Ch 18- The New Deal

American History

Sec 1

Election of 1932- FDR (D) beats Hoover easily

- FDR’s policies for leading the country out of the Depression = the New Deal

- Personality- charming, people person, competitive, outgoing

- Illness- had polio- lost use of his legs

Bank Runs-

- people line up to take $ out of the banks leading up to FDR taking office

- fear- FDR will take US off the gold standard (will cause inflation)

o people want to take $ out to buy gold which holds its value longer

Sec 2

First 100 Days- Congress passes 15 programs, shows the Gov’t is trying to do something

Advisors- create the programs, not FDR himself

- competing groups of advisors w/ differing views

o to hear all sides, make the best decisions with all info available

- 3 groups of advisors

1. business/gov’t should work together (business voluntarily sets prices/wages)

2. distrusted big business, wanted to take over key industries

a. gov’t sets prices/wages

3. more competition, trustbusting, gov’t works to create more competition

a. then wages/prices will be better

1^st thing for FDR- closes the banks

- stops bank runs

- inspected the banks to make sure they were sound

o lets the healthy ones reopen

o restores confidence in banks

Regulate banks/stocks-

- SEC- makes sure companies/brokers release truthful info for investors

- FDIC- insures bank deposits

- Certain banks not allowed to invest deposits

Farmers-

- AAA- paid farmers to not farm as much/ grow some stuff over others (livestock also)

- Criticism-

o Gov’t spending up

o Food prices up

o Tenant farmers not as needed, pushed out

o Don’t reward variety of crops, could lose all in disease, depletes soil

NRA/NIRA-

- businesses set up rules for industry

- laws for fair competition

- loans to businesses

- minimum wage laws

HOLC/FCA- help homeowners/ farmers get loans (Gov’t insures their loans)

CCC- plant trees, fight fires, build trails, military like

FERA- $ to state/local gov’ts for relief

PWA-

- gov’t hired contractors/ gave $ to locals to hire people

- built schools, roads, parks, sewer systems

CWA-

- Fed directly hired workers

- Built airports, schools, roads, parks

- Shut down b/c it costs too much

Sec 3

New Deal- 1^st 2 years, slow, little progress seen

Right Wing Critics- of ND

- too much gov’t spending (have to borrow)

- too much power to Fed gov’t, takes power from the states

- ALL- business leaders

o Too much gov’t intervention in business

Left Wing Critics- ND doesn’t go far enough

- Huey Long- “Share Our Wealth”

o Confiscate incomes over $1 million

o Ensure income/house for all (communism?)

- Father Charles Coughlin- supported ND at first, but…

o Wants gov’t to take over backs, put on heavy taxes on the wealthy

o FDR won’t do b/c he’s in bed with Jews (they run the banks)

- Francis Towsend

o $200 month to elderly, must spent it before they get the next check

o increases spending, removes elderly from the workforce

2^nd New Deal- helps FDR’s reelection bid

WPA- billions of $ for roads, highways, bridges, airports (large scale)

- also, jobs for artists, writers

helping workers- needed workers votes for reelection

- NLRB- monitors union/employer relationships (fair labor practices)

- Strikes- more workers want to unionize for wages/conditions

o 3xs as many union workers from ’33-‘39

SSA- $ for disabled, elderly, unemployed

- paid for by payroll tax (workers and employers)

- farmers didn’t pay in so left out of SSA

Sec 4

Democratic Party-

- shift- core used to be white southerners

- now, b/c of ND programs, blacks, women, farmers, labor unions, immigrants (poor)

Supreme Court- ruled some programs unconstitutional

- FDR proposes adding a Justice for each one over 70 that didn’t retire

- Looked like- FDR wanted to try to manipulate the court, replace old judges with the ones he wants

o It doesn’t go through

Recession-

- FDR cuts spending to balance budget, at same time, SSA payroll tax goes into effect

- Unemployment goes up again

- 2 views

1. balance budget to encourage business leaders to invest in the economy

2. Keynesian economics- more gov’t spending needed to jump start the economy

- FDR goes with option #2

TVA- TN Valley Authority

- dams on TN river for flood control and rural electricity

Fair Labor Standards Act- 40 hr work week, no child labor

Legacy-

- gov’t acts as intermediary, works out conflicts between competing interests

- gov’t more power

- gov’t viewed by people as there to protect/help them