The New Deal

 

I.                    FDR

a.       Characteristics of FDR

                                                               i.      Had to put steel braces on his legs as a kid (this humbled him)

                                                             ii.      Tried for two years to wiggle one big toe (this helped him in patience, tolerance, compassion, and strength of will)

                                                            iii.      Eventually became tall, athletic, and handsome

b.      Eleanor Roosevelt

                                                               i.      Niece of Teddy Roosevelt; was FDR’s distant cousin

                                                             ii.      She was tall and not pretty

                                                            iii.      Became America’s most active first lady

                                                           iv.      Was a champion of the poor

                                                             v.      Was for civil rights (one stood between an aisle separating blacks and whites; also resigned from Daughters of the American Revolution after they refused to allow Marian Anderson, an African-American, to sing at Independence Hall)

                                                           vi.      Through her lobbying of her husband, her speeches, and her syndicated newspaper column, she powerfully influenced the policies of the national government

                                                          vii.      She traveled countless mils with him or on his behalf in all his campaigns, beginning with his run for the New York legislature before WWI

                                                        viii.      Her personal relationship with her husband was often rocky because of his affairs

c.       FDR’s Appeal

                                                               i.      Had a commanding presence, great speaking voice, and was charming

                                                             ii.      As governor of New York, he had sponsored heavy State spending to relieve human suffering

                                                            iii.      He was for the “forgotten man” (the poor), which alienated him from the rich

d.      Democratic Nomination

                                                               i.      Nominated Roosevelt; Al Smith was upset over the nomination – he wanted a second chance

                                                             ii.      Democratic platform:

1.      Repeal of prohibition

2.      Talked about the Hoover created depression

3.      Promised a balanced budget

4.      Wanted sweeping social and economic reforms

                                                            iii.      Roosevelt was the first to accept his nomination in person

II.                 Presidential Hopefuls of 1932

a.       Roosevelt’s Campaign

                                                               i.      Emphasized:

1.      He was not an invalid

2.      Preached a New Deal for the “forgotten man”

3.      Promised a balanced budget

4.      Berated Hoover’s deficits

                                                             ii.      Speeches were written by the “Brain Trust” – a small group of reform-minded intellectuals; most were young college professors; like a kitchen cabinet (an informal group of advisors to the president).  They authored much of the New Deal legislation

b.      Hoover’s Campaign

                                                               i.      Emphasized:

1.      The worst is past; it might have been worse

2.      Reaffirmed his faith in American free enterprise and individual initiative

3.      Thought that if the Hawley-Smoot Tariff was to be repealed, it would be a bad thing

                                                             ii.      His campaign was more pessimistic than Roosevelt’s optimistic campaign

III.               Hoover’s Humiliation In 1932

a.       Election of 1932

                                                               i.      Roosevelt won:

1.      22.8 million-15.8 million

2.      472-59

                                                             ii.      Was a reaction to being anti-Hoover; any respectable Democrat would’ve won; people wanted a change

b.      Shift of Blacks To the Democratic Party

                                                               i.      One feature of the election was the beginning of a distinct shift of blacks from the Republican party (had stayed loyal to Lincoln) to the Democratic party

                                                             ii.      Blacks suffered the worst in the depression – last hired and first fired

c.       The Lame Duck Period For Hoover

                                                               i.      Hoover was helpless to embark upon any long-range policies without the cooperation of Roosevelt.  FDR was very uncooperative

                                                             ii.      Hoover tried unsuccessfully to have FDR agree to anti-inflation policies that would’ve made impossible many of the New Deal experiments

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

a.       First Hundred Days

                                                               i.      Lasted from March-June 1933

                                                             ii.      Period of time when Roosevelt swiftly implemented his New Deal programs; an unprecedented amount of legislation was passed

                                                            iii.      His first actions were to:

1.      Declare a national bank holiday (so that no one would take out money)

2.      Called a special session of Congress

                                                           iv.      New Deal reforms included:

1.      Unemployment insurance

2.      Old-age insurance

3.      Minimum wage

4.      Conservation

5.      Development of natural resources

6.      Restrictions on child labor

b.      Relief, Recovery, and Reform

                                                               i.      Short-range goals – relief and immediate recovery

                                                             ii.      Long-range goals – permanent recover and reform

                                                            iii.      The three-R objectives often overlapped

c.       How Were the Laws Passed So Quickly?

