THE NEW DEAL: 19331941

1
THE NEW DEAL 1933-1941

• The Hundred Days
• by the date of Roosevelts inauguration, the
  disintegration of the banking system convinced
  conservatives and radicals alike of the necessity
  for government intervention
• during the first hundred days of Roosevelts
  presidency, Congress passed an impressive body of
  legislation

2

• on March 5, 1933, the president declared a bank
  holiday
• legislation of the Hundred Days created the
  Federal Deposit Insurance Corporation (FDIC),
  forced the separation of investment and
  commercial banking, extended the power of the
  Federal Reserve Board, established the Home
  Owners Loan Corporation (HOLC), and regulated the
  securities exchange

3

• Roosevelt had no comprehensive plan of action
  rather he employed an ad hoc approach, which
  sometimes resulted in contradictory policies
• although most measures of the Hundred Days were
  designed to stimulate the economy, the Economy
  Act reduced salaries of federal employees and cut
  veterans benefits

4

• The National Recovery Administration (NRA)
• the problems of unemployment and industrial
  stagnation received high priority during the
  Hundred Days
• Congress appropriated 500 million for aid to the
  needy
• the newly created Civilian Conservation Corp
  (CCC) employed tens of thousands of young men

5

• the National Industrial Recovery Act (NIRA), a
  controversial piece of legislation, created the
  Public Works Administration (PWA), allowed
  manufacturers to establish price and production
  limits, established a minimum wage and maximum
  hours, and guaranteed labor the right to bargain
  collectively
• a variant on the idea of the corporate state, the
  NIRA envisaged a system of industrywide
  organizations of capitalists and workers
  (supervised by government) that would resolve
  conflicts internally

6

• the National Recovery Administration (NRA),
  created by the NIRA, oversaw the drafting and
  operation of business codes
• the NIRA failed to end the depression
• dominant producers in each industry supervised
  the drafting and operation of the codes
• they used their power to raise prices and limit
  production rather than to hire more workers and
  increase output

7

• even though the NIRA provided protection for
  collective bargaining, the conservative and
  craft-oriented AFL displayed little enthusiasm
  for enrolling unskilled workers on an
  industry-wide basis
• John Lewis and other labor leaders created an
  alternative to the AFL by establishing the
  Congress of Industrial Organizations, formed to
  organize workers on an industry-wide basis
  without regard to craft

8

• The Agricultural Adjustment Administration (AAA)
• the Agricultural Adjustment Act of 1933 combined
  compulsory production limitations with government
  subsidization of staple farm commodities
• in effect, the AAA paid farmers to produce less
• while some farmers benefited, others,
  particularly sharecroppers and tenant farmers,
  did not

9

• The Tennessee Valley Authority (TVA)
• the Tennessee Valley Authority (TVA) Act of 1933
  created a board authorized to construct dams,
  power plants, and transmission lines, as well as
  to market electrical power to individuals and
  communities
• the TVA also provided a yardstick for
  evaluating the rates and efficiency of private
  power companies
• in addition, the TVA engaged in flood control,
  soil conservation, and reforestation projects

10

• the TVA never became the comprehensive regional
  planning organization some of its sponsors
  intended it did improve the standard of living
  for many in the valley

11

• The New Deal Spirit
• Roosevelt infused his administration with a much
  needed wave of optimism
• Roosevelts receptiveness to new ideas and the
  increased New Deal bureaucracies drew academics
  and professionals into government service
• the New Deal was never a clearly stated
  ideological movement
• it drew heavily on populism, Theodore Roosevelts
  New Nationalism, and the Wilsonian tradition

12

• Washington became a battleground for special
  interests
• William Leuchtenberg described the New Deal as
  interest-group democracy
• the New Deal gave interest groups other than big
  business a voice in Washington
• on the other hand, it slighted the unorganized
  majority

13

• The Unemployed
• in 1934, at least 9 million Americans were still
  unemployed, hundreds of thousands of whom were in
  desperate need
• nevertheless, the Democrats increased their
  majorities in Congress
• Roosevelts unemployment policies accounted, at
  least in part, for Democratic successes at the
  polls
• Roosevelt appointed Harry L. Hopkins to head the
  Federal Emergency Relief Administration (FERA) in
  1933

14

• Hopkins insisted that the unemployed needed jobs,
  not handouts
• in November 1933, he persuaded Roosevelt to
  create the Civil Works Administration (CWA)
• the CWA employed millions on public works
  projects
• the cost of the CWA frightened Roosevelt, who
  soon abolished it
• in 1935, Roosevelt put Hopkins in charge of the
  new Works Progress Administration (WPA)

15

• in spite of these efforts, at no time during the
  depression did unemployment fall below 10 percent
  of the total work force
• Roosevelts fear of deficit spending meant that
  many New Deal measures did not provide sufficient
  stimulus to the economy

