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10/28/16
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Chapter 32TheGreatDepressionandtheNewDeal,
1933–1939
Presented by:
Mr. Anderson, M.Ed., J.D.
I.FDR:PoliticianinaWheelchair• Roosevelt's personality
– Shapedbystrugglewithinfantileparalysis:• Putadditionalsteelinhissoul• Sufferinghumbledhim• Schooledhimselfinpatience,tolerance,compassion,andstrengthofwill
– Apersonalandpoliticalassetwashiswife,Eleanor:
– Distant cousin ofFranklin– Overcamemisery ofunhappy childhood– Emerged aschampion ofdispossessed– Ultimately “conscience oftheNew Deal”
I.FDR:PoliticianinaWheelchair(cont.)
– FDR's political careerasmuchhersas itwas his– Mrs.Roosevelt also marched toherown drummer
» Joined Women's TradeUnion LeagueandLeagueofWomenVoters
– Moving into White House, she brought unprecedented number ofwomen activists
– Network helped makehermostactiveFirst Ladyin history– Shepowerfully influenced policies ofnational government
– Shebattled for impoverished andoppressed– Personnel relationship with FDRrocky,due tohis infidelities– Condemned byconservatives and lovedby liberals, shewas oneofmost controversial—and consequential—pub lic figures of1900s
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I.FDR:PoliticianinaWheelchair(cont.)
• FranklinRoosevelt's political appeal:– PremierAmericanoratorofhisgeneration– AspopulardepressiongovernorofNewYork:
• Sponsoredheavystatespendingtorelievehumansuffering
• Believedmoney,ratherthanhumanity,expendable• Revealeddeepconcernforplightof“forgottenman”• Assailedbyrichas“traitortohisclass”
I.FDR:PoliticianinaWheelchair(cont.)
• Democratic National Convention (July1932)inChicago speedilynominated Roosevelt– Democraticplatform:
• Promisedbalancedbudget• Sweepingsocialreforms• FDRflewtoChicagoandacceptednominationinperson
• Hiswords,“Ipledgeyou,IpledgemyselftoanewdealfortheAmericanpeople”
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II.PresidentialHopefuls of1932– Roosevelt:
• ConsistentlypreachedNewDealfor“forgottenman”• Hewasannoyinglyvagueandsomewhatcontradictory• Manyofhisspeechesghostwrittenby“BrainsTrust”(popularlyBrainTrust)
– Small groupof reform-minded intellectuals– Kitchen cabinet, who authored muchNew Deal legislation– FDRrashly promised balanced budget– And berated heavyHooverian deficits
II.PresidentialHopefuls of1932(cont.)
– Hoover:• RemainedinWhiteHouse:
– Conscientiously battling depression– Outoncampaign, supporters halfheartedly assured half-listening voters
– Insisted Roosevelt's impending victorywould plunge nationdeeper into depression
• WithcampaigngoingbadlyforRepublicans,– Hoover took tostump– Reaffirmed his faith in American freeenterprise andindividual initiative
III.Hoover's Humiliation in1932
• Election of1932:– Hooverhadbeensweptintoofficeonrisingtideofprosperity
– Hewassweptoutofofficebyrecedingdepression– Votes:
• 22,809,638forRoosevelt;15,758,901forHoover• Electoralcount472to59• Hoovercarriedonlysixrock-ribbedRepublicanstates
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III.Hoover'sHumiliation in1932(cont.)
• Featuresofelection:– DistinctshiftofblackstoRooseveltcamp
• Victimsofdepression• ShiftedtoDemocraticParty,especiallyinurbancentersofNorth
– HardtimesruinedRepublicans:• Voteasmuchanti-Hooverasitwaspro-Roosevelt• Democratsvoiceddemandforchange:
– A new deal rather than theNewDeal
III.Hoover'sHumiliation in1932(cont.)
• Lameduckperiod:– Hoovercontinuedtobepresidentfor4longmonths,untilMarch4,1933• Helplesstoembarkuponanylong-rangepolicieswithoutcooperationofRoosevelt
• President-electuncooperative• HooverarrangedtwomeetingswithRoosevelttogetFDRtoagreetoanti-inflationarypolicythatwouldhavepreventedmostNewDealexperiments
– Inpolitics,thewinner,notloser,callstune
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III.Hoover'sHumiliation in1932(cont.)
• Washington deadlocked:– Economyclankedtovirtualhalt– Oneworker infour,unemployed– BankslockedtheirdoorsthroughoutU.S.– SomeHooveritesaccusedRooseveltofdeliberatelypermittingdepressiontoworsensohecouldemergemorespectacularlyassavior
IV.FDRandtheThree R's:Relief,Recovery, Reform
• Inauguration Day,March4, 1933:– Rooseveltdenounced“moneychangers” whobroughtoncalamity
– DeclaredgovernmentmustwagewaronGreatDepression
– Moveddecisively:• Boldlydeclarednationwidebankingholiday,March6-10• SummonedCongressintospecialsessiontocopewithnationalemergency:
IV.FDRandtheThreeR's:Relief,Recovery,Reform(cont.)