                                                               i.      Congress was made up of mostly Democrats, like Roosevelt

                                                             ii.      Congress shared the panicked feeling and rubber-stamped legislation; they gave the president blank-check powers

                                                            iii.      The public was so desperate for action that any movement, even in the wrong direction, seemed better than no movement at all

                                                           iv.      Many ideas were carry-overs from the progressive WWI era

V.                 Roosevelt Manages the Money

a.       Banking Acts

                                                               i.      All were passed after Roosevelt called a special session of Congress

                                                             ii.      Emergency Banking Relief Act of 1933 –

1.      Gave the president the power to regulate banking transactions and foreign exchange

2.      Also gave the power to the president to reopen solvent banks (banks that could pay their debts)

                                                            iii.      Glass-Steagall Banking Reform Act of 1933 –

1.      Created the Federal Deposit Insurance Corporation, which insured individual deposits up to $5,000

2.      This ended the epidemic of bank failures since Andrew Jackson’s “wildcat” days

                                                           iv.      Gold –

1.      Ordered all private holdings of gold be surrendered to the Treasury in exchange for paper currency

2.      Took the nation off the gold standard (everything was to be paid be for by paper money from now on)

3.      He wanted to inflate the value of paper money by buying gold.  As the government bought gold, there would be less of it in circulation, so the value of gold went up.  Eventually, all the government gold buying would put a lot of paper money in circulation and inflate its value

b.      Fireside Chat

                                                               i.      Roosevelt gave 30 of these over the radio

                                                             ii.      He reassured the people that it was better to keep money in a bank than under their mattress

VI.              Creating Jobs For the Jobless

a.       Unemployment

                                                               i.      One in every 4 didn’t have a job

                                                             ii.      This was the highest unemployment rate ever

                                                            iii.      Roosevelt didn’t hesitate to use money to stimulate job growth

b.      Civilian Conservation Corps (CCC)

                                                               i.      Provided employment for 3 million youths who might’ve turned to crime

                                                             ii.      They were employed in reforestation, firefighting, flood control, and swamp drainage

                                                            iii.      The recruits were required to help their parents by sending home most of their pay

c.       Federal Emergency Relief Act (FERA)

                                                               i.      Headed by a social worker friend of Roosevelt’s from New York, named Harry L. Hopkins

                                                             ii.      His agency granted about $3 billion to the State for direct payments or wages on work projects

d.      Agricultural Adjustment Act (AAA)

                                                               i.      Made available millions of dollars to help farmers meet their mortgages

e.       Home Owners’ Loan Corporation (HOLC)

                                                               i.      Created to refinance mortgages on nonfarm homes

                                                             ii.      It assisted about a million households

f.        Civil Works Administration (CWA)

                                                               i.      Created as a branch of the FERA and fell under the direction of Hopkins

                                                             ii.      Designed to provide temporary jobs

                                                            iii.      It was criticized as putting to work thousands in useless jobs, such as leaf raking and snow shoveling

VII.            A Day For Every Demagogue

a.       Father Charles Coughlin

                                                               i.      Headed the National Union for Social Justice, which denounced FDR’s New Deal policies

                                                             ii.      Catholic priest in Michigan who began broadcasting in 1930 and whose slogan was “Social Justice.”  His show was weekly and discussed politics and finance

                                                            iii.      His rants became so anti-Semitic, fascist, and demagogic (god-like), that he was taken off the air by his superiors in 1942

b.      Senator Huey P. Long

                                                               i.      Was a former populist governor of Louisiana who ruled the State like a dictator.  He then became a Senator of the State

                                                             ii.      Was a trouble-maker who used his talents to publicize his “Share Our Wealth” program and attract members to its society.  It promised to make “Every Man a King” by taxing the wealthy

                                                            iii.      Every farmer was to receive $5,000 at the expense of the prosperous

                                                           iv.      Fear of Long becoming a fascist dictator ended when he was shot by an assassin in the Louisiana State capitol in 1935

c.       Dr. Francis E. Townsend

                                                               i.      Was a retired physician whose savings had recently been wiped out

                                                             ii.      He attracted the support of 5 million senior citizens when his plan for relief called for giving everyone 60 years or over $200 a month, as long as it was spent within the month

d.      Works Progress Administration

                                                               i.      Objective was employment on useful projects and to quiet crackbrained proposals

