I. New Deal Takes Shape

• FDR takes office
• At first glance, FDR seemed to have little in common with most Americans--the former governor of N.Y. came from privileged upper class background, could trace roots back to earliest Dutch settlers in New Holland
• Still, FDR finds ways to inspire the American public
• among his strengths were:
• bulldog determination to succeed
• talent for surrounding himself with capable people and getting most out of them (the Brain Trust)
• One of his greatest contributions to the politics of the decade was to instill hope and courage in the people
• Beginning with his inaugural address, FDR lifts the spirit of the people--"We have nothing to fear but fear itself"
• "The Hundred Days"
• Roosevelt was a pragmatist rather than and ideologue--"Take a method and try it. If it fails, admit it frankly and try another"
• The pragmatic approach became very evident in FDR's first months in office, which became known as the "Hundred Days"
• Legislation of the Hundred Days
• first step was to strengthen the financial structure
• ordered a 4 day bank holiday
• during this time, he got Congress to pass the Emergency Banking Relief Act, which permitted sound banks to reopen under direction of the Treasury Dept.
• in his first 'fireside chat,' Roosevelt told Americans it was safer to keep money in a reopened bank than under the mattress
• Later, in June, Congress created the FDIC, which guaranteed bank deposits of up to $5,000
• At about the same time, the Federal Securities Act was passed to help strengthen confidence in the stock market--the SEC also created to regulate the stock and bond markets
• FDR also officially abandoned the gold standard to help raise stock and commodity prices and ease the debt burden of farmers and investors
• FDR next got Congress to pass the 21st Amendment, ending prohibition--ratified by Dec. 1933
• Congress then passed laws to help ease the acute debt problem for farmers and homeowners--the Farm Credit Administration and the Home Owner's Loan Act--which gave low-interest rates on refinancing mortgages
• Relief measures
• March, CCC created to provide useful jobs for young men aged 18-25
• nearly 3 million men took to woods and fields in national forests, parks, and recreation areas, and to help with soil conservation projects
• pay only $30/month, but that was more than many people got at the time
• directed by army officers and foresters, the men worked under a semi-military atmosphere--discipline and living in a camp
• May, Federal Emergency Relief Administration passed, headed by Harry L. Hopkins (who became the second most powerful person in administration)
• Hopkins spent $5 million within 2 hours of taking office
• FERA aimed at working through states
• $500 million in FERA funds supported state construction projects--over 5,000 public buildings and 7,000 bridges, organized adult literacy programs, financed college education for poor students, and set up day-care centers for low-income families
• Rebuilding economic infrastructure
• TVA
• 1916, U.S. government had built power and nitrate (explosives and fertilizer) plants at Muscle Shoals, Alabama--designed to produce cheap public power
• May 1933, Congress created the TVA to help bring electricity to one of the poorest regions of the nation (Tenn., Ala., Ga., Miss., and N.C.)
• TVA brought more than power though, it also opened the rivers to navigation, helped foster soil conservation and forestry, experimented with fertilizers, and drew new industry into the area
• heavily criticized by some for government entering into private enterprise
• AAA (May 1933)
• AAA attempted to bring aid to farmers
• sought to raise prices by reducing production--getting farmers not to follow natural inclination to produce more
• govt. paid farmers to plow under crops and slaughter livestock rather than send them to market--became a public relations fiasco for New Deal when so many in country were going hungry
• During the summer of 1933, AAA began to pay farmers to take acreage out of production
• this helped raise price of farm products
• hurt those on the fringe--sharecroppers and tenant farmers
• National Industrial Recovery Act (June 1933)
• attempted to create a spirit of purpose and cooperation among businessmen
• granted immunity from antitrust prosecutions for major industries
• Also attempted to regulate labor conditions--outlawing child labor in some industries and affirming workers' rights to organize and bargain collectively (Section 7a)
• the National Recovery Administration (NRA) with help of business leaders drafted codes of "fair competition" for each industry--setting production limits, wages, and working conditions; also forbade price cutting and unfair competitive practices
• NRA attempted to help spur recovery by breaking cycle of wage cuts, layoffs, and falling prices
• Gen. Hugh Johnson (who had worked with War Industries Board in WWI) led NRA
• NRA also launched huge publicity program (complete with Blue Eagle), urging consumers to buy only from companies that adhered to the NRA's codes of conduct
• the Public Works Administration (PWA), part of the NIRA also approved $3.3 billion dollars for a public-works program to create work for the jobless, thus pumping money back into the economy
• program headed by Harold Ickes
• PWA spent $4 billion (in all) on nearly 35,000 projects--constructing dams, bridges, and public buildings (post offices in particular)
• Reconstruction Finance Company (created under Hoover) remains active, loaning several billion dollars to banks, insurance companies, and railroads to help keep them stable
• Legislation after the Hundred Days
• In November, Harry Hopkins convinces Roosevelt to fund work relief projects under the Civil Works Administration
• Between November 1933-Feb. 1934, CWA spends $1 billion on short-term projects to provide immediate work for 4 million unemployed
• Roosevelt ends CWA in March, but as the PWA is taking too long to distribute money for public works, FDR turns increasingly to Hopkins to help shape relief policy