• Hundred Days(March9-June 16,1933):– Congresscrankedoutunprecedentedremediallegislation(seeTable32.1)
– Newmeasurestodealwithdesperateeconomy– AimedatthreeR's:relief, recovery, andreform– Short-rangegoals—reliefandimmediaterecoveryintwoyears
– Long-rangegoals—permanentrecoveryandreformofcurrentabuses
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Table 32-1 p746
IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)
• Roosevelt's Hundred DaysCongress:– RubberstampedbillsdraftedbyWhiteHouse– Roosevelt's“mustlegislation” gavehimextraordinaryblank-checkpowers
– Someofthenew lawsdelegated legislativeauthoritytochiefexecutive
– PassedmanyessentialNewDeal“threeR's”thoughlong-rangemeasuresaddedlater
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IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)
• NewDealers embraced progressiveideas:• Unemploymentinsurance,old-ageinsurance• Minimum-wageregulations• Conservationanddevelopmentofnaturalresources• Restrictionsonchildlabor
– Inventedsomenewschemes:• TennesseeValleyAuthority
– NolongerwouldAmericalookasbackwardinrealmofsocialwelfareasitoncehad
V.RooseveltManagestheMoney
• Bankingchaos—immediate action:– EmergencyBankingReliefActof1933:
• InvestedPresidentwithpowertoregulatebankingtransactionsandforeignexchange
• Toreopensolventbanks
• Roosevelt turned toradio:– Delivered firstof30famous“firesidechats”– Nowsafetokeepmoneyinreopenedbanks– Confidencereturned;banksunlockeddoors
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V.RooseveltManagestheMoney(cont.)
• Glass-Steagall BankingReformAct:– CreatedFederalDepositInsuranceCorporation:
• Insuredindividualdepositsupto$5,000(laterraised)• Endedbankfailures,datingbackto“wildcat”daysofAndrewJackson(seeFigure32.1)
• Declining goldreserves:• FDRorderedallprivateholdingsofgoldbesurrenderedtoTreasuryinexchangeforpapercurrency
• Thentooknationoffgoldstandard• Congresscanceledgold-paymentclauseinallcontracts
Figure 32-1 p747
V.RooseveltManagestheMoney(cont.)
• Authorizedrepaymentinpapercurrency
– A“managedcurrency” onitsway:• FDR's“managedcurrency” wasinflation:
– Which hebelieved would relieve debtors' burdens– And stimulate newproduction
• Principalinstrumentforachievinginflationwasgoldbuying
– InstructedTreasurytopurchasegoldatincreasingprices—priceofgoldincreasedfrom$21anounce(1933)to$35anounce(1934)• Apricethatheldforfourdecades
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V.RooseveltManagestheMoney(cont.)
• Policydidincreaseamountofdollarsincirculation• Inflationaryresultprovokedwrathof“sound-money”criticson“baloneydollar”
• GoldschemecametoendinFebruary1934,whenRooseveltreturnedtolimitedgoldstandardforinternationaltradepurposes
– United Statespledged topayforeign bills, if requested, ingold atrateofoneounce ofgold forevery$35 due
• Domesticcirculationofgoldcontinuedtobeprohibited
– Gold coinsbecamecollector's items
VI.CreatingJobs fortheJobless
• Overwhelming unemployment:– Oneoutoffourworkersjobless
• Highestlevelofunemploymentinnation'shistory• Roosevelthadnohesitancyaboutusingfederalmoneytoassistunemployed
• Atsametime“primethepump” ofindustrialrecovery
VI.CreatingJobs fortheJobless(cont.)
• Civilian Conservation Corps (CCC):– MostpopularofNewDeal“alphabeticalagencies”• Providedemploymentinfresh-airgovernmentcampsforaboutthreemillionyoungmen
• Usefulwork—includingreforestation– Firefighting (47 lives lost), flood control, swamp drainage
• Recruitsrequiredtohelpparentsbysendinghomemostoftheirpay
• Bothhumanandnaturalresourcesconserved
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VI.CreatingJobs fortheJobless(cont.)
– CriticsofCCC:• Minorcomplaintsof“militarizingthenation'syouth”
– Adultunemployment:• FederalEmergencyReliefAdministration(FERA):
– Under HarryL. Hopkins– Hopkins's agencygranted$3billion tostates fordirect dolepayments orpreferably forwageson work projects
VI.CreatingJobs fortheJobless(cont.)
• Relief forhard-pressed specialgroups:– AgriculturalAdjustmentAct(AAA):
• Mademillionsavailabletohelpfarmersmeetmortgages
– HomeOwners' LoanCorporation(HOLC):• Refinancedmortgagesonnonfarmhomes• Assistedamillionbadlypinchedhouseholds• Bailedoutmortgage-holdingbanks• Boltedloyaltiesofrelievedmiddle-classhomeownerssecurelytoDemocraticparty
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VI.CreatingJobs fortheJobless(cont.)
