The Great Depression and the

New Deal, 1933-1938

•The first hundred days of Roosevelt’s presidency witness a torrent of

executive and legislative program, acts, and policies that attempt to deal with

the Great Depression and to reform the economic system so that the nation

will never again experience such a devastating economic collapse.

•To jumpstart the economy, FDR institutes an inflationary policy in which

deficit spending is used to create jobs. It is hoped that this will reduce the

number of people needing government aid and increase consumer spending,

further stimulating demand and, consequently, higher employment.

•Uncomfortable with deficit spending, FDR tries to balance the budget

during the depression. Unemployment again rises, and capacity utilization

declines significantly before he returns to his original economic plan.

I. FDR Administration

A. FDR Background1. Political Career

2. Eleanor: “conscience of the New Deal”

3. Steel braces and steel soul

B. Election 19321. FDR: “breezy optimism” but vague on

detailsa. “brain trust”

2. Hoover: defensive tone

3. Results: Shift of black votes

C. Lame Duck1. Attempt at anti-inflationary policy

2. 20th and 21st Amendments, 1933

D. New Deal principles1. No Plan-experiment and communicate

a. Fireside chats

2. Three “R’s”

II. The First 100 Days

A. Banking Crisis, 1933 (10,951 total bank failures-half in 1933)1. Bank Holiday, March 6-10

2. Gold-need it to be elastic and available, no hoarding!a. Gold Reserve Act, 1934 (Recovery)

3. Emergency Banking Relief Act (Recovery)a. “fireside chats”

4. Home Owner’s Loan Corporation (Relief)

5. Glass-Steagall Banking Reform Act (Reform)

B. Regulation Business1. Truth in Securities Act

C. Unemployment1. CCC (relief) most popular

2. Federal Emerg. Relief Act (Relief)a. Harry Hopkins oversaw $3billion in direct dole payments to states

b. CWA in “make-work” tasks or “boondogglin”?

3. Agriculture Adjustment Act (Relief)

4. National Industrial Recovery Acta. Board establish codes of fair competition

b. Antitrust laws temporarily suspended

c. Section 7a-recognize labor unions

5. TVA-most socialistic

III. The New DealA. More Useful Employment

1. Public Works Administration (Recovery), 1933

a. H. Ickes oversaw $4 B infrastructure jobs

2. Works Progress Administration (Relief), 1935

a. $11 billion on 9 million people

b. Public works and Federal Arts Project

B. Farmers1. “artificial scarcity” of AAA criticized

2. Soil Conservation & Domestic Allotment Act, 1936 (relief)

3. Second AAA, 1938

4. Dust Bowl migrants (Frasier-Lemke Farm Bankruptcy Act and RA)

C. Labor1. NIRA and NRA most complex

2. National Labor Relations Act (“Wagner Act”), 1935

a. Encouraged creation of CIO

b. Formal recognition of unions

3. Fair Labor Standards Act, 1938a. Minimum age, wage, and sage!

D. Other Areas1. Securities and Exchange Commission,

1934

2. Federal Housing Administration, 1934

3. Social Security Act of 1935

4. Indian Reorganization Act, 1934

IV. The New Deal Critics

A. Supreme Court1. Schechter Case (NRA)

2. Butler v US (AAA)

3. Judiciary Reorganization Bill, 1937

B. Voices of Dissent1. American Liberty League

2. Senator Huey Long: “Share Our Wealth”

3. Father Charles Coughlin and radio

4. Dr. Francis Townsend and old people

C. Reaction—Election 1936!

D. End of New Deal1. Recession of 1937-38

2. Keynesian Economics

3. GOP gains 1938 congressional elections

V. Evaluation

Criticism of New Deals• Failed to rid unemployment

• Bureaucracy mushroomed

• More central control

• Higher taxes

• Farm production lower while people in world are hungry

• National debt

• “Hand-out” state

• Labor and farmers pampered

• “Creeping socialism”

• FDR criticized changing the Supreme Court

Support for New Deals• Restored optimism of consumer

• Maintained self-respect for unemployed

• Relieved worst of the crisis

• Farmers secured higher prices

• Fairer distribution of national income

• Citizens retained self-respect

• Economic purge

• Reform without bloody revolution

• New Visibility of Women