Chapter 33 Outline

Chapter 33 – The Great Depression and the New Deal 

I. FDR: A Politician in a Wheelchair

1. Presidential campaign of 1932
2. More than 11 million unemployed workers sank into poverty 
3. The public wanted a new president which they found in Franklin D. Roosevelt
4. His wife, Eleanor Roosevelt, became one of the most active First Ladies

II. Presidential Hopefuls of 1932

1. In the campaign, Roosevelt wished to prove that he was not crippled
2. He was often contradictory (which is fine according to Henry David Thoreau) 
3. Roosevelt promised a balanced budget and claimed "throw the spenders out" 
4. Democrats had the advantage in this race.
5. Roosevelt was happy and Herbert Hoover was more serious

III. Hoover’s Humiliation in 1932

1. Hoover was defeated 472 to 59.
2. This was mainly due to the transition of the Black vote from the Republican to the Democratic Party.
3. It could be argued that any presidential candidate except for Hoover could win because the public wanted a change of face so badly
4. During the lame-duck period Hoover attempted to bind Roosevelt to an anti-inflationary policy that would restrict some of the New Deal, but he ultimately failed. 
5. Hooverites would later accuse FDR of letting the depression worsen so that he could emerge as an even more shining savior.

IV. FDR and the Three R’s: Relief, Recovery, and Reform

1. Roosevelt called for a nationwide bank holiday to eliminate paranoid bank withdrawals
2. then he started his Three R’s: Relief, Recovery, and Reform
3. Within the first 100 days FDR and the Deomcratic-controlled Congress passed more legislation than ever before. 

V. Roosevelt Manages the Money

1. The Emergency Banking Relief Act of 1933 was passed first. 
2. FDR declared a one week “bank holiday” in order to get everything set up for a more stable reopening
3. Roosevelt used the Radio to communicate with America through his famous "fire side chats" 
4. In order to put more confidence into the banking system congress passed the Glass-Steagall Banking Reform Act, that provided the Federal Deposit Insurance Corporation (FDIC) which insured individual deposits up to $5000
5. FDR also took the nation off of the gold standard and achieved controlled inflation by ordering Congress to buy gold at increasingly higher prices.

VI. Roosevelt Manages the Money

1. The Emergency Banking Relief Act gave FDR the authority to manage banks.
2. FDR used his fireside chats to communicate with America that they should place money and confidence in the banks.
3. The Glass-Steagall Banking Reform Act was passed.

VII. A Day for Every Demagogue

1. Roosevelt created the Civilian Conservation Corps (CCC), which provided employment in government camps for about 3 million uniformed young men.
2. They reforested areas, fought fires, drained swamps, controlled floods, etc.
3. The Federal Emergency Relief Act looked for immediate relief rather than long-term alleviation, and its Federal Emergency Relief Administration (FERA) was headed by Harry L. Hopkins.
4. The Agricultural Adjustment Act (AAA) made available many millions of dollars to help farmers meet their mortgages.
5. The Home Owners’ Loan Corporation (HOLC) refinanced mortgages on non-farm homes and insured the loyalties of middle class, Democratic homeowners.
6. The Civil Works Administration (CWA) was established late in 1933, and it was designed to provide temporary jobs during the winter emergency.
7. Congress also authorized the Works Progress Administration (WPA) in 1935, which put $11 million on thousands of public buildings, bridges, and hard-surfaced roads and gave 9 million people jobs

VIII. New Visibility for Women

1. women, with the right to vote, were more powerful than ever 
2. Eleanor Roosevelt was the most visible
3. Sec. of Labor Frances Perkins was the first female cabinet member and Mary McLeod Bethune headed the Office of Minority Affairs in the NYA
4. Pearl S. Buck wrote a beautiful and timeless novel, The Good Earth, about a simple Chinese farmer which earned her the Nobel Prize for literature in 1938.

IX. Helping Industry and Labor

1. The National Recovery Administration (NRA), by far the most complicated of the programs, was designed to assist industry, labor, and the unemployed.
2. There were maximum hours of labor, minimum wages, and more rights for labor union members, including the right to choose their own representatives in bargaining.
3. it was shot down by the Supreme Court.
4. One of the Hundred Days Congress’s earliest acts was to legalize light wine and beer with an alcoholic content of 3.2% or less and also levied a $5 tax on every barrel manufactured.
5. Prohibition was officially repealed with the 21st Amendment.

X. Paying Farmers Not to Farm

1. To help the farmers, which had been suffering ever since the end of World War I, Congress established the Agricultural Adjustment Administration, which paid farmers to reduce their crop acreage and would eliminate price-depressing surpluses.
2. The Supreme Court killed it in 1936.
3. The New Deal Congress also passed the Soil Conservation and Domestic Allotment Act of 1936, which paid farmers to plant soil-conserving plants like soybeans or to let their land lie fallow.
4. The Second Agricultural Adjustment Act of 1938 was a more comprehensive substitute that continued conservation payments but was accepted by the Supreme Court.

XI. Dust Bowls and Black Blizzards

1. There was a large drought in 1933, combined with winds which peeled away the over exhausted topsoil of  parts of Missouri, Texas, Kansas, Arkansas, and Oklahoma which forced many farmers to migrate west to California
2. The Frazier-Lemke Farm Bankruptcy Act, passed in 1934, made possible a suspension of mortgage foreclosure for five years, but it was voided in 1935 by the Supreme Court.
3. In 1935, FDR set up the Resettlement Administration, charged with the task of removing near-farmless farmers to better land.
4. Commissioner of Indian Affairs was headed by John Collier who sought to reverse the forced-assimilation policies in place since the Dawes Act of 1887.
5. He promoted the Indian Reorganization Act of 1934 (the Indian “New Deal”), which encouraged tribes to preserve their culture and traditions.
6. Not all Indians liked it though, saying if they followed this “back-to-the-blanket” plan, they’d just become museum exhibits. 77 tribes refused to organize under its provisions (200 did).