• CivilWorksAdministration (CWA)(1933):– SetupbyRoosevelthimself– UnderdirectionofHopkinsviaFERA
• Providedtemporaryjobsduringcruelwinteremergency
• Tensofthousandsofjoblessemployedatleafrakingandothermake-worktasks
• Schemewidelycriticizedaskindoflaborthatputpremiumonshovel-leaningslowmotion
Table 32-2 p749
VII.ADayforEveryDemagogue
• Persistence ofsuffering indicated emergencyrelief measuresneeded– Notonlytobecontinued,butsupplemented– Dangersignalwasappearanceofdemagogues—notablymagnetic“microphonemessiah”:• FatherCharlesCoughlinbeganbroadcastingin1930
– His slogan was“Social Justice”– Hisanti-New Dealmessages went to40million radio fans– Soanti-Semitic, fascistic, and demagogic thathewassilenced in1942byecclesiastical superiors
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VII.ADayforEveryDemagogue(cont.)
– Newbroodofagitatorscapitalizedonpopulardiscontent:• Dr.FrancisE.Townsendpromisedeveryoneoversixty$200amonth
• SenatorHueyP.Long(“Kingfish”)publicizedhis“ShareOurWealth” program
– Promised tomake“EveryManaKing”– Every familywould receive $5,000, supposedly atexpenseofprosperous
– FearofLongbecoming fascist dictator ended when hewasshot byanassassin inLouisiana in1935
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VII.ADayforEveryDemagogue(cont.)
– Demagogues(CoughlinandLong)raisedtroublingquestionsaboutlinkbetweenfascismandeconomiccrisis:
– Authoritarian rule strengthened in Japan– Adolf Hitler acquired absolute authority inGermany– Someworried Roosevelt would turn intodictator
• Toquietunrest,CongressauthorizedWorksProgressAdministration(WPA)in1935
– Objective was employment onuseful projects– Agencyultimately spent about $11billion on thousands ofpublic buildings, bridges, andhard-surfaced roads
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VII.ADayforEveryDemagogue(cont.)
• NoteveryWPAprojectstrengthenedinfrastructure– Onecontrolled crickets in Wyoming– Built amonkeypen in Oklahoma City
• MostlovedWPAprograms:– Federal ArtProject—hired artists tocreateposters andmurals
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VII.ADayforEveryDemagogue(cont.)
• Critics claimedWPAmeant“WeProvide Alms”• Overeight years,nearly ninemillion peoplegivenjobs, nothandouts:– Nourishedprecioustalent– Preservedself-respect– Fosteredcreationofmorethanamillionpiecesofart,manyofthempubliclydisplayed
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VIII.NewVisibility forWomen
– After19th Amendment,womenbegantocarvemorespaceinpoliticalandintellectuallife
– FirstLadyEleanormostvisiblewomaninRooseveltWhiteHouse
– SecretaryofLaborFrancisPerkins(1880-1965)became firstwomancabinetmember
– MaryMcLeodBethune(1875-1955)• DirectorofOfficeofMinorityAffairsinNationalYouthAdministration—servedashighest-rankingAfricanAmericaninRooseveltadministration
p752
VIII.NewVisibility forWomen(cont.)
• Women'scontribution insocial sciences:– Anthropology:
• RuthBenedict(1887-1948)carriedonworkofhermentor,FranzBoas(1858-1942)
– Bydeveloping “culture andpersonality movement” in1930s and1940s
– Benedict's landmark work:Pattern ofCulture (1934):» Established study ofcultures ascollective personalities» Eachculture, likeeach individual, had itsown “moreorless consistent pattern of thought andaction”
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VIII.NewVisibility forWomen(cont.)
• MargaretMead(1901-1978),studentofBenedict:– Herstudies ofadolescence amongPacific island peoplesadvancedbold new ideas about sexuality, gender roles, andintergenerational relationships
– 34books published andcuratorship atAmerican Museum ofNatural History, NewYork
– Popularized cultural anthropology andachieved celebritystatus rareamongsocial scientists
• PearlS.Buck(1892-1973):– Introduced American readers toChinese peasant society– Herbest selling novel, TheGood Earth (1931)earned NobelPrize forLiterature in1938
– Used her fametoadvancehumanitarian causes
IX.HelpingIndustry andLabor
• National RecoveryAdministration (NRA)– Mostcomplexandfar-reachingofNewDealprojects• Combineimmediatereliefwithlong-rangerecoveryandreform
• Triple-barreled:designedtoassistindustry,labor,andunemployed
– Individual industries would work outcodes of“faircompetition” under which hours of labor would be reduced
– Tospread employment tomorepeople– Aceiling placed onmaximumhours oflabor– A floor placed under wages toestablish minimum levels
p753
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IX.HelpingIndustry andLabor(cont.)
– Laborgrantedadditionalbenefits:• Workersformallyguaranteedrighttoorganize• Andbargaincollectivelythroughrepresentativesoftheirownchoosing—notagentsofcompany'schoosing
• “Yellowdog,” orantiunion,contractexpresslyforbidden
• Certainrestrictionsplacedonuseofchildlabor
IX.HelpingIndustry andLabor(cont.)
