The Great Depression and the New Deal Presidential Hopefuls of 1932

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The Great Depression and the New Deal

Presidential Hopefuls of 1932

  • President Herbert Hoover was nominated again by the Republicans while the Democrats nominated Franklin Delano Roosevelt

  • Hoover had been swept into the presidential office in 1928, but in 1932, he was swept out with equal force

  • Eleanor Roosevelt was to become the most active First Lady ever

  • Noteworthy was the transition of the Black vote from the Republican to the Democratic Party

FDR and the Three R’s: Relief, Recovery, and Reform

  • New Deal (Three R’s): relief, recovery, reform

  • The Emergency Banking Relief Act of 1933 was passed first

  • FDR declared a one week “bank holiday” so everyone would calm down and stop running on the banks

  • The “Hundred Days Congress” passed the Glass-Steagall Banking Reform Act, that established the Federal Deposit Insurance Corporation (FDIC)

  • FDR wanted inflation, to make debt payment easier, and urged the Treasury to buy gold with paper money

A Day for Every Demagogue

  • Roosevelt used federal money to assist the unemployed and created the Civilian Conservation Corps (CCC)

  • The Federal Emergency Relief Administration (FERA) created by the Federal Emergency Relief Act looked for immediate relief rather than long-term alleviation

  • The Agricultural Adjustment Act (AAA) made available many millions of dollars to help farmers meet their mortgages

  • Congress also authorized the Works Progress Administration (WPA) in 1935, which gave 9 million people jobs in its eight years of existence

Helping Industry and Labor

  • Secretary of Labor Frances Perkins was the first female cabinet member

  • The National Recovery Administration (NRA) was designed to assist industry, labor, and the unemployed

  • 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

  • The Public Works Administration (PWA) also intended both for industrial recovery and for unemployment relief

Paying Farmers Not to Farm

  • To help the farmers Congress established the Agricultural Adjustment Administration (AAA)

  • 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

  • The Commissioner of Indian Affairs, John Collier, promoted the Indian Reorganization Act of 1934 (the Indian “New Deal”), which encouraged tribes to preserve their culture and traditions

Battling Bankers and Big Business

  • 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

  • The Securities and Exchange Commission (SEC) was designed as a stock watchdog administrative agency

  • The Tennessee Valley Authority (TVA) (1933) constructed dams on the Tennessee River and helped the 2.5 million extremely poor citizens of the area improve their lives and their conditions

Housing Reform and Social Security

  • FDR set up the Federal Housing Administration (FHA) in 1934 to stimulate the building industry through small loans to householders

  • 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

  • The Social Security Act of 1935 was the greatest victory for New Dealers, since it created pension and insurance programs by taxing employees and employers

  • Republicans attacked this bitterly, as such government-knows-best programs and policies that were communist leaning and penalized the rich for their success

A New Deal for Unskilled Labor

  • A rash of walkouts occurred in the summer of 1934, and after the NRA was ruled unconstitutional, the Wagner Act (AKA, National Labor Relations Act) of 1935 took its place

  • John L. Lewis, the boss of the United Mine Workers, formed the Committee for Industrial Organization (CIO) within the ranks of the AF of L in 1935

  • In 1938, the Fair Labor Standards Act (AKA the “Wages and Hours Bill”) was passed, setting up minimum wage and maximum hours standards and forbidding children under the age of sixteen from working

The Court Changes Course

  • The Supreme Court kept blocking FDR’s programs, so he proposed a plan, the Judicial Procedures Reform Bill of 1937, that would add a member to the Supreme Court for every existing member over the age of 70

  • FDR’s “court-packing scheme” failed, but he did get some of the justices to start to vote his way

  • FDR’s failure of the court-packing scheme also showed how Americans still did not wish to tamper with the sacred justice system

New Deal or Raw Deal?

  • During Roosevelt’s first term, the depression did not disappear, and unemployment, down from 25% in 1932, was still at 15%

  • FDR embraced the policies of British economist John Maynard Keynes and in 1937, FDR announced a bold program to stimulate the economy by planned deficit spending

  • Critics were shocked by FDR’s spending, which had increased the federal debt from $19.487 million in 1932 to $40.440 million in 1939

  • Opponents of the New Deal condemned its waste, citing that nothing had been accomplished

  • New Dealers claimed that the New Deal had alleviated the worst of the Great Depression

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