Europe tumbles when US crashes.
- Develops fascism, naziism, communism
FDR believed large corporations were to blame for the economic state,
which could only be solved by an active preseident and a strong govt.
- American Gov't had a responsibilty to help people in distress
- passed dozens of measures to promote welfare and economic recovery
- Not specifically ideological, but a pragmatist
- New Deal (ND) was experimental, some programs failed miserably
Herbert Hoover just didn't want to do anything
- Andrew Mellon wanted to liquidate {real estate, stocks, farmers}
- Let the capitalist system "purge itself of rottenness"
- Invited business, agricultural, unions to talk (later)
- Encouraged them to stop strikes, maintain employment
- "Ineffective cheerleader for capitalism"
- Provided no direct federal relief
- biggest emergency since the Civil War
- Passed 1932 Revevue Act: huge tax increase
- worsened economic slowdown
- Pushed "self-reliance" narrative
- believed in charities, voluntarism
- New Dem Congress forced Hoover to Reconstruction Finance Corporation
- helped out big banks, railroads
- Dems still questioned these policies
- Hoover only allowed RFC to make loans to states
- Hoover did not take it as a sign
Bonus Army March
- Wanted Congress to pay veterans the 4 million cash bonuses they
promised for 1935
- It is actually 1932, but the House authorized it (Senate denied)
- Veterans with no place to go camped in vacant buildings,
shantytown (first nonviolent protestors in US)
- Congress paid for train tickets home
- William Mitchell, Attorney General, ordered buildings cleared
- Secretary of War dispatched soldiers to remove them
- Horses, tanks, tear gas
- General MacArthur
- Soldiers, exceeding orders, burned their encampment
- PR disaster for Hoover + Republicasn (heartless)
- Hoover became tired and poor morale
- said he "had no Wilsonian qualities"
- terrible, cold speaker
1032 Election: FDR met public demand for change (Hoover lost)
- FDR is NY governor
- Said his campaign was a "call to arms"
- Wanted new ideas and agressive action
- Hoover lacked vitality and vision
Roosevelt's First 100 Days
- Asked for broad power from Congress to respond to the emergency
- Chicago Tribune, Repub newspaper, praised him
- Presidency defined by leadership and action
- He and his advisors wanted to build back the economy and help those in
need
- "Our greatest primary task is putting people to work" - FDR
- Gave farmers money to make less crops
- 100 First Days: created 50 programs, some of which to become the ND
- Hundreds of banks were failing
- FDR asked Congress to pass "Emergency Banking Relief Act"
- 4 day bank holiday to stall the bank collapse
- Funded banks to restore confidence
- "Safer to keep your money in a reopened bank than in your
mattress"
- Removed Gold Standard
- Glass-Steagall Banking Act
- Created Federal Deposit Insurance Incorporation (FDIC) to
isnure up to 250K.
- Divided savings banks from investment banks. Only investment
banks could invest in stock mkt after 1933
- Securities Act of 1933 regulated sales of stocks and bonds
- Required publicly traded companies to disclose all relevant
information
- Securities Exchange Commission (SEC) enforces this.
- Helping the Unemployed and Homeless
- Federal Emergency Relief Act (FERA) gave money to states for
unemployed and homeless
- Proved ineffective
- First large-scale effort to put people on gov't payroll at good
wages: Civil Works Admin.