XII. Battling Bankers and Big Business

1. The Federal Securities Act (“Truth in Securities Act”) required promoters to transmit to the investor sworn information regarding the soundness of their stocks and bonds.
2. The Securities and Exchange Commission (SEC) was designed as a stock watchdog administrative agency, and stock markets henceforth were to operate more as trading marts than as casinos.
3. In 1932, Chicagoan Samuel Insull’s multi-billion dollar financial empire had crashed, and such cases as his resulted in the Public Utility Holding Company Act of 1935.

XIII. The TVA Harnesses the Tennessee River

1. The sprawling electric-power industry was condemned by New Dealers who claimed that they were over charged. 
2. the Tennessee Valley Authority (TVA) (1933) sought to discover exactly how much money it took to produce electricity and then keep rates reasonable.
3. It constructed dams on the Tennessee River and helped the 2.5 million extremely poor citizens of the area improve their lives and their conditions.
4. Hydroelectric power of Tennessee would give rise to that of the West.

XIV. Housing Reform and Social Security

1. To speed recovery and better homes, FDR set up the Federal Housing Administration (FHA) in 1934 to stimulate the building industry through small loans to householders.
2. Congress bolstered the program in 1937 by authorizing the U.S. Housing Authority (USHA), designed to lend money to states or communities for low-cost construction.
3. This was the first time in American history that slum areas stopped growing.
4. The Social Security Act of 1935 was the greatest victory for New Dealers, since it created pension and insurance for the old-aged, the blind, the physically handicapped, delinquent children, and other dependents by taxing employees and employers.
5. Republicans attacked this bitterly, as such government-knows-best programs and policies that were communist leaning and penalized the rich for their success. They also opposed the pioneer spirit of “rugged individualism.”

XV. A New Deal for Labor

1. A rash of walkouts occurred in the summer of 1934, and after the NRA was axed, the Wagner Act (AKA, National Labor Relations Act) of 1935 took its place. The Wagner Act guaranteed the right of unions to organize and to collectively bargain with management.
2. The CIO also won a victory against the United States Steel Company, but smaller steel companies struck back, resulting in such incidences as the Memorial Day Massacre of 1937 at the plant of the Republic Steel Company of South Chicago in which police fired upon workers, leaving scores killed or injured.
3. In 1938, the Fair Labor Standards Act was passed, setting up minimum wage and maximum hours standards and forbidding children under the age of sixteen from working.
4. Roosevelt enjoyed immense support from the labor unions.

XVI. Landon Challenges “the Champ”

1. Presidential Campaign of 1936
2. The Republicans nominated Kansas Governor Alfred M. Landon to run against FDR.
3. Landon was weak on the radio and weaker in personal campaigning, and while he criticized FDR’s spending, he also favored enough of FDR’s New Deal to be ridiculed by the Democrats as an unsure idiot.
4. Roosevelt won in a huge landslide, getting 523 electoral votes to Landon’s 8.
5. FDR won primarily because he appealed to the “forgotten man,” whom he never forgot.

XVII. Nine Old Men on the Bench

1. The 20th Amendment had cut the lame-duck period down to six weeks, so FDR began his second term on January 20, 1937, instead of on March 4.
2. He controlled Congress, but the Supreme Court kept blocking his programs, so he proposed a shocking plan that would add a member to the Supreme Court for every existing member over the age of 70, for a maximum possible total of 15 total members.
3. For once, Congress voted against him because it did not want to lose its power.
4. Roosevelt was ripped for trying to become a dictator.

XVIII. The Court Changes Course

1. FDR’s “court-packing scheme” failed, but he did get some of the justices to start to vote his way, including Owen J. Roberts, formerly regarded as a conservative.
2. So, FDR did achieve his purpose of getting the Supreme Court to vote his way.
3. However, his failure of the court-packing scheme also showed how Americans still did not wish to tamper with the sacred justice system.

XIX. Twilight of the New Deal

1. During Roosevelt’s first term, the depression did not disappear, and unemployment, down from 25% in 1932, was still at 15%.
2. In 1937, the economy took another brief downturn when the “Roosevelt Recession,” caused by government policies.
3. In 1937, FDR announced a bold program to stimulate the economy by planned deficit spending.
4. In 1939, Congress relented to FDR’s pressure and passed the Reorganization Act, which gave him limited powers for administrative reforms, including the key new Executive Office in the White House.
5. The Hatch Act of 1939 barred federal administrative officials, except the highest policy-making officers, from active political campaigning and soliciting.

XX. New Deal or Raw Deal?

1. Foes of the New Deal condemned its waste, citing that nothing had been accomplished.
2. Critics were shocked by the “try anything” attitude of FDR, who had increased the federal debt from $19.487 million in 1932 to $40.440 million in 1939.
3. It took World War II, though, to really lower unemployment. But, the war also created a heavier debt than before.

XXI. FDR’s Balance Sheet

1. New Dealers claimed that the New Deal had alleviated the worst of the Great Depression.
2. FDR also deflected popular resent against business and may have saved the American system of free enterprise, yet business tycoons hated him.
3. He provided bold reform without revolution.
4. Later, he would guide the nation through a titanic war in which the democracy of the world would be at stake.