Franklin D. Roosevelt

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Franklin D. Roosevelt

• Path to the White House

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Governor Franklin D. Roosevelt

• New York State
• 1928-1932

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• Became governor of New York in 1928
• Politically ambitious, socially progressive
• Proposed state old-age pensions
• Did not believe Hoovers optimistic reports
• Had Frances Perkins compile unemployment figures
• Created state mechanisms to deal with
  unemployment crisis
• Endorsed unemployment insurance

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Temporary Emergency Relief Administration

• FDR saw aid to the unemployed as a matter of
  social duty
• TERA created in the winter of 1930
• First state to begin unemployment relief
• Agency headed by Harry Hopkins who would later
  head FERA

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FDR Agenda

• Public power, jobs, conservation, social reform
• When Republican legislature balked, FDR took his
  message straight to the people via the radio
• November 1930reelected as governor
• Already had sights on the White House

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Election of 1932

• Promise of a New Deal

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Organizing a Campaign

• Eleanor Roosevelt and Molly Dewson (Consumers
  League) organized the womens vote
• Policy developed by the Brains Trust
• Group of Columbia University academics
• Raymond Moley, political science, probably coined
  the term New Deal
• Rexford Tugwell, agricultural economics
• Adolf Berle, corporate economics

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Democratic Platform

• Balanced budget
• Cut government spending through retrenchment
• Repeal of Prohibition
• Government was losing millions of dollars
  annually
• Cost of enforcement
• Lost revenue from liquor taxes

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Politics of Action

• FDR promised action as opposed to Hoovers
  seeming inaction
• The country demands bold, persistent
  experimentation. It is common sense to take a
  method and try it. If it fails, admit it frankly
  and try another. But above all try something.
• Emphasized the importance of
• Planning, public power, and public works
• Public works only until prosperity returned

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The 1932 Campaign
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Franklin Delano Roosevelt and the First New Deal,
1933-35
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Early 1933

• FDR took office March 1933
• Agriculture and industry in serious trouble
• Output had dropped 50
• One-half of the workforce was unemployed
• Banking had collapsed
• Millions of people were on the verge of
  starvation
• The economy was clearly not self-correcting

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The FDR Team

• Bright and innovative
• Marguerite Missy LeHand
• Secretary, influenced appointments and policy
• Frances Perkins
• Secretary of Labor, labor reformer
• Harold Ickes
• Secretary of Interior, conservationist
• Eleanor Roosevelt
• Pushed the New Deal continuously to the left

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What was the New Deal?

• Not a philosophy as much as a goal
• Economic recovery and social security
• Two early tasks
• Choose and implement an economic strategy
• Boost morale

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Keynesian Economics

• John Maynard Keynes, The General Theory of
  Employment, Interest, and Money (1936)
• Advocated government management of the economy
• Leaving the gold standard, deficit spending, and
  public works
• Represented a group of English economic theorists
  who were wrestling with the world wide collapse
  of capitalism

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• FDR and Keynes met in 1934.
• Both were working on the problem of
  maldistribution of wealth.
• Keynes was working out the problem on a
  theoretical basis
• Later developed a formal mathematical
  relationship between the level of government
  spending and the level of economic activity,
  called the multiplier
• Tax and spending tool used by governments in
  capitalist countries to balance unemployment and
  inflation

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• First New Deal was an attempt to plan the entire
  economy.
• This was antithetical to the American tradition,
  but that tradition had failed
• FDR saw the need to plan as an extension of
  progressivism, not a turn to socialism
• His team agreed, but argued about who should play
  primary rolebusiness or government
• Nature of the New Dealconservative, progressive
  or radicalhas been an issue of continuing
  historical debate and interpretation

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First Hundred Days

• Deal with sectors in crisis
• Banking, agriculture, industry
• Restore public confidence
• Increase government revenue
• Repeal Prohibition
• 21st Amendment, 1933
• Gave farmers a market for corn and wheat
• Provided the government with tax revenue

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Banking Crisis

• Strengthen the Monetary System
• Progressives wanted to set up a truly national
  banking system
• Heads of financial institutions opposed this.
• Emergency Banking Relief Act
• 4 day banking holiday
• Permitted sound banks to reopen
• Began with one per state, backed by the Federal
  Reserve
• Provided managers for unsound banks