• New Deal doesn't help many people
• Southern Tenant Farmers' Union
• poorer tenant farmers and sharecroppers try to fight back against being kicked off land by AAA policies, but landowners crush movement
• FDR's braintrust is split between concentrating on pulling up the agricultural section as a whole versus helping the rural poor
• In 1935, Congress passes several pieces of legislation to help aid farm laborers, tenants, and sharecroppers
• New Deal has not ended depression--most people enthusiastically support FDR's programs but some challenge it
• As New Deal stalls in summer of 1934, FDR faces number of challenges from conservatives and from radicals
• 1934, number of corporate leaders organize American Liberty League--accuse New Deal of leading to socialism
• Father Charles Coughlin and Huey Long
• Both Coughlin and Long support FDR at first, then turn against his policies
• Coughlin
• Catholic priest with radio program broadcast out of Detroit, large following
• after turning against Roosevelt, Coughlin tells his listeners that capitalism is dying, and that a new system based on "social justice" should be created  (not always clear on what "social justice" exactly means)
• Coughlin forms the National Union of Social Justice in Nov. 1934
• He argues that nation's problems were caused by bankers--and that the banks should be controlled by the national government
• Arguments against banks took a steadily increasing anti-Semitic tone as time goes on
• Coughlin's support wanes by mid-1935, and he is censured for his political activities by Catholic church
• Huey Long ("Kingfish")
• Governor of Louisiana (then U.S. Senator)--very ambitious
• starts a Share Our Wealth program in Jan. 1934
• Long proposed to:
• liquidate all personal fortunes above a certain amount
• give every family enough money to buy a home, an automobile, and a radio
• elderly would receive pensions
• worthy boys would be sent to college
• would establish a minimum wage, shortened work week, a balanced farm program, and immediate payment of soldiers' bonuses
• Long's program drew immense following nationwide--claimed more than 27,000 Share Our Wealth clubs and 7.5 million followers
• Long assassinated in 1935--Share Our Wealth continues but declines swiftly
• Biggest challenge to New Deal programs comes from the U.S. Supreme Court
• Court strikes two blows to New Deal in 1935
• Both the AAA and the NIRA were ruled unconstitutional by the Court
• These two programs at heart of FDR's plan for economic recovery

