FDR and the New Deal

As we have seen the Great Depression had a devastating impact on
the American economy and the American people. President Hoover
believed, basically, in waiting things out. As result of Hoovers
inactivity America turned to a new, dynamic leader: Franklin Delano
Roosevelt. Today we will discuss his basic strategy for improving the
economy.

I. Franklin Delano Roosevelt

A. Early Years

1. Raised in upper class family in Hyde Park N.Y.

2. Attended Harvard and Colombia

3. Lawyer then active in NY politics

4. 1912 – Assistant Sec. Of Navy

5. 1918 Narrowly won Governorship of NY,

6. 1920 – VP Candidate with James A. Cox

7. 1921 – Contracted Polio, lost use of legs. This deeply effected
Roosevelt. Now he truly knew what human suffering was all about. He
could identify. He was also a fighter and a winner. He overcame his
handicap and this later would inspire Americans during the
depression.

8. 1930 Reelected Governor of New York State – His innovative
programs gained national attention and were eventually called the
Little New Deal – NY Model

9. Ran for Pres. In 1932 – Used song: “Happy Day’s Are
Here Again.” Pledged to America; “I Pledge
to you, I pledge myself, to a new deal for the American people!”

B. What did Roosevelt do when he got elected?

1. Inauguration Speech: Told America “We have nothing
to fear but fear itself!” He wanted to inspire optimism and hope. He
did not want America paralyzed by fear. He was a man of action.

2. Appointed the “Brain Trust” – These were a group of brilliant
social, economic and political thinkers who comprised Roosevelt’s
cabinet. He surrounded himself with the best, not just political
allies and supporters.

-Harry Hopkins – Social Worker and the architect of
much of the New Deal.

-Henry Morgenthau

-Louis Lowe

-Cordell Hull

-Frances Perkins – Sec. of Labor and first female in the cabinet.

-Sam Rosenman

-Raymond Moley

-Rexford Tugwell

3. First Hundred Days – For the first
hundred days of his administration Roosevelt and his Brain Trust
where a whirlwind of activity. Legislation was introduced and passed
at a furious pace as Congress mostly acted as a rubber stamp.
Roosevelt called Congress into session and asked for executive power
to wage war against poverty and pessimism. He said he wanted a power
“as great as the power that would be given me if we were in fact
invaded by a foreign foe.”
At first he ordered a bank
holiday, which closed every bank in the nation and stopped people
from withdrawing all of their money. This ended the panic. He then
signed legislation called the Emergency Banking Act. This closed all
of the insolvent lending institution and only reopened the solvent
ones. While many lost money at least the panic was eased.

B. What was Roosevelt’s underlying philosophy?

1. Keynesian or “pump priming” economics. Based on the
beliefs of economist John Maynard Keynes it held that money should be
invested in the people, the working class. Then spending would
increase with new money in circulation. As spending increased it was
expected that businesses would expand to meet the new demand and hire
new workers. This would spur on more spending and more growth. This
plan was the opposite of the Republican plan ascribed to by Hoover
and earlier leaders. They had believed in supply side or “trickle
down” economics. In this philosophy money was to be invested at top,
in business. Then businesses would expand, hire new workers and this
in turn would spur on spending and further economic growth.

D. What did Roosevelt mean by relief, recovery and reform?

1. Relief – Immediate action taken to halt the

economies deterioration.

2. Recovery – “Pump – Priming” Temporary programs to restart the
flow of consumer demand.

3. Reform – Permanent programs to avoid another depression and
insure citizens against economic disasters.

FAIR LABOR STANDARDS ACT — provided minimum wage for workers.

CIVILIAN CONSERVATION CORPS — provided work for jobless males
between 18 & 25 in reforestation, road construction, prevention
of forest erosion. Ended in 1941.

AGRICULTURAL ADJUSTMENT ACT — established principle of government
price support for farmers and guaranteed farm purchasing power.

TENNESSEE VALLEY AUTHORITY ACT — federal construction and
ownership of power plants regional development of Tennessee Valley (7
State Area)

FEDERAL SECURITIES ACT — required full disclosure of information
related to new stock issues.

NATIONAL EMPLOYMENT SYSTEM ACT — created US employment service.

HOME OWNERS REFINANCING ACT — use of government bonds to
guarantee mortgages.

BANKING ACT OF 1933 — created Federal Deposit Insurance Corp.,
guaranteeing the safety of bank deposits.

NATIONAL INDUSTRIAL RECOVERY ACT — minimum wages and self
regulation of industry — ended in 1935.

PUBLIC WORKS ADMINISTRATION — appropriated funds to construct
roads and other federal projects.

SECURITY AND EXCHANGE ACT — federal regulation of the operation
of stock exchange.

NATIONAL HOUSING ACT — federal housing administration insured
loans of private banks and trust companies for construction of homes.

COMMUNICATIONS ACT — federal housing administration insured loans
of private banks and trust companies for construction of homes.

HOME OWNERS LOAN ACT — government financing of home mortgages.

NATIONAL HOUSING ACT — construction of low cost public housing
and slum clearance.

SOIL CONSERVATION ACT — established federal soil conservation
services.

RESETTLEMENT ADMINISTRATION — built new model communities for low
income city workers

RURAL ELECTRIFICATION ADMINISTRATION — created and administered
program of bringing electricity to rural areas.

NATIONAL YOUTH ADMINISTRATION — federal work relief and
employment for young people.

NATIONAL LABOR RELATIONS ACT — encouraged collective bargaining
and formation of unions to be supervised by the National Labor
Relations Board.

SOCIAL SECURITY ACT — created Social Security System — old age
and survivors insurance; aid to dependent children etc.