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Public Confidence

• Securities and Exchange Commission (SEC) created
  to oversee the stock market
• FDIC to provide insurance for deposits
• Radio broadcast fireside chats
• First one explained the banking crisis
• FDR had an aristocratic, confident voice
• Spoke slowly
• Explained things in simple terms
• First week in office FDR received 500,000 letters

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First Hundred Days

• Economy Act
• Civilian Conservation Corps
• Abandoned the gold standard
• Federal Emergency Relief Act
• Agricultural Adjustment Act
• Emergency Farm Mortgage Act
• Tennessee Valley Authority
• Federal Securities Act
• National Industrial Recovery Act

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Agricultural Crisis

• Net farm income had fallen ? between 1928-1932
  due to chronic overproduction
• Goal was to raise and stabilize farm prices
• Rexford Tugwell (asst. secretary of agriculture)
  developed a domestic allotment plan
• Pay farmers not to produce and the prices would
  rise

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Agricultural Adjustment Act

• May 1933
• Adopted Tugwells allotment plan
• Subsidy financed by a process tax levied on
  canneries and mills which processed agricultural
  products
• Immediate crisis of overproduction solved by the
  slaughter of livestock and the plowing under of
  crops
• solved the paradox of poverty in the midst of
  plenty by doing away with the plenty. Richard
  Hofstadter

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Was the AAA successful?

• Emergency Farm Mortgage Act
• Refinanced farm mortgage
• AAA helped push up farm prices
• Aided by natural disasters, like the Dust Bowl
• Wheat crop864 million bushels 1928-32
• 567 million bushels 1933-35
• Only 20 million came from AAA subsidies
• Not until 1941 did farm income exceed 1929.

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• Agricultural Adjustment Administration worked
  through local production control committees.
• Favored the rich and white
• Tenant farmers and renters lost their land as it
  was taken out of production, resulting in a rapid
  degree of rural depopulation
• Increased the cost of food to the consumer

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Industrial Crisis

• Total value of finished goods fell from 38
  billion in 1929 to 17.5 billion in 1932
• Almost 40 of wage and salary earners were out of
  work by 1933
• Goal was to start creating jobs and paying wages

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• Some Congressional leaders (led by Robert Wagner)
  wanted to mandate a 30-hour week to share work.
• Frances Perkins agreed, but only if hourly wages
  were raised to maintain total income
• Some in Congress wanted to set a minimum wage
• AFL feared a minimum wage would quickly become a
  maximum wage

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National Industrial Recovery Act

• June 1933, a plan worked out by Raymond Moley who
  was now Assistant Secretary of State
• Amalgamation of two plans
• Public works
• Industrial self-government
• Government sanction of unions

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NIRA

• Contained three Titles
• Title III provided a system of capital stock and
  excess profits taxes to finance Titles I and II
• NIRA Title I
• Program of industrial self-government
• Allowed industry to write its own codes of fair
  competition
• Section 7 mandated agreement on maximum hours and
  minimum pay
• Section 7(a) provided workers with the right to
  organize and bargain collectively
• Section 9 gave the president to remake and impose
  codes

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• Major step away from unregulated competition of
  free market capitalism
• Business favored price and production controls to
  restore profits
• Workers saw the promise of higher wages, shorter
  workdays, full employment, and the growth of
  unions

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• Government sponsored parades to build public
  support and put pressure on employers.
• Employers could ratify the codes or not.
• Displayed a blue eagle logo with the slogan We
  do our part

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NRA Parade in New York City
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Weaknesses in NIRA

• NIRA Title I codes were not very effective
• Section 7(a) was not really enforced, thus wages
  did not rise
• Dominated by big business to their advantage
• Did nothing to create jobs for the millions of
  unemployed

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Pecan Workers in San Antonio
Pecan Crackers
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Pecan Shelling
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Mr. and Mrs. Medina
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NIRA Title II

• Initial appropriation of 3.3 billion for public
  works
• First ND measure to directly create jobs
• More than the entire cost of running the
  government from 1922-30
• National Recovery Administration set up to
  enforce regulations

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A New Approach to Relief

• Hoover felt that public employment should not
  compete with private enterprise.
• FDR was convinced by Harry Hopkins to incorporate
  public works into relief

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The Alphabet Agencies

• FERA Federal Emergency Relief Association
• Headed by Harry Hopkins
• Provided some direct relief (about 6 per week)
• PWA Public Works Administration
• Headed by Harold Ickes
• Funded public works projects for cities and
  states
• Most of the initial money went for planning
• Architects, engineers, contractors, etc.