16

• Literature in the Depression
• John Dos Passos published his harshly
  anticapitalist and deeply pessimistic trilogy,
  U.S.A., between 1930 and 1936
• John Steinbecks The Grapes of Wrath (1939)
  perhaps best portrayed the desperate plight of
  Americas poor
• Thomas Wolfes autobiographical novels such as
  Look Homeward Angel (1929) and You Cant Go Home
  Again (1940) offered a stark and vivid view of
  the confusion of urban life and the impact of
  hard times

17

• William Faulkner wrote vividly of southern
  poverty, pride, and racial problems in his novels
• between 1929 and 1932, he published The Sound and
  the Fury, Light in August, As I Lay Dying, and
  Sanctuary

18

• The Extremists Long, Coughlin, Townsend
• Roosevelts moderation provoked extremists on
  both the left and right
• the most formidable was the Kingfish, Huey
  Long, a senator from Louisiana
• although he never challenged white supremacy, the
  plight of all poor people concerned him
• after initially supporting Roosevelt, Long split
  from the administration and introduced his Share
  Our Wealth plan, intended to redistribute the
  nations wealth

19

• less powerful than Long but more widely
  influential was Father Charles E. Coughlin, the
  Radio Priest
• Coughlin urged currency inflation and attacked
  the alleged sympathy for communists and Jews
  within Roosevelts administration
• Coughlins program resembled fascism more than
  anything else

20

• Dr. Francis E. Townsend proposed old-age
  revolving pensions, which would give 200 per
  month to the nations elderly on the conditions
  that they not hold jobs and that they spend the
  money within thirty days
• the collective threat of these radical reformers
  forced FDR to adopt a bolder approach toward
  solving the problems of the depression

21

• The Second New Deal
• despite Roosevelts efforts, the depression
  continued unabated
• in the spring of 1935, he launched the Second New
  Deal
• the Wagner Act (1935) ensured the right of labor
  to collective bargaining and prohibited employers
  from interfering with union organizational
  activities

22

• the Social Security Act (1935) established a
  federal system of old-age pensions and
  unemployment insurance
• the Rural Electric Administration (REA) brought
  electric power to rural areas
• the Wealth Tax (1935) raised taxes on large
  incomes, estates, and gifts
• critics worried that the New Deal restricted
  liberty
• the cost also alarmed them

23

• by 1936, some members of the administration had
  fallen under the influence of John Maynard
  Keynes, who advocated deficit spending to
  stimulate consumption
• Roosevelt never accepted Keyness theories, but
  the imperatives of the depression forced him to
  increase spending beyond the governments income

24

• The Election of 1936
• the election of 1936 matched Governor Alfred M.
  Landon of Kansas and Roosevelt
• although Landon represented moderate wing of
  Republican party, his campaign was hampered by
  reactionary views of some of his supporters
• Congressman William Lemke of North Dakota ran on
  the Union party ticket, a coalition of extremist
  groups. Roosevelt won easily, carrying every
  state except Maine and Vermont
• Democrats also made large gains in city and state
  elections

25

• Roosevelt Tries to Undermine the Supreme Court
• the conservative majority in the Supreme Court
  declared several major New Deal programs
  unconstitutional
• by 1937, all of the major measures of the Second
  New Deal appeared doomed
• Roosevelt responded by announcing a proposal to
  increase the number of sitting justices, a thinly
  disguised attempt to stack the Court with his own
  appointees
• Roosevelt severely misjudged the opposition to
  the plan

26

• Congress and public strenuously objected to his
  tampering with system of checks and balances
• the president eventually yielded to pressure and
  withdrew his plan
• alarmed by the attack on the Court, two justices
  changed their positions and voted to uphold New
  Deal legislation
• moreover, death and retirement created enough
  vacancies on the Court to allow Roosevelt to
  appoint a large pro-New Deal majority
• nevertheless, Roosevelts personal and political
  prestige suffered from the affair

27

• The New Deal Winds Down
• the Court battle marked the beginning of the end
  of the New Deal
• a series of bitter strikes, starting in 1937,
  alarmed the public
• in June 1937, FDR responded to a moderate
  increase in economic conditions by curtailing
  government expenditures
• the resulting Roosevelt Recession included a
  downturn in the stock market, rising
  unemployment, and declining industrial output

28

• in response, Roosevelt finally committed himself
  to heavy deficit spending, beginning in April
  1938
• at his urging, Congress passed a 3.75 billion
  public works bill, new AAA programs, and the Fair
  Labor Standards Act
• these measures did little to ease the recession
  and alienated conservatives
• particularly after the elections in 1938, a
  coalition of Republicans and conservative
  Democrats gained enough power to halt expansion
  of New Deal reforms

29

• Significance of the New Deal
• the outbreak of World War II ended the depression
• the New Deal ameliorated suffering but failed to
  revive the economy
• Roosevelts willingness to try different
  approaches made sense because no one knew what to
  do
• however, his vacillating policies and his desire
  to maintain a balanced budget often proved
  counterproductive

30

• as a result of the New Deal, the nation began to
  look to the government as the guarantor of its
  public welfare
• Roosevelt expanded the federal bureaucracy and
  increased the power of the presidency
• federal bureaucracies now regulated formerly
  private sectors
• if the New Deal failed to end the depression, the
  changes it effected altered American life and
  society