                                                             ii.      Another agency under the supervision of Hopkins

                                                            iii.      Spent about $11 billion on thousands of public buildings, bridges, and hard-surfaced roads

                                                           iv.      Other projects:

1.      Controlled crickets

2.      Built a monkey pen

                                                             v.      Projects like these were criticized as useless, but the project employed 9 million people over 8 years

e.       Agencies of the WPA

                                                               i.      Found jobs for high school and college students

                                                             ii.      Also employed actors, musicians, and writers

                                                            iii.      Again, many criticized the agencies as useless jobs, but it did preserve art, nourish talent (like John Steinbeck – a future Nobel Prize novelist), and create millions of pieces of publicly displayed art

VIII.         New Visibility For Women

a.       Women In the White House

                                                               i.      Eleanor Roosevelt – most visible woman in the White House

                                                             ii.      Secretary of Labor Frances Perkins – was America’s first woman cabinet member.  She was subjected to much undeserved criticism from male businessmen

                                                            iii.      Mary McLeod Bethune – director of the Office of Minority Affairs in the National Youth Administration (highest African American in the Roosevelt administration)

b.      Women In Social Sciences

                                                               i.      Anthropology – a new field

1.      Ruth Benedict – wrote Patterns of Culture (1934), which established the study of cultures as collective personalities.  Each culture, like each individual, had its own pattern of thought and action

2.      Margaret Mead – was one of Benedict’s students. Wrote 34 books and had a curatorship at the American Museum of Natural History in New York City.  She helped popularize cultural anthropology and achieved a celebrity status rare among social scientists

                                                             ii.      Literature

1.      Pearl S. Buck – won acclaim as a novelist.  Wrote The Good Earth (1931), which earned her the Nobel Prize for literature in 1938.  She also used her fame to advance humanitarian causes

IX.              Helping Industry and Labor – Second New Deal (pushed aid to particular groups, such as labor organizations)

a.       National Recovery Administration (NRA)

                                                               i.      The most complex and far-reaching effort by the New Dealers to combine relief, recovery, and reform.  It was designed to assist industry, labor, and the unemployed

                                                             ii.      Industries were to work out codes of “fair competition”:

1.      Set a maximum number of hours of labor (so that more people could be hired)

2.      Minimum-wage levels

                                                            iii.      Labor was given these rights:

1.      To organize

2.      Bargain collectively through representatives of their own choosing

3.      Antiunion contracts were not allowed

4.      Use of child labor was restricted

b.      Ups and Downs of the NRA

                                                               i.      Ups:

1.      Patriotism was aroused

2.      A blue eagle became their widely known insignia

3.      Upswing in business

                                                             ii.      Downs:

1.      Too much self-sacrifice was expected of labor, industry, and the public

2.      Businessmen violated the codes

3.      The Supreme Court declared the NRA to be illegal in the Schechter decision:

a.       Declared that congressional control of interstate commerce could not apply to a local business (like Schechter’s chicken business)

b.      Congress couldn’t delegate legislative powers to the executive branch (like giving the NRA the right to adjust minimum wage and work hours)

c.       Public Works Administration (PWA)

                                                               i.      Intended for industrial recovery and unemployment relief

                                                             ii.      Headed by the Secretary of the Interior, Harold L. Ickes

                                                            iii.      Over $4 billion was spent on 34,000 projects, including public buildings, highways, and parks

1.      Grand Coulee Dam on the Columbia River

a.       Largest concrete structure in the U.S.

b.      Irrigated ½ million acres (even though the government was trying to reduce farm surpluses)

c.       Revitalized the area

d.      Created more electric power than the TVA

d.      Beer and Wine Revenue Act

                                                               i.      With the repeal of the 18th Amendment eminent, Congress created an act that could generate some revenue for the government.  This act:

1.      Legalized light wine and beer

2.      Put a tax of $5 on every barrel

X.                 Paying Farmers Not To Farm

a.       Overproduction

                                                               i.      Ever since WWI, farmers had suffered from low prices and overproduction

                                                             ii.      During the depression, conditions became even worse; farmers were foreclosed

b.      Agricultural Adjustment Administration (AAA)

                                                               i.      Was to establish “parity prices” for basic commodities.  “Parity” was the price set for a product that gave it the same value as between the years 1909 to 1914

                                                             ii.      The AAA would also eliminate surpluses by paying growers to reduce their crops

