A New Deal Fights the Depression

1. A New Deal Fights the Depression Chapter 15-1

2. Americans Get A New Deal • By the 1932 election it was clear that Americans were ready for a new leader • The election would pit the Democratic candidate Franklin Roosevelt against Hoover • By this time had come to blame Hoover for the economic crisis as well as for lack of relief by the government • FDR was a reformed minded Governor from NY • In the end FDR won an overwhelming victory over Hoover • The Democrats also won the majority in both the House & in the Senate as well

3. Waiting For Roosevelt To Take Over • It would be four months before FDR would enter the White House but he would not sit idlely by as he would begin assembling his advisors • He would draw from all aspects of society; business, education. Lawyers, journalists, etc. • His advisors would become known as the “Brain Trust” • His plan was to create & try everything that could be conceived of, keeping what worked & discarding what did not • His programs would become known as the New Deal • This New Deal would focus on three general goals • Relief for the needy • Economic recovery • Financial reform

4. The Hundred Days • Once in office FDR launched a period of great activity which became known as the Hundred Days • It was during this period that FDR & Congress passed more than 15 pieces of major New Deal Legislation • These new laws & programs would expand the governments role into our nations economy like never before • His first step was to address the crisis in the banking & finance area • On the day after taking office FDR closed all banks declaring a “bank holiday” • He then persuaded congress to pass the Emergency banking Relief Act which would allow examiners to inspect the books of all banks allowing only those that were sound to reopen • Those that were insolvent, unable to pay their debts, were closed • This generated great confidence in the system

5. An Important Fireside Chat • On March 12, a day before the banks were to reopen, FDR went over the radio to give the first of what was to become many “fireside chats” • These charts were informal speeches informing the public on new policy & what was being done to combat the crisis at hand • The speeches made Americans feel as though they were having a personal conversation with the President • The first chat would be over the importance of keeping their savings in a newly opened bank

6. Regulating Banking & Finance • Congress took another step in shoring up the banking system as they passed the Glass-Steagall Act • This act would establish the Federal Deposit Insurance Corporation (FDIC) • This would insure all deposits up to $5,000 by the federal government • Congress also worked to regulate the stock market as the Federal Securities Act was passed that required corporations to provide complete information on all stock offerings • The Securities Exchange Commission (SEC) was also created to prevent inside trading • In addition FDR was able to convince congress to allow the manufacture of some alcohol in order to gain revenue • Prohibition would later be repealed by the 21st Amendment in 1933

7. Rural Assistance • Along with banking reform FDR would also attempt to help those most hit by the Depression……the farmers • The Agricultural Adjustment Act was passed • The AAA sought to raise crop prices by paying farmers to leave fields unplanted as well as destroying crops & even livestock ready for market • Another government venture was the Tennessee Valley Authority which would build a series of dams that would produce electricity, create jobs as well as assist in flood control

8. Providing Work Projects • Other work projects were created to aid in the recovery • The Civilian Conservation Corps was one such project • It was here that young men between the ages of 18 & 25 were put to work building parks, roads, planting tress, etc… • By the end of the program more than 3 million men had been employed • The men were paid $30 a month & out of that $25 was automatically sent home to assist the family • The men were also given uniforms, room, & food • The Public Works Administration (PWA) was also created as part of the National Industrial Recovery Act • The PWA provided money to states for the purpose of constructing new schools & public buildings • When this didn’t make a great enough dent in the unemployment rate FDR created the Civil Works Administration (CWA) to create more jobs

9. Promoting Fair Business Practices • The NIRA also sought to establish fair business practices by establishing new codes or laws • The National Recovery Administration (NRA) would also be established to set prices & establish standards • The goal of the NRA was to slow layoffs, falling prices, & wage cuts • Many would criticize the NRA as serving the interests of big business

10. Food, Clothing, & Shelter • A number of programs would deal with the housing crisis • The Home Owners Loan Corporation (HOLC) would be created to make low interest loans to homeowners • In addition the Federal Housing Agency (FHA) was also created to furnish home mortgages • Another program was Federal Emergency Relief Administration (FERA) which would supply over $300 million in direct relief to those in need

11. The New Deal Comes Under Attack • By the end of the Hundred days millions od Americans had benefited form the New Deal Programs • In addition confidence in the nations ability to recover had been restored • Although FDR knew the policy of deficit spending, spending more than you have, was not the long term answer he knew it was a necessary evil • Many opposed this tactic in spite of the challenges • Opposition would come from both the liberal side, who believed that he did not go far enough, & the conservatives who believed he went to far

12. The Supreme Court Reacts • Some New Deal legislation would be challenged in the courts • The Supreme Court would rule the NIRA unconstitutional as well as the AAA • The court said the Federal government had encroached on state powers as well as gave legislative powers to the executive branch • In fear that the court may try to influence or strike down further New Deal legislation FDR proposed a reorganization of the Supreme Court • He proposed appointing six new members, all that would support his ideas for recovery • This “court-packing” idea created a storm of protest • In the end FDR would get hiss way as he would appoint seven new justices through the established method

13. Three Fiery Critics • Some of the toughest critics would come from the conservative side • Father Charles Coughlin who was a priest from Detroit who conducted a weekly radio show • Dr. Francis Townsend who would propose a health plan for the elderly • Huey Long who would propose a share the wealth plan of giving some to all • Long was achieving the most success as he coveted the White House but he would be assassinated • FDR knew by this time that he had accomplished many things but he also knew the toughest road to recovery still lie ahead