• NRA's “faircompetition” codes:– Calledforself-denialbymanagementandlabor– Patriotismarousedbymassmeetingsandparades
– BlueeagledesignedassymbolofNRA– Forbrieftime,anupswinginbusinessactivity
IX.HelpingIndustry andLabor(cont.)
– ProblemsofNRA:• Toomuchself-sacrificeexpectedoflabor,industry,andpublic
• “Ageofchiselry” asunscrupulousbusinessmen(“chiselers”)displayedblueeaglebutsecretlyviolatedcodes
• SupremeCourtkilledNRAinfamed“sickchicken”case– InSchechter (1935)Court ruled:– Congress could not“delegate legislative powers” toexecutive– Declared congressional control of interstate commercecouldnotapply toalocal business
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IX.HelpingIndustry andLabor(cont.)
– PublicWorksAdministration(PWA):• LikeNRA,intendedforindustrialrecoveryandunemploymentrelief
• HeadedbySecretaryofInterior,HaroldL.Ickes• $4billionspenton34,000projects:
– Public buildings, highways, and parkways– GrandCoulee DamonColumbia River (Washington):
» Irrigated millions ofacresofnew farmland» Created moreelectrical power than entire TennesseeValley Authority
» Transformed PacificNorthwest with abundant waterandpower
IX.HelpingIndustry andLabor(cont.)
– Liquorindustry:• Imminentrepealofprohibition:
– Afforded opportunity to raise federal revenue– And provide employment
• HundredDaysCongress– Legalized light wine andbeer with alcoholic content ofnomore than 3.2%byweight
– Levied taxof$5oneverybarrel somanufactured
• ProhibitionrepealedbyTwenty-firstAmendmentin1933(seeAppendix)
– Saloon doors swung open
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X.PayingFarmersNottoFarm
– Sufferingfarmers:• Sincewar-boomdaysof1918,sufferedlowpricesandoverproduction
• Depression—innumerablemortgagesforeclosed
– AgriculturalAdjustmentAdministration(AAA):• Through“artificialscarcity”establish“parityprices” forbasiccommodities
• “Parity” aspricesetforaproductthatgaveitsamevalue,inpurchasingpower,thatitenjoyedfrom1909-1914
X.PayingFarmersNottoFarm(cont.)
• AAAwouldeliminateprice-depressingsurplusesbypayinggrowerstoreducecropacreage
• Millionsraisedbytaxingprocessorsoffarmproducts,whointurnwouldshiftburdentoconsumers
• “Subsidizedscarcity”wouldraisefarmincome• Payingfarmersnottofarmincreasedunemployment• SupremeCourtkilledActin1936• CongresshastenedtopassSoilConservationandDomesticAllotmentActof1936
– Farmerspaid toplant soil-conserving crops or let land liefallow
X.PayingFarmersNottoFarm(cont.)
• EmphasisonconservationapprovedbySupremeCourt
– SecondAgriculturalAdjustmentActof1938:• Continuedconservationpayments• Ifgrowersobservedacreagerestrictionsonspecifiedcommodities,theywouldbeeligibleforparitypayments
• Goaltogivefarmersnotonlyfairerpricebutmoresubstantialshareofnationalincomepartiallyachieved
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XI.DustBowlsandBlackBlizzards
• Nature helped provide unplanned scarcity:– DustBowl:
• Droughtandwindtriggeredduststorms,buttheywerenotonlyculprits:
• Farmersboughtcountlessacresofmarginallandundercultivation
• Dry-farmingtechniquesandmechanizationhadrevolutionizedGreatPlainsagriculture
• Methodsleftpowderytopsoiltobesweptawayatnature'swhim(seeMap32.1)
XI.DustBowlsandBlackBlizzards(cont.)
• Tensofthousandsofrefugeesfledruinedfarms– Manysettled in San Joaquin Valley ofCalifornia– Yettransition wascruel– Dismal storyof these human tumbleweeds realisticallyportrayed by JohnSteinbeck, TheGrapes ofWrath (1939)
– Effortstorelievetheirburdens:• Frazier-LemkeFarmBankruptcyAct(1934):
– Made possible suspension ofmortgage foreclosures for fiveyears—voided nextyearbySupremeCourt
– Revised law, limiting graceperiod to threeyears, unanimously upheld
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XI.DustBowlsandBlackBlizzards(cont.)
• ResettlementAdministration(1935):– Charged with removing near-farmless farmers tobetter land– 200million young treessuccessfully planted onbareprairiesbyyoungmenofCivilian Conservation Corps
• NativeAmericansfeltfar-reachinghandofNewDealreform:
– Commissioner ofIndian Affairs John Collier sought to reverseforced-assimilation polices inplacesince DawesActof1887(seeChap. 26)
– Collier promoted Indian Reorganization Actof1934» “Indian NewDeal” encouraged tribes toestablish localself-government andpreserve native craftsand traditions
XI.DustBowlsandBlackBlizzards(cont.)