                                                            iii.      The cost would be paid by processors of farm products (such as flour millers), who in turn would increase the price to consumers

c.       Problems With the AAA

                                                               i.      Program started after the cotton crop for 1933 had already been planted; many of the new plants were destroyed

                                                             ii.      Several million pigs were purchased and slaughtered; some were given to people who needed food, while others were used for fertilizer.  Many criticized the latter as wasteful

                                                            iii.      Paying farmers not to farm actually increased unemployment

                                                           iv.      The food processors and consumers were unhappy at the increased taxes or prices they had to pay to finance the program

                                                             v.      The Supreme Court eventually declared its taxation provisions unconstitutional in 1936

d.      Soil Conservation and Domestic Allotment Act of 1936

                                                               i.      Payed farmers to plant soil-conserving crops, like soybeans, or let their land lie fallow for conservation

                                                             ii.      The Supreme Court upheld this act

e.       Second Agricultural Adjustment Act of 1938

                                                               i.      More comprehensive than the last act, but continued conservation payments

                                                             ii.      If growers observed acreage restrictions on specified commodities like cotton and wheat, they would be eligible for parity payments

XI.              Dust Bowl and Black Blizzard

a.       Drought In the Great Plains

                                                               i.      In 1933, a long drought struck the States of the trans-Mississippi Great Plains

                                                             ii.      Lack of rain, but much wind and sun caused what would be called the Dust Bowl.  Some had to wear protective masks on their faces and one 7-year old boy even suffocated

b.      Causes of the Dust Bowl

                                                               i.      Drought and wind (erosion)

                                                             ii.      High grain prices during WWI had enticed farmers to bring countless acres of marginal land under cultivation

                                                            iii.      The steam tractor and disk plow were tearing up land faster than anything else, leaving the thin, powdery topsoil to be blown away (overintensive farming)

c.       Results of the Dust Bowl

                                                               i.      In 5 years, 350,000 Oklahomans and Arkansans went to southern CA.  They were written about in John Steinbeck’s best-selling novel The Grapes of Wrath (1939), which was a popular book

                                                             ii.      Relief efforts –

1.      Frazier-Lemke Farm Bankruptcy Act of 1934

a.       Made possible a suspension of mortgage foreclosures for 3 years

2.      Resettlement Administration (1935)

a.       Removed near-farmless farmers to better land

3.      Civilian Conservation Corps

a.       More than 200 million young trees were successfully planted on the bare prairies as windbreaks

d.      Native Americans

                                                               i.      Commissioner of the Bureau of Indian Affairs

1.      Was John Collier.  He wanted to:

a.       Return ownership of certain lands to tribes

b.      Establish tribal governments

c.       Provide economic relief

                                                             ii.      Indian Reorganization Act of 1934

1.      Reversed the forced assimilation policies of the Dawes Act of 1887.  It did the following:

a.       Encouraged tribes to establish local self-government and to preserve their native crafts and traditions

b.      It also helped stop the loss of Indian lands and revived tribes’ interest in their identity and culture

c.       Some disliked the legislation because they felt it made them “museum pieces.”  77 did not comply with the legislation, while nearly 200 others did

XII.            Battling Bankers and Big Business

a.       Reforming Bank Laws

                                                               i.      Reformists wanted to restrict bankers who had loaned money to gullible investors and speculators.  They wanted to limit fraud and deception

                                                             ii.      Federal Securities Act

1.      Required promoters to transmit to the investor sworn information regarding the soundness of their stocks and bonds

                                                            iii.      Securities and Exchange Commission (SEC)

1.      Designed to act as a watchdog for stocks

2.      The stock market was truly to operate as a market and not a gambling casino

b.      Reforming Big Businesses

                                                               i.      Public Utility Holding Company Act of 1935

1.      It regulates the parent or “holding” companies (that hold the stock of) electric and natural gas utilities, so that such owners can’t raise rates by charging high fees to utilities for services from their affiliates, and can’t speculate in riskier businesses with the ratepayer’s money, since such speculation harms utilities’ credit and raises their cost of borrowing money, thereby raising customers’ utility bills

2.      Requires utility parent companies to incorporate in the same state where the utility operates, so that the state can regulate them, or to be regulated by the Securities and Exchange Commission (SEC) if they operate in several states

