New Deal Era690-697

FDR’s 1st Inaugural Address

• “This great Nation will endure as it has endured, will revive and will prosper.”

• “The only thing we have to fear is fear itself”• “I shall ask the Congress for the one remaining

instrument to meet the crisis—broad Executive power to wage a war against the emergency”

• Full Text of Speech: http://www.nytimes.com/interactive/2009/01/17/washington/20090117_ADDRESSES.html

Time for notes, do not redundantly write down all of the New Deal agencies. Instead write down the “new” information.

• New Deal Era• FDR was willing to try new things to try to turn

the economy around.• Fireside chats: FDR’s regular talks with the

American people via radio in the 30’s and 40’s– They suggested an intimate conversation– Demonstrated the president’s effective use of the

new electronic political medium

• FDR enlarged the role of the executive branch in initiating policy, giving the president more power

• He used his cabinet to formulate the policy after he would suggest/initiate it

First New Deal

• First hundred days• Banking crisis was the largest problem for FDR

at first• This is what brought the depression to the

middle class• 9 million had lost their savings since beginning

of depression• By Jan. 1933, 38 states had closed their banks,

and the other 10 were close

• Banks were closed on March 5th, not to open until March 13th when an emergency banking bill was passed as long as the Treasury Department had enough in reserve

• Emergency Banking Act : FDR used the federal gov’t to investigate the nation’s banks and restored confidence in banks

• 4,000 banks failed in 1933, most before the bill passed• 61 in 1934

This was the first of 15 pieces of legislation enacted by Congress in the first 100 days of Congress’ session

• Home Owners Loan Corporation established to refinance home mortgages

• Glass-Steagall Act separated investment banking from commercial banking and created the FDIC, which insured deposits up to $2,500

• Civilian Conservation Corps (CCC) was developed, which sent young men to do reforestation and conservation work

• Tennessee Valley Authority (TVA) government sponsored approval for innovation of government sponsored regional development and public energy

• FDR legalized beer in April 1933• 18th Amendment repealed in December 1933• Agricultural Adjustment Act: December 1933

– Agricultural overproduction– Business failures– Unemployment relief

Norris Dam in Tennessee, completed in 1936

• AAA also established a system for 7 major commodities that provided cash subsidies to farmers who cut production

• The hope was that prices would go up because the subsidies would cause goods to become scarce

• Larger farms seemed to benefit most:– The large owners would reduce renter’s and

sharecroppers’ acreage rather than their own– In the South, many sharecroppers were black, so

there were racial overtones– Up to 200,000 tenant farmers were displaced, and

moved largely to northern cities and to CA

National Recovery Administration

• Established a system of industrial self-gov’t to handle the problems of overproduction, competition, and price instability

• Each industry decided on a code for prices and quotas for production

• Established minimum wages and maximum hours and outlawed child labor

• Also gave workers the right to collective bargaining.

Unemployment Legislation

• FERA: Federal Emergency Relief Administration set up in 1933 by Harry Hopkins

• Offered federal money to the states for relief programs

• Allowed for people to have emergency money until they could find some money to survive

• Program lasted 2 years, and gave out over $1 billion in relief

• Generally a short-term fix for people in need

Other programs:

• Public Works Administration (PWA)• Civil Works Administration (CWA)

• What was another goal of these programs???• **to create price increases, an inflationary

tactic• Necessary to stimulate recovery and stop

deflation• Also to abandon the gold standard and allow

its value to rise like other commodities• It ultimately provided the Federal Reserve to

promote stability!• Stable prices and full employment w/o being

tied to gold

Second New Deal

• Wagner Act• Upheld the right of industrial workers to join a

union and outlawed unfair labor practices – Ex: Firing workers for union activities

-Established the National Labor Relations Board which protected workers from employer coercion, supervise elections for union representation, and guarantee the process of collective bargaining

Social Security Act:

• Provided pensions for most workers• Domestics were not covered, which greatly

affected poor African American women• Pensions were financed by a federal tax that

all employers and employees would pay• Established a joint federal-state system of

unemployment compensation

Works Progress Administration

• Harry Hopkins• Main federal relief agency for remainder of

depression• WPA put federal relief workers directly on the

payroll• Built roads, public buildings, parks, airports,

bridges

Construction on the Grand Coulee Dam in 1938; a PWA project

• WPA employed 8.5 million people• Did not pay well, but better than nothing• Ended in 1943 when WWII produced full

employment

Harry Hopkins

Revenue Act of 1935

• Increased estate and corporate taxes• Instituted higher personal income tax rates in

top income brackets