– New lawhelpedstoplossofIndianlandsand– Revivedtribes' interestinidentityandculture– NotallNativeAmericansapplaudedit:
• Somedenounceditas“back-to-the-blanket”measurethatwouldmakemuseumpiecesoutofIndians
• 77tribesrefusedtoorganizeunderit,thoughnearly200othersdidestablishtribalgovernments
Map 32-1 p756
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XII.BattlingBankersandBigBusiness– NewDealersdeterminedtoreform“moneychangers”• WhohadplayedfastandloosewithgullibleinvestorsbeforeWallStreetcrashof1929
– “TruthinSecuritiesAct” (FederalSecuritiesAct):• Requiredpromoterstotransmittoinvestorssworninformationregardingsoundnessofstocksandbonds
– SecuritiesandExchangeCommission(SEC)1934:• Watchdogagencytoprotectpublicagainstfraud,deception,andinsidemanipulation
– Stockmarkets would operate moreas trading marts and less asgambling casinos
XII.BattlingBankersandBigBusiness (cont.)
• NewDealers directed fire atpublic utilityholding companies:– Onesuchsupercorporationcollapsedin1932whenSamuel Insull'sfinancialempirecrashed
– PublicUtilityHoldingCompanyActof1935:• “Deathsentence” tosuchbloatedgrowth,exceptwhereitmightbedeemedeconomicallyneedful
XIII.TheTVAHarnessestheTennessee
– Electric-power industryattractedireofNewDealreformersforchargingexcessiverates:• Anindustrythatreacheddirectlyintopocketbooksofmillionsofcustomersforvitallyneededservices
• TennesseeRiverprovidedNewDealerswithopportunity:
– Bydeveloping hydroelectric potential ofentire area,Washington could combine immediate advantage:
» Employment of thousands ofpeople towork
» And long-term project for reforming power monopoly
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XIII.TheTVAHarnessestheTennessee (cont.)
• Tennessee Valley Authority (TVA) (1933)• VisionofSenatorGeorgeW.NorrisofNebraska• Fromstandpointof“plannedeconomy,” byfarmostrevolutionaryofallNewDealschemes
• Determinedtodiscoverpreciselyhowmuchitcosttoproductanddistributeelectricity
• Withthat“yardstick,” fairnessofrateschargedbyprivatecompaniescouldbejudged
• NewDealerspointedwithpridetoamazingachievementsofTVA
Map 32-2 p757
XIII.TheTVAHarnessestheTennessee (cont.)
– Benefitstoarea:• Fullemployment• Cheapelectricpower(seeFigure32.2)• Low-costhousing• Abundantcheapnitrates• Restorationoferodedsoil• Reforestation• Improvednavigation• Floodcontrol
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XIII.TheTVAHarnessestheTennessee (cont.)
• NewDealersagitatedforparallelenterprisesinvalleysofColumbia,Colorado,andMissouriRivers
• Conservativereactionagainst“socialistic” NewDealconfinedTVA'sbrandoffederallyguidedresourcemanagementandcomprehensiveregionaldevelopmenttoTennesseeValley(seeMap32.2)
Figure 32-2 p758
XIV.Housing andSocial Security
• NewDealhousing policies:– FederalHousingAdministration(1934):
• Buildingindustrystimulatedbysmallloanstohouse-holders:
– For improving their dwellings– Forcompleting new ones
• SopopularitoutlastedageofRoosevelt• Congressbolsteredprogramin1937byauthorizingUnitedStatesHousingAuthority(USHA):
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XIV.Housing andSocial Security(cont.)
– Agencydesigned to lend money tostates orcommunitiesfor low-cost construction
– 650,000 units started, tragically short ofneeds– Collided with opposition fromrealestatepromoters,builders, landlords, andanti-New Dealers
– Still slums areas ceasedgrowing andshrank
• Social Security Act1935:– Unemploymentinsuranceandold-agepensions– Oneofmostcomplicatedandfar-reachinglawsever topassCongress
XIV.Housing andSocial Security(cont.)
• Providedforfederal-stateunemploymentinsurancetocushionfuturedepressions
• Providedsecurityforoldage:– Specified categories of retired workers would receive regularpayments fromWashington
– Payments ranged from$10 to$85amonth (raised periodically)– Financed bypayroll taxonemployers andemployees
• Provisionsmadeforblind,physicallyhandicapped,delinquentchildrenandotherdependents
XIV.Housing andSocial Security(cont.)
• Republicanoppositionbitter:– “Social Security” must bebuilt upon acult ofwork, not a“cultof leisure,” insisted Hoover
– GOPnational chairman falselycharged thateveryworkerwould have towear ametaldog tagfor life
• SocialSecurityinspiredbyindustrialnationsofEurope• Inurbanizedeconomy,governmentnowrecognizingitsresponsibilityforwelfareofcitizens
• By1939,over45millioneligibleforSocialSecuritybenefits
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XIV.Housing andSocial Security(cont.)