31

• Women as New Dealers The Network
• largely because of the influence of Eleanor
  Roosevelt and Molly Dewson, head of the Womens
  Division of the Democratic National Committee,
  the Roosevelt administration employed more women
  in positions of importance than earlier
  administrations
• Secretary of Labor Frances Perkins became the
  first woman to hold a cabinet post

32

• Molly Dewson and Eleanor Roosevelt headed an
  informal, yet effective, network of influential
  women whose goal was the placement of
  reform-minded women in government
• Eleanor Roosevelt exerted significant influence,
  particularly in behalf of civil rights

33

• Blacks During the New Deal
• while minimal in 1932, the shift of black voters
  from the Republican to the Democratic party
  became overwhelming by 1936
• however, Roosevelt remained unwilling to alienate
  southern members of Congress and deferred to them
  on racial matters
• new Deal programs often treated blacks as
  second-class citizens
• in 1939, black unemployment was twice that of
  whites, and wages paid to whites were double
  those received by blacks

34

• despite this situation, an informal Black
  Cabinet, including Mary McLeod Bethune and
  Charles Forman, lobbied the federal government in
  behalf of better opportunities for blacks
• in the labor movement, the new CIO recruited
  black members
• thus, while black Americans suffered during the
  depression, the New Deal brought some relief and
  a measure of hope

35

• A New Deal for Indians
• the New Deal built on earlier policies toward
  Native Americans
• while retaining many paternalistic and
  ethnocentric attitudes, government policies
  improved after the appointment of John Collier as
  Commissioner of Indian Affairs in 1933
• under Collier, the government expressed a
  willingness to preserve traditional Indian
  cultures
• at the same time, it attempted to improve
  economic and living conditions

36

• the Indian Reorganization Act of 1934 allowed a
  degree of autonomy by attempting to reestablish
  tribal governments and tribal ownership of Indian
  lands
• some critics, including many Indians, charged
  Collier with trying to turn back the clock
• others attacked him as a segregationist
• not all Indians, moreover, particularly those who
  owned profitable allotments, were willing to
  yield their privately held land to a tribal
  corporation

37

• The Role of Roosevelt
• how much credit for New Deal policies belongs to
  Roosevelt is debatable
• Roosevelt left most details and some broad
  principles to his subordinates
• his knowledge of economics was skimpy, and his
  understanding of many social problems remained
  superficial
• nevertheless, Roosevelts personality marked
  every aspect of the New Deal

38

• his ability to build and manipulate coalitions
  made the program possible
• he personified the government and made citizens
  believe that the president cared about the
  condition of ordinary Americans

39

• The Triumph of Isolationism
• although an internationalist at heart, Roosevelt,
  like other world leaders, placed the economic
  recovery of his own nation ahead of global
  recovery
• isolationist sentiment in America intensified
  during the 1930s
• Senator Gerald P. Nye headed an investigation
  (1934-1936), the findings of which convinced
  millions of Americans that financiers and
  munitions makers had been responsible for
  Americas entry into World War I

40

• Congress passed a series of neutrality acts,
  which severely restricted the options available
  to the White House and State Department
• in part because of domestic problems and in part
  because of his own vacillation, Roosevelt seemed
  to lose control over foreign policy

41

• War Again in Europe
• the aggression of Japan, Italy, and Germany
  convinced Roosevelt of the need to resist
  aggression
• fear of isolationist sentiment, however, led
  Roosevelt to move cautiously and to be less than
  candid in his public statements
• the invasion of Poland and subsequent
  declarations of war by Great Britain and France
  budged Congress to adopt cash and carry
  legislation

42

• in the fall of 1939, Roosevelt sold arms to
  Britain and France, although he lacked legal
  authority to do so
• Roosevelt also approved a secret program to build
  an atomic bomb
• when Britain ran out of money in 1940, Roosevelt
  swapped destroyers for British naval bases
• in September 1940, Congress established the
  nation's first peacetime draft

43

• A Third Term for FDR
• Roosevelt ran for an unprecedented third term in
  the presidential election of 1940
• partisan politics and his belief that only he
  could control the isolationists undoubtedly
  played a role in Roosevelts decision to seek
  reelection
• Wendell L. Willkie, a moderate from Indiana,
  headed the Republican ticket

44

• since he supported the basic structure of the New
  Deal, Willkie focused on opposing the trend of
  Roosevelts foreign policies
• while rejecting isolationism, Willkie accused
  Roosevelt of intending to take the United States
  to war
• Roosevelt won the election handily

45

• The Undeclared War
• Roosevelts victory encouraged him to expand aid
  to Great Britain
• in March 1941, Congress approved the Lend-Lease
  Act
• the American navy began to patrol the North
  Atlantic and to pass intelligence data to the
  British navy

46

• in April 1941, the United States occupied
  Greenland in July it occupied Iceland
• after the Greer incident and the sinking of the
  Reuben James, the United States had, for all
  practical purposes, although not officially, gone
  to war