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1/22/09

FDR

A. The New Deal Restores


Hope
•  FDR promised a “New Deal” for the •  Joining his coalition and supporting his
American people cause were:
•  He focused on Relief, Recovery & –  Southern whites
Reform –  Northern urban blacks
•  In his inauguration he stated… “the only –  Small farmers
thing we have to fear, is fear itself” –  Blue Collar workers

1. Fireside Chats 2. Second bonus march


•  To communicate with the people, FDR •  Bonus marchers returned to
gave bi-weekly press conferences & he Washington under the new
spoke to the nation via the radio administration
•  These “fireside chats” were comforting •  FDR provided campsites for the
veterans, Eleanor visited the veterans,
to the nation and FDR said he would support paying
the veterans a bonus!
•  What a change from Hoover!!

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B. FDR’s Team
Work Relief
Aids and Advisors
•  FDR surrounded himself with eager •  Harry Hopkins
and hardworking individuals
1.  He called his advisors his “Brain Trust”
2.  Cabinet Positions and Heads of
Agencies included Democrats and
Republicans

Secretary of State Secretary of the Interior


•  Cordell Hull •  Harold Ickes

Division of Negro Affairs of the


Secretary of Labor
National Youth Administration
•  Frances Perkins •  Mary McLeod Bethune
•  She also organized a
•  First woman cabinet Federal Council on
member Negro Affairs, this
unofficial group became
known as FDR’s “Black
Cabinet” meeting
weekly to inform FDR
on issues facing the
black community during
the depression

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3. Eleanor Roosevelt
•  Very important to
FDR’s public image
•  She was an
outspoken advocate
primarily for groups
that supported
women and African
Americans

C. John Maynard Keynes


“Keynesian Economics”
•  Eleanor won over the black community •  Deficit spending
when she planned an open concert for •  Gov’t should spend
opera great Marian Anderson on the massive amounts of
steps of the Lincoln memorial money on goods
and services to
•  Anderson would sing “We Shall increase demand
Overcome” and revive
production

D. Domestic Policies 1. Emergency Banking Relief Act


“The first 100 days” EBRA
The First New Deal (March-June 1933)
•  Day after his inauguration (March 5,
•  Massive projects were pushed through 1933) FDR ordered a total “bank
in the first 3 1/2 months of his holiday” closing all banks nationwide
presidency •  The goal was to stop the run on banks
•  All presidents since FDR have been •  The EBRA was passed in 4 hours in
judged by what they have accomplished Congress to help the failing banks
in their 100 days too.

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•  Treasury Dept. inspects all banks •  About 2/3 of the banks would reopen by
•  Sound banks can reopen March 15
•  Those moderately bad could reopen •  FDR used the “fireside chat” to explain
with gov’t loans the act to Americans and tell them to go
•  Insolvent banks stay closed back to the banks that were open
•  US taken off the gold standard
*** private ownership with gov’t regulation
NOT nationalization of banks

2. Employment Relief
Providing Relief and Creating Jobs for the
People

a.  Civilian Conservation Corps (CCC)


•  Harold Ickes (Sec. of Interior)
•  Single men aged 17-28
•  $30/month - $22 sent home
•  Lived in camps run by army officers
•  Free food and uniforms
•  Restored and maintained forests, beaches, parks, build
roads, plant trees, soil erosion & flood control
•  2.5 million men worked for the CCC

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b. Federal Emergency Relief


Administration (FERA)
•  Sending funds to local relief agencies
and states
•  Gave general $ for food, clothing, and
unemployed
•  Directed by Harry Hopkins
–  Within his first 2 hours on the job, he gave
out some $5 million (In total he dolled out
$500 million over the years)

c. CWA - Civil Works


Administration
•  Gave money to local gov’ts
•  Provided jobs to improve roads, parks,
airports and other facilities to the
unemployed
•  In its tenure, the CWA hired more than
4 million Americans
•  Many people took these “boondoggle”
jobs so they could have any job

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3. Farm Relief and Rural a. AAA- Agricultural


Development Adjustment Administration
Help for the farmers and falling prices

•  An important factor contributing to the •  FDR wanted to reduce production in


Great Depression in the US in the order to boost farm prices
1930’s was the decline in farm •  The farm economy could be revived if
prosperity during the 1920’s the amount of land under cultivation
was reduced

b.  Tennessee Valley


Authority
Regional Legislation
•  A new tax was levied to pay farmers not
to raise certain crops and animals
•  The act only helped the large farms, not
the small farmers, tenant farmers, or
sharecroppers
•  FDR faced a lot of criticism in a time
when so many Americans were hungry

TVA - Tennessee Valley


Authority
•  Wanting to revitalize the economic life •  The TVA
of the Tennessee Valley, massive –  Built dams on the Tennessee River to
building projects brought $500 million control floods
into the region and employed 200,000 –  Generated hydroelectric power and made
men and women rural electrification possible
–  Stimulated economic activity in a
depressed area

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•  The TVA was criticized by


conservatives as a socialistic attempt at
a planned economy
•  In time, the gov’t owned electric power
plants and dams would be sold to
private investors