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• As the winter of 1933-34 approached, it became
  clear that relief was not reaching people fast
  enough
• CWA Civilian Works Administration
• Headed by Harry Hopkins
• Charged with creating 4 million jobs by Jan 1935
• Created 4.3 million jobs by January 1934
• Eventually employed about 20 million people and
  completed 400,000 projects
• CWA and PWA merged in 1935 to form the WPA Works
  Progress Administration

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• Between 1933-39, public works projects
  constructed schools, hospitals, roads, bridges,
  military airports, warships and combat planes.
• 651,087 miles of highways, roads, streets
• 121,031 bridges
• 125,000 public buildings
• 8,192 parks
• 853 airports and landing fields

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WPA Flood Control Project
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WPA Housing Project
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WPA Road Construction
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School bus stuck in the mud.
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School bus on the new WPA built road.
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Egg buyer stuck in the mud.
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Hauling Milk
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Pack Horse Librarians
Kentucky
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Checking out books.
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Carrier at a rural school.
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Home Delivery
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Reading to an illiterate man.
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Reading to a bedridden patient.
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Adult Education
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Walter Donaldson
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Donaldson Home
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Donaldson going to school at night.
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Donaldson writing a letter.
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Haysi, Virginia School Annex
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Inside the Haysi school annex.
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Haysi Athletic Field
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Haysi School Library
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Haysi School Sewing Room
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WPA Sewing in Chicago
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Eleanor Roosevelt
Addressing a group of workers.
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Mrs. Roosevelt visiting a play school.
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Civilian Conservation Corp

• Civilian Conservation Corp Reforestation Relief
  Act
• Began in 1933 and lasted 7 years
• Camps supervised by the U.S. Army
• Worked on projects in conjunction with the
  departments of Interior, Agriculture, Labor

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Bugler at CCC Camp
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Barracks at CCC Camp in North Carolina
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FDR visiting a CCC camp.
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• Gave jobs to 2 million young men aged 18-25
• Paid 30 per month
• Major projects involved reforestation, soil
  conservation and flood control
• Planted 3 billion trees, built 3470 fire towers,
  97,000 miles of fire roads, provided irrigation
  for 84.4 million acres of farmland, brought 20
  million acres under erosion control

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Tennessee Valley Authority

• May 1933
• Build hydroelectric dams on the Tennessee River
• Support the development of industry and
  agriculture
• Flood control
• Conservation
• Provide a yardstick to judge national
  electricity rates

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• TVA became the symbol of constructive government
  action and the ideal that the public welfare
  should outweigh private industry
• TVA was the closest thing to socialism in the New
  Deal.

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Tennessee Valley Authority
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Rural Electrification Administration

• In 1932, only one farm in 100 had electricity
• REA passed in 1936 (part of Second New Deal)
• Financed nationwide construction of hydroelectric
  dams
• Relied largely on farmer-owned electric
  cooperatives to build power networks
• Government provided low interest loans
• By 1955, 90 of rural homes and farms were
  electrified

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First New Deal

• Public spending to jump start the economy and
  provide individual relief
• FDR wanted the AAA and the NRA to revive
  agriculture and industry by raising prices and
  pushing up wages.
• Public programs to provide jobs to the
  unemployed.
• TVA inaugurated planned regional development

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Was the First New Deal a Success?

• Most serious failure was NIRA Section I
• In a capitalist economic system, independent
  unions are the best way to raise wages, increase
  purchasing power and, thus, demand for goods
• Employers hated restrictions imposed by NIRA and
  refused to deal with independent unions.
• Industry failed to create new jobs, so a large
  labor surplus meant that industrialists didnt
  have to raise wages.

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• First New Deal had limited economic success, but
  restored confidence in government, and especially
  in the presidency.