• Infuture,othercategoriesadded:– Farmanddomestic workers
» Millions ofpoor menandwomen initially excluded– Incontrast toEurope, wherewelfare programs wereuniversal:
» American workers had tobeemployed» And incertain jobs togetcoverage
XV.ANewDealforLabor
– WagnerAct:• NationalLaborRelationsAct(1935)• Namedaftersponsor,SenatorRobertF.Wagner• CreatedpowerfulnewNationalLaborRelationsBoard:
– Administrative purposes
– Reasserted right of labor toengage in self-organization– Tobargain collectively through representatives of its ownchoice– Considered MagnaCartaof labor, Wagner Actproved tobemajor milestone forAmerican workers
XV.ANewDealforLabor(cont.)
– UndersympatheticNationalLaborRelationsBoard:• Unskilledworkersbegantoorganizeintoeffectiveunions• LeaderwasJohnL.Lewis,bossofUnitedMineWorkers
– Formed Committee for Industrial Organization (CIO)withinskilled-craft American Federation ofLabor (AFL)
– In1936, AFLsuspended CIO– CIO thenmoved into auto industry:
» Resorted tosit-down strike» Refused to leave factorybuilding ofGeneral Motors atFlint,Michigan
» Thus prevented importation of strikebreakers
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XV.ANewDealforLabor(cont.)
– Conservative respecters ofprivate property scandalized– Victory when General Motors recognized CIOas solebargaining agencyfor its employees
• Unskilledworkerspressedadvantage:» USSteelCompany avertedstrike when itgranted rightsofunionization to its CIO-organized employees
» “Little steel” companies fought backsavagely» 1937:Memorial Daymassacre atRepublic SteelCompany plant inSouth Chicago
» After police opened fire, areastrewn with several scoredeadand wounded
XV.ANewDealforLabor(cont.)
• FairLaborStandards Act1938:– AlsoknownasWagesandHoursBill
• Setminimum-wagesandmaximum-hoursforindustriesinvolvedininterstatecommerce
– Goals: 40centsanhour (later raised) and40-hour week
• Laborbychildrenundersixteen(undereighteenifoccupationdangerous)forbidden
• Reformsbitterlyopposedbyindustrialists,especiallytextiles
• Excludedagricultural,service,anddomesticworkers– Meant manyblacks, Mexican Americans, andwomen notbenefit fromact
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XV.ANewDealforLabor(cont.)
• Laborunionizationthrived(seeFigure32.3)– President received valuable support atballot-box from laborleaders and appreciative workers
– CommitteeforIndustrialOrganizationformallyreconstitutedasCongress ofIndustrialOrganizations(newCIO)underJohnL.Lewis• By1940claimedmembershipoffourmillion,including200,000blacks
• JurisdictionalfeudingcontinuedwithAFL:laborseemedmorebentoncostlycivilwarthanonwarwithmanagement
Figure 32-3 p760
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XVI.LandonChallenges“theChamp”
– Upcomingelectionof1936:• DemocratsrenominatedRooseveltonplatformsquarelyendorsingNewDeal
• Republicanshard-pressedtofindacandidate– Settled onhomespun governor ofKansas, Alfred M.Landon– Landon amoderate who acceptedsomeNew Deal reforms butnotpopular SocialSecurity Act
– Republicans condemned NewDealofFranklin “Deficit”Roosevelt for its radicalism, experimentation, confusion, and“frightful waste”
– Landon backedbyHoover (called for“holy crusade forliberty”) and American LibertyLeagueofwealthyconservatives
XVI.LandonChallenges“theChamp” (cont.)
• Rooseveltdenounced“economicroyalists”
– Electionreturns:• LandslideoverwhelmedLandon,whoonlywontwostates—MaineandVermont
• Popularvote:27,752,869to16,674,665• Electoralcount523to8–mostlopsidedin116years• Democratsnowclaimedmorethantwo-thirdsofseatsinHouseandsameproportioninSenate
XVI.LandonChallenges“theChamp(cont.)
– Battleof1936:• MostbittersinceBryan'sdefeatin1896• PartiallyboreoutRepublicanchargesofclasswarfare
– Needyeconomic groups lined upagainst so-called greedyeconomic groups
• CIOcontributedgenerouslytoFDR'scampaign• Manyleft-wingersturnedtoRoosevelt,asthird-partyprotestvotedeclinedsharply
• BlacksswitchedtoDemocraticparty
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XVILandonChallenges“theChamp(cont.)
• Rooseveltwonbecauseheappealedto“forgottenman,”whomheneverforgot
– Somesupporters onlypocketbook-deep: “reliefers”– Roosevelt forgedpowerful andenduring coalition of
» Southerners,
» Blacks, urbanites, andpoor» Marshaled support of“New Immigrants”—mostly Catholicsand Jews—who hadcomeofagepolitically
» In1920s one outofevery25 federal judgeships went toaCatholic
» Roosevelt appointed Catholics tooneoutofevery four
XVII.NineOldMenontheBench
– RoosevelttookpresidentialoathonJanuary20,1937,insteadoftraditionalMarch4:• TwentiethAmendmentratifiedin1933(seeAppendix)
– Swept awaypostelection lameducksession ofCongress– Shortened bysixweeks awkward period before inauguration
• RooseveltinterpretedreelectionasmandatetocontinueNewDeal:
– Tohim, Supreme Court judges were stumbling blocks– Innine major cases involving NewDeal, theyhad thwartedNewDeal reforms seven times
XVII.NineOldMenontheBench(cont.)