XIII.         The TVA

a.       Growth of the Electric-Power Industry

                                                               i.      Grew in a few decades from nothing to a $13 billion industry

                                                             ii.      The Tennessee River drained a badly eroded area which had 2.5 million of the most poverty-stricken people in America

                                                            iii.      By developing hydroelectric potential in the area, the government could combine the immediate advantage of putting thousands of people to work with a long-term project for reforming the power monopoly

b.      Tennessee Valley Authority (TVA)

                                                               i.      Created in 1933

                                                             ii.      Was a vision of Senator George W. Norris of Nebraska

                                                            iii.      This was the most revolutionary act because:

1.      The government ran the business

2.      It could discover how much the production and distribution of electricity cost, so that a measure could be set up to test the fairness of rates charged by private companies (there were rumors of price gauging)

c.       Results of TVA

                                                               i.      Critics:

1.      Low cost of TVA power was due to the absence of taxes

2.      Was socialism (this argument would confine this type of federal guided development)

                                                             ii.      Proponents:

1.      Full employment

2.      Cheap electric power

3.      Low-cost housing

4.      Restoration of eroded soil

5.      Reforestation

6.      Improved navigation

7.      Improved flood control

                                                            iii.      In the future, many dams would be built out West.  Hydroelectric power from those dams would drive the growth of the urban West, and the waters they diverted would nurture agriculture in the previously bone-dry western deserts

XIV.         Housing and Social Security

a.       Federal Housing Administration (FHA)

                                                               i.      Building industry was stimulated by small loans to people who owned houses, to improve their house or for completing new ones

                                                             ii.      It was one of the few agencies to outlast the age of Roosevelt

b.      U.S. Housing Authority (USHA)

                                                               i.      Designed to lend money to States or communities for low-cost construction

                                                             ii.      650,000 units were completed

                                                            iii.      Real estate promoters, builders, and landlords opposed the building, but slums shrank for the first time

c.       Social Security Act

                                                               i.      To cushion future depressions, it provided for federal-State unemployment insurance

                                                             ii.      It also provided security for old age – retired workers were to receive regular payments from the government and were to be financed by a payroll tax on both employers and employees

                                                            iii.      Provisions were also made for the blind, the physically handicapped, delinquent children, and other dependents

                                                           iv.      Eventually, social security would be expanded even further

d.      How Did Social Security Come About?

                                                               i.      Through the example of Europe

                                                             ii.      In agricultural America, there had always been farm chores for all ages, and large families had cared for its own.  In the urbanized economy, the government was now recognizing its responsibility for the welfare of its citizens

XV.           A New Deal For Labor

a.       Labor Feeling More Secure

                                                               i.      New Deal programs lessened unemployment

                                                             ii.      Labor began to feel more secure and assertive, so more strikes occurred (summer 1934)

b.      National Labor Relations Act of 1935 (Wagner Act)

                                                               i.      Created the National Labor Relations Board, which would help unskilled workers organize themselves into effective unions

                                                             ii.      Reasserted the right ob labor to engage in self-organization and to bargain collectively through representatives of their own choice

c.       Committee For Industrial Organization (CIO)

                                                               i.      In 1935, John L. Lewis, boss of the United Mine Workers succeeded in forming the Committee for Industrial Organization within the ranks of the skilled-craft American Federation of Labor

                                                             ii.      However, ever since the 1880s, skilled labor unions showed remorse towards unskilled workers, especially blacks.  The AFL continued this trend by not recognizing the new union

                                                            iii.      CIO and the Automobile Industry –

1.      In late 1936, workers refused to leave the factory building of General Motors in Flint, Michigan, preventing the importation of strikebreakers (sit-in)

2.      The CIO won when General Motors recognized the CIO as the sole bargaining agency for its employees

                                                           iv.      CIO and the Steel Industry –

1.      United States Steel Company averted a costly strike by voluntarily granting rights of unionization to it employees in the CIO

2.      However, there was still a Memorial Day massacre in 1937 at the Republic Steel Company in South Chicago

d.      Fair Labor Standards Act of 1938

                                                               i.      Industries involved in interstate commerce were to set up minimum-wage and maximum-hour levels (40 cents an hour and 40-hour week)

                                                             ii.      Labor by children under 16 was forbidden

                                                            iii.      This was opposed by many industrialists who had profited from low-wage labor