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4. Business Assistance and a. FDIC - Federal Deposit


Reform Insurance Corporation
•  Legislation to regulate finance •  Insured bank deposits up to $5,000
(today it is $100,000)

Legislation to help business

•  The sharp decline of industrial prices in


the early 1930’s had caused many
business failures and much
unemployment

b. NIRA - National Industrial 1. NRA - National Recovery


Recovery Act Administration
•  Provided for a system of federally authorized
•  The NIRA sought to combat the Great business codes
Depression by reducing competition and •  These codes would spell out fair practices
bolster industrial prices –  Regulated wages, working conditions, production
and even prices
•  The NIRA set up these administrations:
–  40 hour work week
–  Child labor abolished
–  Minimum wage .30¢-.40¢ hour
–  Organized labor given collective bargaining rights

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2. PWA - Public Works Grand Coulee Dam


Administration (Colorado River)
•  Best part of the NIRA might have been
the PWA which was established for
relief
•  Directed by Sec of Interior - Ickes
•  Gov’t spent money to create jobs
•  The PWA undertook huge projects
which needed many skilled workers
nationwide

Causeways and Bridges to


the FL keys

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Triborough Bridge (NYC)

c. Federal Securities Act 5. Housing


•  Required companies to provide
information about their finances if they
offered stock for sale
•  Provided further protection against
economic downturns

a. HOLC - Home Owners E. The Second New Deal


The Second Hundred Days
Loan Corporation 1934-1935
•  Middle-income homeowners having
trouble paying their mortgage The New Deal Falters
•  HOLC refinanced mortgages to make •  When the New Deal programs failed to
the payments more manageable bring about significant economic
improvements, criticism began to mount
•  HOLC made about 1 million low-interest
loans and saved those families from •  Many were afraid of the growing power of
the New Deal Agencies of the Federal
foreclosure
Gov’t

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A Second New Deal 1.  Employment Relief


Reorganize Relief
•  Most of the public still supported FDR
•  In the mid-term election of 1934, FDR
won even more seats for the Democrats
•  With this support, FDR launched even
more bold programs, called the “Second
New Deal”

a. WPA - Works Progress


Administration
•  Create more jobs
–  8 million
•  Where the PWA employed skilled workers for
big jobs, the WPA employed unskilled
workers for even more jobs
–  Build 20,000 playgrounds
–  Schools
–  Hospitals
–  Airfields
–  Build or repair roads
–  Made garments for the needy

Federal Writers Project

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•  Authors were hired


to survey the
nation’s local gov’t
records, wrote state
guidebooks and
collected life stories
of 2,000 former
slaves

Federal Music Project


•  Started community
symphonies and
organized free
music lessons
•  Preserved fast-
disappearing folk
music from rural
areas

Federal Art Project


•  Put more than
10,000 artist to work
•  Painted some 2,000
murals, mainly in
public buildings
•  Produced some
100,000 other
paintings, 17,000
sculptures and many
other works of art

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Federal Theater Project


•  Employ playwrights,
actors, directors and
composers
•  It became very
controversial when it
was believed it was a
breeding ground for
international
communism, and the
project was killed in
1939

b. National Youth
Administration (NYA)
•  Found part-time jobs for young people
still in school doing odd projects from
–  Auto repair in New York City to
–  Putting up tuberculosis isolation units in
Arizona
•  Employed more than 2.5 million young
adults

2. Farm Relief and Rural a. Resettlement


Development Administration
•  Farm Security Administration (FSA)
•  The AAA had ignored the farmers who did not
own the land the FSA tried to make up for this
•  This loaned $ to owners of small farms and
helped resettle tenants and sharecroppers on
productive land
•  The FSA loaned more than $1 Billion to
farmers and set up camps for migrant
workers

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b. Rural Electrification 3. Business Assistance and


Administration (REA) Reform

•  Brought electricity to 90% of farms that


didn’t have it in the 1930’s

a.  SEC - Securities and Exchange •  SEC headed by


Commission Joseph P. Kennedy
•  Established to regulate the stock market
from future collapse
•  Protected investors from dishonest
trading practices
•  Financial statements must be public
•  Prevents insider trading

b. Revenue Act of 1935 4. Housing


•  Also known as the Wealth Tax Act a.  Federal Housing Administration (FHA)
•  Raised the tax rate on individual •  Trying to help people own homes by
incomes over $50,000 guaranteeing private mortgages.
•  The FHA also instituted the following
•  Taxes went up on gifts and estates
•  10% down payment (down from 30%)… still
•  Rich are getting taxed more the standard for many first time homeowners
today
•  Graduated corporate income tax
•  Extension of payments from 20 to 30 years
(still the standard for many home loans)

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5. Retirement a. Social Security Act


•  Landmark legislation because it
established the principle of federal
responsibility for the welfare of the
people
•  The act legislated a tax that transfers
money from workers to pensioners

•  Social Security allowed for


–  Old age pensions
–  Financial support for the disabled
–  Financial support for dependent mothers
and children
–  Unemployement compensation

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