– Courtultra-conservative;sixofninejudgesover70• RoosevelthadnotappointedanyonetoCourtinfirstterm
• Somejusticesheldonprimarilytocurb“socialistic”NewDeal
• FDRbelievedvoters(presidentialelectionsof1932and1936andcongressionalelectionsof1934)hadclearlydemonstratedsupportforNewDeal
• ToFDR,Courtobstructingdemocracy
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XVII.NineOldMenontheBench(cont.)
– Roosevelthitonschemetofixproblem:• Provedtobeoneofhismostcostlypoliticalmisjudgments• AskedCongressforlegislationtopermithimtoaddanewjusticetoSupremeCourtforeveryoneoverseventywhowouldnotretire
• Maximummembershipwouldbefifteen• HeallegedCourtfarbehindinitswork—whichprovedtobefalseandbroughtaccusationsofdishonesty
• HeadstrongFDRnotrealizethatCourt,inpopularthinking,hadbecomesacredcow
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XVIII.TheCourtChanges Course
– CongressandnationconvulsedoverCourt-packingplan:• FDRvilifiedforattemptingtobreakdelicatechecksandbalancesamongthreebranches
• Accusedofgroominghimselfasdictatorbytryingtobrowbeatjudiciary
• ToRepublicansandsomeDemocrats,basiclibertiesseemedinjeopardy
• Courtsawaxhangingoveritshead:– Justice Owen J. Roberts, aconservative, began tovotewithliberal colleagues
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XVIII.TheCourtChanges Course(cont.)
• In1937,Courtupheldprincipleofstateminimumwageforwomen,reversingits1936decision
• Insucceedingdecisions,CourtbecamemoresympathetictoNewDeal:
– Upheld National LaborRelations ActandSocial SecurityAct
• Roosevelt's“Courtpacking” furtherunderminedwhenCongressvotedfullpayforjusticesover70whoretired:
– Oneofoldest conservatives resigned– Replaced byNewDealer, JusticeHugo Black
XVIII.TheCourtChanges Course(cont.)
– Congressfinallypassedcourtreformbill:• Watered-downversionappliedonlytolowercourts• RooseveltsufferedfirstmajorlegislativedefeatathandsofhisownpartyinCongress
• EventuallyCourtbecamemarkedlymorefriendlytoNewDealreforms
• Successionofdeathsandresignationsenabledhimtomakenineappointmentstotribunal—morethananyofhispredecessorssinceGeorgeWashington
• Clock“unpacked” Court
XVIII.TheCourtChanges Course(cont.)
– Yet inasense,FDRlostbothCourtbattleandwar:• SoarousedconservativesofbothpartiesinCongressthatfewNewDealreformspassedafter1937,yearoffightto“pack” bench
• Withthiscatastrophicmiscalculation,hesquanderedmuchofgoodwillthatcarriedhimtovictoryin1936election
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XIX.TwilightoftheNewDeal
– Roosevelt'sfirsttermdidnotbanishdepression:• Unemploymentpersistedin1936atabout15%,downfrom25%of1933,butstillhigh(seeFigure32.4)
• Recoveryhadbeenmodest• Thenin1937economytookanothersharpdownturn:
– Surprising severe depression-within-the depression thatcritics dubbed “Roosevelt recession”
– Government policies caused nosedive:
» Justasnew SocialSecurity taxesbegan to takeeffect» FDRcutgovernment spending totry tobalance budget
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XIX.TwilightoftheNewDeal(cont.)
– Rooseveltthendeliberatelyembraced ideasofBritisheconomistJohnMaynardKeynes:• FDRannouncedboldprogramtostimulateeconomybyplanneddeficitspending
• Keynesianism—useofgovernmentspendingandfiscalpolicyto“primethepump” ofeconomyandencourageconsumerspending
• Policybecameneweconomicorthodoxyandremainedsofordecades
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XIX.TwilightoftheNewDeal(cont.)
• Roosevelt continued topush remainingreformmeasuresofNewDeal:
• UrgedCongresstoauthorizesweepingreorganizationofnationaladministrationininterestsofefficiency
• Notdone,andthusanotherdefeat• Twoyearslater,CongresspartiallyrelentedandpassedReorganizationAct:
– Gavepresident somepowers foradministrative reforms,including keynew ExecutiveOffice inWhite House
XIX.TwilightoftheNewDeal(cont.)