- Civilian Conservation Corps (CCC) managed by War Dept. employed
unmarried unemployed young men as "Soil Soldiers" ($1/day for no
more than 9mo)
- Cleared brush, constructed roads, trees, parks, taught farmers
- National Industrial Recovery Act (NIRA) established PWA (sewage
plants, dams, highways) and National Recovery Administration (NRA)
- NRA set prices, wages, and working standards --- unique for
the government in peacetime
- NRA codes included fair labor policies (like 40hr/8hr, no
child labor, unionization), negotiation policies
- Supreme Court declared it unconstitutional because it
would be a Congressional responsibility
- Some NRA policies had lasting effects like
national minimum wage, workweek
- Farm Credit Administration and Agricultural Adjustment Act/Adm
(AAA)
- FCA bailed out farmers so they didn't lose homes, farms
- AAA paid farmers to destroy cotton crop
- Pigs were slaughtered and buried
- Wheat, cotton, corn production declined, prices rose
- In the first 100 days, FDR gained the most pulbic support
- Most loved by the people
- Twice weekly press conferences won over journalists
- Very visible to the people
- Hated by some people
- Leftists criticized him for not doing enough (decline slowed,
but prosperity remained elusive)
- Conservatives believed he was bringing in socialism
- Prone to idealistic principles and pragmatic politics, allowing
compromise and contradiction
Huey Long, enemy of FDR
- Classic Demagogue/populist appealing to the people
- Wore pink shirts, pastel ties
- King Fish of Louisiana
- Used bribery, intimidation and blackmail to support his policies
- Funded schools, lowered taxes
- Jealous of FDR.
- "Share the Wealth Society"
- Wanted to raise taxes on wealthiest Americans and redistribute
thousands to the poorest
- May have unseated Roosevelt
- Roosevelt called the senator one of the two most dangerous in the
country
Father Charles Coughlin, the other most dangerous man
- Fiery Roman Catholic radio priest
- Criticized Roosevelt as "anti-god" pushing Communist conspiracy
- that he wanted to put oil companies, big companies, and god-given
resources under gov't control
- Very anti-semitic, which forced radio stations to drop him by 40s
- In 30s, he was going strong however
The Court was strongly opposing Roosevelt's New Deal and Congress's
support of him
- Businesses were filing lawsuits that allowed this
- Ex: Court unanimously killed NIRA, saying it violated anti-trust
- US v Butler: tax on middlemen (warehouses, processors) in Agricultural
Adjustment Act unconstitutional
- 7 of 9 cases, SC ruled against ND.
- Second New Deal tried to undermine the appeal of Huey Long
- Banking reforms, taxes on wealthy, continue employing people
- Works Progress Administration (WPA) employs hugely: increases by 2
million people each year
- NLRA "Wagner" Act guaranteed workers the right to unionize and
protected them. Required businesses to act in good faith.
- Social Security Act: old age pensions and unemployment relief
(insurance) through wage and payroll taxes
- Only by 1950s did it become seen as primary source of
retirement income, previously supplemental
- Conservative compared to European countries: other countries
used general funds instead of payroll taxes; also used a
regressive flat tax
- Removed a lot of money from circulation, hurting economy
- Excluded about half of workers
- Wealth-Tax "Soak the rich" Act
- Raised taxes on evasive rich
- Called communism; Roosevelt responds that he wanted to "save
capitalism" by supporting a more equal dist. of wealth
Huey Long assassinated in 1939. Roosevelt wins in a landslide against
Alf Landon
- Keeps huge Democrat majority in Congress
- Constructs a new Democrat political bloc
Court-packing
- If Congress enlarged the Court, it wouldn't block the Second ND
- Wanted 6 new justices, one for each over 75 years old
- Backfired; public focused on constitutionality of proposal
- Congressional Reps and Dems decided it was too controversial
- Justices began to uphold SS Act, Wagner Act.
- One conservative justice resigned, replaced by Roosevelt with a
New Dealer
Evaluating the New Deal
- Economy began to grow around 1939, so gov't stopped spending,
increasing unemployment, tumbling the economy
- Roosevelt relaunched federal spending
- Housing funding
- Conservative Southern Democrats balked at Northerners and
African-Americans, acting against New Deal
- Congressional elections of 1938 lost many seats to Reps
- Roosevelt began speaking about "preserving" reforms instead of
expanding
- Stalemate
- "more energy than coherence"
- But it did improve life in many ways: worker protections, bank regs,
public health
- Demonstrated that American Democracy could handle a collapse of
capitalism
- 10M Americans still remained unemployed
- Halfway Revolution was its longlasting impact