The Great Depression and The New Deal

Who is FDR?

Background on FDR

• Was a 5th cousin of Teddy Roosevelt

• Had a long political career before becoming President

• Contracted Polio and lost use of his legs

• FDR came from a privileged background but became a heroic symbol for the ordinary man.

• Why?

The Election of 1932

The Banking Crisis.• Upon taking office Roosevelt’s administration was faced

with a banking system on the verge of collapse as panicked depositors rushed banks to withdraw their savings.

• Between 1929 and 1933 one in three U.S. banks failed causing a loss of tens of millions to depositors.

• By 1933 banking in most states was suspended which meant that people had no access to their accounts.

• In the first 3 months of his Presidency, FDR, and his administration of reform minded advisors, embarked on an active campaign known as the first 100 days.

The Banking Crisis

FDR and the First 100 Days• Roosevelt declared a “bank holiday” and called congress

into a special session.

• During this period congress passes the Emergency Banking Act which provided funds to support threatened institutions.

• It also passed the Glass-Steagall Act which prevented commercial banks from buying and selling stocks in the stock market. (How does this help?)

• The Federal Deposit Insurance Corporation (FDIC) was created to insure the accounts of individual depositors. (Does this still exist?)

The First 100 Days Cont’d• Along with the Emergency Banking Act, FDR persuaded

congress to create a series of government agencies that he hoped would promote economic recovery.

• The most important of these was the National Industrial Recovery Act which established the NRA (National Recovery Administration).

• The NRA worked with business leaders to set standards for prices and production in a number of different industries (steel, mining, autos), it also recognized workers’ right to organize unions.

• With over a 750 codes as part of the NRA, it was almost impossible for the government to police and ultimately did not lead to economic recovery.

The First 100 Days cont’d• Along with the NRA, the first hundred days created an

alphabet soup of government programs:1) FERA (Federal Emergency Relief Administration)-

made grants to local agencies to help impoverished people.

2) CCC (Civilian Conservation Corps)- gave unemployed young men jobs on projects like forest preservation, flood control and improving national parks. (employed over 3 million men at $30 a month)

3) PWA (Public Works Administration)- built roads, schools, and other public facilities.

4) CWA (Civil Works Administration)- employed over 4 million people in the construction of highways, tunnels, courthouses and airports.

The CCC in action

The CWA in Action

The PWA in Action

Alphabet Soup Cont’d1) TVA (Tennessee Valley Authority)- built a series of

dams to prevent floods and deforestation on the Tennessee River and to provide cheap electric power to people and businesses in a seven-state area of the south.

2) AAA (Agricultural Adjustment Act)- aimed at helping farmers by authorizing the federal government to set production quotas for major crops and paying farmers not to plant more. (6 million pigs were ordered slaughtered as a result of the AAA).

Tennessee Valley Authority

                                    

New Deal and Agriculture• The problems farmers faced during the depression were

compacted by drought, which when combined with mechanized agriculture destroyed topsoil creating dustbowl conditions.

• Dust storms could make the day as dark as night and one storm carried dust from the plains as far as Washington DC

• The AAA helped farmers who owned property by artificially raising prices for crops and cattle, it adversely affected tenant farmers and sharecroppers who were forced off the land because farmers were being paid by the government to cultivate less land.

• This resulted in a mass migration of people from places like Oklahoma to California. (these “okies” were made famous in John Steinbeck’s The Grapes of Wrath.

Woody Guthrie’s The Great Dust Storm

On the 14th day of April of 1935,There struck the worst of dust storms that ever filled the sky.

You could see that dust storm comin', the cloud looked deathlike black,And through our mighty nation, it left a dreadful track.

From Oklahoma City to the Arizona line,Dakota and Nebraska to the lazy Rio Grande,

It fell across our city like a curtain of black rolled down,We thought it was our judgement, we thought it was our doom.

The radio reported, we listened with alarm,The wild and windy actions of this great mysterious storm;

From Albuquerque and Clovis, and all New Mexico,They said it was the blackest that ever they had saw.

From old Dodge City, Kansas, the dust had rung their knell,And a few more comrades sleeping on top of old Boot Hill.

From Denver, Colorado, they said it blew so strong,They thought that they could hold out, but they didn't know how long.

Our relatives were huddled into their oil boom shacks,And the children they was cryin' as it whistled through the cracks.

And the family it was crowded into their little room,They thought the world had ended, and they thought it was their doom.

The storm took place at sundown, it lasted through the night,When we looked out next morning, we saw a terrible sight.

We saw outside our window where wheat fields they had grownWas now a rippling ocean of dust the wind had blown.

It covered up our fences, it covered up our barns,It covered up our tractors in this wild and dusty storm.

We loaded our jalopies and piled our families in,We rattled down that highway to never come back again.

Dust Bowl Conditions

Dust Storm

Dust Bowl Migrants

Dust Bowl Migrants

Dust Bowl Migrants

Laissez-Faire is Dead• By the end of the first New Deal in 1934 it was clear that

Roosevelt’s plan had failed to pull the country out of depression. This failure, combined with the call for greater economic equality, led Roosevelt and the Congress to work on a second New Deal.

• While the first New Deal focused on economic recovery, the second focused on economic security-a guarantee that Americans would be protected from unemployment and poverty.

• Rather than trying to plan business recovery (like the NRA did) the Government’s objective in the second New Deal was to re-distribute national income through a system of taxes and welfare programs.

The Second New Deal• While many of the programs of the first New Deal drifted

off, the legacy of the second New Deal still resonates strongly today.

• The second New Deal’s most important legislation were the WPA (Works Progress Administration), the Social Security Act and the Wagner Act.

• Like the first New Deal, the second New Deal require Government intervention in the economy and society on a scale that the U.S. had not seen before. The question now wasn’t whether the government should intervene in the economy, but how it should intervene.

WPA (The Works Progress Administration)

Aspects of the WPA• WPA hired 3 million Americans from all walks of life

including professionals like dentists and doctors.

• Like the CWA and PWA it built public facilities, but the WPA also had an artistic element that ensured that even at a time when money was short the arts would be supported.

• The WPA put artists (painters, dancers, writers, actors and musicians) to work in a variety of jobs from painting murals, to writing local histories and guidebooks, to recording oral slave narratives, to putting on orchestras, ballets and plays for public performance.

Examples of WPA Art

WPA Ar

Social Security• The Social Security Act was the centerpiece of the second

New Deal• It was an example of Roosevelt’s belief that government

had a responsibility to ensure the material well-being of ordinary Americans.

• It created a system of unemployment insurance, old-age, aid to the disabled, poor and families with dependent children.

• Was a shift from temporary support to permanent support.• Was funded through tax revenues on businesses and

employees. • Represented a radical departure from the usual functions of

the U.S. government. IS THIS GOOD OR BAD?