– HatchAct1939:• Barredfederalofficials,excepthighestpolicy-makingofficers,fromactivepoliticalcampaigningandsoliciting
• Forbadeuseofgovernmentfundsforpoliticalpurposes• Forbadecollectionofcampaigncontributionsfrompeoplereceivingreliefpayments
– HatchActbroadenedin1940:• Placedlimitsoncampaigncontributionsandexpenditures
– After some found waysaround it, legislation proveddisappointing
XIX.TwilightoftheNewDeal(cont.)
– By1938,NewDeallostitsmomentum:• Rooseveltcouldfindfewnewreforms• Incongressionalelectionsof1938,Republicansscoredvictoriesbutfailedtogaincontrolineitherhouse
• Foreignaffairsincreasinglydominatedpublicdebate
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XX.NewDealorRawDeal?– FoesofNewDealcondemned:
• Allegedwaste,incompetence,confusion,contradictions,andcross-purposes
• Aswellasgraftinalphabeticalagencies—“alphabetsoup,” sneeredAlSmith
• Deploredemploymentof“crackpot” collegeprofessors,leftist“pinkos,” andoutrightCommunists
• ClaimedNewDealerstryingtomakeU.S.A.overinBolshevik-Marxistimageunder“Rooseveltski”
XX.NewDealorRawDeal?(cont.)
• RooseveltaccusedofbeingJewish(“Rosenfield”)andtappingtoomanyJewishleftists(“TheJewDeal”)forhis“DrainTrust”
• Businesspeopleshockedbyleap-before-you-look,try-anything-oncespirit
• “Bureaucraticmeddling”and“regimentation”werebittercomplaintsofanti-NewDealers
• Federalgovernment,withallitsemployees,becameincomparablylargestsinglebusinessincountry
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XX.NewDealorRawDeal?(cont.)
• Promisesofbudgetbalancingflewoutwindow– National debt in1932 =$19,487,000,000– Skyrocketedby1939 to$40,440,000,000
• Americabecoming“handoutstate;”U.S. stoodfor“unlimitedspending”
• Businessmenbitter:– Accused NewDealof fomenting class strife
– Conservatives insisted laborers and farmersbeingpampered
– Businessmen wantedgovernment offtheir backs
– Private enterprise being stifled by“planned economy,”“planned bankruptcy” and“creeping socialism”
XX.NewDealorRawDeal?(cont.)
• States' rightsignored,whilegovernmentcompetedinbusinesswithitsowncitizens,under“dictatorshipofdo-gooders”
– Roosevelt'sleadershipdenounced:• “One-mansupergovernment”• HeavyfireagainstattemptstobrowbeatSupremeCourtandcreate“dummyCongress”
– Tried to“purge” Congress ofDemocratswho would notmarch in lockstep with him
– Threesenators whom hepublicly opposed all reelected
XX.NewDealorRawDeal?(cont.)
• Mostdamning indictment ofNewDeal:– Failedtocuredepression– Floatinginseaofredink,ithadonlyadministeredaspirin,sedatives,andBand-Aids• $20billionpouredoutinsixyearsofdeficitspendingandlending
– Gapnotclosed between production andconsumption– More farmsurplus underRoosevelt than under Hoover– Millions still unemployed in 1939after sixyearsofdrain,strain, andpain
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XXI.FDR'sBalanceSheet– NewDealersstaunchlydefendedrecord:
• Somewaste,butpointedoutthatrelief—noteconomy—hadbeenprimaryobjective
• Somegraft,butarguedithadbeentrivialinviewofimmensesumsspentandobviousneedforhaste
• NewDealrelievedworstofcrisisin1933• Promotedphilosophyof“balancingthehumanbudget”• Washingtonregimetobeused,notfeared• CollapseofAmerica'seconomicsystemaverted• Fairerdistributionofnationalincomeachieved• Citizensabletoregainandretainself-respect
XXI.FDR'sBalanceSheet(cont.)
• Thoughhatedbybusinesstycoons,FDRshouldhavebeentheirpatronsaint
– Deflectedpopular resentments against business– MayhavesavedAmerican system offreeenterprise– Hisquarrel notwith capitalism butwith capitalists
– Purged American capitalism of someof itsworst abuses– Headed offradical swing to left– Claimed thatNewDealdid notbankrupt United States– Massive national debt causedbyWWII,not NewDeal
» National debt =$40billion in1939;$258 billion in 1945
XXI.FDR'sBalanceSheet(cont.)
• FDRprovidedboldreformwithoutbloodyrevolution• Upbraidedbyleft-wingradicalsfornotgoingfarenough,byright-wingradicalsforgoingtoofar
– Choosing middle road, Roosevelt has beencalled greatestAmerican conservative sinceHamilton
» Hamiltonian in espousal ofbiggovernment, butJeffersonian inconcern for“forgotten man”
– Demonstrating valueofpresidential leadership, heexercisedpower to relieve erosion ofnation's greatest resource—itspeople
– Helped preserve democracy inAmerica atatime whendemocracies abroad disappearing todictatorship
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XXI.FDR'sBalanceSheet(cont.)
• Unwittinglygirdednationforitspartintitanicwarthatloomedonhorizon—awarinwhichdemocracytheworldoverwouldbeatstake
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