which was John L. Lewis, the boss of the United Mine Workers who
also succeeded in forming the Committee for Industrial Organization
(CIO) within the ranks of the AF of L in 1935.
ii.
The
CIO later left the AF of L and won a victory against General Motors.
XIV.
Roosevelt’s
“Coddling” of Labor
1.
The
CIO also won a victory against the United States Steel Company, but
smaller steel companies struck back, resulting in such incidences as the Memorial
Day Massacre of 1937 at the plant of the Republic Steel Company of South
Chicago in which police fired upon workers, leaving scores killed or
injured.
2.
In
1938, the Fair Labor Standards Act (Wages and Hours Bill) was passed,
setting up minimum wage and maximum hours standards and forbidding children
under the age of sixteen from working.
3.
Roosevelt
enjoyed immense support from the labor unions.
4.
In
1938, the CIO broke completely with the AF of L and renamed itself the Congress
of Industrial Organizations (the new CIO).
XV.
Landon
Challenges “the Champ” in 1936
1.
The
Republicans nominated Kansas Governor Alfred M. Landon to run against
FDR.
i.
Landon
was weak on the radio and weaker in personal campaigning, and while he
criticized FDR’s spending, he also favored enough of FDR’s New Deal to be
ridiculed by the Democrats as an unsure idiot.
2.
In
1934, the American Liberty League had been formed by conservative
Democrats and wealthy Republicans to fight “socialistic” New Deal schemes.
3.
Roosevelt
won in a super huge landslide, getting 523 Electoral votes to Landon’s 8.
4.
FDR
won primarily because he appealed to the “forgotten man,” whom he never forgot.
XVI.
Nine
Old Men on the Supreme Bench
1.
The
20th Amendment had cut the lame-duck period down to six
weeks, so FDR began his second term on January 20, 1937, instead of on March 4.
2.
He
controlled Congress, but the Supreme Court kept on blocking his programs, so he
proposed a shocking plan that would add a member to the Supreme Court for every
existing member over the age of 70, for a maximum possible total of 15 total
members.
i.
For
once, Congress voted against him because it did not want to lose its power.
3.
Roosevelt
was ripped for trying to be a dictator.
XVII.
The
Court Changes Course
1.
FDR’s
“court-packing scheme” failed, but he did get some of the justices to start to
vote his way, including Owen J. Roberts, formerly regarded as a
conservative.
2.
So,
FDR did obtain his purpose of getting the Supreme Court to vote his way.
3.
However,
his failure of the court-packing scheme also showed how Americans still did not
wish to tamper with the sacred justice system.
XVIII. The Twilight of the New Deal
1.
During
Roosevelt’s first term, the depression did not disappear, and unemployment,
down from 25%, was still at 15%.
i.
In
1937, the economy took another (brief) downturn when the “Roosevelt recession,”
caused by government policies, occurred.
ii.
Finally,
FDR embraced the policies of British economist John Maynard Keynes.
2.
In
1937, he announced a bold program to stimulate the economy by planned deficit
spending.
3.
In
1939, Congress relented to FDR’s pressure and passed the Reorganization Act,
which gave him limited powers for administrative reforms, including the key new
Executive Office in the White House.
4.
The
Hatch Act of 1939 barred federal administrative officials, except the
highest policy-making officers from active political campaigning and
soliciting.
XIX.
New
Deal or Raw Deal?
1.
Foes
of the New Deal condemned its waste, citing that nothing had been accomplished.
2.
Critics
were shocked by the “try anything” attitude of FDR, who had increased the
federal debt from $19.487 million in 1932 to $40.440 million in 1939.
3.
It
took World War II, though, to really lower unemployment, but the war
also created a heavier debt than before.
XX.
FDR’s
Balance Sheet
1.
New
Dealers claimed that the New Deal had alleviated the worst of the Great
Depression.
2.
FDR
also deflected popular resentments against business and may have saved the American
system of free enterprise, yet business tycoons hated him.
3.
He
provided bold reform without revolution.
4.
Later,
he would guide the nation through a titanic war in which the democracy of the
world would be at stake.
