Beginning of the Great Depression

Black Friday: Stock Market crash, 1929 Economy nose dives 1929-1933 President Hoover: considered ineffective Hoovervilles: shanty towns filled with

unemployed Bonus Army demanded WWI bonuses in

1932 Marched on Washington; US Army put down

Bonus Army shacks burn

Hoovervilles

The New Deal

The New Deal: FDR and Democrats Plan to End the Great Depression March 9, 1933 FDR called Cong. into special

session to address crisis of the Depression 3 goals of the New Deal: 1. RELIEF for the unemployed 2. RECOVERY of business & agriculture 3. REFORM of gov’t and economic institutions “Hundred Days”: Mar. 9-June16, 1933 15 major bills passed by Congress

Roosevelt’s Philosophy

Viewed Depression as an emergency on same level as if nation at war

Situation required increased role of federal gov’t

“The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and to try it. If it fails, admit it frankly and try another. But above all, try something!” FDR 5/22/32

Roosevelt’s “Brain Trust”

Sought advice from diverse group of men and women

Professionals and academics included in FDR’s team

FDR wanted a variety of opinions and ideas on how to attack the Depression

“Bank Holiday”

FDR closed all nation’s banks for 8 days – aimed to end runs on the banks

Banks would be examined and allowed to reopen if proved they were financially sound

Congress created the FDIC in June ‘33 (Federal Deposit Insurance Corporation)

purpose: to insure bank deposits – if bank failed, depositor would get money back

These measures ended runs on banks and restored public’s confidence in banking indus.

CCC – Civilian Conservation Corps

Created in Mar. ’33 Purpose: relief for unemployed Content / Accomplishments: provided jobs

for young men (age 18-25) in reforestation and conservation work

Lived in camps; shelter, food & clothing provided

Paid wages (portion was sent home to family) Lasted 9 yrs; employed 2.9 mill.

NIRA / NRA:National Industrial Recovery Act June ’33 Purpose: recovery of business Permitted manufacturers to draw up industry wide

“codes of fair practice” to raise prices and limit production (suspended antitrust legislation)

Child labor outlawed; min. wage and max. hours were established

Workers guaranteed collective bargaining rights National Recovery Adminis. set up to administer the

program (symbol: blue eagle) Also created the PWA (Public Works Administration)

Criticisms of the NIRA

Declared unconstitutional by Supreme Court in May ’35

Court ruled that it gave the President lawmaking powers and regulated local, rather than interstate commerce

Labor protections reenacted in Wagner Act (Nat’l Labor Relations Act) and Fair Labor Standards Act

Wagner Act (1935)

Guaranteed unions collective bargaining rights

Outlawed discrimination against workers due to union membership / activities (spying on union activities and blacklisting)

Set up NLRB (Nat’l Labor Relations Board) to enforce law’s provisions

Fair Labor Standards Act (1938)

Banned child labor (under age 16 could not work in factories)

Established national minimum wage and max. workweek

SEC – Securities and Exchange Commission Created in 1934 Purpose: reform Content: Federal gov’t would regulate stock

exchanges; SEC set up to do this SEC given power to tell companies what info

must be included in financial statements

AAA – Agricultural Adjustment Administration Created in May 1933 Purpose: recovery of agriculture Content / Accomplishments:

3 goals: save farmers homes, raise prices of farm products, limit agric. production

Created subsidies; farmers were paid (from $ raised by new tax) to remove acreage from production; this limited supply and raised prices for farm products

Criticisms of AAA

Many farmers had already planted so plowed crops under at same time many were going hungry

AAA declared unconstitutional in 1936 by Supreme Court; tax to fund subsidies was unconstitutional

FDR’s “Court Packing Scheme”

FDR upset by Supreme Court striking down New Deal programs (NIRA, AAA)

Asked Congress to increase size of Supreme Court (6 more members) – why?

stated reason: many justices elderly & overworked; this would relieve the burden on them

unstated reason: app’t more liberal justices who would support the New Deal & sway court in FDR’s favor

Reaction to FDR’s Plan

Negative public reaction; Congress did not pass the bill

Accused FDR of trying to increase Presidential power & upset balance (separation) of powers in federal gov’t

Impact of FDR’s attempt: - FDR lost political support public less willing to accept new programs

In long run, Court became more accepting of New Deal; FDR able to influence court w/ app’ts

TVA: Tennessee Valley Authority

Created in May 1933 Purpose: recovery Content / Accomplishments:

3 goals: hydroelectric power development, flood control, prevention of soil erosion

Dams built on Tennessee River to achieve above goals

Created jobs and provided cheap electricity for rural areas (along with REA)

WPA: Works Progress Administration

Created April 1935; consolidated many other programs together in one agency

Purpose: relief for unemployed Headed by Harry Hopkins 1935-1943 spent $11 bill. and employed 8.5 mill.

people constructing public works such as roads, bridges, schools, courthouses, libraries, hospitals, playgrounds, airfields, etc.

Largest New Deal program Also included Federal Art, Writers’, and Theatre

Projects

Social Security Act

Passed in 1935 Purpose: reform; provide security in form of

regular payments to people who could not support themselves

Funded by payroll tax 3 types of payments: 1. old-age pensions 2. Unemployment insurance 3. Aid for dependent children and disabled

persons

New Deal: Positive

Raised incomes Preserved natural resources Provided cushion for sick & aged Enabled unions to organize Added to material wealth of nation Guaranteed safety of bank deposits Reduced unemployment

New Deal: Negative

Increased national debt Doubled size of federal gov’t Created large bureaucracy Failed to increase private business activity 7.5 mill. remained unemployed Many said federal gov’t assumed too much

power (socialistic) Did not end Great Depression (WW II did)

Lasting Legacy of New Deal

Increased size and role of federal gov’t

(doubled size of fed. gov’t and created large, inefficient bureaucracy)

Fed. gov’t took more active role in people’s lives – decreased powers of the states

Created attitude among Americans that federal gov’t is responsible for people’s welfare and should guarantee us a certain standard of living