                                                           iv.      The act excluded agricultural and domestic workers, so many blacks, Mexicans, and women were not benefiting from the act

e.       Labor Unions Thrive

                                                               i.      The president supported labor unions; labor unions grow enormously during Roosevelt’s presidency

                                                             ii.      The CIO broke completely with the AFL in 1938 and called itself the Congress of Industrial Organizations (instead of Committee)

                                                            iii.      By 1940, they claimed 4 million members, including 200,000 blacks

XVI.         Landon Challenges “the Champ”

a.       Democratic Nomination

                                                               i.      Democrats had made considerable progress with the New Deal

                                                             ii.      They renominated Roosevelt

b.      Republican Nomination

                                                               i.      Chose the governor of Kansas, Alfred M. Landon

                                                             ii.      He accepted some of the New Deal reforms, but not Social Security

                                                            iii.      His platform condemned the New Deal for its radicalism, experimentation, confusion, and waste (supported the American Liberty League – group of wealthy businessmen who organized in 1934 to fight “socialistic” New Deal schemes)

c.       Election of 1936

                                                               i.      Roosevelt won:

1.      27.8 million-16.7 million

2.      523-8

                                                             ii.      The most lopsided vote in 116 years

                                                            iii.      Democratic majorities were returned to Congress

d.      Voting Patterns

                                                               i.      Needy economic groups, who had voted Republican, now voted Democrat

                                                             ii.      CIO, left-wingers (former third party votes), and blacks

e.       Why Did Roosevelt Win?

                                                               i.      Appealed to the “forgotten man”

                                                             ii.      Roosevelt forged a powerful coalition of the South, blacks, urbanites, and the poor

                                                            iii.      Got support of New Immigrants – many of whom were Catholic and Jews (Roosevelt made many Catholic appointments)

XVII.      Roosevelt’s Court Packing Scheme

a.       20th Amendment

                                                               i.      Ratified in 1933

                                                             ii.      Moved inauguration from March to January

                                                            iii.      Purpose was to limit the lame duck session of Congress by 6 weeks (period where the president was powerless to initiate new policies)

b.      Supreme Court Cases and the New Deal

                                                               i.      In 9 major cases involving the New Deal, 7 had been struck down

                                                             ii.      The Court was conservative, and 6 of the 9 were over 70 years old

                                                            iii.      Some were hanging on because they thought it was their patriotic duty to put down the “socialistic” tendencies of Roosevelt; Roosevelt believed that the voters in three elections – 1932, 34, and 36 had given a verdict in favor of his programs

                                                           iv.      Roosevelt wanted the Supreme Court to get in line with public opinion

c.       Roosevelt’s Response To the Problem

                                                               i.      He asked Congress for legislation to permit him to add a new justice of the Supreme Court for every member over 70 who would not retire; the maximum membership could be 15

                                                             ii.      Roosevelt wanted:

1.      New blood

2.      Said the new court was far behind in its work (this was false and brought heated accusation of dishonesty)

3.      Judges to support his programs

                                                            iii.      This would be Roosevelt’s biggest political mistake in his career

XVIII.    The Court Changes Course

a.       Criticism of Roosevelt’s Court Packing Scheme

                                                               i.      Roosevelt was vilified for attempting to break down the delicate checks and balances among the three branches of government

                                                             ii.      He was accused of trying to make himself a dictator

                                                            iii.      In the eyes of many citizens (mostly Republicans), many basic liberties were at stake

b.      Supreme Court Happenings In Roosevelt’s Second Term

                                                               i.      Justice Own J. Roberts, who was regarded as a conservative, began voting liberal

                                                             ii.      Upheld the principles of:

1.      Minimum wage for women

2.      National Labor Relations Act (Wagner Act)

3.      Social Security Act

c.       Results of Roosevelt’s Court Packing Scheme

                                                               i.      Good:

1.      Congress voted full pay for justices over 70 who retired.  One of the oldest justices resigned and was replaced by a New Deal supporter, Hugo Black

2.      Even though Roosevelt wasn’t able to change the court through legislation, it became more friendly to New Deal reforms; a succession of deaths and resignations enabled him to make 9 appointments, more than any of his predecessors since George Washington

                                                             ii.      Bad:

1.      FDR doused much of the goodwill that helped him during his first term

XIX.         Twilight of the New Deal

a.       Results of the New Deal

                                                               i.      Unemployment went from:

1.      1933 – 25%

2.      1936 – 15%

                                                             ii.      The country was only inching its way back to economic health

b.      Roosevelt’s Recession

                                                               i.      Government policies caused a recession within the depression

                                                             ii.      It was caused by:

1.      Social Security taxes (that were taking away money from incomes)

2.      Administration cutting back on spending to balance the budget

c.       Deficit Spending

                                                               i.      Means that you will spend more than you take in, and will borrow to make up the difference

                                                             ii.      Up until this point, the New Deal had run deficits each year, but they were small and not intended

                                                            iii.      In 1937, Roosevelt embraced an idea by British economist John Maynard Keynes.  Roosevelt would now have a policy of planned deficit spending, although small to conquer the depression

                                                           iv.      Deficit spending has been done by most presidents ever since

d.      Reorganization Act of 1939

                                                               i.      Originally put down by a more conservative Congress and one that questioned Roosevelt’s autocratic notions in the Supreme Court packing scheme

                                                             ii.      This act gave the president limited powers for administrative reforms

                                                            iii.      Created the Executive Office in the White House

e.       Hatch Act of 1939

                                                               i.      Abuses of campaigning:

1.      New Dealers had the richest campaign chest in history

2.      Government relief checks were given to voters just in time for elections

                                                             ii.      To reform the abuses, this act was passed, which did the following:

1.      Barred federal officials from active political campaigning

2.      Forbade the use of government funds for political purposes

3.      Forbade the collection of campaign contributions from people receiving relief payments

4.      Placed limits on campaign contributions and expenditures

                                                            iii.      People were able to get around the legislation

f.        End of the New Deal

                                                               i.      Congressional elections of 1938 cut into the Democratic majority in both houses

                                                             ii.      The New Deal was lacking the support and momentum it had earlier

XX.           New Deal Or Raw Deal?

a.       Critics of the New Deal

                                                               i.      Some of the work that was being done was wasteful; it was just to give people jobs

                                                             ii.      Employed people who were not suited for the jobs

                                                            iii.      Employed some communist or socialist minded people

                                                           iv.      Roosevelt was employing too many Jews

                                                             v.      Was trying things without studying or looking into it first

                                                           vi.      Creating a lot of programs and employing people doesn’t necessarily mean that there’s progress

                                                          vii.      The bureaucracy was growing; the federal government employed hundreds of thousands.  The State governments, on the other hand, were becoming weaker

                                                        viii.      The budget couldn’t be balanced.  The U.S. stood for “unlimited spending.”  National debt:

1.      1932 - $19.5 billion

2.      1939 - $40.5 billion

                                                           ix.      Americans were becoming less self-reliant and more reliant on government handouts

                                                             x.      Business leaders claimed they could get themselves out of the depression if government didn’t interfere – too much planned economy and socialism

                                                           xi.      Roosevelt was trying to run a dictatorship (he tried to add members to the Supreme Court and he tried to purge members of Congress who opposed his policies)

                                                          xii.      Better results could’ve been achieved if more deficit spending would’ve occurred – Roosevelt was merely applying bandaids

                                                        xiii.      The New Deal didn’t cure the depression – WWII cured it

XXI.         FDR’s Balance Sheet

a.       Advocates of the New Deal

                                                               i.      Some liked that Roosevelt was trying to do something about the situation

                                                             ii.      Admitted some waste, but said that relief was the primary objective

                                                            iii.      Conceded that there was graft (gaining money illegally), but it was small in comparison to the amount spent and the need for quickness

                                                           iv.      New Deal relieved the worst of the crisis in 1933

                                                             v.      Roosevelt accepted the principle that the government was morally bound to help the welfare of the people by managing the economy

                                                           vi.      The total collapse of America’s economic system was averted; Roosevelt saved the free enterprise system

                                                          vii.      A fairer distribution of the national income to the workers, farmers, and poor was achieved

                                                        viii.      Citizens were given the opportunity to regain and retain their self-respect

                                                           ix.      The socialist tendencies of the New Deal were overblown and actually helped big businesses

                                                             x.      There were bold reforms without a bloody revolution (some European countries were giving rise to communism or fascism during this time)

                                                           xi.      Demonstrated that you could have a big government (like Hamilton) and be concerned about the “forgotten man” (like Jefferson)

                                                          xii.      Roosevelt preserved democracy when some countries were going down the road of dictatorships

                                                        xiii.      Roosevelt showed how valuable a president could be