• Despite the challenges from the left and right, FDR remains popular with most Americans and easily wins reelection in 1936
• Reason for FDR's continued popularity comes from a shift in New Deal policy--what is called the Second New Deal
• By the middle of 1935, FDR is fed up with his critics in business and industry--refuses to try and please everyone
• 2d New Deal focuses on needs of urban and rural poor and the workers
• These new programs greatly expand federal relief efforts to American workers and pump money into economy
• Driving idea behind many of 2d New Deal programs is deficit spending
• Proposed by British economist John Maynard Keynes
• argues that deficit spending in a positive way will pump money into the economy and combat the depression
• Second New Deal programs
• WPA, 1935
• Headed by Harry Hopkins
• spends $5 billion dollars immediately ($11 billion over 9 years) to put people to work
• 8 million people work in construction (34,000 construction projects), clerical, professional, and arts
• murals, photographs
• Slave narratives
• LeConte, Park, and Baldwin Halls on campus constructed under WPA
• National Labor Relations Act (Wagner Act), 1935
• stimulates union growth
• requires employers to recognize and bargain with their employees' unions
• establishes the National Labor Relations Board to act as a watchdog in labor-management relations
• Resettlement Administration (1935)
• RA loans money to small farmers, tenants, and sharecroppers so they can acquire their own farms on productive land
• also creates the Rural Electrification Administration (REA)--provides power to rural America
• RA replaced in 1937 by the Farm Security Administration to make loans to prevent marginal farmers from sinking further.
• Social Security Act, 1935
• provisions
• provides for old-age pensions (main thrust of act)
• survivors' benefits for families of deceased workers
• unemployment insurance
• aid to dependent mothers and children and to the handicapped
• businessmen dislike the act--imposed taxes to finance the old-age and survivors' benefits
• Revenue Act, 1935
• Raised tax rates on incomes over $50,000
• created federal estate and gift taxes
• established federal tax on corporations
• Fair Labor Standards Act, 1938
• Set minimum wage and maximum work-week
• also prohibited child labor under age of 16
• FDR argues that Second New Deal saves the capitalist system by "reforming its excesses and adressing its less desirable social consequences"

• Court-packing
• In 1937, FDR tires of Supreme Court striking down New Deal programs
• Proposes a court-reform bill allowing president to appoint a new SC justice to sit alongside any justice over 70 who will not retire--aimed at neutralizing those justices who oppose his programs
• Congress kills this "court-packing" plan
• Still, some justices evidently see the light because no more New Deal programs struck down
• This move hurt FDR's standing among American public badly for a time
• New economic slumps
• Roosevelt suffers another setback when economy slumps in fall of 1937
• Recession caused by
• reduced consumer spending power because of social-security deductions
• cutbacks in New Deal work and relief programs as federal government tries to balance the budget
• 1938, FDR and Congress authorize new spending to revive and expand the PWA, WPA, and other work programs
• revival of economy begins and unemployment declines
• New Deal's end
• During FDR's second term, Congress passes only a few reforms--notably the Fair Labor Standards Act and the AAA of 1938 (also struck down by the Supreme Court)
• Coalition of conservative southern Democrats and Republicans blocks further reform and attacks some of New Deal agencies
• Roosevelt attempts to break up anti-New Deal coalition by asking voter to defeat conservatives in 1938 elections, but voters elect even more conservatives
• By 1939, FDR and Congress begin to turn attention to foreign affairs--WWII--no new domestic reforms attempted

• Gathering fears about the world
• Americans feel more positive about their own country by the late 1930s, but fear gathering war clouds abroad
• These underlying worries were highlighted on Halloween 1938 with Orson Welles radio broadcast of the War of the Worlds--caused nationwide panic
• Rise of fascism
• Americans had good reason to be concerned about world affairs
• Rise of fascism in Europe
• in 1922, Benito Mussolin leads fascists to power in Italy
• Jan. 1933, Hitler becomes chancellor of Germany
• quickly establishes absolute dictatorship
• persecutes Jews
• embarks on program of military buildup and conquest
• 1936, Hitler's troops reoccupy Rhineland, two years later Germany annexes Austria into a "greater Germany"
• Also in 1938, at Munich Conference, France and Britain agree to allow Hitler to take over the Sudetenland in western Czechoslovakia
• in 1935, Italy invade Ethiopia--world does nothing
• Asia
• 1931-33, Japan invades and conquers Chinese province of Manchuria--sets up a puppet state there (one favorable to Japan)
• 1937, Japan begins conquest of rest of China
• 1936--Germany, Italy, and Japan form Axis Alliance
• This war is not ours
• Most Americans critical of U.S. involvement in WWI, resolve not to become embroiled in international war again
• Congressional investigative committes during 1934-36 determine that bankers and manufacturers in U.S. made huge fortunes off of WWI, findings reinforce anti-war sentiment
• 1935-1937, Congress passes series of Neutrality Acts that embody anti-war feelings
• prohibit U.S. from making loans or selling arms to warring nations
• ban American travel on ships of warring nations